The Nature of Employees and HRM - Essay Example

Managing people case study: Fastening Technologies Limited BY YOU YOUR SCHOOL INFO HERE HERE Managing people case study: Fastening Technologies Limited Introduction Fastening Technologies Limited faces many different problems related to human resources and how human capital development is linked to strategic goals and mission. The business operates under a functional, centralized authority with layers of management in each division. However, this type of organisational structure is common in a production environment where controls are needed. There are many uncertain elements that have not found effectiveness in HR strategy or employee relations, the largest of which is the performance appraisal process and measurement systems for performance outcomes with individuals or groups at Fastening Technologies. Concurrently, the changing demands from non-unionised employees are calling for salary re-negotiation that can easily lead to significant imbalance in management salaries. However, in order to remain without considerable trade union influence, the company is considering renegotiating these pay structures as part of what appears to be a poorly-developed salary and reward system. This report highlights the problems at Fastening Technologies in comparison to traditional versus more progressive HR policies and models available. Recommendations are offered in how to improve the most fundamental and long-lasting problems at the company related to performance appraisal systems, rewards management, and organisational structure and culture. The nature of employees and HRM Armstrong (2006) identifies that the total aim of HRM is “to ensure the organisation is able to achieve success through people” (p.28). This is a well-developed practice at Fastening Technologies Limited as with a change in HR leadership came new and ongoing discussions about how to link mission goals and strategy with human development and performance. Fortunately, Fastening Technologies has a team-focused organisational model that supports team training and interpersonal relationship development between managers and subordinates. Through the efforts of current HR leadership, the business has become a collectivist culture where group needs and team structures drive decision-making in management and within the line and support employee networks. Despite the efforts to build new systems and remove HR redundancies during a period where pricing has led to cost-cutting issues, Fastening Technologies seems to have a fundamental misunderstanding about employee behaviours and their personality related to job performance and motivation. Treven & Potocan (2005) refer to the locus of control model that dictates the level to which employees will believe in their own fate mastery or believe others have the ability to control their lives and environment. People with an internal locus of control believe they control their own destinies, those with an external locus of control can manifest stress and act defensively based on their perceptions of external influence (Treven & Potocan). The case study shows a lack of knowledge at the individual level with much more emphasis on team-working and the development of group structures. This was noticeable with the proposed remodified organisational structure to handle outsourcing and various management duties collectively. The very basis of the new group and team-working focus, as supported by some unorthodox training programmes to build a collectivist mindset, negates individual needs and creates new problems related to salary negotiation or leaves those questioning their roles within the organisation. This is likely the reason why the company had over 40 different semi-structured measurement and performance systems in place without a standardized practice as the company had shifted away from understanding individualism and its role in this larger business. This was one of the most transparent problems at Fastening Technologies: no clear direction established for linking individual performance with strategic goals as they are defined by the HRM system. The performance management system Fastening Technologies, despite years of labour investment and restructuring, has not been able to iron out an acceptable and worthwhile appraisal system as a metric for performance measurement. Management finds the process too labour-intensive and employees, for individual reasons, are put off by the system and find little value. Service & Loudon (2010) identify research results from a sample of 1,000 different workers in which over 80 percent of respondents perceived performance systems as a joke. This points toward an industry-wide standard related to performance management systems as most companies are unable to develop a single model of measurement that meets with strategic intent or human capital development goals. Fastening Technology has been unable to create a standardised system of measurement that looks at individual accomplishment and that is not labour intensive and rejected by the management and employee groups. Copeland (2004) identifies that “metrics provide a clear statistical perspective on human capital performance” (p.45). Because of the change resistance when new appraisal systems are proposed or implemented, no clear metrics system that works systematically as related to strategic performance outcomes can be established at Fastening Technology. During a time where costs and labour are a burden on training alone, no clear system has been identified for line and support workers. Gambrel & Cianci (2003) highlight elements from Maslow’s Hierarchy of Needs that describe the universal need for affiliation in order to gain esteem and self-respect in the workplace. Affiliation leads to higher visibility and personal recognition at the business and can produce such outcomes as self-confidence, power, perceptions of control, or prestige (Gambrel & Cianci). In many