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A recent examination of the role of personnel in financial services pointed out that personnel is often either bypassed over strategic decisions or manipulated by senior line colleagues to undertake the onerous (job-shedding) consequences of decisions taken by line executives (Lecky-Thompson, 1997). The author concludes with the thought that if the people management function continues to be compromised: "will personnel remain on the margins, or will it be heading for extinction?" (1997, p. 27)
To start with we need to define the terms Personnel and Human Resources. People that are employed by organizations to perform some kind of work are called Personnel. They can be highly skilled professionals or unskilled labourers. Human capital theory can be associated with the resource-based view of the firm as developed by Barney (1991). This proposes that sustainable competitive advantage is attained when the firm has a human resource pool that cannot be imitated or substituted by its rivals. Human Resource department is responsible for hiring new personnel, providing training, and providing information about benefits, responding to complaints from employees and even firing employees. This department is also responsible for obtaining security clearances for people working in sensitive areas and also providing the accounting department with information about employees so that they can be paid. Those who work in Human Resources also have to deal with issue that are health care related or regarding sexual harassment or employee disputes.
Personnel management is administrative in nature. It deals with complying with the laws and regulations pertaining to the employment, dealing with payroll and handling related tasks. On the other hand Human resources is responsible for managing the workforce. According to Human resources the workforce is the primary resource that contributes to the success of an organization. Personnel management is typically the sole responsibility of an organization's personnel department. Personnel management motivates employees with things such as rewards and bonuses, ease of work responsibilities and compensations. According to Personnel management employee satisfaction provides the motivation necessary to improve job performance. Human resource management can be described as reactive, providing a response to demands and concerns as they are presented.
Nalbantian et al (2004) emphasize the purposeful measurement aspect of HRM. They define human capital as: 'The stock of accumulated knowledge, skills, experience, creativity and other relevant workforce attributes' and suggest that HRM involves 'putting into place the metrics to measure the value of these attributes and using that knowledge to effectively manage the organization'.
With the advent of the new era, organizations have become more financial target driven. The difference between the concepts' of personnel management and human resource management is bridging, and the organizations are implementing more hybrid models for maximum optimisation of resources.
As described by Scarborough and Elias (2002): 'The concept of human capital is most usefully viewed as a bridging concept - that is, it defines the link between HR practices and business performance in terms of assets rather than business processes.' They point out that human capital is to a large extent 'non-standardised, tacit, dynamic, context dependent and embodied in people'.
Guest (1987) believes that one of the key policy goals of HRM is strategic integration: 'The ability of the organization to integrate HRM issues into its strategic plans, ensure that the various aspects of HRM cohere, and provide for line managers to incorporate an HRM perspective into their decision-making'. He has stated (1991) that 'HRM is too important to be left to personnel managers.'
In the business era Human Resource Management has become one of the main assets. The proper management of Human Resources plays a vital role in determining the success of a certain organisation. Managing human resources across organizations will have great impact on progress results and in achieving and sustained business success. Organisations have recognised this concept and are implementing this ideology resulting in organisations taking a strategic approach to the management of their people.
As Becker et al (2001) emphasize: 'The most potent action HR managers can take to ensure their strategic contribution is to develop a measurement system that convincingly showcases HR's impact on business performance.' They must 'understand how the firm creates value and how to measure the value creation processes.
The turn of the century, brings a change in teh economy and the markets. Human resources managers will have to adapt to theses new challenges. With these changes there has to be a paradigm shift. Several changes such as revision of organisational structure and functions in order to keep up to pace with relevance, latest trends and strategies need to be done. While investing in technology, organizations are also concentrating on other aspects that would be considerable in attaining a holistic performance of their respective organisation. Human resource management is one such aspect that need, if not all, much more attention and investment than technology.
To institutionalise a well-defined system to expedite the handling of disputes and grievances organisations have realised that they need to unleash their human resource employee relation's imagination to create capability and flexibility that in order for them to recruit, develop, and retain skill employees for future missions. Human resource departments are adopting a modern day progressive employee relation's paradigm that embraces and enhances the recruitment, development, and retention of employees in concert with human capital strategic management planning initiatives.
