Introduction
The functioning of any organization depends on multiple factors affecting outcomes. To achieve success, a firm should select the strategy supported with the available resources and possess an improved understanding of the market and customers to generate a competitive advantage and create the basis for its further evolution. Expansion can also be a complex issue and undermine the organization’s work, especially if it has unresolved issues or problems. The choice of the growth strategy should be made regarding the available resources and their appropriate management. Athena Bancorp’s case proves the critical importance of strategic planning, understanding of the current firm’s position, and human resource management (HRM). The recommendations provided to Beth Daniels rest on HR practices and the effective use of available specialists to improve the company’s position.
Background
Athena Bancorp is a successful bank with five branches and $1.8 billion in assets. The bank’s founder and CEO, Beth Daniels, has an ambitious plan for further evolution, presupposing that the bank should use the available resources to occupy the niche and continue rising (Schlesinger & Abbot, 2019). The bank focuses on creating outstanding and high-quality services and their provision to clients in friendly, understandable, and effective ways. Daniels views it as the main advantage as all customers should be satisfied with the provided services and want to return to the bank again. For this reason, she views employees as the main asset and resource of the company; Daniels also selects all workers by herself (Schlesinger & Abbot, 2019). At the same time, because of the focus on high effectiveness, specialists overwork, are exhausted, demonstrate their dissatisfaction, and the inability to support the further evolution of the company if nothing changes. It poses a severe problem for Athena Bank as it might need a reduction in the growth speed to attract attention to other critical issues.
Analysis
Analyzing the Athena Bank case, it is vital to apply the resource-based view (RBV). It is a specific framework focusing on strategic resources a firm can use to attain the existing goals and generate competitive advantage (Cohen, 2015). Employing RBV, the company can create further expansion aims and plan its growth. Thus, different types of resources should be considered to succeed. For the Athena Bank case, it is possible to focus on financial and human resources. Due to its specific strategy, the bank managed to generate high income and acquire the money needed to support new projects and future rise. For this reason, Daniels wants to exploit this factor and continue evolution (Schlesinger & Abbot, 2019). However, as for human resources, it is vital to note the exhaustion of all workers, growing turnover rates, and decrease in employees’ loyalty (Cohen, 2015). These factors also precondition the problems with clients’ satisfaction and worsening of services’ quality.
In such a way, from the RBV perspective, the generation of one strategically important resource was achieved through the exploitation of another, with low attention to its restoration. There is critical exhaustion of human resources due to the focus on high performance and fast rise of Athena Bank. It means that one of the leading HR functions, which is the creation of the conditions beneficial for the employees’ work, is disregarded, and workers cannot contribute to the further evolution of Athena Bancorp. Additionally, the contexts of strategic HRM are changeable, meaning that it is critical to consider the current conditions of the company and its needs and cultivate environments beneficial for increased performance (Cohen, 2015). For this reason, the further evolution of the company might demand the introduction of new ways to work with employees and the utilization of consistent practices.
Recommendations
The recommended course of action for Athena Bank includes several steps. First of all, it is necessary to slow down the speed of the company’s growth. Although the rivalry in the sphere remains high, and the existing financial resources are sufficient to support the further evolution, the company’s current HR strategy fails to respond to recent changes and ensure beneficial working conditions for specialists (Cohen, 2015). It results in the deterioration of the quality of provided services, turnover, and clients’ dissatisfaction. If no changes in HRM are introduced, the company will face severer challenges in the future and lose its competitive advantage presupposing the outstanding work of all specialists. Under these conditions, it is vital to refocus the company’s and CEOs’ efforts on establishing effective HR practices.
The existing approach to HRM presupposes hiring experienced and skilled specialists to ensure that they can meet clients’ diverse needs and ensure that all services are accessible and clear to people. It helped to attract new partners and create the image of the bank; however, currently, it fails to meet the external and internal fits of Athena Bank (Jiang et al., 2012). Although the firm can respond to the external environment, the current HR strategy cannot deal with internal consistency, complementary and ensure that all systems are connected within the organization (Baird & Meshoulam, 1988). Surveys among employees show that they are not satisfied with the existing environment, look “unsmiling,” tired, overwork, and think about finding a new job (Schlesinger & Abbot, 2019). These factors indicate the inconsistency between the employed HR practices and the company’s goals.
From the current situation, the first task is to reduce the pressure all employees experience at the moment. The high turnover rate and the necessity to work extra hours show the top management’s inability to work with human resources. The central goal of HR strategists is to align the existing structure, resources, and HR systems in the way they can promote the strategic objectives of the organization and meet its current goals (Cohen, 2015). Additionally, there is the need to balance external and internal fits to establish high-performance work practices guaranteeing positive outcomes (Jiang et al., 2012). One of the first steps is the consideration of existing employees’ needs and their satisfaction using resources available to the company at the moment. In other words, Daniels can be recommended to invest in improving HR strategies as the contribution to the future of the company and cultivation of its most valuable resource.
The pressure can be reduced in several ways. First, fixed schedules with no extra working hours should be established. It will ensure that all specialists have time for rest, avoid burnout, and can devote their free time to families or their health. It will also ensure that employees will demonstrate higher performance during working hours and meet clients’ needs (Posthuma et al., 2013). Planning the further expansion, Daniels should also consider the fact that the existing recruitment strategies are not effective anymore as the emergence of new departments means she cannot interview and select all candidates on her own. For this reason, there is a need for an HR strategist responsible for recruitment practices. The list of demands can be created by Daniels in accordance with her vision; however, it is vital to find new specialists to reduce workload and distribute tasks effectively.
The establishment of a high-performance work system can also be achieved by identifying the most responsible positions and assign the most effective workers selected personally by Daniels to them. Other, less significant tasks can be distributed between employees hired by HR specialists and meeting the current demands (Huselid et al., 2005). It will guarantee that the bank can consider all clients’ needs and, at the same time, it preserves its competitive advantage resulting from the customer-centered environment and specialists’ assistance in all questions (Jackson & Schuller, 1995). Moreover, only high performers cannot add much value as it hurts the working environment in the organization (Huselid et al., 2005). The lack of career opportunities and poor relations between team members resulting from hiring only top specialists can destroy the collective. Under these conditions, it is vital to promote diversity as the part of HR practices.
Conclusion
Altogether, Athena Bank faces problems because of its too fast growth and poor HR strategies. Employees suffer from burnout, high pressure, and extra hours. Beth Daniels wants to exploit the firm’s popularity and continue its evolution; however, it can be recommended to stop and pay attention to cultivating appropriate HR practices. It is fundamental to create a positive environment within the company and ensure that both external and internal fits are considered by existing HR strategies. Hiring additional specialists and changing recruitment practices it is possible to enhance the situation and attain positive results.
References
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Schlesinger, L., & Abbot, S. (2019). Athena Bancorp. Harvard Business School. 1-10.