ways, these affiliation needs and the positive results of group visibility give the company and its HR team an advantage as it very definition and structure builds a cohesive organisational team-focused norm. However, there is no method currently in place that secures efficient individualised performance in a way that is considered valuable in this collectivist culture. HR recruitment and selection systems Fastening Technology maintains a very poorly structured HR recruitment and selection system that does not have a formal linkage to strategic goals and carries no competency framework to measure appropriate skills with labour needs. At first glance, this would seem to be a risk management issue with consequences on skills development and implementation of new training programmes. Even though the company allocates considerable labour and finance into improving recruitment and selection, lack of enthusiasm and an ever-changing internal and external environment have left this a proverbial back burner issue in favour of more team-based policies. Service & Lockamy (2008) identify key characteristics that should be considered in areas of promotion. These include hygiene factors such as written and oral communication skills, the level of ethical behaviour indicated, and teamwork. Additionally, the mindset of the individual as related to analytical skills, collaborative competency, or reflective (such as planning aptitude) are common promotional criteria (Service & Lockamy). There was no evidence provided in the case study that the business has a well-developed system for internal promotions and they are working in an environment where certain labour groups are asking for re-negotiation of salary. The only real advantage that Fastening Technologies maintains in relation to HR recruitment and selection is a low turnover rate and few instances of sicknesses and absences as described by the case study. Therefore, this gives the business time to develop a structured promotional system that motivates, serves team-focused goals, and is always linked to strategic intentions. A quality HR model should not only emphasize teamwork, but should sustain high morale, motivation, empowerment and involvement (Panayotopolou & Papalexandris, 2004). None of these factors other than teamwork make up the current recruitment and selection methodology or framework at the business which leads to the problems with training budget and recognising individuals that are high performers against company strategy standards. In a collectivist environment, which is supported by the case study, employees make collectivist decisions that favour group needs. Waarts and Van Everdingen (2000) have found through research that collectivism is negatively related to innovativeness in a firm. This is likely why the company is having so many problems related to their recruitment and performance management systems as the collectivist environment drives decision-making related to groups and the process of recognising individual performance is a burdensome process to all parties involved. The collectivist environment would negate, based on Waarts & Van Everdingen’s findings, innovation related to meeting individual needs, motivations and goals. So much effort is placed into team function and structure that elements related to employee behaviours and attitudes are over-looked or given less priority over group training and assessment. Employees and rewards Having an effective rewards management system is directly related to motivation and job satisfaction (Galanou, Georgakopoulos, Sotioropoulos & Dimitris, 2010). Under most practical HR models, an employee with high job satisfaction is more productive (Galanou et al). One element missing at this collectivist organisation is, as mentioned early, a focus on individual needs analysis and structuring systems that work to measure this. Kase & Zupan (2005) identify that decentralisation efforts, self-managed teams, and high compensation that is contingent on job performance are strategic-fit approaches to universal HR best practice. Again, at the company in the case study, so much group and team-working focus has pervaded most other systems that recognise individual talent even though these talent development and training systems are present. Decentralisation of thick layers of management is known to produce more satisfied employees, however the structure that guides this organisation is not supportive of individualism. Adams (2010) agrees, stating that only when employees are engaged and knowledgeable about the business strategy will they succeed. Adams offers that the knowledge economy in business requires individuals to be released from command-and-control management to find new liberating opportunities. At this case study company, there is no thought being put into decentralisation tactics that provide more autonomous working environments which is resting also on a poor performance management system. Much HR coordination is being put into entry-level recruitment whilst somewhat sacrificing the more foundational human behavioural elements that empowerment and decentralisation can provide. Friedman (2007) offers that a quality HRM model should first align HR needs with strategic goals. This is occurring at the organisation to fit cost and efficiency needs and represents, essentially, a universal best practice effort and structure for human resources. However, a functional HRM system must have a change management philosophy to consistently aid in renewing organisational productivity (Friedman). Change is constant at the organisation as a product of external customer and other stakeholder influence and also through collaborative meetings with HR coordinators and other line or senior-level management teams. Employees, in the case study, are spoken of as resources requiring alignment, a rather hard HRM strategy, rather than considering how to implement change based on behavioural needs or job role needs and are