Organizational Development plays a vital role in the strategic management of change, providing a focus for the Organizational change needed for continuous improvement, aligning systems, culture and activities to the achievement of Organizational goals. OD is defined as, a long-range effort to improve an organisation's problem-solving capabilities and its ability to cope with changes in its external environment with the help of external or internal behavioural-scientist consultants, or change agents as they are sometimes called (Wendell French, 1964)
Change is the key to organisational success for Human Resource professionals. Human resource management helps organisations to understand their history, strategise for the present, and create visions for the future. The new HRM concepts move beyond the traditional experiences of personnel, recruitment and selection, classification and compensation, health promotion and benefits, risk management, training, and organisational development to one of visionary guide, change agent, and culture monitor (1995).
Â Human resource management is defined as the process of coordinating an organisation's human resources, or employees, to meet organisational goal. The Hr manager deal with such areas as employee recruitment and selection, performance evaluation, compensation and benefits, professional development, safety and health, forecasting, and labour relations. However even HRM has its own set of challenges, viz. maintaining a diverse workforce, adapting with the major technological changes, keeping up with governmental regulations, handling corporate restructuring and downsizing, and formulating strategies essential to personnel management.
Â Â Â Â Â Â Â Â Â Â Â As a result, many executives have suggested that effective Human Resources (HR) strategies are one of the most important aspects of successfully implementing organisational strategy within the company.The Human Resources manages people within the organisation and also plans for future ventures and objectives involving people in the Company. (Handy, 1999). It is very vital that the people in the organisation are managed properly else the organisation may even fall apart. The Human Resource Department's main objective is to harness the best in their employees and thus contributing to the Organisation's success.
Traditionally, HR managers were often viewed as the standardizing, regulating arm of executive management closely aligned with personnel and administration functions. However the role of the HR manager must match the needs of his or her changing organization.
The HR manager should be a strategic partner, an employee sponsor or advocate and a change mentor along with the traditional responsibilities of personnel and administration functions. The HR manager has the following areas of responsibility
Salary and Benefits
The HR Manager covers up a system that attracts, develops, motivates, and retains employees. Differences in culture, attitudes, values and norms make managing people difficult. An organisation's valuable resource, its personnel, has to be managed systematically and strategically. The line manager is responsible to keep the people to be motivated and for them to seek improvement and career development for their own betterment along with that of the organisation. It is critical that the human resources and the organisation as well should align their people, work, structure and organisational behaviours to the purpose of the organisation and effectively reward the right performance that supports the objective of the organisation. The HR manager is also responsible for change in culture. He should have the perceived benefits, a deadline for execution and also the realised gains in relation to the change in culture. In this step, there should be reality checks which should be done often. There should also be continuous integration. Through this scheme HR Department should be able to change the culture in the organisation and add value to it. (Harold, 2003).
Dave Ulrich, one of the best thinkers and writers in the HR field today, and a professor at the University of Michigan, recommends three additional roles for the HR manager.
Business and Strategic Partner
As a strategic partner, the HR manager contributes to the development and the accomplishment of the organization's business plan and objectives. The HR business objectives are established to support the attainment of the overall strategic business plan and objectives. The role identified by Ulrich involves working closely with senior business leaders on strategy execution, in particular designing HR systems and processes that address strategic business issues. Making the organisation more customer-focused; cost efficient; innovative, and structured in such a way that it can quickly respond to changing priorities.
As an employee sponsor or advocate, the HR manager needs to expertise in how to create a work environment conducive for people to be motivated, contributing, and happy. This can be achieved by employing effective goal setting methods, communication and empowerment through responsibility. The HR manager has to ensure that the employee are given growth opportunities, gain sharing and profit-sharing strategies, organization development initiatives, various approaches to problem solving.
Due to the ever changing nature of organizations the HR professional to frequently champion change. The HR manager must have the knowledge about and the ability to execute successful change strategies. It is essential that the HR manager ensures that the changes are faced by minimal employee dissatisfaction and resistance to change. The HR manager finally has to determine the measures that will evaluate how well his organization is succeeding in all of this.
According to Alan Price (2007), "A process which anticipates and maps out the consequences of business strategy on an organization's human resources. This is reflected in planning of skill and competence needs as well as total headcounts."
Human resource planning is very crucial for every organisation. The penalties for in appropriate staffing could prove costly for the organization.
If the organization is under staff, then it could lead to loss orders, customer and profit.
Overstaffing means wastage of resources and would prove to be expensive. Overstaffing reduces the competitive effectiveness. Also it increases the cost to the company in terms of redundancy payments, minimum periods of notice, etc.
Human Resource planning requires that the appropriate number staff levels must be known for the present and also for the future to meet the needs of the organization. This means comparing the present resources with the future predicted resources. Appropriate steps then be planned to bring demand and supply into balance.
