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Hr Value Criteria Objectives Management Essay

HR value criterion. From the perspective of a case you are familiar with explain why you generally prefer one of three different HR value criteria objectives more than two others. Also explain when you might use each of the other two instead of the one you generally prefer. Use concrete examples that we considered in class or from your own perspective to support your points. Include as appropriate globalization, organizational form, and/or HR leverage dimensions of the situation.

Recruiting and staffing. From the perspective of a case you are familiar with explain why you generally prefer one of three different recruiting and staffing strategies more than two others. Also explain when you might use each of the other two instead of the one you generally prefer. Use concrete examples that we considered in class or from your own perspective to support your points. Include as appropriate globalization, organizational form, and/or HR leverage dimensions of the situation.

Employee relations. From the perspective of a case you are familiar with explain why you generally prefer one of three different employee relation strategies more than the other two. Also explain when you might use each of the other two instead of the one you generally prefer. Use concrete examples that we considered in class or from your own perspective to support your points. Include as appropriate globalization, organizational form, and/or HR leverage dimensions of the situation.

HR value criterion. From the perspective of a case you are familiar with explain why you generally prefer one of three different HR value criteria objectives more than two others. Also explain when you might use each of the other two instead of the one you generally prefer. Use concrete examples that we considered in class or from your own perspective to support your points. Include as appropriate globalization, organizational form, and/or HR leverage dimensions of the situation.

“In your company you are a member of an orchestra.

It depends upon your HRM whether the result is music or noise”.

The Saint George Private Hospital (SGPH), founded in 1998, is a district hospital situated in Larnaca that employs more than 60 health care professionals including doctors, nurses and administrative personnel. The SGPH was established by three well-known local doctors who, by building on their reputation, were aiming to position their ‘business’ as one of the city’s best hospitals, recognized for excellence and innovative emergency, surgical and maternity services, delivered by caring and valued staff. However, over the first decade of the business’ life, the performance measures such as the number of patients treated, patient mortality and staff per workload, were disappointing; the rising cost of care, a shrinking revenue base, increasing marketplace scrutiny of administrative and overhead costs, and intense competition among both for-profit and non-profit providers added even more urgency to the cost-control imperative. The hospital’s health system focused on hard issues such as the legal framework, organogrammes, financing and technical skills development and less focused on HR management has proved incapable to face the new challenges; the hospital’s market share was gradually declining leading to a major crisis.

Although, they have been pursuing major cost-reduction efforts to survive the recession they realized that they had to implement strategies that will create value and deliver results in efficient and effective ways. In this direction, the assessment of a HR Value Proposition was essential as it would offer an integrated approach to what HR department can and should do to create sustained value. More specifically, they had to choose among the following HR value criteria:

Employee satisfaction. The HR realizes the issues that matter most to the workforce and maintains accurate mechanisms to track employee satisfaction relative to these key issues, ensuring that their company is meeting the key needs of employees and maintaining ongoing two-way communications with the workforce. HR creates an employee value proposition that lets employees know they are valued and are allowed to add value.

Productivity: Embrace a culture of productivity by developing management characteristics to sustain and enhance productivity gains. Adopt measures such as labour budget cuts, hiring freezes and layoffs. The majority of productivity gains will come from getting the right person, with the right skills, in the right place, at the right time.

Satisfaction of multiple stakeholders: The HR strategy is set according to a variety of performance goals relating to stakeholders and their levels of satisfaction in achieving these goals. The performance goals are designed to meet stakeholders’ expectation. Stakeholders include medical staffs, patients, hospital managements, professional staffs, and boards of trustees.

In order to choose among the aforementioned HR value criteria objectives an evaluation of each criterion is needed. In productivity design, every step within every process should add value to the patient’s experience and to the financial stability of the hospital. However, the point is to add as much value as possible without excessive cost. Hospital leadership often assumes that trade-offs are necessary due to potentially competing goals (e.g., decreasing labor costs will lead to decreased quality and patient satisfaction). In some highly mission-driven hospitals, an emphasis on productivity can be seen to be in conflict with concern for employee well-being. In a health care organization such approaches are almost always in the long run, they are ineffective and costly.

