As we enter the new millennium more and more companies are recognizing the importance of managing their human resources as effectively as possible. They are also recognizing that doing so, however, cannot be done without recognition and incorporation of the global context. It is virtually impossible to read a business periodical or newspaper anywhere in the world without seeing stories detailing the success of a company due to how effectively it manages its people.
As the environment becomes more global, managing people also becomes more challenging, more unpredictable and uncertain and more subject to rapid change and surprise. The importance of managing people effectively, many companies are devoting a great deal more time, attention, skill and effort to have a competitive edge. Researchers indicate that the competency levels of HR managers in high performing firms are significantly higher than those of HR managers in low performing firms. (Stone 2005 pp 9-10).
Within the context of the business, this report will discuss the three areas of study regarding managing human resource in a competitive environment: Strategic human resource management; Recruitment and selection and motivation.
STRATEGIC HUMAN RESOURCE MANAGEMENT
Business strategy is concerned with achieving competitive advantage. The effective development and implementation of strategy depend on the strategic capability of the organization, which will include the ability not only to formulate strategic goals, but also to develop and implement strategic plans through the process of strategic management. (Sparrow 1994)
1.1.2 Strategic HRM models
Strategy is about implementation, which includes the management of change, as well as planning. (Sizani 2000). Three models are used in this process. Firstly, high performance management (high performance working), this is achieved by ‘enhancing the skills and engaging the enthusiasm of employees’. High commitment management aims at eliciting a commitment so that behaviour is primarily self-regulated rather than controlled by sanctions and pressures external to the individual, and relations within the organization are based on high levels of trust! In addition, high involvement management creates a climate in which there is a continuing dialogue between managers and the members of their teams in order to define expectations and share information on the organization’s mission, values and objectives. Within the framework of the concept of strategic HRM, these describe various approaches to its development and implementation. (Storey 1989)
1.1.3 Implementing HR Strategies
Strategies tend to be expressed as abstractions are translated into programmes with clearly stated objectives and deliverables.Obtaining strategies into action is not easy. Barriers can be met by HR strategists when attempting to implement strategic initiatives often result from a failure to understand the strategic needs of the business, with the result that HR strategic initiatives are seen as irrelevant, even counter productive. (Storey 1992) This problem is compounded if there has not been an adequate assessment of the environmental and cultural factors that affect the content of the strategies. HR practice ensure that a coherent, holistic approach is adopted. (Storey1992 p219)
To overcome these barriers it is necessary to conduct a rigorous initial analysis, which covers business needs, corporate culture, and internal and external environmental factors. The framework could be a SWOT of the organization. Secondly, to formulate strategy, the formulation should set out the rationale for the strategy and spell out its aims, cost and benefits. (Stoyanova 2005 p219-220)
RECRUITMENT AND SELECTION
The process of staff recruitment and selection is becoming increasingly complex and Human Resource (HR) strategies means that the successful outcome of these processes is vital for job performance and organizational success. The importance of the recruitment and selection process is vital for organizational competitiveness and a failure to approach this function effectively will have consequences for future job performance. Jobs change accordingly as organizations respond to economic and technological pressures (Nankervis, Compton & McCarthy, 1999, p.190).
In addition to the need for management to evaluate the effect of social, economic and political impacts on the organization, a factor that contributes towards poor performance is the incorrect assessment about the types of jobs that need filling and the skills needed to perform them. In other words, the organization’s external environment directly affects the organizational context (Irwin, 2003, pp.6-7).For example, whilst an organization will restructure and re-engineer work processes to adapt to new technology or comply with legislative requirements, it will also reallocate work and create new jobs. However, if it fails to correctly address its staffing needs, then employees will inevitably fail to perform.
1.2.1 Key factors for successful recruitment
It is, then, important to incorporate one of the key factors for successful recruitment – job analysis and job design. Compton, Morrissey & Nankervis acknowledge that this activity should be responsive to “changes in organizational structures and strategies, employee skills, competencies…it is the main source of information about the position to be filled and type of person to fill it”(2002, p.27).
