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Founded by Ken Thomas in 1946 in Australia, TNT is now a global company with its presence in more than 200 countries; employing around 10,000 people only in the United Kingdom.
TNT relies heavily on its core values, which form the foundation for the principles or standards followed by the entity in all business aspects. Though the strategies and the aims change and evolve continuously, the core values remain the same: (i) be honest; (ii) challenge and improve all we do; (iii) aim to satisfy customers every time; (iv) be passionate about our people; (v) measure success through sustainable profit; (vi) act as a team; and (vii) work for the world.
These values have, above all, impacted the way human resources are managed and developed. Resultantly, everything (ranging from customer relations to financial management) has revolved around these core values.
TNT is the market leader in its industry of business-to-business (B2B) delivery services; delivering approximately 3.5 million items every week.
Contribution of HR Practitioner in Business Performance
There is a rapid change in the economic environment and this change is distinguished by the phenomena of varying investor and customer demands, globalization and escalating market competition. For successful competition in such an environment, organizations persistently need to improve their performance by introducing innovative products and processes, reducing costs and improving productivity, quality and speed to market.
To top it all, human resource - the people who constitute an organization - is perhaps one of the most significant and major resource of an entity. In today's ever changing market scenario, people and the way they are managed, is gaining importance because it has become a major source of competitive benefit; other sources have declined in power as compared to the past trends (Caliskan, 2010). Though the conventional sources of success such as protected markets, economies of scale, product and process technology etc. can still offer competitive power, but an entity's human resources are more essential for its sustainability.
Resource based view empathizes that the primary basis for competitive advantage of an organization lies in the proper functioning of the precious resources available to it (Wernerfelt, 1984). This view advocates that through facilitating the progress of firm-specific competencies, human resource systems can add to sustained competitive advantage of a firm. Many a times, the distinctive capabilities of managing human resources have been identified behind sustained better performance of numerous firms (Lado, 1994).
Managers now realize that it is actually the people, and not the markets or other resources, who act as the decisive differentiators of an enterprise. Other than people, all the assets of a firm are static and inert. Being passive resources, they call for human application to create value (Fitz-enz, 2000).
However, this change in the aptitude of managers regarding the relative importance of resources places a much higher responsibility on the HR practitioners. Their roles have become more diverse, more challenging and more important for overall business performance and efficiency.
Basically, HR personnel have to provide services to the internal stakeholders; ranging from line managers to the strategic managers. These services might be general or specific; the intention is to provide helpful services that meet the requirements of the business. Moreover, HR practitioners provide advice and guidance to the management; either at the strategic level, or at the lower management level.
HR personnel also act as business partners; sharing responsibility with the line managers to play their part in the success of the business. They should take on the responsibility to identify business opportunities and look for ways in which they can assist in achieving the business objectives. Thus, in order to serve a long-term purpose, HR professionals should amalgamate their activities with the management (Tyson, 1985).
HR practitioners also have to take on the role of strategists. Guided by the business plans (which are at times formulated by taking into consideration their contribution too), they have to address long-term management issues, usually related to the development of Human Resource.
HR practitioners can easily observe and analyze the changes that take place inside and outside their organization; produce diagnoses of the situation and identify the potential opportunities and threats. As a result, they propose innovations that may be concerned with teamwork, structural change or employee development.
Very importantly, HR personnel may perform the role of the guardians of the firm's values pertaining people. They regulate the attitudes and behaviors of the people and align then to the core values of the organization. They also point out any proposed actions or policies which are inconsistent with the overall values of the firm.
At TNT, the focal point for all the aspects of business strategy is the 'delivery of superior customer experience'. Business strategies are the paths through which businesses achieve their objectives. A competitive strategy, like the one followed by TNT, can be based on: (i) securing a distinctive position in the market; and (ii) building core competencies.
TNT recognized that it is cost-effective to secure existing customers, than attracting new ones. To pursue this approach, it needs to make sure that the existing customers are given unmatched services, at the right time and the right place.
TNT enjoys a major strength of strong core values. If the HR practitioners make sure that all the employees, from top to the bottom, stick to the core values while doing their part of the job, they would be able to head towards the goals of the organization, which are aligned with the values.
In this regard, it is to be kept in mind that a strong potential threat is posed by the competitors offering lower rates to the customers, than TNT. If the HR practitioners perform their part of innovation well, then TNT would be able to over this major threat. However, they will have to take on the role of strategists too, for another major threat posed is the rising costs. Adequate planning has to be made in advance to combat the future crisis of mounting costs.
If the HR practitioners of TNT perform the roles mentioned above, then they would prove to be very helpful in pursuing the business strategy. It would allow TNT to build a stronger workforce, develop the skills of the staff, and plan for future contingencies.
International Presence of TNT
Of utmost importance is the fact that TNT is a global company, with its presence in more than 200 countries. While it has its own merits and demerits, it opens a whole new world of HR processes that have to be considered and undertaken.
Usually, firms with global presence offer products or services that are streamlined and standardized to allow manufacturing or provision to be achieved locally in a cost-efficient way; TNT projects a consistent image throughout the world by using its global strapline: Sure we can. The subsidiaries of such global companies are not rigidly controlled; except the control over the presentation and quality of the product or service. Though they perform their own manufacturing, service delivery or distribution activities, they rely on the technical expertise of the parent company.
It is argued that the core concern for multinational companies is the need to administer the challenges of global efficiency and multinational flexibility - 'the ability of a business to deal with the risks and take advantage of the opportunities that arise from the assortment and unpredictability of the global environment' (Bartlett, 1991).