By setting the employee satisfaction as HR value proposition the hospital maintains job satisfaction as well as a high degree of trust, collaboration, and teamwork. Having a clear and well communicated workforce plan helps employees feel secure, and they are much more likely to stay with this type of organization. There is a passion for service and caring; employees are continually looking for ways to remove “bottlenecks” and eliminate waste, so they are efficient and patients flow through the system with ease. Dedicated, professional employees directly contribute to improved quality outcomes and improved patient satisfaction. However, although there is a positive correlation among employee satisfaction and productivity, it is costly and does not ensure benefits for all stakeholders. An HR value criterion such as the employee satisfaction can be most appropriate for an organization where profits are not one of the major issues for its survival.

Each stakeholder group has its own expectations, and if the hospital executives are to gain their acceptance -which is crucial for the survival of the business- they must set their performance goals to address the specific concerns of each group. Hence, the third value criterion objective appears to be the most appropriate for a private hospital such as SGPH.

Figure 1: Stakeholders’ expectations

The medical and professional staffs' concerns for clinical quality and superior services and facilities are translated in such goals as improving the hospitals' ability to offer new services and to successfully introduce new facilities and equipment. Patient expectations for quality service and satisfaction and low cost are reflected in such goals as the hospitals' efforts to achieve greater success in retaining patients and controlling expenses. Such performance goals as enhanced ability to fund an institution's growth, improving return on investment in new services and facilities, increased profit margins, and controlling operational expenses address a hospital management's expectations regarding profitability, cost restriction, and institutional leadership. The board of trustees' concern about growth and effectiveness is addressed through a variety of goals such as steady growth in revenue, maintaining optimal cash flow, improving return on capital, and successful introduction of new services and facilities.

An investigation of the relationship between systems of human resource management practices and effectiveness of patient care in hospitals suggest that managers and policy makers should focus sharply on improving the functioning of relevant HR management systems in health care organizations as one important means by which to improve patient care. However, developing effective health care organizations is increasingly complex as a result of demographic changes, globalization, and developments in medicine. For-profit hospitals have greater financial concerns, which is reflected in the greater importance attached by them to the goals of increasing revenue, improving return on capital, and improved occupancy rate. The increase of the hospital’s HR leverage by hiring more part-time staff (nurses, supporting staff) or contact employees rather than full-timers might is a possible option in order the hospital to improve its efficiency measures but still to preserve its high quality standards.

However, achieving an efficient hospital requires a balance between cost, quality and staff engagement. Health care should be considered as a social good and not an economic good. HR value proposition means that HR practices, departments, and professionals produce positive outcomes for key stakeholders; when others receive value from HR work, HR will be credible, respected, and influential. When HR practices align with strategies, goals are met and sustained.

Recruiting and staffing. From the perspective of a case you are familiar with explain why you generally prefer one of three different recruiting and staffing strategies more than two others. Also explain when you might use each of the other two instead of the one you generally prefer. Use concrete examples that we considered in class or from your own perspective to support your points. Include as appropriate globalization, organizational form, and/or HR leverage dimensions of the situation.

Stefan’s Bakeries is a family-owned business located in Kiti, near Larnaka Airport. Established in 1955, Stefan’s Bakeries is run by the third generation of the family and prides itself on delivering the finest and freshest bakery products in the area. Apart from its main bakery in Kiti, the family manages four branches in the neighbor communities. Production and distribution of fresh bakery products to its branches and supermarkets come from its main bakery-laboratory in Kiti which is formed into three divisions according to the type of products: fresh products division, frozen products division and long-shelf-life products division. The division fresh products- which is the business main priority- offer to its large number of customers a choice of its wide range of fresh products for all occasions such as cakes and treats for weddings and christenings. The complete product offering list includes over 200 items. Stefan’s Bakeries currently employs 53 full-timers in total spread in five departments: sales, production, marketing, administration and office and transportation, procurement and maintenance (Figure 1). Sales and production departments operate on shifts, 24 hours a day 365 days a year.

During the summer the existing staff was not sufficient; there was a seasonal increase in demand because the area is overcrowded by tourists and travellers as the bakeries are located in seafront communities. Additionally, during summer there are five times more weddings than in winter and the bakery -unable to satisfy the demand- was ‘rejecting’ customers. Moreover, the business had a number of other serious HR Figure 1: Percentage of staff positioned in each department

problems, which were associated with a lack of dedicated knowledge and expertise. These included very high labour turnover and high levels of absenteeism, which had a detrimental impact on productivity and performance.