Further, intensified competitive pressures, changing technology and market uncertainty has made the employment decision more complex (Allan, 2000, p.189). Difficulties faced by organizations and management also include as ‘mechanical and political inaccuracies’ about the job by exaggerating the difficulty of performing the job due to job loss fears. In addition, the methods for gathering information are crucial for the accuracy of the job analysis (Compton, Morrissey & Nankervis, 2002, p.30).
1.2.2 Problem faced in during recruitment process
Management may experience failure in effectively sourcing potential candidates during the recruitment process and this may affect the competitive advantage because of the inability to acquire skilled workers. (Compton, Morrissey & Nankervis, 2002, p.29).
One reason for this may be failure in integrating a dynamic job analysis and recruitment procedure into the organization’s strategy (source). Recruiting is affected when management make fundamental strategic changes to the organizations structure or design and this will impact upon job requirements and may result in poor job performance if incorrect selection has occurred (Stone, 2002, pp.174-175).
1.2.3 Evaluation of recruitment method
While the organization may have a thorough understanding of the job requirements, HR management will need to evaluate the most effective recruitment methods, internally and externally, otherwise HR practitioners may fail in acquiring the most suitable pool of applicants (Compton, Morrissey & Nankervis, 2002, pp.52-57). It is common perception by management that internal recruitment methods are beneficial because of the cost advantages and knowledge of applicants.
However, it should be acknowledged that there may be discontent from rejected applicants and the belief that internal recruitment reduces creativity because if ‘inbreeding’ and limited pools of applicants may appear discriminatory (Stone, 2002, p.178; Compton, Morrissey & Nankervis, 2002, p.52).
Significantly compounding the challenges faced by HR management and practitioners in the recruiting process is the handling of job applications and interview preparation. One main contributor of poor selection of applicants is the failure to establish a selection criterion that is not only consistent with organizational strategies, but reflects the frame of reference set by the job analysis. Employers frequently change job requirements, which results incorrect selection if HR and line management select unqualified candidates (Compton, Morrissey & Nankervis, 2002, p.81).
This will have consequences for the organization, such as increased training time, labour turnover, absenteeism and poor performance (Stone, 2002, p.212). Therefore, information required for interview preparation must be accurate and objective.
Once management addresses the complex task of effectively sourcing and attracting the right applicants for the available position(s), it is pertinent to address the selection process and methods used to eliminate unsuitable applicants.
1.2.5 Background check
In further substantiating an employee’s ability to perform their task once selected, thorough reference checking must be undertaken and it is critical to perform this before making a job offer (Stone, 2002, p.236). Failure to conduct an adequate background check can be expensive, embarrassing and certainly dangerous. Assaults or harassment towards staff or clients by the employee’s behaviour may result in an organization becoming liable for negligence by not undertaking thorough background checks (Greengard, 1995, pp.85-90). Organizations must undertake relevant reference audits to obtain as much relevant information about an applicant as possible without violating their privacy (Irwin, 2003, pp.40-41).
In today’s economy, the biggest task in front of a HR Manager is to motivate and retain employees. All the attempts made in this direction are big failure and no one knows the route to employees’ heart. Motivation is an organization’s life-blood; yet “motivation,” as a business subject is often ignored. Even when not ignored, it certainly is not a focal point for strategic thinking. (Boyett and Boyett, 2005).
Although there are many types of motivation, the management must identify with their associates (employees) on an individual level for successful programs. The goal is to increase production and efficiency to reach maximum results for the organization. Motivation for better performance depends on job satisfaction, achievement, recognition, and professional growth (Boyett and Boyett, 2005). Providing a positive motivational work environment is a challenging managerial activity in the competitive world. Therefore, it is essential to understand associates and their professional needs.
