The human resources of an organization consist of all people who perform its activities. Human resource management (HRM) is concerned with the personnel policies and managerial practices and systems that influence the workforce. It as a strategic and coherent management approach of an organization's labor force - the people who individually and collectively contribute to the achievements of the objectives of the business.Â
In a constantly changing world, which requires flexible responses, with strong competition from nearly every continent, due to increased globalisation, it is important for organisations to have some kind of competitive edge. This can be achieved by managing the human resources with a focus on organisational performance. Under this directive it is obvious that assessment tools are crucial for evaluation of organisation's HRM practices as HRM plays an important part for the functioning of every single department in an organisation due to the fact that it can take direct influence on the people working there.Â
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On completion of this assignment, we aim at a better understanding of:
The need to assess organizational performance
The different tools/framework used for such assessment
The influence of Strategic HRM with respect to organizational performance
To collect data about Aquarelle, we corresponded with the HR manager of an Aquarelle industrial unit. Since he was unavailable for an interview, upon his approval, we sent him a questionnaire via mail, which he briefly answered. We thus based our writings on the responses we got from the questionnaire, though we collected most data from the Aquarelle website and annual reports.
4.1 Tools to Assess OP
Performance in the context of Aquarelle is a broad concept which has been used synonymously with productivity, efficiency, effectively, and more recently competitiveness. Aquarelle aims to deliver "unbeatable value" to its customers to help them increase their market share and profitability. "Unbeatable value" key ingredients being quality, service, flexibility, product development and competitiveness. Therefore, it is important for Aquarelle that all significant work activity must be measured. Work that is not measured or assessed cannot be managed because there is no objective information to determine its value. Several performance measurement tools are in use at Aquarelle: benchmarking, total quality management, learning organization and knowledge management.
Benchmarking seeks out, internalizes and improves upon competitors' best-practice capabilities. Aquarelle is continuously comparing and measuring its organization against other textile organization anywhere within the organization as well as outside, in order to gain information that will help them take action to improve their performance.
Benchmarking has forced the organisation to analyze themselves against the best in the industry and to incorporate those practices into their operations. Aquarelle indulge in benchmarking in order to satisfy its customers, set performance standards and targets based on what others are achieving, pick up new ideas and exceed the achievements of the best in the field. Furthermore, the unit is even integrated with its own weaving mill (Consolidated Fabrics Ltd) and also sources yarn from different regions of the world in order to ensure that the most competitive prices are offered.
4.1.2 Total Quality Management
Quality has been a central theme at Aquarelle in which product quality is widely seen as an important way of improving organisational performance by attracting and retaining satisfied customers. Increased competition from overseas, rapid innovation of new technology and shareholders' profit demand left Aquarelle with no choice but to look for ways to keep costs down and to organize the work of employees in ways that are more profitable. Total quality management is a reflection of the necessity for a large company like Aquarelle to find new and innovative ways of competing constructively, and of managing its workforce. TQM needs to be extended to all aspects of the organization's activities, not just the standards associated with finished products. It is here that the distinction is said to lie. Therefore, at Aquarelle, dyeing, weaving, finishing and washing operations are performed in-house and meticulously supervised ensuring impeccable quality.
4.1.3 Learning Organization
Aquarelle has recognized the commercial significance of organizational learning and the notion of the 'learning organization' has been a central orienting point in this. Aquarelle senses that a learning organization is an ideal and towards which it has to evolve in order to be able to respond to the various pressures and competition it is facing. It encourages its employees to continually expand their capacity to create the results they truly desire, their new and expansive patterns of thinking are nurtured, and collective aspiration is set free. These are not brought about simply by training individuals; it can only happen as a result of learning at the whole organization level.
Always on Time
Marked to Standard
Aquarelle aims to be an organization that facilitates the learning of all its employees and continuously transforms itself. It is also characterized by its total employee involvement in its process of collaboratively conducted and collectively accountable change directed towards shared values or principles. Aquarelle provides continuous learning opportunities and uses learning to reach its goals. Moreover, it links individual performance with organizational performance. It fosters inquiry and dialogue, making it safe for people to share openly and take risks. Aquarelle, as a learning organization, reviews its successes and failures, assesses them systematically and records the lessons in a way that employees find open and accessible. Learning organizations have to be able to adapt to their context and as a consequence, Aquarelle develops its people to match the context.