Last year the HR department, in order to face this challenge, recruited another 16 full-timers; 6 in production department, 6 in sales department, 2 in distribution and 1 in administration and marketing respectively. The HR’s decision has been proved to be wrong since it increased rapidly the business’ costs and hence reduced productivity (average profits per full-time employee). In an attempt to improve measurements the HR department replaced 8 employees with equal number of immigrants, but the costs remained comparatively high.

Staffing is has been the greatest headache – too many staff and costs rise; too few and customer service suffers badly – and if service deteriorates too much, customers will defect to the competition. In order to strike a balance and improve productivity and efficiency the HR department had to choose among the following staffing and recruiting strategies:

Overstaffing. Staffing all departments with multiple personnel ready to serve any increase in demand. The greater the number of personnel the better - in matter of already trained and experienced staff- for the business in the future.

Just in case staffing. Staffing the production and sales department with multiple personnel just in case an increase in demand will emerge.

Just in time staffing. Staffing the production and sales department with personnel that can be recalled in real time from one department to the other to address fluctuations in demand.

The first strategy is rejected since it means excessive people doing unnecessary work under the excuse that the business is building experience and knowledge for the future. Staffing, particularly the production department, with more employees than needed, results in inventory waste and overstock. Building a safety stock of finished products based on a just-in-case mentality results in excess inventory, causing inefficiencies that get buried since bakery’s products are perishable. The excess inventory becomes obsolete, increases the storage costs and it raises the overall business costs. Overstaffing in production is most common in a component assembly environment and is also a common practice of political parties . In the other side, the just in case strategy, although appears to be more effective than overstaffing as it requires fewer employees, is still costly. By hiring more full-timers in the production and the sales department the business resolves the under-staffing problem in summer and satisfies any occasional increase in demand in winter but irrationally pays wages the rest of the year.

Finally, the JIT staffing enables the business to bring the resources it needs when it needs it; enabling them to develop, execute, implement, and profit - just in time. Employees trained to serve both production and sales departments can shift from the one to the other according to the demand. An occasional increase in demand, such as 4 orders for wedding threats at the same time will transfer 2 to 3 employees from the sales department to the production department. In a case where this is not feasible – mainly in the summer period when sales department is loaded as well- part-timers can be hired for the sales department where no excessive training and knowledge is needed. Hence, the combination of just-in-time strategy and higher leverage will minimize the capital costs of holding excess inventory and staff. The workload of the business will build until it will be clear that another professional is needed, so a new employee it will be hired; the staff is added according to specific needs, or just in time. By adding staff incrementally, labor costs can be reduced.

Hence, among the three staffing strategies, the just-in-time staffing is preferred since in this way the business can much the production needs with productive resources and better handle any fluctuations. Just in time staffing in combination with a leverage increase will additionally improve flexibility, thereby helping the business to reduce costs, increase productivity, remain competitive, and generate high employment growth. More specifically, the new HR strategy is expected to:

Reduce costs from obsolete products by 50 %

Increase productivity by 25%

Decrease labor turnover and absenteeism by 5% (the high labor turnover was due to imbalanced workload between winter and summer; employees were quitting during the summer period)

Improved rate of output by 20%

In addition, much of the businesses success could be by recruiting and retaining the right, qualified people and by investing in training programmes. The business goal should be to hire employees who will be productive and add value. In order to achieve this, the HR management should approach the regional collages and through Transfer Partnerships employ students as part-timers who study in related fields. In this way, they can mutual gains; the students will move from theory to practice, apply what they have been teached and gain experience, and the business will increase it HR leverage, benefit from having high skilled employees, exchange ideas, be more innovative etc.

Employee relations. From the perspective of a case you are familiar with explain why you generally prefer one of three different employee relation strategies more than the other two. Also explain when you might use each of the other two instead of the one you generally prefer. Use concrete examples that we considered in class or from your own perspective to support your points. Include as appropriate globalization, organizational form, and/or HR leverage dimensions of the situation.

Pronoia Corp. -the organization I am currently working- is an insurance and financial services company located in Nicosia with branches in Limassol, Larnaka, Paphos and Paralimni. The corporatoion is currently employing approximately 200 people. Pronoia Corp., established in 1992, after its merger in 2007 with the Aspis Securities, became one of the island’s leading insurance and financial corporations. Pronoia Corp. has an excellent position in the securities industry, including great figures in business operations, high reputation and recognition by domestic and foreign investors, as well as future plans for market development.

