What is HRM
The term HRM or human resource management means managing people in different areas of the business. Human resource responsibilities consist of four types of responsibilities in the business management hiring, retaining, compensation and designing their work in the organization. The basic objective of almost every HRM department in the business organizations is to maximise the overall production efficiency of the organization and the optimal use of the human resources (employees) As Edward L. Gubman observed in theÂ Journal of Business Strategy,Â "the basic mission of human resources will always be to acquire, develop, and retain talent; align theÂ workforceÂ with the business; and be an excellent contributor to the business. Those three challenges will never change."
Human Resource Management in the Current Era
In recent years, HRM field changed to a great extent and has the major effect on the field of human resource management. One of the major aspects is technology development in the business environment. So human resource management has to face new challenges like to train the employees for new technologies like satellite networking and tele-conferessing and other such like devices.
Importance of Human Resource Management
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Until a few years back the HRM department was being considered the department of less importance in the corporate hierarchy but now human resource department value in the organizations has grown dramatically because management knows that HRM department is directly responsible for the progress and nourishment of the business. Without effective HRM department it is impossible for companies to compete and evolve the current era of business competition. And this recognition of HRM importance has reached not only to the large scale businesses but also to the small scale businesses. As Irving Burstiner commented inÂ The Small Business Handbook,Â "Hiring the right people-and training them well-can often mean the difference between scratching out the barest of livelihoods and steady business growthâ€¦. Personnel problems do not discriminate between small and big business. You find them in all businesses, regardless of size."
Importance of Performance Appraisal in Current Scenario
To measure and evaluate the performance of the employees is always very crucial for business and the concerned managers and officials continuously perform this rating and evaluation throughout the year. The importance of appraising performance of the employees can be compared to the managing financials and other resources of the organization because the performance of the employees has the direct relation with the utilization of the other resources of the organization and heavily effect the overall performance of the organization.
How to conduct performance appraisal programme
The five key elements of the performance appraisal are:
MeasurementÂ - assessing performance against agreed targets and objectives.
FeedbackÂ - providing information to the individual on their performance and progress.
Positive reinforcementÂ - emphasising what has been done well and making only constructive criticism about what might be improved.
Exchange of viewsÂ - a frank exchange of views about what has happened, how appraises can improve their performance, the support they need from their managers to achieve this and their aspirations for their future career.
AgreementÂ - jointly coming to an understanding by all parties about what needs to be done to improve performance generally and overcome any issues raised in the course of the discussion.
There are many tools for performance appraisal which are being used by the different organizations like behavioural anchored rating scale, forced choice method, checklist, graphic rating scale, rating, M.B.O. etc.
Case study AUTOGLASS Ltd
Autoglass is the UK's leading vehicle glass repair and replacement company, and has the largest market share. It is part of the Belron group, which is the world's biggest vehicle glass company. In the UK, there are just over 2,000 employees, approximately 1,100 of whom are mobile technicians, working out of 130 branches.
There are three main groups of employee: trained and trainee technicians based throughout the UK; customer service staff based in the customer contact centre in Bedford and in Autoglass branches across the UK, and support staff located in the state-of-the-art head office in Bedford.
Always on Time
Marked to Standard
The HR department is a team of 25 people, which manages all the HR functions including: resourcing, employee relations, management development, technical training, internal communications, health and safety, and technical services.
The case for alignment
The organisation has always performed well. HR has a good reputation and has been an important part of the business since the late-1990s. (From the early-1990s, HR was known as 'Personnel and Training'.) The HR plan is formulated with close consideration to the business strategy, but as well as this HR is in a position to add to the business planning processes. The HR director is a member of the executive committee, which is responsible for strategy and business development. In 2002, although the company continued to be successful, it was felt there was a need to map out new opportunities for growth and to review the strengths of the business, so Autoglass committed to a strategic review. This ran in partnership with the parent company. An important part of this was a people review, which examined:
Who have we got? The demographic picture
How people enter and exit the business - recruitment, tenure and turnover
How people are managed
The organisational culture.
How was alignment achieved?
Although historically there has been a personnel function in Autoglass since the early-1990s, the HR director role was created in 1997.HR is now an established fulcrum between company and staff. There are two key strands to this role, which HR endeavours to interweave. Improving:
business performance by working closely with the business heads and the yearly/five-year business plans
the working lives and conditions of employees and, as it is not a unionised environment, HR takes this role seriously.
The HR director believes that working conditions affect the standard of people coming into the company. For example, HR recently increased holiday entitlement for managers after noticing that their offering was a bit short of the national average. This was done despite some management resistance.
A great example of HR working in line with the business at Autoglass was the role played in critical structural and reward changes in 2000 after it was recognised that the business structures had become too complex.HR led the approach to these changes while working very closely with regional managers, providing professional competence, guidance and moral support. For the organisation, it was an excellent example of cross-functional working. The changes included:
Discontinuation of the network structure, so branches became independent
Even stronger commitment to the mobile working strategy
Table Of Different Significant HR Initiatives And Business Out Comes
Training and development
Auto glass invest more than average in its training and development programme50, providing a comprehensive training programme for technicians through the National Skills Centre. In addition, there is a management training plan, and management development centres have been run based on carefully analysed leadership success factors
Staff turnover has fallen
The quality of service has improved
An organisation-wide capability review has recently been conducted
The trainee management programme is Auto glass's graduate recruitment programme, which is fairly unique in the industry.
