Human Resources Management Leading an Organization to Become an Employer of Choice in the Market - Term Paper Example

Human Resource Management Abstract This report is about human resources management and its role in the society. An organization is nothing without its people and the organization needs to give back in return to its employees as well. HRM has its own objectives that aim to provide the best to its employees and manage employees in a way that it benefits the organization. HRM has its own perspectives and viewpoint over managing employees and there are certain factors that are given highest importance accordingly. HRM evolved after the industrial revolution when people began to choose organizations and many theories came up to motivate employees in order to retain them and attract the best ones. But today’s world is highly competitive and firms need to have cutting edge strategies that help retain the best employees and also attract new ones. But the reasons to why employees switch organizations have been discussed and analyzed. The HRM strategies that firms can use to attract new talent and retain their best employees have also been discussed and evaluated. The recommended HRM policies that could lead an organization to become an “employer of choice” in the market have also been discussed and evaluated. Towards the end of the report is the conclusion. Table of Contents Pg No Abstract Introduction…………………………………………………………….Pg 4 1.0) Critical Assessment of the role of HR……………………………… Pg 4-7 1.1) Environmental Challenges that HRM faces…………….Pg 7-9 2.0) Critical Analysis of the reasons for the high rate of employee turnover…………………………………………………………………Pg 9-11 3.0) HRM strategies that can be adopted to improve attraction of new employees and retention of existing staff…………………………..Pg 11-12 3.1) what managers can do to retain employees and attract new talent…………………………………………………Pg 12-15 4.0) Recommended HRM policies and practices that could lead an organization to become an “employer of choice” in the market… Pg15-16 4.1 Benchmarking……………………………………………Pg 16 4.2 Surveys and Focus Groups………………………………Pg 17 5.0) Conclusion………………………………………………………Pg 17 References……………………………………………………………Pg18-19 Human Resource Management Introduction: The world has evolved dramatically with automobiles, steel, tire and various other industries had erupted during the industrial revolution. A number of countries came into the limelight like Japan, Germany, and Taiwan against the European Union. Organizations make up a nation because they provide jobs, earnings, standard of living; they influence lifestyles and at times culture. Without organizations a country can never grow. Some developing nations are dependant on imported stuff and that has adversely affected their domestic market which is the main reason why these countries never develop and are either taken over by an influential culture or vanish from the face of the earth. On the other hand who makes the organizations? It’s the people who make an organization and without people the organization is just a still building with equipment which is useless because it’s the human mind that commands control over these still things and turns them into gold for nations. 1.0) Critical Assessment of the role of HR: Human resources refer to the people of an organization. Human resource managers seek to facilitate the contribution people make to achieve an organizations goals and strategies. As a slogan at a Union Carbide Plant puts it, “Assets make things possible, people make things happen.”1 It is important that human resource strategies support organizations objectives because they play a significant role in helping companies to achieve their objectives and goals. The central challenge facing organizations is the continued improvement of our organizations, both private and public. The people make an organization so they are responsible. The purpose of human resource management is to improve the productive contributions of people to the organization in ways that are strategically, ethically and socially responsible. Human resources determine every organizations success! HR simply manages the people of an organization and not the factors that shape the employee’s contribution in an organization like capital, materials and procedures. Thus, HR can be termed as ambitious in this sense of the word.2 The objectives of human resource management are benchmarks against which actions are evaluated. There are several HR objectives: Organizational objective: To ensure that HR exists to contribute to the success of an organization. HR needs to be managed in a way that it benefits the organization and helps to achieve its goals. Functional objective: To make sure that the department’s contribution is at a level that fits to the needs of an organization. HR management needs to be sophisticated so that resources are not wasted. Societal objective: To be ethically and socially responsible this is a need in today’s society and the world. It is a requirement of the organizations to ensure social responsibility and when each department within the organization aims to be socially and ethically responsible then the combined effort of the firm will show to the world. Personal objective: The major responsibility of an organization is to make sure that the employees are achieving their personal goals with the organization and also personal growth and self actualization. Since dissatisfied employees result in high turnover. Also that fulfilling this objective is essential in retaining good employees and reducing turnover. Human resources Management is a system that consists of many interdependent activities. A system consists of two or more parts or subsystems that work together as an organized whole with identifiable boundaries. The HRM Model and subsystems are illustrated below: HR is done on a proactive basis which is to anticipate the HR problems and take corrective actions beforehand and also reactive basis which is to take corrective actions after the problem has occurred. 