However, the branch managers have recently observed few major issues: the rapid expansion of branches as well as the release of new products such as derivative financial products requires more qualified managers and staff. Taking into consideration that new recruits is a long-lasting procedure for developing working expertise and that current employees, such as the sales people, are reluctant to learn new knowledge for selling new products, the organizational goal for rapid market expansion appears to be infeasible. Additionally, the corporation has to face the current bureaucratic-hierarchical structure that increases turn-around time in providing customers with their contracts, since each department at each branch is responsible for entering data independently. The increased issuance time eliminated the available time for obtaining new customers. The employees at the bottom of the pyramid for any problem we report through a supervisor up to a hierarchical chain of command to senior executives who provide direction and control. This time-wasting procedure reduces the corporation’s overall efficiency and productivity. Hence, the corporation has to make a key strategic choice among the following three different strategic options:

Hierarchical. The current organizational structure where employees at the top of the pyramid are responsible for the employees of lower rankings.

Employee involvement. Employees participate in managerial decision-making and improvement activities appropriate to their levels in the organization.

Self-managed work team approaches. Members of self-directed teams typically handle job assignments, plan and schedule work, make production-related decisions, and take action on problems. Members of self-directed teams work with a minimum of direct supervision.

Although hierarchical organizational structure is common for large and complex companies, for this particular case has been proved to be inefficient and therefore is rejected. This structure does not fit the company’s goals and objectives, delays cooperation and hence the completion of tasks and results in slower cycle times and less productivity. Even if this structure becomes flatter, does not allow for great responsibility and motivation.

The second strategy -employee involvement- is theoretically more effective at enhancing innovations than traditional bureaucratic structures because it promotes the sharing of product knowledge between managers and workers, and therefore more likely to develop strategies and suggestions for better. According to Markowitz (1996) “giving employees decision-making power boosts their morale and commitment to the organization, which aids productivity and therefore everyone benefits; the corporation will gain higher profits and stability and workers are more fulfilled and attached to the companies because they have a voice in decision-making.” The adoption of employee involvement strategy will result in better communication between management and employee, will increase service and product quality since will provide higher motivation and better methods increasing quality as well as the rate of output.

However, developing new skills and responsibilities for lower-level participants will be a costly procedure and requires a lot of training. Hiring and promotion will be linked not only to a person’s capacities, but also to the degree of his/her involvement or participation in company life. If the new program creates a new structure that needs support and management, support personnel must increase. Employee’s involvement can slow decision making because a greater number of people have to understand and accept the decision. This strategy will be well suited to science-based organizations whose key staff are noted for their creativity, intrinsic motivation for work that interests them, stronger affiliation with their discipline than their organization, and sensitivity to directive management.

Since the Pronoia Corp. aims to speed up new training and to learn knowledge on selling new financial products, and at the same time to increase efficiency and productivity (measured in profits per full time employee), the knowledge sharing by employees becomes necessary. This kind of environment allows group members to acquire skills from one another and to gain mastery over task performance. As such, the teams are not quality circles or cross-functional task groups. Across the world, the pressure of increasing global competition, the necessity to be more efficient and productive, and the effects of rapid change leads companies to looking for the best approach to the demands for higher quality and better productivity at the same time. The only way to compete is through employees who perform the tasks that are in the best position to ensure and improve its quality, are best able to lower costs by eliminating waste throughout the process, are in the best position to speed up their processes by reducing cycle times and are the ideal agents of change when they are in touch with their processes, trained through education and experience, and empowered to act decisively.

Self-directed work teams could be groups of 5 to 25 people, drawn from within a function or department, who work with a high degree of autonomy to produce a complete component or to perform a particular service. Management must appreciate that relinquishing control to the effective and skilled employees will result in a more productive organization with better teamwork and faster problem resolution. The self-managed team approach includes flexible job design, higher pay rates associated with the smaller number of job classifications, training and development, new dispute resolution, and employment security.

An empowered organization will be able to respond more quickly to changes, improvements, and new customer requirements. This will occur as they begin to act independently in pursuit of their expectations and within the boundaries of the organization. In addition, this approach results in the expansion of staff skills (problem-solving as well as technical skills are developed) and significantly improves morale and job satisfaction. The organizations moving toward self-managed teams structure in job design will result in absenteeism decline, higher productivity (more than 25%) and better quality of output as a result of a the greater sense of involvement and in-team decision making responsibility which comes with these systems. Any team member can be an objective and unbiased contributor to the solution.

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