The Role of HRM Strategic Interventions in Enhancing an Organization's Effectiveness - Essay Example

Reading Header: Role of HRM Strategies Interventions in Enhancing an Organizations Effectiveness. number: Lecturer: Date: Introduction The importance of the human resource management (HRM) function in modern organisations has now gained prominence as firms take cognizance of the significance of employees as the major drivers in corporation’s growth. Prominent management analysts Jack & Susan Welch have affirmed that the HRM function in an organisation should be allotted a ‘position of power and primacy’. The HRM strategies must evolve a thorough, non-bureaucratic appraisal scheme that is scrutinized for veracity; efficiency, remuneration, acknowledgment, and training that inspire and therefore maintain employees; involve the ‘common’ employees in decision-making; design a level organisation chart that has logical reporting links and duties (Welch, 2008). Schuler and Jackson (2000) assert that the impact of HRM is primarily exhibited in the ‘formulation and implementation of strategy’. This encompasses the planned vision or deciding the business of the firm, objectives, schemes, development and execution, appraising, modifying, and refocusing on the upcoming projects. During the firm’s implementation, stage the classification of strategic business issues (SBIs) and the setting of strategic business objectives (SBOs) is established. These include measurable and achievable set targets. Schuler and Jackson have formulated a Four-Task Model of HRM, which includes the management of staff projects and opportunities, capabilities, performance and motivation. The authors term this the raison d’etre of HRM that guide the firm’s options by linking HRM with the firm’s strategic management. Assessing the Performance of HRM The Centre for the Study of Social Policy (2002) has recommended several strategies to use in the analyses of the performance of human resource management (HRM). These include turnover, employee fulfilment, involvement in education, and age of openings are generally employed to evaluate achievement of HRM approach. A number of HRM tasks also appraise the contentment of HRM’s ‘clientele.’ These processes encompass the appropriate recruitment procedures and broad-spectrum appeal of applicants hired (Pg.6). The three main obstacles to a team’s fulfilment and triumph are change, lack of control and mistrust (Flores, 2003). Maxwell et al (2004) have linked strategic human resource development (HRSD) to service management as contemporary firms increasingly view the fulfilment of their customers’ needs as their ultimate aim and reason for existence. In this regard, they cite the five major attributes of service management ascribed to Gro¨nroos (1994) which encompass, general organizational viewpoint, client driven, holistic standpoint, excellence as an fundamental element of service administration, and internal growth of employees in alignment to the organisational goals (Gill Maxwell, 2004). For an effective strategic human resource management (SHRM), a firm must identify all employee’s competency or capabilities and hence appropriately assign matching tasks and place them in the best department as per their skill level to adequately enhance the firm’s overall performance (Sempere, 2002). Hansson (2007) argues that a company’s investment in training of their personnel is mostly dependent on past economic benefits or profitability. Firms that have educated their employees have realised more tangible benefits hence tend to intensify training if it results in more enhanced performance. Hansson therefore proposes that the amount invested in training has a linkage with the firm performance or profitability. According to the Society for Human Resource Management (SHRM), organizational and employee development within an organization, merge the objectives of both the individual employee and the firm’s vision effectively. The career management of employees converge to form an optimum stage whereby the firm and employee needs become compatible [See Figure1]. Figure 1 Hard and Soft Approaches to Human Resources Management HRM models can be classified in terms of ‘hard’ or ‘soft’ approaches. In the ‘hard’ approach, HRM is viewed in terms of a firm’s drive to strategically manage and control her personnel with specific objective of realising the company’s goals. Conversely, in the ‘soft’ approach, HRM is strategically organised around the firm’s personnel hence consider more about their welfare and dedication to the firm (Reid et al, 2002). Modern human resources approaches have revealed that employee relations need not be necessarily rigidly controlled or expensive to the corporation to impact positively on the workforce. Firms like Virgin Atlantic, Microsoft, Google and BA have managed to sustain high profitable levels despite having the most liberal policies in the human resources management. Analysts have therefore developed various low-cost ideas or no-cost ideas that have more profound impact on the employees that rapidly induce