Human resource strategy proposal for bp
The changes in business and the impact of globalisation on increased competitiveness have pushed organisations to incorporate a strategic approach to human resource management (HRM) to achieve competitive advantage. Strategy is defined by the Chartered Institute of Personnel and Development (CIPD), (http://books.google.co.uk/books?hl=en&lr=&id=zXG_lJ8BrMwC&oi=fnd&pg=PR9&dq=the+key+to+improved+business+performance&ots=GLUULx2eFZ&sig=I9jHj5YhE5QIBmWYn-o-U0NvDlc#v=onepage&q&f=false).[Online].(Accessed 05 Mar. 2011) as a plan that integrates the goals, policies and action of an organisation into a cohesive whole. Fundamentally strategy is concerned with achieving a competitive advantage. By adopting a strategic approach to HRM, organisations seek to manage its human resources in a coherent approach that replicate the business strategy.
CIPD views strategic HRM from two main perspectives, CIPD, [Online].(http://www.cipd.co.uk/subjects/corpstrtgy/general/strathrm.htm?IsSrchRes=1).(Accessed 05 Mar. 11);
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The ways in which an organisation achieves its business goals by putting in place activities that support and guide employee's behaviour.
And the manner in which the human resources and activities are planned to achieve the business goals.
Therefore, strategic HRM is an integrated approach that aligns the internal and external context of an organisation for organisational performance, that is, a strategic fit between strategic intent and organisation resources. In order to suggest an appropriate human resource strategy for BP's human resource issues (appendix), this paper shall adopt an integrated approach to the various views of strategic HRM; Best Fit, Resource Based and Best Practices approach.
1.2 Best Fit
The best fit view is all about the vertical integration. It is a contingency view in which an organisation links its business strategy (external market) and individual performance (internal environment) to create an effective HR policies and practices and achieve competitive advantage. Beardwell J and Claydon T., Human Resource Management: A contemporary Approach (Prentice Hall, 2010) used the life cycle and competitive advantage model to explain the best fit approach.
The life cycle model links the appropriate HR practices to the different stages in the life cycle of a business. This model suggests that the HR policies at start up will differ with those during an organisation's growth, mature and decline phase. Drawing evidence from BP's website, a statistical review in June 2010 by then BP's CEO, Tony Howard, BP,(http://www.bp.com/sectiongenericarticle.do?categoryId=9023752&contentId=7044473).[Online ].(Accessed 05 Mar.2011), shows a sharp decline on record in global energy consumption and falling energy prices caused by global recession which is likely to continue in the long term. This decline in global energy consumption will affect energy companies especially BP which is a major player in the energy market with its huge global presence. Assuming this trend continues as predicted, this would set BP's business life cycle at its mature or decline phase. This means the HR strategy for BP will be one of downsizing and redundancy of employees but which needs to retain viability and contribute to sustainable competitive advantage. This dual strategy will enable BP to master the present while preparing for the future eventualities. A proposed strategy will be to retain high performance staff, recruit less and train staffs to multi task.
On the other hand, the competitive advantage model argues that HR practices work best when adapted to the competitive strategy; Redman T and Wilkinson A., Contemporary Human Resource Management (Prentice Hall, 2009). The model identifies three types of strategic behaviour which can be linked to BP's HR practices: defenders, prospectors and analysers.
Defenders operate in small niche market producing high quality products and services backed by high prices.
Prospectors are more flexible and use innovative strategy to change product line quite often.
Analysers are less innovative but stable and efficient and will only enter the market when it is risk free.
Evidence from BP's website, (http://www.bp.com/productlanding.do?categoryId=9025115&contentId=7047794).[Online].(Accessed 05 Mar. 2011) shows that innovations and technology and an efficient energy are a priority to tackle the challenges to meet energy demand and environmental concern. Therefore, to gain competitive advantage BP could adopt a dual strategy of make defender and buy prospector to remain both innovative and efficient at a lower operating cost. That is a make strategy that invests in employees to seek efficiency and a buy strategy for new technology to remain innovative in the market. This is a similar dual strategy approach that has been successfully used by the Singapore Airlines (SIA), (http://www2.warwick.ac.uk/fac/sci/wmg/ftmsc/modules/modulelist/pop/articles/singapore_airlines.pdf).[Online].(Accessed 05 Mar. 2011) that adopts a cost reduction strategy while providing premium services.
