Introduction
Objective of the Report
The aim of this report is to present strategic human resource development plan about a lack of understanding of performance management in the franchise, and create a SHRD plan in an attempt to eliminate issues identified.
Research Methodology
The report relied on existing data from the company reports and assessment of existing studies on SHRD approaches in the industry. Thus, the report presents recommendations based on the franchise issues as well as the industry perspectives.
Specifically, the report looks at human resource (HR) activities on training and development, performance management, and rewards and recognition practices in the franchise.
Limitations
This report is specific to a given franchise. Thus, it cannot apply to other franchises in different locations, which may have different issues. The report relied on past data, which may not give the current situation and emerging situations.
Understanding Performance Management of the Franchise
This section looks at the main issues in the franchise and recommendations based on SHRD theories on how to handle such issues.
Table 1: Recommendations and objectives
Linking Training and Development to Strategic Objectives
One major challenge is the failure of the franchise to link LJ Hooker’s strategic objectives with its training and performance management. This implies that the company cannot create competitive advantage, delivery its value proposition, and meet needs of its customers.
The main contributing factors to these issues are the managers’ behaviours, attitude, and training approaches.
A behavioural perspective of is one of the psychological theories that can apply in this case. A behavioural perspective looks at the behaviour of workers as the link between a firm’s performance and its strategic objectives.
It states that HR practices and policies should raise and control employees’ behaviour and attitude. Thus, HRD activities must identify and emphasise positive behaviours and attitude to improve the firm’s performance.
Schuler and Jackson note that there are ways of showing the link between competitive strategies and activities of the HR in order to predict, modify, study, and improve HRD activities and strategies in various situations (Schuler and Jackson, 1987).
Strategic human resource development must differentiate aspects of HRD like practices, processes, programmes, and policies. These aspects reflect aims, culture, and values of the firm and roles of the HR.
However, the main HR practices affect the behaviours and motivation levels of employees. From a behavioural perspective, SHRD plan must focus on how external environments influence salespersons, goal setting, reward, and motivation (Yorks, 2004).
Training and Development
The franchise must encourage every salesperson to have an individual training and professional development needs. The process should encourage skill development in the franchise.
At the same time, it provides opportunities for both the employee and manager to identify training and development jointly so that they can improve job performance and support career growths.
Human capital theory focuses on competitive advantage from the resources and internal strategy of a company (Becker, 1994). Barney defines a competitive advantage as “when a firm is implementing a value creating strategy not simultaneously being implemented by any current or potential competitors” (Barney, 1991, p. 101).
SHRD has economic theories in which human capital theory emanates. Human capital theory posits that the firm must invest knowledge development and expertise of its workforce.
The franchise must develop competitive strategies by using its human resources and other resources with positive values, resources with imitable quality, and resources that are beyond competitors’ knowledge and substitution (Barney and Griffin, 1992).
The franchise, SHRD must develop competitive strategies through human resources for value propositions and differentiation strategies.
First, salespersons must offer returns to the franchise. This means that the franchise should have various human resources skills and knowledge in order to achieve value for the franchise.
The manager must ensure that various salespersons have these skills. Second, the franchise must try convincing highly qualified human resources not to resign. Wright and McMahan note that human resources with high capabilities are rare due to general distribution ability (Wright and McMahan, 1992).
Hence, the franchise must retain its highly qualified salespersons and ensure that potential recruits have the highest capability levels. The franchise must apply effective selection and recruitment procedures because of challenges in attracting and retaining highly qualified salespersons (Becker, Ulrich and Huselid, 2001).
Therefore, the process of recruiting and selecting new salespersons must take into account the franchise needs, employees’ qualifications, and their compensation. Third, the franchise must ensure that salespersons have “inimitable quality for competitive advantage” (Ulrich, 1991, p. 77).
Thus, SHRD plan must encourage inimitable quality by recruiting the best talent. Fourth, the franchise must ensure that no qualified salespersons should leave the company because of issues arising from reward and recognition. Therefore, it must address issues of rewards and recognition, which are responsible for high rates of staff attrition.
Rewards and Recognition
The purpose of rewards and recognition are to encourage high-levels of performances. Therefore, the franchise must recognise and reward excellent individual performances in order to avoid attrition (Yorks, 2004).
According to agency theory, people in the organisation usually pursue their self-interests and not those of the organisation. Uncertainties and other external factors influence the relationship among various people in a firm (Bernthal and Wellins, 2006).
Jensen and Meckling note that transaction costs result from “monitoring, negotiating, evaluation, and enforcing exchanges among parties” (Jensen and Meckling, 1976, p. 87).
Agency theory highlights firm’s activities for creating competitive advantages. Thus, the HRD must be aware of its effects on human resources.
The main concept behind agency theory is that most employees have habits of reducing their outputs and depending on contributions of other members (free ride) in situations where there are no incentives to motivate them.
Such employees only turn out to be active if the working conditions allow them to demonstrate their exceptional abilities and skills. Thus, teamwork may not be the best approach for encouraging such employees.
Consequently, SHRD must make sure that there are key performance indicators for measuring exceptional performances, and create sufficient reward and benefit systems for such employees.
The franchise can create strategies to align its employees’ behaviours to go with strategic goals and performance management (Mathis and Jackson, 2011).
Implementation
Table 2: Implementation plan
In the implementation stage, we look at various HRD strategies developed from recommendations. In this regard, we consider the vertical, horizontal, and temporal linkages of Gratton, Hope-Hailey, Stiles, and Truss (Gratton, Hope-Hailey, Stiles and Truss, 1999).