positive results to both the company and grateful staff. Amongst the no-cost ideas proposed in the University of Colorado employee manual are sending written laudatory messages to a worker; sending similar written messages to relatives highlighting their deeds; recommending them for prizes, allotting them singular assignments and mentoring programs. Others include provisions of paid holidays to attend education courses; commemorative excursions or dinners; posting encouraging messages at the firm’s communication channels; appealing for individual employee contributions. The low-cost ideas proposed encompasses erecting a bulletin board for staff commendations, refreshments; celebrations commemorating accomplishments; departmental reward schemes; prizes; pictorials of the high fliers; complimentary coupons; and rewarded with training or education sponsorships (Campbell, 2004). According to Shellenbarger (2000, p.B1), ‘employees who dont feel that they are respected or trusted, or who dont feel that the company cares about them, are much more likely to quit’. Holoviak (2004, pg.3) by the same token backs the use of these non-traditional worker motivation techniques that encompass: recruiting from the correct standpoint; employee participation in the objectives and vision of the company; practical principal statutes of management; involving workers in commercial ideas; and initiating substantial sweeteners or reimbursements. Stern (2001) conversely proposes maintaining the traditional rigid approach that he insists is more efficient than the modern casual system of indulging workers. He therefore recommends a mentoring arrangement in which the more accomplished seasoned workers integrate fresh employees in the corporation’s standards and vision. This allows them to be quickly assimilated in the environment and company while ensuring a more prosperous lasting career. This method can be termed as the hard approach, which employs the conventional tactics long perfected by centuries of corporate management and the scientific model popularised, by Fredrick Taylor rather than the contemporary human relations management. Drizin (2009, pg.1) also criticizes companies attachment to the conventional yardsticks of human resources success to long serving staff as being outdated in contemporary global setting. Drizin cites research by Walker Informations 1999 and 2001 National Employee Studies, which revealed that there was, reduced employee turnovers among in government service particularly in the nursing profession despite other statistics indicating that there existed low job satisfaction in the sector. He thus concluded, ‘that high worker retention does not equal high employee loyalty’ and low turnover will not necessarily generate more quality service. Performance Management An organisation human resource management (HRM) is evaluated through the performance of its personnel by virtue of strategically set targets. This is enhanced through effective and coordinated performance management. Canman (2000) defines performance management as: The process of establishing a common understanding in the organization of the organizational goals to be achieved and of the performance to be put forth by the personnel in this context; and guiding personnel so as to enhance the degree of contribution they shall make by working for the common efforts paid to achieve such goals; and the evaluation, remuneration, appraisal and development of personnel (Pg.135). Maher (2008) however argues that ‘vision without substance is not vision, its illusion’. Thus by not actively incorporating all the people in the organisation, the firm’s visualisations or goals will just remain mere dreams that cannot be fully achieved. Performance management is designed incorporated sequence encompassing performance planning, that emphasise setting objectives, training, checking and response mechanisms, reassessments. The employees are made aware of the minimum organisations expectations on their conduct in conformity with those of the firm. Employees are implicated in planning their goals and vision, obtain adequate help and training, and comprehend how they will be appraised while keeping track of their performance. The employee goals and targets must be those that achievable hence avoid setting impossible targets and those that perform exceptionally are rewarded appropriately (Hartle, 1994). The Turkish Public Personnel Management (2007) guidelines require all public personnel to undergo an annual appraisal and training to improve efficiency. In order to qualify for promotion, the employee must attain a minimum grade of 70 percent and must have received at least 75 hours of training for advancement in their career. The Irish public service Strategic Plan 2008-2010 expressed similar approaches to HRM nevertheless the Irish civil servants must present bi-annual reports of their performance appraisals according to the Civil Service Performance Verification Group (CSPVG) guidelines and production schemes enclosing ‘SMART’ performance pointers (OIC, 2008). The approach emphasises