Human resources have to collate information from the whole organisation. HR has to opinionated on various aspects like redundancy or recruitment costs, redeployment, availability of skilled workers from within, availability of skilled workers externally, training and management need, etc. They also need to help and support the line managers with the consequences of implementing the various options.
The first step is to make a detailed report that indicates how many staff exists in the company. The information should be with respect to number or employees, age, experience, skills, gender, etc. Next predict the number of employees that will be there after 1,3 and 5 years by taking in to consideration normal turnover, planned staff movements, retirements, etc. Thus an estimated figure is achieved with various time frames.
Future staffing need would be achieved by taking into consideration aspects like extrapolation (of past trends); projected production/sales; employee analysis, etc. HR would take into consideration employee attitude, behaviour and commitment as they are very important for development, performance assessment and the management of change.
Then the job analysis needs to be done. This involves detailed examination of the job profile. It is important to find out the level of skill set required for the particular job. It can be determined by extrapolating from any current similar job that is is being performed. Thus a job description is obtained.
Based on the job requirements, the appropriate people have to be searched for. The job analysis gives details of what the job requires and provides the knowledge or skill level required to perform that job. Based on the competencies of existing employees and those available in the job market, jobs and personnel are matched. Based on the "best" fit approach people would be hired. The people who have the right skill set and experience and who require least training are selected. Human resource planning also involves considering retaining, retirement, Redundancy and downsizing.
Thus after taking in to account all the permutations such as recruitment, training, retraining, labour reductions (early retirement/redundancy) or changes in workforce utilization equilibrium will be achieved. This will reflect 'actual' as against predicted experience on the supply side and changes in production actually achieved as against forecast on the demand side
The recruitment process can be internal, external or online. The various stages of recruitment are advertising, job description, job application, interviews, assessment, decision making, legislation selection and training (Korsten 2003, Jones et al, 2006). Examples of recruitment policies within healthcare sector and business or industrial sectors could provide insights on how recruitment policies are set and managerial objectives are defined. After a thorough analysis of the job and market (labour) conditions, and successful interviews and psychometric test abilities of applicants are determined. Many other techniques of selecting are used by different organization like emotional intelligence in inexperienced applicants and corporate social responsibility, different types of interviews, in tray exercise, role play, group activity, etc.
Failure in recruitment can create problems for a company impacting its profitability and inappropriate levels of staffing or skills. Insufficient recruitment can lead to under staffing and thus leading to labour shortage. There are various ways of improving the effectiveness of the recruitment process. They are Munro-Frasers five-fold grading system, Rodgers seven point plan, psychological tests, personal interviews, etc.
Most suitable manpower can be hired only my extensive planning and effective decision making by the management. Competition among business organisations for recruiting the best potential has increased focus on innovation, and management decision making and the selectors aim to recruit only the best candidates who would suit the corporate culture, ethics and climate specific to the organisation (Terpstra, 1994). This means the potential candidate must have a combination of being a "best "fit for the particular job and at the same time being a team player. Human Management resource approaches are focused on meeting organisational objectives and insight of strategic plans through training of personnel to improve company performance and profits (Korsten, 2003). The process of recruitment does not however end with application and selection of the right people but involves maintaining and retaining the employees chosen.
The process of recruitment
This involves the redeployment of staff from one process to another. It can also be a job promotion i.e. Movement of an employee to a upper level. Internal recruitment has several benefits. Individuals from within the organization has the knowhow of the company policies and procedures and also requires less time to "fit in", thus reducing cost. Internal job promotion is a retention tool and also a incentive to the deserving hard working employees. However this can be disrupting as well. Promotion of one employee may upset someone else. Also the promoted employees will have to be replaced.
External means candidate who came from outside, not work in our store. This gives the employers a wide range of options of the available talent pool in the job market. Also gives way to fresh new and innovative talent to enter the organisation. However it incurs a cost more than the internal selection. Also if a candidate proves to be less effective then as mentioned on paper it is a further more cost to the company.
Under this method professional institutes are contacted and a suitable candidate so selected. On campus interview is one such examples. Other examples include job fairs and seminars.
In this method advertisement in newspaper, TV and radio are aired to find a suitable candidate. Online recruitment, job centres and magazines are other sources of indirect recruitment
Third Party Method
Under this method third party we used for recruitment there are :
Friends and Relatives.
These include walk in, talk in write in, tele-recruitment, etc.