When the activities of the firm are not confined to one country, international HRM presents many different issues, not present otherwise; comprising of the assortment of international organizational models that are present, issue of convergence or divergence, the problems of surviving in different environments and cultures, and the approaches used to choose, deploy, enhance and recompense expatriates.
A major issue in this regard is the extent to which international firms' HR policies should either 'diverge' to be differentiated in an answer to local requirements or 'converge' worldwide to be essentially the same in each location.
Though managers of the parent company have a natural tendency to form the nature of significant decisions, but there are much stronger arguments for giving as much local autonomy as possible with the intention to ensure that local requirements are suitably taken into consideration. Organizations have to pursue very dissimilar HRM practices and policies according to the applicable phase of international corporate evolution: domestic, international, multinational and global (Adler N J and Ghader, 1990).
Some recommendations to adapt to the international operations are: (i) acknowledgment by the parent company that its own unusual ways of managing human resources reflect some of the values and assumptions of its home culture; (ii) recognition by the parent organization that its peculiar ways are neither universally better nor worse than others; (iii) appreciation by the parent institute that its foreign subsidiaries may have other chosen ways of supervising people that are neither fundamentally better nor worse, but could possibly be more successful locally; (iv) readiness from head office not only to recognize cultural differences, but also to take action so as to make them discussable and therefore useable; and (v) the development of a genuine trust by all parties that more imaginative and valuable ways of managing people could be developed as a result of cross-cultural learning (Laurent, 1986).
TNT pays considerable attention to the training and education of its staff; most of the employees get a chance to move up the hierarchy. In this context, the HR department, based in UK, has made substantial efforts. However, things change when other countries become involved. International HR policies have to deal with the extent to which there should be divergence or convergence in the HR practices adopted in foreign country subsidiaries or units. These also have to embrace differences in employment law, different employee relations processes, the nature of the labor market and any cultural disparities in the ways in which people are treated. These issues, if not handled with care, can pose very dangerous threats to the survival of the subsidiaries in their respective countries.
However, with all this, TNT has to make sure that it delivers its business strategy globally. For this to happen, the higher management will have to keep in mind the crucial points discussed above about the differences that arise and the need to accept and respond to the same.
TNT should focus on delivering its core values in its offices across the world. Building onto the same spirit, it should then move on to provide training to the managers to familiarize them with the organization's culture and the structure. The HR practitioners can support TNT's goal of delivering its business strategy globally by: (i) training the staff to achieve consistency while allowing flexibility; (ii) obtaining leverage while achieving focus; (iii) building global brand equity while honoring local customs; (iv) distributing learning and creating innovative knowledge; and (v) engendering a global perspective while ensuring local accountability.
Assessing the Performance of HR
There are two major ways of assessing the performance of employees - performance appraisal and performance management.
The formal evaluation and ranking of employees by their managers at, generally, an annual review meeting is defined as performance appraisal. On the other hand, performance management is a constant and much wider, all-inclusive and more natural procedure of administration that clarifies common expectations, highlights the support task of managers who are expected to act as trainers rather than judges, and focuses on the future.
Performance appraisal has been brought into disrepute because too often it has been operated as a top-down and for the most part bureaucratic system owned by the HR department rather than by line managers. It has been distinguished by many commentators as solely a means of exercising managerial control (Townley, 1989). Performance appraisal had a propensity to be backward looking, absorbed on what had gone wrong, rather than looking ahead to future development needs. Performance appraisal schemes survived in remoteness. There was little or no relationship between them and the needs of the business. Line managers have often discarded performance appraisal schemes as being prolonged and beside the point. Employees have been offended by the superficial nature with which appraisals have been performed by managers who lack the skills required, are likely to be biased and are merely going through the motions.
TNT should follow the cycle of performance management: (i) conclude a performance and development contract; (ii) manage the performance of the employees throughout the year; and (iii) assess the improvement and accomplishments so that action plans can be arranged and agreed and, in several schemes, performance can be rated.
An evaluation of the lower level workers would also reveal the performance of the HR personnel; for regular customer services are provided by the low level employees.
Conclusions and Recommendations
Based on the discussion and the findings of the paper, several recommendations are made for TNT and other organizations.
The academic research clearly indicates that human resources are a cause of sustained competitive advantage, while, conventionally, the costs connected with the development of HR strategy have been viewed as an operating expense, these costs would be better deemed as an investment in capital assets.
The way a company manages its HR has a noteworthy association with the company's results, an exposure that sustains the resource-based view, where business competitiveness is connected, at least in part, to the investments in company specific assets. Even though the published studies in general report positive statistical relationships between the greater implementation of HR practices and business performance, it should not be forgotten that numerous other factors besides HR practices could manipulate organizational performance.
TNT seems to invest heavily in its HR in the UK. However, little is revealed about the status of employee development in other countries. Though it is strength of TNT that it has developed a training program for its employees, it needs to make sure that its business strategy is delivered globally to all its offices and centers. Moreover, a developed strategy map is a huge strength. Other firms need to follow TNT's example and fully develop their strategy maps.
The core advantage enjoyed by TNT is its ability to deliver the business strategy to the grass-root level; enabling all the workers to stream-line their performance in accordance with the strategy.
Though TNT allows greater opportunities for career development, it needs to maintain a proper performance management system. The underlying connection between HR and organizational performance will facilitate the HR managers to devise programs that will bring forwards improved operational results to achieve higher organizational performance. The center of attention of the HR management should be to comprehend organizational performance processes and plan HR practices that control process and resulting variables.