Effective human resources management is an intrinsic part of successful business management. Of all companies and organizations, there is no one aim not to employ the best qualified, reliable and motivated employees and deploy them effectively to obtain great return. As the company grows, they require the assistance and advice of human resource consultant / specialist to further strengthen. To small and medium size of company, the role of human resources manager /executive may be limited to such traditional functions as the administration of employee salaries and fringe benefits, interview arrangement and recruitment process. In a large organization, it may form an integral part of senior management's overall strategic planning. Indeed, most senior human resources mangers are actively contribute to the strategic planning process and its implementation.
The scope of responsibilities undertaken by human resources manager / executive includes enhancing the company's overall performance through such activities as providing both in-house and external training opportunities, encouraging and aiding employees to acquire additional skills, monitoring and motivating employees to ensure high morale, job satisfaction and mitigating employee turnover. In the extent of medium to long-term strategic planning process, it may include advice to the entire staff strategy if, for example, a company intends to venture into overseas market. Such advice will cover a whole range of considerations including local employment laws and regulations, taxes, work practices, education for families and general cultural factors.
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The author of this paper is currently working with Great Harvest Construction (Singapore) Pte Ltd, which is a subsidiary of Great Harvest Group in Hong Kong. This research paper will go through various tools such as the human resources scorecard system, on-the job training and promotions, to determine how these may help a Chinese family-run company to develop a sound strategic plan and improve its performance. This paper will analyze the HR scorecard approach in which what steps can be taken to ensure effective on-the job training and the optimal approach to the company's promotion process.
Background of the Researched Company
The researched company was registered as M/s Sam Luen Contractor in 1991. It was then realign the corporate value chain from trade contractor to main contractor, namely Great Harvest Construction Limited in 2001. By year 2006, the company diversifies their business strategy into developer, building contractor, and building product manufacturer under the umbrella of M/s Great Harvest Group (GHG). The company is specialized in fitting out works, building construction and structural steelwork, and external façade fabrication.
GHG mainly runs its business in Hong Kong, Macau and Singapore with over 1000 staff and workers. Since GHG is a traditional Chinese family business in Hong Kong, all family members are the final decision makers. They will hand over the company business to the next generation in order to maintain the family heritage and traditions. The family bonding therefore remains strong and it is most likely that the perception of "family first and business second" is likely to continue in the foreseeable future.
The aim of this paper is to determine how human resource management tools may be applied to GHG in order to achieve better strategic planning, better decision-making and thus strive in overall performance, with the HR scorecard system, on-the-job-training, and the promotion process.
Company that does not use the HR scorecard system will find employees have poorer discipline and standards. For example, at GHG's Singapore office, most employees do not show up on time in the office every day; frequent sick leave application and abuse of the internet usage for personal purposes during office hours. As for daily routine, employees do not appear to appreciate the importance of working as a team and have a poor grasp of completing tasks within deadline. Therefore, there does appear to be a strong case for implementing an HR scorecard. Not only does it measure employee's performance effectively, it also measures the effectiveness of strategic company policy.
On-the job training is a crucial aspect of training for employees within their own working environment in the company. It allows the new employee to learn exactly what they will be expected to perform after training. It can enhance employees' confidence, enabling them to work to higher standards and eventually become more productive. On-the-job training has peripheral advantages. Often, it provides an opportunity for employees to meet colleagues from other team / department of the company they would not otherwise get to know, which enhances their overall understanding of how the company operates. This kind of training is generally more cost effective and less disruptive than outsourcing. In general, it can be used to build new competencies and broaden business knowledge and managerial skills. The disadvantages of on-the-job training will tied up the expensive machinery and slow down the normal production cycle for those already trained. (Cauvier, 1998).
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Promotions are a key part of ensuring the long term stability and growth of any company. Most employees look forward to promotions, since these normally entail higher salary, greater responsibility and increased job satisfaction. For employers, promotions provide an opportunity to reward employees and to raise employees who have demonstrate their competency and loyalty to higher rank. The promotion process is, however, fraught with pitfalls for both the employee and employer. It is often considered unfair, lack in transparency. Such a perception is of paramount importance if an organization intends to retain its valuable employees' loyalty and maintain / upkeep their motivation.
Literature Review on HR Tools
As Denis L. Cauvier mentioned that effective management need to take a step-by-step, common sense to approach. This can reduce staff turnover, increase employee morale and team work, and enjoy higher levels of staff performance.
Lawrence S. Kleiman also pointed out that human resource management is the organization function that consists of practices that help the organization deal effectively with its people during the various phases of the employment cycle.
In the textbook, the following of the HR tools are mentioned.
"The HR Scorecard is a concise measurement system that shows the quantitative standards the firm uses to measure HR activities, to measure the employee behaviors resulting from these activities, and to measure the strategically relevant organizational outcomes of those employee behaviors."
"On-the-job training is a common training technique. It has four steps: preparing the learner, presenting the operation, doing performance tryouts, and following up."
"In making promotion decisions, the employer must decide between seniority and competence, a formal or informal system, and ways to measure competence."