The best fit view has been strongly criticised for its lack of flexibility in a dynamic changing environment. To achieve dynamic fit and given that BP is; an innovative, a high risk taker, results oriented, flexible to change, quality and process focus company, it should develop a human capital pool with these broad range of skills that will promote behavioural flexibility among its employees. This should help solve the problem of flexibility in changing environment.
1.3 Resource Based View (RBV)
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The resource based view is a paradigm shift from the 'best fit' approach that draws on the internal resources of an organisation. It is particularly applicable in unpredictable external environment and focuses on achieving uniqueness and sustainable competitive advantage through the manipulation of an organisation's resources. The VRIO (Value, Rarity, Inimitable, Organisation) framework, Beardwell J. and Claydon T., Human Resource Management: A contemporary Approach (Prentice Hall, 2010), is a useful tool to explain RBV relationship and formulation of a strategy.
Value is all about the impact of HR contribution through improved customer service and customer added value.
Rarity is simply to exploit rare characteristics of the firm's human resources to gain competitive advantage.
Inimitability means recognising an organisation's unique history and culture to develop unique practices and behaviours that make it difficult for competitors to copy.
Organisation is integrating internal resources into a coherent system so that they can capitalise on adding value, rarity and inimitability.
The VRIO framework has been successfully used by the Singapore Airlines, (http://www2.warwick.ac.uk/fac/sci/wmg/ftmsc/modules/modulelist/pop/articles/singapore_airlines.pdf).[Online].(Accessed 05 Mar. 2011) to develop a set of unique characteristics such as replacing its fleets more frequently than do its competitors. As a result, its fleet is young and energy efficient and operates at a lower cost. BP's website (http://www.bp.com/sectiongenericarticle.do?categoryId=9025116&contentId=7046892) .[Online].(Accessed 05 Mar. 2011) shows that BP is very keen on deep sea exploration, an activity other energy companies are afraid to venture into. Using this approach, BP can make deep sea exploration its unique culture and develop unique practices such as training and developing deep sea specialists to make it difficult for its competitors to copy.
Implementing HR policies has been a key issue highlighted with the RBV and BP can overcome this by creating opportunities that will improve the discretionary behaviour of both line managers and employees such as; team working, training and development schemes, long term employment security and better pay structure.
1.4 Best Practice
Best practice or 'high commitment' human resource practices are a distinctive set of successful HR practices which firms can adopt irrespective of their setting and which will lead to improvement in performance. Due to the global economic crisis, most organisations are now adopting a policy of negotiating reduced wages to maintain job security and employment commitment. In same way, BP can adopt this best practice and integrate it with others that are specific to its needs. The BP's career webpage; What BP is Looking For, (http://www.bp.com/sectiongenericarticle.do?categoryId=9031574&contentId=7057908).[Online].(Accessed 11 Mar. 2011), shows that BP is committed to developing leaders and supporting its employees through continuous improvement. Therefore, the appropriate best practices for BP should focus on enhancing the skill base of employees and this could be achieved through HR activities such as; introducing succession planning scheme to train future leaders, comprehensive training and development opportunities, selective staffing, results based performance and working in teams.
1.5 Recommended Strategy and Main Features
The recommended human resource strategy for BP to adopt will be one that integrates all the key features of best fit, RBV and best practice views proposed above and as explained in the table below.
Key Strategic Features
Leadership Qualities A Priority
Management should introduce comprehensive leadership training and development programmes.
A succession planning scheme should be encouraged and practiced.
Recruitment process should be selective and make leadership qualities a priority
A Deep Sea Organisational Culture
Employees should be encouraged to be innovative, take risk, results oriented, flexible to change, quality and process focus.
There should be continuous training for specialists and high investment in deep sea exploration.
Management should invest in employees to seek efficiency.
Combined Organisational and Industrial Best Policy and Practice
Retain high performance staff, recruit less and train staff to multi task.
Negotiate reduce wages to maintain job security and employment commitment
Continuous training programme for all employees to develop a broad range of skills.
Team working should be encouraged to improve on discretionary behaviour.