1.3.1 Motivating techniques
Motivating people can be challenging because associates are individuals, meaning what works for one, may not work for another. Managers must be able to communicate with associates. According to Kenneth Kovach (1999), the idea of motivating employees by monetary incentives has changed . Kovach’s survey provides good ideas for motivational opportunities.
(a) Get to know every employee
Whenever starting a new job, all managers should make a point of having a one-on-one meeting with each member of their staff. These one-on-one sessions are a great opportunity to encourage employees to contribute their ideas.
(b) Show respect by asking employees for their feedback
when management asks employees for feedback about their management style and practices, they communicate respect and concern. In such an atmosphere, employees are more likely to feel committed to their work and the company.
(c) Give employees as much control as possible over their work
The more control and autonomy employees have over their work, the more they’re able to use their minds. When employees have a say in their work, and therefore feel in control, they become more energized, enthusiastic, and productive
(d) Challenge them to improve the operation
One way for managers to make it clear that they welcome input and suggestions is to give each employee a clear mandate in their work requirements to take a hard look at the whole operation and make recommendations for improvements.
(e) Give employees “who serve the customer” the power to please the customer
If frontline customer service professionals have the power to please the customer, the predominant tone of their interactions is one of appreciation and delighted surprise. This can’t help but create a sense of pride and well-being – the emotional foundation of world class customer service.
(f) Notice when employees do things right
Since we are all affected by how we are perceived, and since “what gets noticed, gets repeated,” giving in to this natural tendency creates a downward spiral of increasing undesirable behaviors and decreasing morale. To prevent this from happening, provide managers with training and coaching about how to become a more consistent “good finder.”
(g) Do not forget the implementation
A crucial part of this whole equation is the actual implementation of the great ideas generated by employees. Without follow-through, the organization simply ends up with a long list of unused suggestions-and a lot of frustrated employees. To the extent possible, managers should put the person who suggested a great idea in charge of the actual implementation.
Motivation can be properly or improperly achieved and can either hinder or improve productivity. Motivation involves getting people to do something because they want to do it. The competitive advantage cannot be achieved without knowing what is important to associates. Simply stated, if the proper motivational environment is in place, the business will be rewarded with productive associates.
Organizations are experiencing major environmental upheavals such as increased globalisation, competition and technological advances. Translated through major changes in organizational strategy, structure, shape and technology, these environmental forces require speed, quality, innovation and globalization for firms wishing to survive in the battlefield of international arena with a competitive edge. These environmental forces have given rise to the need for understanding and utilizing knowledge in strategic human resource management.
In response to this dynamic change, HR managers must approach the recruitment and selection process from a strategic perspective. Recruitment and selection strategies and policies must integrate within both HR and organizational strategies. In turn, HR and line managers must successfully source and attract potential employees in a highly competitive environment as well as abiding by legislation.
Motivating methods encourage employees to contribute their ideas for improving their organization. Implemented on their own, each of those practices would have limited impact. The key is to use a multifaceted approach that continually reinforces the fact that employees’ ideas are welcome, valued, and rewarded. It would be awesome to see how much an organization’s effectiveness could be improved if all managers were to systematically seek out and implement these kinds of suggestions from front-line employees. By helping the management team optimize employee emotions, they will be helping the organization make a significant impact on the primary sources of competitive advantage in today’s marketplace.
Human Resource Management is a vast area to cover in a short report so I have outlined three most important aspects of HRM, which gives an organization a competitive edge to survive in today’s competitive environment. Some of the other important aspects include the following
a. HR information systems
2. determining, attracting and selecting HR
a. job design
b. quality of work life
3. Developing human resources
a. apprising and managing performance
b. HR development
c. career planning and development
4. Rewarding human resources
a. employee compensation
b. incentive compensation
c. employee benefits
5. Managing human resources
a. Industrial relations
b. Managing change and workplace relations
c. Negotiating in the workplace
d. Employee health and safety
e. Managing diversity
6. Human resources in a changing world
a. International HRM
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