The HR Scorecard is an efficient system for measuring a company's HR activities, employee behavior resulting from these, and any relevant organizational outcome of employee behavior. It highlights the effect of a company's HR policies on employee behavior and the effect in achieving the company's overall strategic objectives.
There are seven steps in the HR Scorecard approach as listed below.
Step 1: Define the business strategy that creates a corporate strategy-oriented human resource system starts by define what the company's strategic plans are. For example, GHG need to improve their employee's motivation so that the company's senior management can develop a better business strategic plan.
Step 2: Outline the Company's value chain that achieving its strategic goals if any business engages in certain strategically required activities. For example, GHG need to understand the domino effect of employee behaviors are vital to his or her firm's success must first understand what the firms' required activities are and to clearly define the company's value chain in order to plan the company's overall business strategy.
Step 3: Identify the strategically required organizational outcomes. Every company must produce strategically relevant outcomes if it is to achieve its strategic objectives. The strategy map helps the manager recognize these core outcomes.
Step 4: Identify the required workforce competencies and behaviors. In order to achieve its overall strategic purposes, all companies should plan and effect timely policies with justified competencies and behaviors for achieving short to medium term results.
Step 5: Identify the strategically relevant HR system policies and activities. Once the HR manager knows what the required employee competencies and behaviors are, he or she can turn to identifying the HR activities and policies that will help to produce them. For example, at GHG, employees are obliged to take direct personal responsibility for their given task , as well as being monitored for their willingness to demonstrate creativity and innovation.
Step 6: Design the HR Scorecard measurement system. HR Scorecards system aids in achieving state of equilibrium of financial and non-financial goals or measures, of short-term and long-term goals, and of external goals and internal goals.
Step 7: Periodically evaluate the measurement system. A great advantage of the HR Scorecard process is that it is predictive. There are many factors inducing the company's business. HR Scorecard is neither a quick fix nor one-shoe-fits-all size approach. Therefore, the HR manager should periodically re-evaluate measures and links.
On-the-Job Training shows the employee how to perform the job and allows him or her to do it under the supervision. The advantages of on-the-job training are relatively inexpensive and new employees are actually contributing to the company during learning process. The most important is it ensuring the trainer has a clear, unambiguous understanding of what to teach and share, and he is fully competent on it. Trainer should be aware of the principles of learning and can use the four-step job instruction technique to ensure the training is effective. (Byars, 2000)
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Step 1: Prepare the learner - An employee always desires to learn a new job. The trainer needs to ensure the learners understand their own jobs as well as other jobs they may be called upon to perform. The trainer must co-ordinate all necessary training materials and has a solid knowledge of the main principles on the training. The environment for the training place should be comfortable. Moreover, the trainer should know how to motivate learners to bring up questions during the training process and instruct learners how to deal with unexpected problems such as a technical problem or relevant 'soft' issue.
Step 2: Present the operation - The trainer must prepare detailed and clear information for presentation, in which they systematically follow the information used for training. They should explain to the learners the purpose of the training and what is the company's expectation from them after training. They should go through each job several times at a slower speed in order to make sure the learners understand. They should explain each step clearly, and specify the trickiest parts as well as the errors most likely to be made. Again, they should go through the job several times at a slow speed and explain the key points as well. Finally the learners should demonstrate to the trainer every step so that the trainer can be sure the learners fully understand the job without any confusion.
Step 3: Do a tryout - Let the learners to go through several times at a slow speed and explain every step to the trainer. The trainer must correct mistakes. Afterwards, they should request the learners to explain again in order to make sure they understand and comprehend correctly. They should be requested to handle some complicated steps, and then have mistakes corrected when problems are identified. The learners will then gradually improve their skills and speed.
Step 4: Follow up - A supervisor shall be assigned to oversee the production workers. The supervisor should look at every item produced. Meanwhile, they should explain to the workers the quality standard that required. Gradually the workers will have a better understanding of the quality requirements. In addition, the supervisor has to correct the mistakes done to ensure trainee not to repeat the same faults become frequent. They can thereby reduce mistakes and potential problems. Additionally the supervisor needs to praise the workers when their performance is good in order to encourage them and enhance their morale and motivation.
Promotions form an integral and critical aspect of most people's careers. Promotions traditionally refer to advancements to positions of increased responsibility.
Most employees look forward to promotions, which usually comes with pay rise, much more responsibility and job satisfaction. For employers, promotions provide an opportunity to reward employees and to raise employees who have demonstrate their competency and loyalty to higher rank. The promotion process is fraught with pitfalls for both the employee and employer. It is often considered unfair, lack in transparency. Such a perception is of paramount importance if an organization intends to retain its valuable employees' loyalty and upkeep their motivation. Four key decisions should be weighed in any company's promotion process.
Decision 1: Is seniority or competence the rule? The most important criterion in determining the basis for is promotion: whether seniority or competence, or combination of the two.
Leaving aside smaller entrepreneurial entities, where competence must by definition take precedence over seniority, whilst many of the reasons for a promotion should be the same and the debate tends to be more relevant to large corporations and to public entities.
