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In large and complex business organisation there are differences between human resource management and personal management. Complex firms created more than six million new jobs in the United States in the 1980s. During the same period, "Fortune 500 firms reduced employment by more than a million (Holt 1993)". "In recent years, small firms have accounted for nearly 90 percent of the net new jobs added in the U.S. Since small firms employ nearly half of the American workforce (Holley and Wolters 1987)", their success is critical for the economy. To be successful in a global market, a small firm needs a highly motivated, "skilled and satisfied workforce that can produce quality goods at low costs (Holt 1993)". However, to develop such a workforce, a firm has to implement an appropriate human resource management (HRM) strategy.
"Unlike large businesses, published research further indicates that recruiting, motivating, and retaining employees is one of the biggest problems for small firms (Hornsby and Kuratko 1990, Mathis and Jackson 1991, Gatewood and Field 1987, Verse 1987)". These findings are substantiated by a recent study (Hess 1987) "which reports that small firms ranked personnel management as the second most important management activity (next to general management). (Allbusiness.com)" "However, in practice, other functional areas such as finance, production, and marketing usually get preference over personnel management (McEvoy 1984)". "Even textbooks on small business management pay considerably more attention to finance, marketing, and planning than personnel management (Hess 1987)". Also, "researchers report that managers of small firms lack training in formal personnel management practices and they do not consider the use of generally accepted HRM practices as essential for improving productivity (Amba-Rao and Pendse 1985, McEvoy 1984)". "This lack of understanding of HRM issues and their importance in the operation of a successful business has impacted many small firms. Inadequate and inefficient management of human resources of firms have often resulted in low productivity, and high dissatisfaction and turnover among the employees (Mathis and Jackson 1991)". "At least one study has found HRM practices to be the leading cause of small firms' failures (McEvoy 1984)".
"A good HRM program will recruit, select, motivate, and retain employees who have the required workforce characteristics (Deshpande, Golhar, and Stamm 1993; Saha 1989)". A majority of the published research investigating HRM issues in small businesses is conceptual and has concentrated on diverse HRM topics. Maurer and Fay (1986) examined the legal issues involved in employee selection methods used in small business. "Gatewood and Field (1987) proposed a model selection program for small business". Fairfield-Sonn (1987) developed a strategic process model to guide the establishment of small business training and development programs. Curran (1988) suggested various training strategies for small business. Fowler and Murlis (1989) proposed compensation systems for small companies. "Cosgrove and Dinerman (1982) addressed industrial relations issues in small firms. Holley and Wolters (1987) examined employment-at-will issues in small businesses". "Finney (1987) and Smith (1991) addressed personnel challenges faced by HRM managers of small firms and proposed strategies for effective HRM".
On the other hand, some empirical work has also been reported in the literature that examines specific aspects of HRM. "McEvoy (1984) studied personnel practices of 84 small businesses near a large Midwestern metropolitan area and found that small businesses lacked creative staffing practices". "An investigation of compensation practices of 78 small firms in north-central Indiana revealed that small business compensation and maintenance practices lacked a systematic and rational approach (Amba-Rao and pendse 1985)".
This empirical study compares HRM issues in large and small manufacturing firms. In particular, the following issues are examined: (a)Recruitment and selection (b) Workplace diversity (c) Payment and rewards (d) training and development. essential workforce characteristics, (b) sources of recruitment used, (c) selection instruments used, and (d) other HRM practices.
Recruitment is the process of identifying that the organisation needs to employ someone up to the point at which application forms for the post have arrived at the organisation. Selection then consists of the processes involved in choosing from applicants a suitable candidate to fill a post. Training consists of a range of processes involved in making sure that job holders have the right skills, knowledge and attitudes required to help the organisation to achieve its objectives. Recruiting individuals to fill particular posts within a business can be done either internally by recruitment within the firm, or externally by recruiting people from outside.
The advantages of internal recruitment are that:
1. Considerable savings can be made. Individuals with inside knowledge of how a business operates will need shorter periods of training and time for 'fitting in'.
2. The organisation is unlikely to be greatly 'disrupted' by someone who is used to working with others in the organisation.
3. Internal promotion acts as an incentive to all staff to work harder within the organisation.
4. From the firm's point of view, the strengths and weaknesses of an insider will have been assessed. There is always a risk attached to employing an outsider who may only be a success 'on paper'.
