Introduction
According to Hall (2008, pp.63), for the past thirty years organizations have been unable to take advantage of the potential within human resource. There is a general realization that human resource is a very important resource for any organization but optimizing its capacity has been elusive. Hall goes on to outline that the major reason for lack of high degree of success is that most human resource professional fail to establish vision to guide the success from beginning to end.
Hall proposes an approach focused on three aspects. The identification of the specific part played by human resource in adding business value to an organization, the establishment of the general perception on the use of employees to gain competitive advantage within the organization and finally, to identify the various factors that will govern the success of the vision the company holds for the human resource. Different companies employ diverse strategies in their bid to maximize on the potential held by human resource.
However, the general lack of consistency across various sectors and lack of an approach that is holistic, gives the general idea that there is still room for improvement. The area of human resource is like a gold mine that is yet to be exploited completely. This is because the capacity of human resource has just been limited by our level of thinking. This is evidenced by the fact that most organizations have been able to establish competitive advantage using the human resource by employing different strategies.
Perhaps, it is because human resource has always been approached with a lot of ambiguity inefficiency. A complete analysis can only be obtained by looking at the human resource strategy of a particular company and identifying the short comings. This will act as an example in outlining the various opportunities available for the human resource.
Complex approach to the monetary compensation, taking measures for grievance handling, creating conditions for professional and personal development of employees as well as implementation of e-Hr strategies have proven to be the most effective human resource management strategies.
Example 1: Forrest Computer Services (FCS)
Forrest Computer Services (FCS) offers end to end networking options assisting individuals and corporate customers. After the crisis the company top management was aimed at radical reorganization of the company. The implementation of the plan presupposed the massive employee participation as well as putting a burden on human resource department and communication system. Initially resulting in massive deficit, this plan appeared to be helpful for enhancing the effectiveness of the workforce effectiveness.
HR strategies implemented at FCS
The radical reorganization of FCS required structuring the organization into self-sufficient subdivisions. As it was cited in Bratton & Gold (2000), Carolyn Oliver, human resource director of FCS described the motivation of senior management for reorganization of the company: “Every software house can provide the software and systems the clients want: it is the efficiency with which the client is handled that makes the difference and that comes down to the way we are organized” (p. 330).
In other words, shifting the responsibility and restructuring were aimed at satisfying the customers’ growing demands and making the service provider stand out from the crowd. Employee participation in decision-making was expected to be helpful for the company prompt reacting to the changes in the market. At the same time it might contribute to the employer branding and have a positive impact on the workers’ attitude to the company and their motivation.
Employee development at FCS
Reorganization of FCS appeared to be a challenge for the human resource department that was induced to retrain the employees as well as to develop the communication system. One more goal for imposing these measures was providing the opportunities for human resource development.
Wilson (2005) noted that “HRD is the integrated use of training and development, career development, and organization development to improve individual and organizational effectiveness” (p. 10). It means that this requirement presupposed creating new career opportunities and self-development opportunities for employees, resulting in workers’ retention, enhanced professionalism and increased customers’ satisfaction.
Employment relations and grievance handling at FCS
Reorganization of the company required changes in the existing employment relations and updating the current employment agreements as well as shifts in employees’ and managers’ consciousness. Martin (2009) noted that “discipline and grievance is achieving organizational justice” (p. 90).
The fact is that providing the senior employees of the self-managed teams with new responsibilities and functions, the company management risks losing control. Bratton & Gold (2000) evaluated the benefits of the reorganization for FCS critically: “On the one hand, it created a free-flowing organization with the flexibility and motivation to react to changes in the market.
On the other hand, it bolstered the need for watertight human resource systems to keep this motivated mass from running out of control” (p. 331). Creating the conditions for effective cooperation and reducing the risk of grievance under new unaccustomed circumstances, the senior management was induced to make the appropriate changes in the employment agreements.
Training at FCS
Due to the fact that the self-managed teams were operating in the same computer market, it was important to reduce the risk of their competing each other instead of the external competitors. Retraining was required for informing the employees on the benefits of the new style as well as developing their skills for participation in the company.
Stamaits (2002) noted that “employee development is an important factor in working with management and groups to accomplish organizational goals. The employees must be trained to obtain the maximum use of their resources” (p. 146). It means that training was aimed at both realizing the employee’s potential and enhancing the effectiveness of the working process.
Recommendations for FCS management
The reorganization of FCS resulted in massive deficit of funds as well as managers’ shock due to their misinterpretation of the campaign mission. These negative effects could be avoided by means of proper preparation and planning. For example, it is advisable to start the employees’ training before proceeding to actions in order to prevent possible misunderstandings. Effective functioning of self-managed teams requires thorough organization and improvement of the communicative systems within the company.