It is generally true that promotion based on competencies is a great motivator. But an organization may often be constrained in its ability to use competence as the sole factor in decision making for promotion. Sometimes labor union agreements or civil service requirements govern promotions. Union agreements sometimes contain clauses that emphasize seniority, such as: "In the advancement of employees to higher paid jobs when ability, merit, and capacity are equal, employees with the highest seniority will be given preference." It is also the case in many countries that seniority rather than competence determines promotions in public-sector organizations. This has often been seen in the past as a trade-off. The financial rewards may have been lower than in the private sector, but job security and promotion were much greater. It is, moreover, possible to make the argument that an overemphasis on perceived competence or even performance can make the promotion system seem least fair and lead to greater staff turnover, less continuity in a company and even thereby lower overall performance.
Decision 2: How should we measure competence? If a firm elects to base promotions on competence, how should this be defined and measured effectively and acceptable? Usually this is done through an assessment by management superiors, HR departments and to an extent peers based on past performance and achievements and the presumption that an employee will continually keep up good performance in the future once given more responsibility and opportunities. It is, however, sometimes easier to measure an employee's past achievements than to predict accurately his/her likely future performance.
In the end, it is impossible to have a foolproof methodology. Nonetheless, when an employee to be promoted to the higher level management of an organization is shortlisted, it is sometimes the case that an organization will outsource to external assessment centers to determine if an employee has the potential up to be at the very top of an organization or whether they have indeed reached the extent of their competence.
Decision 3: Is the process formal or informal? Depending on the size and nature of the organization, such as whether it is a private company, a large listed company or a government organization will have a significant bearing on the nature of the promotion process. Equally, of great importance will be the jurisdiction and the employment laws within that jurisdiction. Under European employment legislation, for example, there are major anti-discriminatory regulations in place with the aim of securing fair treatment for all groups of employees. And employers must factor that into account. Failure to promote within the terms of such legislation is leading to a huge increase in claims of unfair dismissal or treatment. In smaller companies, however, the process is often informal and promotions may result as much as from personal chemistry between immediate superior and/or subordinate, or from known friendships or family relationships. Whilst this may be effective up to a point, there is always the danger that talented employees will feel they are unlikely to have a fair chance at promotion to the higher positions and choose to leave. In addition, such informal promotion systems may de-motivate employees across the organizational levels.
Many organizations have formal, published promotion policies and procedures and will provide employees with the criteria by which the firm awards promotions. A firm may post open positions internally within organization and the requirements and circulate in the office. Some employers also maintain a detailed computerized record / database of employees' qualifications and performance so they will be notified of possible new openings for them within the organization.
Decision 4: Vertical, horizontal, or other? The promotions can be greatly complicated by external factors such as a difficult economic environment or a merger. When two organizations merge the duplication very often means the manager of one department must become subordinate to his counterpart from the other organization. Employees may feel their path to promotion is blocked. In addition when a company is facing difficult economic circumstances, company policy / strategic plan / priorities may change, whole departments may be closed down and a formerly successful division head may find he has become superfluous to requirements.
An organization may have highly talented employees whom it would like to reward, but who are not motivated by senior executive responsibilities. At GHG, for example, how do you provide promotional opportunities for those, like designers / site agent, who may have little or no interest in administrative roles?
Another option is to promote an employee "horizontally" across organizational hierarchy. For instance, one may move a sales & marketing employee to HR in order to develop his/her skills and to test and challenge his/her aptitude for a new and different role within the organization. It is also possible to implement a form of promotion when leaving the person in the same job such as you can enhance the scope and responsibilities of the existing job, provide additional training and even increase the pay package. (Dessler, 2005)
Nowadays, plenty of companies trying to reach their business arm abroad, particularly Hong Kong construction related company triggered by the fear of saturation. The traditional Chinese family-run business models need to adapt and response to the constant changing environment. They are to adopt and implement their business methodology which can be compatible and up for the challenge of doomy business climate thrive with steady progress. Furthermore, the next generations are being well educated in University locally or overseas. As a result, GHG need to employ external consultants and senior staff who are worth in the field of HR management, on-the-job training in order to achieve the company's overall strategic goal.
Today, GHG employs senior management to oversee the company's business. However, the founder is still the key person in charge and influences the company policies and final decision. Sometime they do not trust their staff even though they are experienced and proven their loyalty.
Human resource management is the strategic and coherent approach to the management of the company's most valued assets. It helps to meet the company's strategic goals by employing people and developing their capacities, utilizing, maintaining and compensating their services in tune with the job and organizational requirement, and managing them effectively as well.
Since GHG is a Chinese family-run company, the founder is has the final decision making and influences the company's operation. This system has many faults. Thus, it is recommended that the HR Scorecard, on-the-job training and promotion policy should be adopted in GHG. Some recommendations on how to improve human resource management in order to meet strategic goals are listed below.
Strengthen the human resources department such as introducing more employee benefits, recruiting, interviewing and hiring addition human resource staff.
Improving the employee's morale and self confidence in order to help the company to increase its performance and strategic goals.
Carry out effective on-the-job training system to improve the employee's skill and secure the job satisfaction.
Last but not the least, an effective promotion policy can maintain and motivate the best staff.