4.1.4 Knowledge Management
The critical role of knowledge management in achieving and sustaining competitive advantage and thus organizational performance has been strongly emphasized by Aquarelle. The latter helps in structuring and mapping knowledge, such as developing typologies or synthesising different knowledge types. It also develops knowledge databases - documenting best practices, expert directories, market intelligence and so on. It then embeds knowledge in its new products. Capturing and re-using information as knowledge - such as utilising old project deliverables as source materials is another strategy used by Aquarelle to enhance organisational performance.
The employees or even top level managers share lessons learnt about knowledge processes through distribution, dissemination or personal interaction. Aquarelle creates knowledge or intellectual capital teams for identifying and auditing intangible knowledge assets. Furthermore, measuring and managing the value of knowledge assets is another way of determining organisational performance. Aquarelle also forms people-oriented knowledge centres - such as focal points for developing knowledge skills and knowledge databases. In addition to all these Aquarelle uses collaborative technologies for knowledge exchange between people, for example, the implementation of electronic mail and groupware for multiple-user access in a local area network.
As any other organization, Aquarelle also aims at becoming a very successful organization. And to measure the performance of its organization it has been using these tools. However, there are various other tools which can be used to assess the performance of the organization which Aquarelle could well make use of in addition to all those listed above.
4.1.5 Balance Scorecard
Recognizing some of the weaknesses and vagueness of previous management approaches, the balanced scorecard approach will provide Aquarelle a clear prescription as to what it should measure in order to 'balance' the financial perspective. It will enable the organization to clarify its vision and strategy and translate them into action. It will provide feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results.
The balanced scorecard suggests that we view the organization from four perspectives:
The Learning & Growth Perspective: This perspective includes employee training and corporate cultural attitudes related to both individual and corporate self-improvement.
The Business Process Perspective: It will allow the managers of Aquarelle to know how well their business is running, and whether its products conform to customer requirements (the mission).
The Customer Perspective: It will allow Aquarelle to realize the importance of customer focus and customer satisfaction in any business.
The Financial Perspective: Timely and accurate funding data will always be a priority, and managers will do whatever necessary to provide it. It also means handling and processing of financial data.
4.1.6 Management by Objectives
Management by objectives (MBO) is a systematic and organized approach that will allow management of Aquarelle to focus on achievable goals and to attain the best possible results from available resources. It aims to increase organizational performance by aligning goals and subordinate objectives throughout the organization. Ideally, the employees get strong input to identify their objectives, time lines for completion, etc. MBO includes ongoing tracking and feedback in the process to reach objectives.
The principle behind Management by Objectives (MBO) is to make sure that everybody within the organization, Aquarelle, has a clear understanding of the aims, or objectives, of that organization, as well as awareness of their own roles and responsibilities in achieving those aims. The complete MBO system is to get managers and empowered employees acting to implement and achieve their plans, which automatically achieve those of the organization.
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All individuals within the organization will be assigned a special set of objectives that they try to reach during a normal operating period. These objectives are mutually set and agreed upon by individuals and their managers. Performance reviews will then be conducted periodically to determine how close individuals are to attaining their objectives. Rewards will be given to individuals on the basis of how close they come to reaching their goals. MBO programs continually emphasize what should be done in an organization to achieve organizational goals. So MBO will clarify job responsibilities, provide clear performance goals and reduce ambiguity through feedback.
At Aquarelle, MBO will offer a practical support at team level and will lead employee performance as well as organizational productivity. The encouragement by participation of group in organization planning affects job satisfaction of each group member. Furthermore, MBO process will secure employee commitment to attaining organizational goals since they will participate in whatever decision-making there will be. Hence, committed employees are equal to good organizational performance.
4.2 Framework for Assessing Organizational Performance
Organizational Assessment can be described as a systematic approach to assess an organization with the view of improving its performance. The framework for assessing the Organizational Performance was developed by the International Development Research Centre (IDRC) to help organizations regularly assess their current performance and guide them in the making of better decisions which might be a benefit both in the short-run and long-run.