service development using effectual strategies and schemes in employment, coaching, expansion, performance, remuneration and career growth. To enhance a firm’s strategic human resource management (HRM) performance, the company must ensure they have an effective recruitment strategy that will enlist competent individuals as well as ensuring the retention of the hired personnel [See Figure 2]. Heneman and Judge (2003) describe recruitment as the, “the process of acquiring, deploying, and retaining a workforce of sufficient quantity and quality to create positive impacts on the organization’s effectiveness” (p. 4). The efficiency of the staffing procedures is increasingly being evaluated due to the high expenditure accrued in acquiring the right employees who in turn must stay for long haul to justify the costing (Cappelli, 2000). Figure 2 www.shrm.org/ McNamara (2008, pg.1) using an employee-relations hypothesis has deduced that the reason behind high turnovers in organisations is due to lack of adequate motivation of employees. He alludes to missing link of enhanced motivation techniques that inspire employee loyalty within organisations. McNamara refers to the widespread mythologies connected with workers gratification in the workplace that employers cling to as adequate to sustain employees in the organisation. These include the traditional motivators like higher pay, attractive office, and job-related security among others. Role of Recruitment in HRM Strategies Contemporary organisations have changed their recruitment methods by embracing modern inexpensive strategies. These include the use of the internet as a selection and searching forum. Many candidates post their resumes at various recruitment agencies where the employers can easily access the best candidates at minimal costs as opposed to the conventional models. In a recent study by the Chartered Institute of Personnel and Development (CIPD) revealed that most companies (75 percent) are now using their own websites to advertise and recruit staff. Another tool or model includes an online testing and research facility on a potential candidate, which has sufficiently reduced expenditure in HRM and recruitment. However, the National Online Recruitment Survey (NORAS) has criticised the models for alienating the older candidates who do not fully utilise the internet in the recruitment exercise (CIPD, 2009). The hiring of the correct workforce is thus essentially important to piffling out the fidgety workers that have ‘one eye on the horizon’ and may not be loyal to the company’s aspirations. According to Shilling (2003, pg. 2) high worker turnover expenditure is caused by various issues. These include the expenditure accrued in hiring provisional/casual labourers apparent that is quickly discerned by diminishing yields; toll on residual workforce strained and compelled to take up additional duties to disguise production deficits; extraneous expenses in overtime pay; guidance costs for provisional workers; exit interview procedures and dispensation of final benefits. Another factor is the loss of exiting worker’s experience and aptitude, including recommendations; joblessness indemnity expenditures; staffing overheads including the engagement of recruitment agencies or in advertising revenues. The Chartered Institute of Personnel and Development (CIPD) has determined a formulation of its inventory of the replacement costs for an exiting staff that is calculated by factoring the overall crude turnover rate for the entire workforce thus computing the annual expenditure accumulated by the exiting staff. The major categories as determined by the CIPD are: management or dispensation costs for the exiting employees terminal benefits, the expenses sustained in hiring new workers, the expenditure accrued in keeping up with production within the company as they await the hiring of new staff in the vacancy period. The preparation overheads needed to acclimatise the fresh worker to the company’s procedures and duties is also another factor (CIPD, 2009). Total number of departing personnel over time x 100 Average total number of personnel engaged over time Likewise, the CIPD has formulated a permanence index that illustrates the rate of retention for staff as follows: Total personnel departing after a year’s service x 100 Total personnel retained beyond one year Role of Employee Motivation Contemporary HRM strategies require organisational leaders assume the responsibilities of a therapist, guide, organizer, taskmaster, trainer and adviser to the workforce. The foremost test for corporations nowadays is keeping their workers motivated and performing their duties properly. As people constantly interact with each other, they unconsciously mange each other in their transactions and thus learn how to relate with diverse people in addition. However, within a workplace environment, managing people is a deliberate act that has to be cultivated and enhanced through leadership skills and training. Contrary to expectations, people like to be managed! Individuals feel more secure, supported