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Strategic HRM is a complex process which is constantly evolving. The HRM strategy identified above is unique to BP in terms of the evidence found from its website and its major human resource issues discussed during the module session. The strategy adopts an integrated approach of best fit and resource based incorporating best practice as seen fit. Given that the economy is constantly changing, flexibilities have been imbued in the proposed strategy to make it dynamically feasible.
2.0 STRATEGIC RECRUITMENT AND SELECTION PROCESS
The biggest asset in any organisation is its people. In order to remain a high performance company and stay competitive, BP needs to attract and nurture the right people with the right talent and right leadership qualities. Therefore, BP's HR practices and policies will play an important role for managing its people and achieving its business objectives.
The challenges faced by BP to manage its people can be categorised as, BP,(http://www.bp.com/sectiongenericarticle.do?categoryId=9031553&contentId=7057895).[Online].(Accessed 02 Mar. 2011);
Attracting, developing and retaining talent.
Shortage of skilled personnel.
Developing a true leadership.
Developing corporate social responsibility
Transferring key knowledge and relationships.
Responding to these challenges, BP has introduced a number of initiatives; BP, (http://www.bp.com/subsection.do?categoryId=2319&contentId=7060032) [Online].(Accessed 02 Mar. 2011). Though these measures are good, a strategic recruitment and selection process can be adopted to tackle these challenges.
2.2 Strategic Recruitment and Selection Process.
According to a survey by CIPD, Annual Survey Report 2007: Recruitment, Retention and Turnover (CIPD, 2007) only 51% of the organisations surveyed in the UK had a resourcing strategy. Given that eight in ten of the employers ranked recruiting as a top priority in resourcing, it becomes imperative for BP to develop a recruiting strategy.
To source the right type of employees, BP can select its talents internally, externally, use a combination of both or adopt alternative methods. The internal approach is a traditional method where employees are given priorities for unfilled vacancies before an external source is considered. The advantage with this method is that it motivates employees, improves their morale and provides them with opportunities for career progression. However, internal sourcing is expensive and generally leads to inbreeding and lack of creativity while external recruitment brings in fresh ideas and skills by hiring employees with different backgrounds.
Whatever method BP decides to use, it is crucial that BP adopts a strategic approach that will identify the skills required before selecting the most suitable people to meet the human resource needs of an organisation; Boxall P. and Purcell J., Strategy and Human Resource Management, (Palgrave Macmillan, 2003). Furthermore, Beardwell J. and Claydon T., Human Resource Management: A Contemporary Approach (Prentice Hall, 2010) emphasis this need of a strategic approach as a prime source of competitive advantage to ensure the organisation has 'the right people in the right place at the right time'. The strategic recruitment and selection process include techniques that stretch from attracting, selection and induction.
2.2.1 Attracting Talents: BP's Brand Strategy
CIPD, (http://www.cipd.co.uk/hr-resources/factsheets/employer-brand.aspx) .[Accessed 03 Mar. 2011) defined employer's brand;
'as a set of attributes and qualities - often intangible - that makes an organisation distinctive, promises a particular kind of employment experience, and appeals to those people who will thrive and perform best in its culture'
BP's brand strategy will depend on its brand strength and how it differs from its competitors. A useful strategic approach is that by CIPD: A no-nonsense approach, (http://www.cipd.co.uk/hr-resources/factsheets/employer-brand.aspx).[Online].(Accessed 03 Mar. 2011). In this step-by-step approach, BP will first need to investigate by communicating with top management, the employees, and external talent sources to understand the true perception of its employees' experience. Secondly, BP should use the feedbacks from this investigation to create a distinctive Value Propositions (VP); a unique and compelling offer by BP to attract, retain and engage the employees in return for their performance. A suggested unique and compelling VP for BP is shown in fig 1 below;
Next BP is to make sure it can deliver on its brand promise. By doing this and thinking about the employee's experience not only from the recruitment stage but through induction to actual work life experience, BP will be using its employees to sell itself in a process known as employee branding. Therefore a good employee branding should be reflective of the employee experience as shown in fig 2 below;
Finally BP will need to continuously measure, evaluate and review its brand strategy to make sure it is delivering real value.Â This will be reflected through increase in application and enquiries, employees going the 'extra mile', and advocating for BP.