At the same time employees’ training might be beneficial not only during the reorganization period, the senior management should realize its significance for reaching the company’s goals and take advantages of retention and enhanced proficiency of workers. Training is an aspect that is used to reorganize the way in which employees carry out various operations and how they relate with each other in the workplace.
Employees’ relations within the workplace are an important aspect that should have the capacity to nurture them on how to build upon the general mood of the organization (Johnson, 1999, pp.12). Training of employees on such aspects that build the mood of the organization requires that the employees are conversant with the mission, vision and objectives of the organization in general.
This kind of training can always be conducted in house ands in most instances, there no need for an external trainer. This kind of training is also less involving as it does not require that employees leave their work places in order to engage in the training. This is unlike other forms of training such as the ones involving leadership and capacity building that requires trips or vacations. These tips are the major causes of such training initiatives being expensive.
Since they are the major contributors of the expense implies that a training initiative can be conducted by eliminating them. A second consideration is that when such training initiatives are conducted they can be done solely by the human resource department or in case an outsider is required, the manpower is not always huge. (James, 2002, pp.47). This aspect also reduces significantly the amount of money an organization spends towards this initiative.
Example 2: reorganization at Servo Engineering
Servo Engineering, the company producing the rotating machinery, was divided into six self-managed teams in 1995 with the aim of involvement of employees into the company activities. When employees are organized into groups it improves their relationship towards one another and gives them a string sense of belonging. Furthermore the employees will also have improved confidence when airing out their concerns. (Jones & Hill, 2009, pp.92).
Each team was equipped for completing most manufacturing stages without external help acting like a small factory. As it was cited in Bratton & Gold (2000), George Wyke, the personnel manager of the company admitted that “What the SMT system has done as far as man-management [sic] is concerned, it has pushed that responsibility further down the chain, into the SMTs” (p. 35). Training of employees is one of the most primary human resource practices that greater emphasis should be placed on.
Training of employees should be geared towards empowering them with the necessary skills to enable them carry their duties with confidence and efficiency.
Training is an aspect that can be easily forgotten or sidelined. This is due to the general perception that it is usually expensive and that there is no surety of immediate response. Providing the employees with opportunities for career growth and self-development the experiment appeared to be rather successful and resulted in retention of professionals and enhanced effectiveness of their work.
This is in line with the strategy to improve customer care and make the company a memorable experience for consumers. However, the amount of money that the organization invests towards training according to Gregory & William, 2006, pp.78), is not in line with the degree of training required within the organization. Basically, within such an industry customer care can be the only determining factor of whether customers become regular visitors.
Training should also be done in a professional manner, preferably being conducted by a professional company. Training for various departments within an organization should be conducted by professional companies. For instance, when it comes to procurement various practices within the procurement field should be conducted.
Example 3: Air National Human Resource Strategies
Air National, an airline based in New Zealand, is focused on effective use of its workforce and implementing the innovative strategies of human resource management. The workers realize the advantages of working at this company being provided with opportunities to express their opinions and participate in decision making.
Human resource is dynamic and from time to time it requires that professionals implement new ideas. An organization should have a sincere initiative to support the development of human resource. Most organizations use different approaches to promote employee development. However, the bottom line relies on the kind of perception the employees have on the employer’s initiatives.
The corporate policy recognizes the importance of the employees’ contribution to the discussion of the most important problems. Differentiation competitive strategy allows implementing individual approach to every employee creating better conditions for realizing the potential and polishing skills. As it was cited in Bratton & Gold (2000), Clive Warren, Air National CEO noted that “people are our most important asset.
To get superior performance, managers have to care about how they live and develop, not just about how they work and produce” (p. 68). Creating the positive employer branding, this strategy attracts the most skillful employees and might be helpful for their retention. Their commitment to the company coupled with emphasis on employees’ empowerment results in climate of cooperation and self-accountability.
Example 4: Aegon UK
Aegon UK is the insurance group with more than 4000 employees. Realizing the importance of monetary reward as a powerful instrument of manipulating the workforce, the company chose a holistic approach to its reward system. Pay for performance is an essential strategy that links pay to the performance as a way of linking performance to pay.
This strategy is important in that it links performance to a monetary reward which is bound to act as a motivation. However as outlined by Jones & Hill (2009, pp.92), it is important to define the level of performance that deserves to be rewarded. Nucor is a similar organization that has implemented the same strategy successfully by providing employees with 30 % reward in the meet the quality and quality target expectations in productivity.
Rewards, especially when they are monetary in nature has the capacity to boost the morale of employees. Most employees will love to work hard so that they can be able to purchase a particular commodity or enjoy holiday at some exotic place. However, monetary rewards should be used with caution as they can send the wrong message to the employees or even abused (Cannoy, 2003, pp.772).