3 HR perspectives or viewpoints include the following: Strategic approach: HR should be managed in a way that it contributes to the success of the organization Human resource approach: HRM is the management of people and each human being is important and has a certain sense of dignity and self respect that must not be ignored at any cost. Management approach: HR management is the responsibility of every manager in an organization. It’s a two way operation with the manager guiding and monitoring and the subordinate to interact, obey and work with utmost devotion. Systems approach: HR management takes place within the larger organization and the HR efforts need to be analyzed with respect to the contribution they make in an organization. Proactive approach: This is to manage HR effectively by anticipating HR challenges and taking the corrective actions before the thunder strikes. 1.1) Environmental Challenges that HRM faces: Very few large organizations existed during the thousands of years between Moses and the Industrial revolution. But with the revolution numerous organizations erupted like lava out of the volcano. The industries for automobile, steel, locomotives, press etc spread like ants on the earth. From then emerged the problems of handling the people and satisfying because initially the people needed employment and a source of living so originations were taking advantage of it by using cheap labor for more work. Gradually, things evolved and there were more employment opportunities then people needed them so that is when human resources kicked in because companies had to take strategic steps to reduce turnover and retain the useful employees. The scientific management by Frederick W. Taylor emerged with its Fordist and Post-Fordist view. Henry Ford’s automobile giant was the beginning of HRM in organizations. Then from the World War I and until the Great Depression in 1930’s the Hawthorne experiments revealed certain facts. The study says that the organizations improved the lighting and hygiene (motivational or satisfaction factors) so the employee performance improved but later it was found out that it was the concern and that care shown by the organization that actually motivated the employees to work better. The theory also talks about dissatisfiers and that the absence of these factors is not enough because there have to be effective motivational factors. But although the presence of dissatisfiers can cause dissatisfaction among employees and that will result in poor performance and eventually increasing turnover. The external challenges faced by an organization are as follows: Workforce Diversity: This occurs from differences in demographics like age, race, origin, religion, race, culture, creed etc. The differences in generations have also contributed to this factor. From the baby boom late 1950’s and to the bust into 1970’s. The trends changed by 1990’s and then the Generation “X” (20-24yrsold) turned out be independent, rebellious and different. Cultural differences are based on differences in attitudes, beliefs and lifestyles. Immigrants have also caused diversity because they migrate from different places with different cultures and lifestyles. Technological challenges: Technology has come a long way and has contributed a lot to HRM on the whole. Artificial intelligence, robots and other technologies have all contributed to a better and well managed organizations. But it has caused worker alienation because technology is replacing humans and this will adversely effect the world’s population. Organizational Challenges: There have been unions and information systems to complement the organization and its problems. Each organization has its own culture and philosophy and there are bound to be conflicts. Professional Challenges: Each organization now requires a formal degree or certificate in order to be applicable to work in the company. The education requires brains and money and not everyone has both. This is a challenge people have to face inevitably. 2.0) Critical Analysis of the reasons for the high rate of employee turnover: Turnover is the loss of employees by an organization. It represents employees who depart for a variety of reasons. They are as follows: Abraham Maslow has laid down a set of needs and when these are not being fulfilled then employees go to organizations where these needs are being met. Employees are often not satisfied with companies because maybe their personal objectives and growth are not being met while meeting the objectives of the organization. Maybe they are not getting good opportunities for self actualization. Compensation is a critical factor because employees need to be compensated fairly for their contribution to the organization. Herzberg explained two factors namely the motivational and hygiene factors. Employees need the hygiene factors mentioned below but they require the right motivational factors as well that is recognition, achievement, growth etc. If these needs of the employees is not being satisfied then they tend to