2.2.2 Strategic Recruiting Methods
Globalisation and the global economic recession have pushed many employers to search creative employment channels and target a diverse application group. A CIPD report, Annual Survey Report 2007: Recruitment, Retention and Turnover (CIPD, 2007) indicated that local newspaper and corporate website were still favourite routes used by most employers. But due to technological changes and employees preference for a more flexible approach, organisations are now resorting to online recruitment techniques such as social networking sites like Facebook because they are cost effective and faster. BP a strong promoter of diversity, (http://www.bp.com/sectiongenericarticle.do?categoryId=9023446&contentId=7058326).[Online].(Accessed 05 Mar. 2011), can win the war on diversity by creating a diverse recruitment policy that is inclusive of both the traditional (newspapers and corporate website) channels plus mainstream recruiting channels. Fig 3 portrays the diversity recruitment process;
To use both traditional and mainstream recruiting methods such as; Newspapers, Universities, E-recruitment, social networking sites, career fairs, and iPhone, to develop a heterogeneous group of applicants.
Top management to become involved and support line managers in implementation.
To provide management with diversity training.
To keep altering recruitment practice so as to avoid recruiting every time from same social background and age groups in case it discriminates against certain job seekers.
2.2.3 Strategic Selection Techniques
Strategic recruitment is a continuous process and includes adopting the right selection techniques. There are different techniques organisations have used to select potential employees: interviews, integrity test, curriculum vitae, assessment centres and psychometric tests. CIPD, Annual Survey Report 2007: Recruitment, Retention and Turnover (CIPD, 2007) reported that local newspapers and corporate websites were still favourite routes used by most employers though the psychometric and assessment centres have been popular. Whatever method BP chooses, it is important that the method is reliable and valid. Reliability measures the accuracy and consistency of the selection test while validity measures its predictability.
The 'psychometric' test has typically been associated with the 'best practice' for employee selection; Redman T and Wilkinson A, Contemporary Human Resource Management (Prentice Hall, 2009). The psychometric tests are designed to accurately measure a candidate's knowledge, abilities and personality traits. These tests have become popular with recruiters because they are designed to be reliable and predictable and are effective for handling large volumes of applicants.
Assessment centres on the other hand focus on behaviours required for the job and involves candidates completing a number of different tasks as part of the selection process; CIPD, (http://www.cipd.co.uk/hr-resources/factsheets/selection-methods.aspx).[Online].(Accessed 05 Mar. 11). BP website shows its corporate website is the preferred selection route; (http://www.bp.com/sectiongenericarticle.do?categoryId=9031578&contentId=7057906) .[Online].(Accessed 05 Mar. 2011). But selection is more than just using a particular technique, BP needs to implement a strategic psychometric approach which takes into account a social framework that includes selection as 'best fit' and as an interactive discussion process; Redman T and Wilkinson A., Contemporary Human Resource Management, (Prentice Hall, 2009).
To adopt a 'best fit' approach, BP will need to identity its unique qualities such as values and culture, employment patterns, market segment and use these qualities to differentiate it selection practices from a 'best practice' approach.
Furthermore, BP should make its selection process interactive. The HR department should exchange information with other managers that are directly affected. Moreover, negotiation with participants should be a two-way process and designed to be perceived as fair. That is; treating participants with respect and dignity, providing them with information and making them part of the whole process.
In addition, it is important that BP should provide adequate training courses for all those involved in assessing candidates at all stages of the selection process and that they are adequately briefed about the jobs.
It is the process whereby employees adjust to their jobs and working environment; CIPD, (http://www.cipd.co.uk/hr-resources/factsheets/induction.aspx).[Online].(Accessed 05 Mar. 11). The purpose, which is to ensure a smooth integration of staff into the organisation. BP can make its induction process more effective by;
Making induction a vital part of its recruitment process.
Designing a well structured induction programme to ensure that all new recruits receive information consistent with BP's values and culture.
Carrying out physical orientation to describe where the facilities are and an organisational orientation to show new employees the important role they play in the overall business strategy.
Ensuring a quality 'welcome' because employees develop lasting impressions within their first few weeks of working.
In a nutshell, if BP decides to adopt a strategic recruitment and selection approach to tackle challenges in its people management it will be vital that BP differentiates its brand strategy from that of its competitors. Furthermore, BP should be able to determine its core competencies to determine the correct recruiting channel(s). Finally, how it assimilates its new employees speak loud about its culture and values.
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