and appreciated when they judge that somebody is ‘looking out’ for their interests, development and is at hand to assist in case of problems. However managing people has challenges, “a managers most important and often most difficult job is to manage people.” (Welch, 2008) Studies have revealed that workers who are accorded more flexible working schedules and other casual conditions were more predisposed to be enthused about their jobs. A study at Johnson & Johnson illustrated that employees who are accorded flexible work programmes and family excursions generated a 50 percent lower nonappearance rates when contrasted with the whole company’s workforce. Likewise, at Rank Xerox, employees were authorized on controlling their individual job timetable that indicated a positive and improved employee motivation, enhanced client service, and additionally a remarkable 30 percent less absence for the personnel (Harrington, 1997). This sensible employee relations strategy has been reciprocated by exemplar staff loyalty depicted at British Airways, whereby employees who enjoy some flexible operational schedules among other perks repaid the company by their acquiescent and cooperation in having their salaries reduced to assist the company overcome poor returns in the current global recession. In effective HRM approaches, one of the main tasks of a manager is assisting an employee through the life cycles processes within the organisation described as HIAR or Hire, Inspire, Admire, and Retire. The manager must be less ‘manager’ and more ‘leader’, hence inspires and motivates those entrusted to lead. Former Chrysler Inc. CEO Lee Iacocca asserts that,’ management is nothing more than motivating other people’ (University of California, 2008). Organisations always strive to ensure the effectiveness of their production process to the satisfaction of their customers and shareholders, a factor that is entirely dependent on the output of all their employees. An inspired workforce serving as the medium for growth epitomizes an effective HRM strategy. Motivation is acknowledged as the catalyst for enhanced production; however solely lacks within many firms due to ineffective HRM strategies and minimal inducements for the staff coupled with many discouraging practices that further de-motivate them (Sorensen, 2002). Since everyone has personal affairs, families, opinion and struggles, all employees should be treated equally regardless of position within the organization (Bright, 2009); (Weightman, 2004). S.M.A.R.T.E.R Strategies In the organisation’s HRM strategies, the firm establishes long and short-term objectives. According to Blair (2006) the planned objectives have to be S.M.A.R.T.E.R, i.e. Specific, Measurable, Attainable, Realistic, Timely, Ethical, and Relevant. In the Paretos Principle or Paretos Law an effective HRM stratagem is taken in the theorem that states you should focus ‘80 percent of your time on the 20 percent of your work that really matters’ to better manage yourself (The 80-20 Rule) (Koch, 2007). Clifton and Harter (2003) allege that an organization’s success is largely a function of employee’s contentment. Patterson et al (2004), nevertheless assert that managing people in organisations is principally a function of an individual’s character and the environment resident. Conventional studies maintain that well crafted organizational traditions lead to progressive development of a company’s performance index by facilitating internal behavioural uniformity (Sorensen, 2002). Goffee et al (2007) stress that an efficient HRM administration; necessitates a thorough consideration of incentives, work arrangement, recompense schemes, and group demands. Lindner (1998) advocates for a blend of systematic bundling of benefits, including career enhancement, progression, internal and external stipends, and non-financial rewards. As part of strategic planning and managing people, Baldwin (2009) argues that a manager should ensure that they groom employees to take up other duties other than the accustomed ones. Conclusion The conventional altitude that people are a variable cost has now changed as HRM ascertain that to gain a competitive advantage in modern industry, a well educated and skilled, inspired and dedicated workforce is needed at every point of the organisation. An effective performance system must be developed as advocated by Stolovitch and Keeps (1992) who propose a practical system that is ‘specific and measurable’ to achieve business or organizational goals. For HRM strategies to be effective, they must incorporate the employee’s needs and aspirations as well as those of the firm in an integrated scheme to ensure growth in the firm. A firm must have clear strategic achievable and measureable objectives and vision that steer the firm based on its most valuable asset, which are its employees. Strategies must encompass initial recruitment, training, remuneration, retention and other employee relations schemes, which motivate staff into more enhanced productive activities. 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