Once suitable candidate is hired, and then comes the stage of Induction and training. During Induction new employees are introduced to the organisation and to their work responsibilities in that organisation, fellow new workers and also company policies and procedures are explained in the induction programme. Training is give to the new hires to learn the desired skill set. Training can be "in-house "or in form of external college courses. Many big organizations provide detailed training scheme, which is done on an 'in-house' basis as it cuts cost. 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.
Different hiring strategies are adopted by different organizations specifically while hiring at different level. While hiring for entry level positions or "lateral" hiring , people with experience are taken on board. Hiring for people for entry level can also be based on competitive exams. Campus recruitment is widely been used nowadays for entry level hiring. This helps in getting the best possible talent. A personal approach is favourable while hiring for senior level positions. The most niche hiring takes place at senior levels where the essence is discreetness. Thus HR professional's approach people at higher levels on a one-one basis. The essence of the selection is to choose from the available candidates, deciding upon the perks and wages, making an offer and finally, getting them "on board".
There is, says Dulewicz (1989), "... a basic human tendency to make judgements about those one is working with, as well as about oneself." Appraisal, it seems, is both inevitable and universal. In the absence of a carefully structured system of appraisal, people will tend to judge the work performance of others, including subordinates, naturally, informally and arbitrarily.
Performance appraisal systems began as simple methods of income justification. The process was directly proportional to the productivity. Based on the performance there would be a pay rise or pay cut. But the benchmark would be supervisor's expectations. The pay cut or pay rise should be guidelines for the employees to judge his performance. However in the absence of any development possibilities, these cuts and rise were not much helpful, in some cases would stir up a controversy. Critics have their doubts about the performance appraisal process. Some have even suggested that the process is so inherently flawed that it may be impossible to perfect it (see Derven, 1990, for example).At the other extreme, there are many strong advocates of performance appraisal. Some view it as potentially "... the most crucial aspect of organizational life" (Lawrie, 1990).
Employers need to offer pay and conditions that will attract and retain good people. And on the other hand employees need to feel that their pay is fair. There are those, for instance, who believe that performance appraisal has many important employee development uses, but should not attempt to link the process to reward outcomes - such as pay rises and promotions. Mostly appraisee's are typically in a direct subordinate-supervisor relationship with the appraisers. Giving an appraisal result that would have a direct impact on the subordinate's promotion and result in resentment and serious morale damage. This can lead to workplace disruption, soured relationships and productivity declines.
However, there is a flip side to it. Performance appraisal must be linked to rewards and perks. Organizations must have a reward system which is fairly distributes based on merit, performance and outcome. Employees are also inclined towards appraisal results being linked with rewards, however they want transparency in the reward distribution. Ironically, not all employee motivation and productivity problems are solved by pay raises and promotions. It isn't necessary to make pay adjustments beyond a fair industry-wide (market place) level. Employees can be motivated to increase productivity by providing opportunities for career development (training or schooling).
As per Burkitt (2001), redundancy is one of the most traumatic events for an employee. Organisations should always attempt to avoid redundancies. If possible, it is preferable for an organisation to establish a formal procedure on redundancy. Many organisations have a formal agreement devised and agreed between management and employee representatives. Different organizations deal with redundancies in different ways. The following stages will be followed in most redundancies
Appropriate planning and formulating a redundancy formula
Inviting volunteers (natural wastage ,etc)
use of objective selection criteria
compliance with all stages of the organisation's dismissal proceduresÂ
advance notice of individual consultation meeting
permitting a colleague to be present at consultation meetings
opportunity to appeal
allowing seeking of suitable alternative employment
statutory or other redundancy payment
Helping redundant employees obtain training or alternative work.
Redundancies can be avoided be natural wastage, hiring freezes, stopping overtime, redeployment, offering employees sabbaticals, 'alternatives to redundancy' (ATR) schemes in which employees do not work for their employer for a specified period, and are free to seek new work whilst receiving an ATR allowance, etc
Once redundancy is inevitable, the organization should make sure that there are no unfair dismissals, the redundant employees should have the right to appeal, also they should if possible be offered alternatives. Counselling and support should be offered. They should also be compensated duly. In any redundancy situation, the immediate priority is the fair and sensitive treatment of employees who are losing their jobs. Once this has been achieved, the organisation's ongoing effectivenessÂ is largely dependent on the morale of the survivors. Clumsy redundancy handling is bad for the employer's business and long-term reputation. Redundancy has to be the last resort.