The disadvantages of recruiting from within are that:
1. You will have to replace the person who has been promoted
2. An insider may be less likely to make the essential criticisms required to get the company working more effectively
3. "Promotion of one person in a company may upset someone else. (questia.com)"
External recruitment makes it possible to draw upon a wider range of talent, and provides the opportunity to bring new experience and ideas in to the business. Disadvantages are that it is more costly and the company may end up with someone who proves to be less effective in practice than they did on paper and in the interview situation. There are a number of stages, which can be used to define and set out the nature of particular jobs for recruitment purposes:
Job analysis is the process of examining jobs in order to identify the key requirements of each job. A number of important questions need to be explored: the title of the job to which the employee is responsible for whom the employee is responsible a simple description of the role and duties of the employee within the organisation.
Examples and Discussion:
Recruitment at Tesco
Tesco is the biggest private sector employer in the UK. The company has more than 360,000
employees worldwide. In the UK, Tesco stores range from small local Tesco Express sites to
large Tesco Extras and superstores. Around 86% of all sales are from the UK.
Tesco needs people across a wide range of both store-based and non-store jobs:
â€¢ In stores, it needs checkout staff, stock handlers, supervisors as well as many specialists,
such as pharmacists and bakers.
â€¢ Its distribution depots require people skilled in stock management and logistics.
â€¢ Head office provides the infrastructure to run Tesco efficiently. Roles here include
human resources, legal services, property management, marketing, accounting and
"Tesco aims to ensure all roles work together to drive its business objectives. It needs to
ensure it has the right number of people in the right jobs at the right time. To do this, it has a
structured process for recruitment and selection to attract applicants for both managerial and
operational roles. ( thetimes100.co.uk)"
Workforce planning is the process of analysing an organisation's likely future needs for
people in terms of numbers, skills and locations. It allows the organisation to plan how those
needs can be met through recruitment and training. It is vital for a company like Tesco to plan
ahead. Because the company is growing, Tesco needs to recruit on a regular basis for both
the food and non-food parts of the business.
Positions become available because:
â€¢ jobs are created as the company opens new stores in the UK and expands internationally
â€¢ vacancies arise as employees leave the company - when they retire or resign - or get
promotion to other positions within Tesco
â€¢ new types of jobs can be created as the company changes its processes and technology
An important element in workforce planning is to have clear job descriptions and person
specifications. A job description sets out:
â€¢ the title of the job
â€¢ to whom the job holder is responsible
â€¢ for whom the job holder is responsible
â€¢ a simple description of roles and responsibilities.
A person specification sets out the skills, characteristics and attributes that a person needs
to do a particular job.
Together, job descriptions and person specifications provide the basis for job advertisements.
They help job applicants and post-holders to know what is expected of them. As they are sent
to anyone applying for jobs, they should:
â€¢ contain enough information to attract suitable people
â€¢ act as a checking device to make sure that applicants with the right skills are chosen for interview
â€¢ set the targets and standards for job performance.
Training and Development:
New workers in a firm are usually given an induction programme in which they meet other workers and are shown the skills they must learn. Generally, the first few days at work will simply involve observation, with an experienced worker showing the 'new hand' the ropes. Many large firms will have a detailed training scheme, which is done on an 'in-house' basis. This is particularly true of larger public companies such as banks and insurance companies. In conjunction with this, staff may be encouraged to attend college courses to learn new skills and get new qualifications. Training thus takes place in the following ways:
1. On the job - learning skills through experience at work
2. Off the job - learning through attending courses.
Promotion within a firm depends on acquiring qualifications to do a more advanced job. In accountancy for example, trainee accountants will be expected to pass exams set by the Association of Chartered Certified Accountants (ACCA). At the same time, a candidate for promotion must show a flair for the job. It is the responsibility of the training department within a business to make sure that staff with the right skills are coming up through the firm or being recruited from outside.
The Association of Chartered Certified Accountants has 300,000 members and students throughout the world. It is a professional body setting standards for the accountancy profession. To be properly qualified, accountants must have passed examinations that make them eligible for membership of one or more professional accounting bodies, such as ACCA. Typically accountants will improve their knowledge and experience by taking courses run and organised by ACCA during their professional training enabling them to develop and enhance their careers.
Diversity at work place: Example and Discussion
In an American subsidiary of a global bank based in Japan, a few Japanese female workers complained to management that their older Japanese male bosses were being disrespectful to them. The human resources manager questioned all of the women in the office. Every Japanese woman reported problems with the Japanese men. In contrast, the American women reported no problems at all. Confused, the human resources manager questioned the Japanese male managers. The answer? The Japanese men responded that they understood American expectations related to sexual harassment, so they were careful about what they said to the American women. They were perplexed by the responses of the Japanese women. "What is the problem?" the Japanese men wanted to know, "They know that we don't mean anything. Any Japanese person would understand." Communication, which has never been straightforward and easy in the first place, is becoming even more complicated as organizations take on global partners.