This model accounts for various activities and practices of HR department. These include performance management, rewards and benefits, training and development, recruitment, selection, and retention of employees.
The main aim is to link these practices with the HR strategy. The model posits that the HR must set or modify its various policies and practices based on the strategy implementation. This is a vertical relationship. On the other hand, horizontal linkage ensures that HRD practices relate to one another.
The HR department has a crucial role to play in the implementation of recommendations. However, the sales manager and salespersons must also be responsible for their roles for successful implementation of recommendations.
Training and Development
The franchise manager shall be in charge of recruiting and training new salespersons. He shall also make sure that new salespeople learn strategic objectives and culture of LJ Hooker in order to contribute to the strategic goals. The main aim is to select, recruit, and retain qualified staff that can drive sales volumes (Barney, 1997).
Training and development must focus on individual development, strategic objectives of LJ Hooker, and motivational needs of salespersons (Miner, 2005). They must also reflect current conditions in the market and individuals’ weaknesses.
Managers of sales teams must know how their team members are performing in sales, revenue growth, property management, top performers, new marketing initiatives, and other areas of interest to the franchise and LJ Hooker. The performance appraisal must note how every salesperson is contributing to the overall performance of the franchise.
This should also focus on enhancing cooperation, collective decision-making, effective communication, effective training, and create a friendly working environment.
Performance Management
Salespersons’ performance is the key to success of the franchise. Poor management of performance shall lead to resignation. Thus, performance management should focus on key KPIs of LJ Hooker and the franchise. The manager must be responsible for spearheading performance management in the franchise.
Reward and Recognition
Excellent performances of salespersons play significant roles in determining recognition and reward of individuals’ efforts. The sales manager should provide timely and accurate performance data to show the progress of the team and the entire organisation.
Thus, the process must recognise both contributions of individuals and the entire team in the franchise (Mello, 2010).
Implementation plan
Evaluation
We apply Kirkpatrick’s evaluation framework in order to account for effects of the HRD strategies on performance management (Kirkpatrick, 1994).
It looks at the trainees’ reaction to training, learning outcomes, changes in job behaviours and performance, and results of HRD initiatives based on return on investment (ROI), contributions, and others.
Evaluating Individual Performance
Evaluating individual performance aims at measuring individual performance. The franchise must identify most significant objectives in KPIs.
The franchise shall look at areas that drive performance such as employee commitment, training and development, rewards and recognition, and motivating workforce (Nankervis, Compton and Baird, 2005).
The attention should also be on workforce diversity, managers’ roles, training and development, strategic objectives of LJ Hooker and the franchise, and their impacts on performance.
The franchise can conduct interviews to identify gaps in performance management. The franchise aligns its performance management with the needs of salespersons. There should be an action plan from this review.
Evaluating Current Performance Management Strategies
The evaluation looks at current practices against franchise strategies. It also entails reviewing salespersons’ performance against KPIs in sales and revenues performance, gross income, recruitment and training, market shares, and property management (Stone, 2010).
This stage should also focus on the effectiveness of KPIs in assessing performance of the franchise. This stage identifies challenges with KPIs and makes appropriate recommendations.
Creating New KPIs
The franchise creates new performance management tools and KPIs based on the effectiveness its previous performance. These areas may include recruitment and selection, training and development, sales KPIs, rewards and recognition among others. It should address salespersons’ needs in training and development.
Evaluations of workers’ commitment, loyalty, engagement, sales objectives, the franchise innovation, and adaptability in terms of market needs, and how they affect performance are also necessary for the franchise.
The new KPIs should be effective in different circumstances and predict results for employees at any given time.
Applying the KPIs
The franchise should test its new KPIs to determine their effectiveness. This process should also involve collecting results and making recommendations.
Evaluation Plan
Conclusion
The research has identified three areas of interest to the franchise in managing performance. It shows the importance of HR department in formulating SHRD initiatives for competitive advantage.
First, training and development should align business strategy with the SHRD practices. Second, training and development should change attitude, equip salespersons with the necessary knowledge and skills, motivate employees, improve sales volumes, and build internal relationships in the franchise. Finally, rewards and recognition must recognise individual contribution.
The report makes use of SHRD theories such as human capital theory, behavioural perspective, and agency theory in order to explain how HR department can be a strategic partner in formulating business strategic objectives.
Implementation of recommendations uses the vertical, horizontal, and temporal linkages of Gratton, Hope-Hailey, Stiles, and Truss. This model covers important areas related to HRD functions.
However, it shows that line managers and salespersons must play their parts to ensure that the implementation is successful. The evaluation stage uses Kirkpatrick’s evaluation model to review the achievement of SHRD initiatives on performance management.
Recommendation
The franchise must improve its performance management in order to create competitive advantage. The HR department must establish itself as a strategic partner through its SHRD initiatives.
For effective performance management, the franchise should eliminate the high rates of qualified staff turnover by ensuring staff are satisfied at work. This shall guarantee that such salespersons will not want to leave the company. This is necessary for creating competitive advantage.
Rewards and recognition must also account for contributions of individual employees in order to reduce turnover of qualified salespersons. This process must account for interests of individual employees and the entire team.
Performance management in the franchise must be a continuous process. The franchise must review its KPIs in order to reflect changes in the industry and external factors. Constant evaluation of the new KPIs must provide further recommendations for improvements.
Training Recommendations
References
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