Pay management is considered to be an integral part of the general company human resource strategy. For this reason, a lot of various factors are taken into consideration while defining the amount of monetary compensation, career development and performance are among them.
The program is entitled the Human Resources Integrated Approach and its main objective as it was defined in Armstrong (2007) is “to develop a set of HR processes which are integrated with each other and with the business objectives” (p. 653). The success of Aegon Uk depends upon implementation of this human resource strategy significantly.
Example 5: Norwich Union Insurance
The senior management of Norwich Union Insurance puts emphasis on development of total reward strategy making monetary compensation sufficient and fair. Entitling their reward program Progression, Performance and Pay, the developers pointed at the main criteria of assessment that are taken into consideration for defining the amount of the reward. The payments at this organization are variable depending on employee’s progression and performance instead of focusing on the amount of working hours.
Armstrong (2007) noted that “Progression, Performance & Pay moves us towards ‘total reward’ where financial reward is just one element of the reward package. Other elements are benefits, recognition of performance, career opportunities and personal development” (p. 654). Opportunities of learning and personal development are essential elements of the company policy.
Example 6: Mattel taking advantages of intranet
Mattel, the famous producer of Barbie and Hot Wheels, implements the innovative technologies in its human resource strategies. Recently the employees were enabled to improve their leadership skills taking courses on e-learning network. Focus on training and improving the managers’ organizational skills is beneficial for enhancing the effectiveness of the working process.
Mathis & Jackson (2002) noted that “It initiated its first performance-management, succession management and career opportunities systems. In five years the company increased in value by about $ 5 billion” (p. 49). This fact proves significant role of human resources reorganization for modification of corporate culture.
Example 7: Xerox conducting intranet surveys
The world-known company Xerox recognizes the importance of the retention factor. Several intranet surveys were conducted in the recent years aimed at researching the employees’ view of the company’s objectives and their place in meeting them.
Mathis & Jackson (2002) noted that “greater use of e-learning, technology, and leadership development have paid off in reducing turnover and convincing employees that career opportunities exist at Xerox” (p. 63). Research of the workers’ community and measures aimed at retention appeared to be significant for enhancing the effectiveness of the working process.
Example 8: Applebee’s human resource retention strategies
Applebee’s International is a company operating a restaurant chain. Its human resource department is focused on the retention of the workforce. All employees are divided into three broad categories: hourly, middle and bottom employees, these parameters are taken into consideration for the appropriate decision making.
As opposed to other companies, the underachieving employees are not fired, but informed on the fact that they belong to the bottom group and should improve their performance. Mathis & Jackson (2002) noted that “Their ‘people metrics’ approach is based on hiring hourly employees based on their competencies, rating managers in the three groups and rewarding managers who are able to keep high performers” (p. 67). This method has proven to be effective and even was adopted by the Applebee’s franchisees.
Example 9: PepsiCo criteria for rating managers
The human resource department of PepsiCo emphasizes the significance of a complex approach to rating of employees. At the same time the employment relations are considered to be the most important retention factor.
Gennard & Judge (2005) noted that “Employee relations is a management problem-solving activity designed to establish the rules, regulations and agreement by which the services of employees are bought and sold – ‘the price’ at which labour services are to be exchanged in the labour market (p. 14). The surveys conducted by PepsiCo were aimed at analysis of the existing relations and estimating the level of the employees’ satisfaction with their working conditions. Hall (2008) noted that
PepsiCo uses both performance and behaviors when rating managers. PepsiCo’s research found that of employees who intended to stay with the company, 94 percent were satisfied with their manager. For those who intended to leave, only 42 were satisfied with their manager (p. 213).
The holistic approach presupposes considering not only professional but personal qualities of employees.
Example 10: IBM training employees
IBM senior management concentrated on training of its employees and development of their professional skills with the aim of employee development on the one hand and enhancing the effectiveness of the working process on the other hand. Employee development also involves the training of employees in order to improve their skills and to sharpen their knowledge with regards to the mission and objectives of the organizations.
Nurturing of a strong workforce requires that an organization begins by empowering employees. In this perspective, it is imperative to realize that human resource professionals outline that when opportunities are available to employees it is obvious that they will take advantage of this and initiate the change.
The fact that IBM is one of the world’s leading companies proves the effectiveness of this approach. Sheckley & Keeton (2001) noted that “Moved from an approach that enlarged the instructional division and focused on its goals to one that placed priority on the learning needs of students and corporation” (p. 10).