Diversity is no longer just a black/white, male/female, old/young issue. It is much more complicated and interesting than that. In The Future of Diversity and the Work Ahead of Us, Harris Sussman says, "Diversity is about our relatedness, our connectedness, our interactions, where the lines cross. Diversity is many things - a bridge between organizational life and the reality of people's lives, building corporate capability, the framework for interrelationships between people, a learning exchange, a strategic lens on the world."
A benefit of a diverse workforce is the ability to tap into the many talents which employees from different backgrounds, perspectives, abilities and disabilities bring to the workplace. An impressive example of this is found on the business cards of employees at one Fortune 100 technology company. Employees at this company have business cards that appear normal at first glance. On closer inspection, the raised Braille characters of employee information are evident.
1. We saw the traditional "IBM for life" sort of career path on the horizon in the rearview mirror long before the current economic crisis. Even then, for some, jobs at small companies held their own allure.
2. With more than 180,000 tech jobs cut in 2008, though, thousands more workers no doubt will find an obvious attraction -- "Salary versus no salary," as Lancet Software VP Randy Mattran put it.
3. But small companies also can offer employees flexibility and the chance to expand their range of skills through experimentation and innovation, according to Elaine Varelas, managing partner at career management company Keystone Partners.
4. The key to success for those coming from huge corporations, she says, is to have clear expectations on both sides. Bill Karpovich, cofounder and CEO of commercial open source software company Zenoss, expressed the opportunities like this: "As much as you can do, you can do it in a small company."
5. Capgemini Consulting offers one of the widest reaching HR services portfolios in the industry, we are experienced in determining an delivering Rewards and Recognition services across all industry sectors.
Capgemini Consulting works collaboratively with clients to help design appropriate and innovative reward and Total reward strategies and has worked with major organisations including a global media organisation, a large government department, and a major UK bank. We have experience in building reward solutions, helping our clients manage the change associated with reward and helping to ensure the identified benefits are achieved, including delivering innovative and smart performance management frameworks that protect reward investment and drive a culture of high performance.
The benefits of Reward and Recognition strategies:
An effective Reward and Recognition strategy delivers measurable organisational benefits. Effective reward and recognition will:
Help organisations to achieve their recruitment and retention objectives
Enable organisations to build on holistic improvements in the wider HR and people proposition
Align people's behaviour with business strategy and organisational objectives
Align and connect performance management, personal development, reward and career progression
Drive a high performance culture
Achieve more value from benefits spend
Communicate the value of total reward to an organisation's employees
Example: Capgemini's approach
The Capgemini Consulting approach to Reward and Recognition is based around working collaboratively with clients to answer critical questions and deliver solutions in five main areas:
Reward solution development: We work with the client to build a vision and roadmap for the strategy, and to build the design of reward module options and components. We also build complex models to evaluate the cost and benefits of the solution.
HR Insight: We work with the client to evaluate how a reward framework will impact on and enable the wider HR strategy; and to develop a strategy to communicate the benefits and the relevance of such an approach to all interested parties.
Change Management: We work with the client to communicate the reasons for the change and transformation programme with a view to minimising resistance and maximising brand impact.
Stakeholder Management: We work with the client to build an HR infrastructure which adds value at all levels of the organisation. This includes engaging with business sponsors, key stakeholders and the wider business.
Project Management: We also evaluate each offering and model the return on investment from individual benefits as well as developing a risk management strategy across the programme.
Payment and rewards: Examples and discussions
Remuneration (including base pay, short-term incentives and long-term incentives). Many human resource and business leaders once believed that pay represented the total solution for attracting talent, motivating high performance, reducing turnover and a host of other human resource challenges. However, remuneration is just part of the picture. Other reward program elements can be just as important, if not more important, to employees. ( authorial.com)
Benefits (including superannuation, cars, work/life and other benefits). Benefits account for an increasing part of the reward package, and employees recognise this. They look closely at the company's superannuation plan and other benefits, and select elements in their remuneration packages aligned to their needs. And not only do needs and preferences vary from employee to employee, they also change over time.
"After a merger in 2000, PepsiAmericas recognized the need to bring together its three separate companies each with its own distinct culture. This prompted the development of a strategic business plan that would result in melding the strengths of each company into a single, unified entity. The PepsiAmericas HR team played a prominent role in leading the transformation, focusing attention on how PepsiAmericas managed its human capital".
"Performance management doesn't become reality until it's linked to pay. If you don't link it, it's all talk. You can purchase niche solutions to help do this, but unless they're integrated and linked, they don't really work. The information doesn't flow through. You don't gain any advantage unless they are well linked and integrated. (ceoforum.com)"
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