Improving the quality of branch management
There is an employee assistance programme,which has a utilisation rate of just under five per cent
Managing director's 'open house' programme
Field-based HR roles
staff satisfaction is used as a key performance indicator and the overall index score has increased from 50 to 61 since 1995.
Pay and benefits
The pay scales are in the upper quartile and all staff are on a variable earnings plan
Business performance has improved year on year since 2000,with 2003 being the best year ever
Autoglass has a well-established performance management system. Every manager has received training in the process. Recent trends show that positive ratings are on the increase
The staff survey shows the highest positive results around 'clarity of goals and what's expected of me'.This suggests the organisation is providing a framework for employees to work to their maximum capacity
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Productivity-based reward system for technicians, which was a huge benefit to the business.
The management and output of the strategic people review is a good reflection of the overall HR ethos in Autoglass, which focuses on the practical and does not 'over intellectualise' in pursuit of best practice. The HR director feels that it is more important to realise that organisations are not linear: learning about your specific case and finding out 'where the pain is' in the business is more realistic. While working towards more 'blue sky' improvements is important, it is critical to balance this with attending to existing problems.HR see this balance as their key role.
To plan current and future HR work so that it aligns with business needs, Autoglass uses both quantitative and qualitative methods including staff satisfaction survey results, turnover and sickness data as well as listening to what people at all levels around the business are saying. For example, senior managers go out into the business and lead open house participative sessions with a cross-section of staff.HR facilitate these sessions, focusing on what issues are being dealt with in the business currently and managing staff expectations.
The HR department is confident in its ability to add value. Resources for the review were found almost entirely internally rather than using large-scale consultancy to manage the process. For the strategic review, Autoglass used an internal team (including a regional manager ,a contact centre manager, an HR manager, the HR director and the rewards manager),with support from their parent company Belron and one independent consultant from The Work Foundation to provide an external perspective.
Generally, according to the staff attitude survey, satisfaction ratings have improved in gradual progression over roughly the last 8-year period to 61 from a base of 50.Although managers own the results of their area, HR feels this says a great deal about its contribution to the business and the working lives of staff overall. The pace of improvement has accelerated since the changes in 2000 that resulted from the 'changing the game' project. The business, after an initial dip, was energised.
More specifically, the people review provided an excellent birds-eye view of how HR was functioning. While the policies and processes were working well generally, it was felt that there were areas of real weakness that were a cost to the business and could be improved on. The main issue was that the recruitment process for technicians was not working. In response to the review findings, in under a year HR has designed and perfected a new approach to recruitment. Although there is habitually high turnover in the industry, this has improved. The process has been well received throughout the business.
Training and development initiatives have had a positive effect on the business. Drop-out rates from training programmes are low, indicating that staff and their managers value training and give it a high priority. Around 56 per cent of people are working to a personal development plan. More crucially, the National Skills Centre had a positive impact, most notably on performance of fitters, and a business case for a relocation and expansion of the facility was approved earlier in the year.
Succession planning has resulted in a balance at senior levels between internal promotion and external appointments. Most vacancies are advertised internally, but an exclusively external process is used if it is known that the necessary skills and experience do not exist in the organisation or new blood is needed.
Conditions for success
The good reputation of HR is critical to its involvement in business planning and performance improvements. The HR director feels that HR people who understand the business they are in and are confident to be part of the issues peculiar to it is central to sustaining their reputation. This combined with enlightened senior management is how HR sustains its strategic role.
In Autoglass it is accepted that people are 'part of the solution rather than part of the problem'. 'The people dynamic is crucial - people are a vital part of our business,' says the HR director. With an overwhelming majority of their customers meeting technicians in the field face-to-face, the people element cannot be ignored.HR is fundamental to recruiting and managing these people.
Influencing business heads is an important and iterative process at Autoglass. Partnerships with business heads are central to most of the projects they work on, for example the structural and pay changes in 2000.In addition, persistence with initiatives and ideas has been a large part of HR's success in adding value. 'While you need a few quick wins, issues such as motivation and leadership are only long term. There is no use in pretending otherwise,' says the HR director.
Phase One of the overall strategic process took longer than anticipated due to some complicated market research. As a consequence, the follow-up stages have been delayed. Often the stark realities of business needs are cyclical and demand short-term responses, which can inhibit longer term thinking. However, HR views this as 'the way things are' rather than a major challenge although there can be 'tensions' in getting people to realise that long-term solutions are vital to managing out short-term problems. For example, getting people to use new recruitment approaches and getting people to stick with it even if it does not work at first.
Building on achievements and working with the business as they evolve.
Consistently reviewing HR policies and processes.
Continuing to find the weak spots in the business and looking at where HR can intervene.
Pushing the boundaries of the 'employer of choice' agenda, for instance implementing a sabbatical policy.
Learning and sharing across the Belron group, particularly looking at the more mature businesses in the organisation, such as those in Belgium and Holland