flee to other organizations. Employees want money (raises and bonuses regularly because they need compensation that matches their perceived contribution to the organization. Lack of coordination in departments and employees leads to an unhealthy environment where people fight a lot and that is also another reason to why employees switch to other organizations where the environment is friendlier. Some employees are high on the need of affiliation as explained by David McClelland’s theory of achievement, affiliation and power. People high on the need of affiliation pay importance to team spirit and group dynamics so when they do not get it they switch to other organizations. At times managers are not very interactive with employees and are often too busy for their subordinates then that creates a feeling of alienation among the employees and they feel left out or ignored and that is why they switch. Perks are an important reason to why employees switch! Often some get luxury cars, apartments or vacation packages and others do not so every employee would switch to an organization where he/she gets these perks. 3.0) HRM strategies that can be adopted to improve attraction of new employees and retention of existing staff:4 It is important to find out what is important to the staff and interaction is a better way to know the employee personally. But the company can follow certain strategies to retain staff and these strategies will also help to attract new talent and they are as follows: Ask: It is important to ask and inquire in order to know what the employee is going through and what they need. But there is a simple warning that asking increases expectations among the employees. Exit interviews: It is important to do exit interviews with the employees who are leaving the organization because they can tell the truth about what is going on within the organization. The data collected can be used to overcome the problems and that which is lacking within the firm. This will help to provide to the employees the best in order to retain them. Post-employment checkups: This is a proactive strategy since it suggests to interview employees when after a certain time period to which they have been hired. It is favorable to do check up interviews within 60-90 days. What works for you? The managers should themselves analyze their position to what they want from the organization and things they like or dislike about the company. This will help provide an insight of what employees would like or dislike. Since one should like for another for what one likes for oneself. MBWA: Management by walking around. This might lead to suspicion but employees will get used to it eventually. Walking around and carrying out significant conversations with employees will help to know what they are going through at work. Observing while talking rounds can be helpful in collecting a lot of employee related data. 3.1) what managers can do to retain employees and attract new talent!5 Managers can take certain steps to retain employees and attract new ones and the strategies are as follows:6 Don’t be a Jerk: As the saying goes that “People join a company but leave a manager.” This means that the manager was the reason to why the employee left. If all sorts of motivational techniques are used and provided to the employee but if the employee has a bad relationship with the immediate manager then the employee would prefer to leave the organization. The manager is to whom the employee is answerable to and if the relationship with the manager is bad then the employee will be adversely affected and will eventually leave the organization. The manager should be a proper guide and a leader who can inspire in his employees to work efficiently and not instigate negative feelings in them. So managers need to be understanding and empathetic with their employees. 7 Avoid the Peter Principle: Often managers start their venture from the bottom of the hierarchy and they get promoted due to commendable performance and technical skills. But it is important to provide opportunities to these skilled and talented people in the organization. They need to be provided with good training and development and also that providing dual career tracks can help employees. Set Clear Expectations: It is important to be clear about what is expected of employees at work because when people understand what is expected of them they can put in their best efforts. Establish High Standards and Accountability: It is important to set high standards and when people achieve them there should be a system of accountability so that people are responsible of their actions. High standards without accountability will discourage employees. Feedback: Managers need to set standards and, goals and milestones that need to be achieved by employees and then feedback of the quality of work should be given to employees. Negative feedback must always be given in private and positive feedback must be given publicly and this will motivate employees to work harder. Spend Time and Make Time: It is important for managers to take out time for their employees in order to get close to them and also to get to know them. Often managers consider this useless. Although its very important and this helps to understand the employees better and provide them with what they want and expect. This will satisfy workers and the honest concern from the manager will help to retain employees. Be Enthusiastic: Enthusiasm is contagious and it spreads plus managers must know the importance of it and that