therefore subject to change without direct interaction or involvement. Recommendations for improvement Fastening Technologies requires, first, a revamping of its performance appraisal process. It was identified that the presence of collectivist cultures tends to negate innovation, which is something that seems to be occurring at this company. The performance management systems launched and found to be failures meet with considerable employee and management resistance. In order to meet with best practice in HR and also establish an individualised system that supersedes group rewards and recognition, it is recommended for Fastening Technologies to adopt a new training focus instead of spinning through over 40 different performance appraisal templates. Bambacas & Bordia (2009) offer that when training is sold to employees or perceived as non-transferable to another organisation, it will be considered too costly to exit in favour of new employment. Internal marketing is something that is missing in this as a means of improving interactivity with individual employees related to performance measurement and reward. There is costly and labour-intensive, outsourced training occurring to stimulate a better group environment, however the method by which training is considered is practical and part of the organisational norm. If the business considers using an internal promotion scheme, such as using the Intranet for communications medium, training can be sold as an effective and non-transferable system that is valuable to only Fastening Technologies. Even though there is not a high turnover problem, the ability of the company to recognise individual performance is not accomplishing any desired goal outcomes. Using low-cost marketing to redefine perceptions of training quality and value would target employees at the individual level and prevent the costs (both labour and financial) of constantly revamping performance appraisals. The business should also use HR resources to develop and appoint an organisation-wide change agent that is visible and able to use psychological principles to assist in driving support for new change policies. Resistance to the performance appraisal process prevents any quality metric system to identify individual employees and the company has a difficult time launching new procedural activities based on this resistance. Friedman (2007) offers the importance of adopting a change agent under best practice for HRM to achieve competitive advantage and to deliver a renewed and ongoing adaptability in the face of change needs. The HR process has many elements that are uncertain as leadership attempts to make ongoing modifications or change the method by which HR is linked to long-term strategy. The ongoing presence and employee-level visibility of a change agent makes the process of change more interactive, which was supported by the literature regarding the importance of decentralisation and improved autonomy. Since this is already a strong collectivist organisational culture, a change agent should improve implementation or assessment of new human resources strategies. It is also recommended that the business consider launching a new format for the performance appraisal, since metrics are necessary for the company to achieve its intended strategic versus human resources goals. Morgeson, Mumford & Campion (2005) highlight the effectiveness of the 360 degree appraisal system that involves peer, management and sometimes even customer assessment to gauge all performance capabilities. Such a system, often used in best practice HRM models, “calls attention to importance performance dimensions previously neglected” (Morgeson et al, p.197). The company identified in the case study maintains quality technology systems that are used in the facilitation of human resources practices. With small technological improvements, a new HRIS system can be developed that captures real-time comments about employees and then stores them in a database. Since this is a collectivist organisation with strong team focus, gaining support for self-service comments about other employees’ accomplishments or weaknesses would drive a sort of automatic 360 degree system and instil empowerment and decision-making. Rather than relying on change resistant managers during the annual appraisal, the assessing line manager or HR manager could view this year-long testimonial on the HRIS systems, filter it, and ensure an accurate appraisal without the long-term investment on behalf of managers. It would also satisfy cost issues related to a time where stakeholders are demanding price reductions and avoid problems with resistance. Conclusion Fastening Technologies has undergone dramatic improvements in its HR design, however the most fundamental human behavioural concepts and change resistance realities prevents creation of a structured and efficient HRM focus with a system to include individual performance measurement and motivation. Even though the company does not show long-term problems with absenteeism and turnover, the lack of ability to identify individual needs during a time where group needs are considered more important than individual capital leads to problems with understanding employees and their satisfaction needs. If all recommendations provided are followed, Fastening Technologies should be more in-line with best practice and identify with correcting lingering problems with resistance and metrics performance. References Adams, A. (2010). 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Managerial promotions formulas and a human resource management model, Management Research News. 31, 4, p.245. Treven, S. & Potocan, V. (2005). “Training programmes for stress management in small businesses, Education & Training. 47, 8/9, pp.640-653. Waarts, E. & Van Everdingen, Y. (2006). Fashion retailers rolling out across multi-cultural Europe, International Journal of Retail & Distribution Management. 34, 8, p.645. Read More