Example 11: Amazon.com
Amazon.com, an electronic commerce company, is aimed at hiring and retaining the most qualified personnel. Recruitment is a very important process in the management of human resource. Hiring often presents challenges to most organizations apart from the fact that it is also expensive. It is always important that an organization knows the kind of employee it needs for a particular position in terms of experience and academic background.
The process of advertising the particular position is especially tricky due to the fact that omission of some relevant information or inclusion of some irrelevant information may end up attracting applicants who are not fit for the position. Realizing the intensity of competition for the qualified personnel in the market, the human resource department implements the current strategies of material and non-material rewards and creating the better conditions for the employees.
Example 12: Philips
The main objective of Philips Electronics is improving the people’s living conditions by means of providing them with innovative technologies. At the same time the company senior management is aimed at improving their employees’ lives creating comfortable working environment for them.
Monetary compensation still contributes significantly to employee motivation and towards proper human resource management. The payment should not be exorbitantly high, but it should be generally regarded as fair (Carl, 2006, pp.253). Healthy problem solving procedures and methods should be something that an organization should be having in place. These methods should be created with total consideration of the most probable problems that an organization might face.
Rose (2008) noted that for the purpose of skillful employees’ retention, the human resource department should “consider flexible pay and benefits packages involving a range of non-pay benefits that can be traded, for example, against basic pay” (p. 317). Training and employee development is considered to be one of the main values of the company, realizing that professional growth of employees and the company growth are inseparable.
Example 13: Ericsson implementing e-HR system
E-HR is one of the latest achievements of technological progress that can be implemented in developing the human resource strategies. It might be helpful for economizing time, money and efforts. Hopkins & Markham (2003) noted that “E-HR can help HR to take on a more strategic role by reducing the time needed for administration thereby freeing staff to take on the crucial strategic role, and by providing information for strategic decision-making” (p. 78).
Automation of the procurement system is actually a current practice that most organizations are taking advantage of. This practice has the capacity of giving a company a good image of being environmentally sensitive and it also maximizes revenue. The training in current procurement methods goes beyond the need to teach employees the use of automated systems, but also involves principles that organizations should duly adhere to.
The principles act as guiding factors that most organizations can customize to fit within their unique requirements. The general observation is that companies that implement these principles have the capacity to save significantly on their revenue which can be channelled elsewhere.
In 2000 Ericsson was one of the first companies to introduce the progressive system. The company’s human resource department points at the benefits of the technology. Hopkins & Markham (2003) noted that Ericsson “estimates that the introduction of the system saved the company more than 1 million in organizational value each year since then. On top of these benefits are those resulting from its being able to attract and retain talented staff” (p. 74).
Example 14: Oracle
Oracle management took advantages of the introduction of e-HR system. Hopkins & Markham (2003) stated that
By 2000 an e-HR system had led to savings of $ 1.6 million for each 10,000 of its [Oracle] employees, and it was now employing one HR staff member for each 2000 employees rather than one per 1000 previously (p. 76).
Reorganization of the human resource department and implementation of the innovative trends enhanced the productivity of the working process.
Example 15: Sears
Introduction of e-HR system at Sears led to significant improvement of the company management and retention of the skillful employees. As it was cited in Hopkins & Markham (2003), estimating the benefits of the innovative approach, Sears management “Has reported investing $ 57 million in e-HR system that is saving the company $ 16.5 million per year and they expect to have paid back the initial investment by 2004” (p. 79). These figures are the weightiest arguments proving the advantages of implementation of e-HR system as one of the HR strategies.
Discussion
Each organization has unique concept and perception of its human resource. The general realization is that this perception and concept usually is reflected in the performance of the employees. There are various principles that have been outlined that can assist an organization to ensure that the productivity of its human resource is maximized.
These principles create a favourable environment and motivate employees to sincerely work towards the progress of the organization. Whichever the principle chosen, it should be able to drive an organization towards competitive advantage as well as cater for the needs of employees. Currently, human resource has actually been identified as an area where an organization can excel and overtake competitors. Employees portray the general mood within an organization that is bound to be picked by customers.
Therefore, when employees are generally happy it implies that a positive mood will be portrayed and customers will therefore love been associated with the organization. Human resource is one of the resources whose value can be improved over time. Most other resources have their values decline with time. Human resource can be trained, can be motivated and developed via various ways outlined in this paper.
Conclusion
Due to the intense competition at the present day market, the human resource departments of contemporary companies have to meet the growing demands and implement the innovative human resource management strategies.
On the other hand, the experience of the world’s leading companies demonstrates the benefits of the complex approach to the monetary compensation and creating conditions for professional and personal development of employees that in most cases result in the company growth. Employer branding, comfortable working environment and opportunities for career development are significant for attracting and retaining the most qualified employees, satisfying the customers’ demands.
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