it should transfer to employees. Provide resources and support: It is important to provide all resources to employees since the absence of resources that are necessary to carry out the job cause dissatisfaction. Managers need to help and support employees so that they can overcome challenges and meet objectives. Job Enrichment: This is to provide ample opportunities to move upwards in an organization. Although this is not feasible in certain organizations. This will help improve the morale of employees and help them develop their career and fulfill their need of self actualization. If this need is fulfilled then employees are most likely to stick to the organization. Recruit well: Managers need to be careful while they recruit. They must observe and recruit the right person at the right time and for the right job. Personality job fit is essential to make the duo work. But its important to keep in mind the qualifications required for workers to be able to fit a job. This will reduce turnover. Since recruitment and turnover are both costs for a firm. Communicate: Effective communication is essential since then only the employees will be able to understand the organization’s culture and philosophy. This will help them adapt to the corporate environment and put in their best efforts. 4.0) Recommended HRM policies and practices that could lead an organization to become an “employer of choice” in the market:8 Becoming an employer of choice is important to all organizations because that determines the company’s image and demand in the market. It is an organization-wide effort that is required in order to become the employer of choice. This is a need of every organization whether large or small, local or multinational. There is one strategy that is the Vertical Bridge Employer of choice program that can help to achieve the desired position and success. This program helps companies understand that the demographics, changes in the labor market and changing business trends will influence and affect the way a business is run. 9Companies need to adapt to these changes in order to be competitive. The program analyses the current position of the company in the market that whether it’s a desirable place to work or not and then the program aims to work along with the entire management and staff in an organization to come up with strategies to make the company the Employer of choice. Becoming the employer of choice has certain advantages like succession planning that is planning into securing the future, recognition in the industry, increased profitability and the ability to hire and retain the best employees available in the market. 4.1 Benchmarking: This is the first step of the program to become the employer of choice. It is important to set benchmarks and by paying careful attention to certain areas within the business and they are as follows: Strategic Planning Strategic Leadership Training and development Growth (personal and organizational) Balance in work and life (avoid abnormal working hours like till midnight since no one wants to work this late.) Quality of work life should be excellent A sufficient amount of growth and learning opportunities within the firm Competitive compensation plans and benefits. Corporate social responsibility Care and concern for the employees. 4.2 Surveys and Focus Groups: Surveys and focus groups can help conduct a research in the market to learn about the benchmarks and then adapting the most competitive strategies in order to be the employer of choice. Market research is a good tool to survey within the organization and also outside the organization to collect relevant data and adapt the most competitive strategy to become the employer of choice in the market. 5.0) Conclusion: Thus, HRM is essential for every organization in today’s world and the role of HR has become very significant lately. HRM is all about people and they make an organization. The employees have needs and if their needs are not satisfied then they tend to switch to other organizations and that increases turnover for the employees. The companies can adopt strategies that help to improve attraction of new employees and help retain employees. There are policies that a company can adopt in order to become the employer of choice in the market. An organization can adopt strategies and become the best in the market and be able to retain the best employees and attract the best ones in the market. References William B Werther, JR and Keith Davis (2004) Human Resources and Personnel Management. Arizona: Arizona State University Press Beverly Kaye and Sharon Jordan-Evans, Love'Em or Lose'Em, Getting Good People to Stay (San Francisco, CA: Berrett-Koehler publishers, Inc., 2004) Brian O Reilly (2004) The New Deal: What companies and Employees owe one another. Fortune, June 13, 2004. P.52. Marcus Buckingham and Curt Coffman (2004), First, Break All the Rules New York, NY, Simon & Schuster. Peter F. Drucker (2004) Management and the World’s work Harvard Business Review. Sep-Oct. pp. 65-76 Employer of Choice Retrieved May 20, 2008, from web title Web site: http://www.verticalbridge.ca/services/eoc.php Retention Tactics that Work, Catherine D. Fyock, SHRM whitepaper, www.shrm.org, September 2001 To Retain Key Employees- Develop the Boss, Munzell and Moore, SHRM whitepaper, www.shrm.org, Designing Total Reward Programs for Tight Labor Markets, Lofgren, Nyce, Schieber, Watson Wyatt Worldwide, presentation at conference, Wharton School, University of Pennsylvania, Philadelphia, April 2001 Read More