Basically, the framework comprises of the following areas:
4.2.1 Organizational Performance
The effectiveness in any organizations is normally based on the way the firm's strategies have been implemented in the course of accomplishing its mission and fulfilling its goals and objectives. It is a fact that the effectiveness of any HR practice or set of practices depends solely on the firm's strategy when impacting its performance.
At Aquarelle Clothing Ltd, the effectiveness of its organizational performance is highly valued as its primary objective is to provide its customers with unbeatable value where quality, service, flexibility and product development are the key concerns.
The performance of any particular organization, no matter how successful it is or what business strategies it applies, is constantly evaluated by the latter's efficiency (that is, the cost per service, the number of outputs per employee, the number of outputs per person per year, the average value of grants per person and so on). In other words, the efficiency of the company's performance requires the fact of providing a good level of services at a relatively low cost.
The international shirts manufacturer, Aquarelle, gives importance to efficiency and also keeps track about its production capacity which is currently 6 million units and its number of employees which is around 3450. In this way it better monitors its production.
In any society, no matter where the organization is situated, it does take time to develop and arise through evolutionary processes while facing internal crises, such as confusion occurring in the social structure of the organization, as well as external crises, for example political instability or even financial crisis in the country. Since both the internal and external environment in which the organization is evolving is not stable, it has to find a way to keep itself from being outdated by adapting to change in different situation for its survival.
Due to the fact that Aquarelle shirts are exported internationally to many renowned customers in Europe and USA, it has to closely monitor the market trends, political changes both locally and internationally which might accordingly affect its position.
220.127.116.11 Financial viability
Throughout the time that the organization is concentrating on its goals, objectives, appropriate cost structure and the survival of itself, it also has to cater for its surplus and deficits. The organization in the view of maintaining its survival should monitor its financial resources in such a way that its inflow is greater than its outflow. In this way, financial viability includes multiple sources of funding, financial surplus and positive cash flow.
The funding sources of Aquarelle are not limited to only one type of product category for its customer base. It provides clothing for different age groups and types from kids' shirting, ladies blouses to men's casual and formal shirts, that also for renowned and famous boutiques in USA and Europe like J. Crew, Gap Group, Nautica, Zara, Esprit, Marks and Spencer mostly known as M&S, Massimo Dutti and so on. Thus even if one particular shop is experiencing some sort of problems, Aquarelle production is not going to be affected.
Consequently it is noted that both efficiency and effectiveness is important to any organization. However, in case there is a need to choose between the two, it is better to opt for effectiveness even if this choice is based at the cost of sacrificing efficiency of the organizational performance. This is so because effectiveness is in fact the mission statement providing the raison d'être of the organization while efficiency is about providing good value for money in both qualitative and quantitative terms. Also, where proper management of the organization is in concern then its relevance and financial viability is equally important as it monitors its program and finances respectively on a regular basis.
4.2.2 External Environment
Aquarelle just like any other company is not a stand-alone entity. Hence it has to adapt itself to the legal and cultural context pertaining to the country and region in which operations will take place in addition to other element coming into play. All these help to mold the image and define the vision and mission of the company. Below are found the fundamental variables used by Aquarelle to analyse and understand the external environment:
18.104.22.168 Administrative and Legal Environment
First of all the manufacturing sector has been dominated by textiles and clothing. In response to the changing international environment and in order to increase competitiveness, most incentives granted to the sector were abolished by the Finance Act 2006. However, three components of the package remained effective for mills that started operations before 30 June 2008: a corporate tax holiday until 30 June 2016, special investment tax credit, and a tax credit to investors. Similar incentives apply to textile companies. Other incentives include land at concessionary rates; duty-free and VAT-free raw materials and equipment; no tax on dividends or capital gains; 50% relief on personal income tax for two expatriate staff; and concessionary electricity tariffs.
The development of textile and clothing, the main industry, was favoured in the past by preferences under the Multifibre Arrangement (MFA), and preferential access to key markets such as the EC and the United States. Other factors that have contributed to the growth of the industry include relatively low labour costs, incentive schemes, a well-developed banking subsector, good infrastructure, and long-standing business relations with buyers.
For Aquarelle we shall consider some of the most important legislations to corroborate our explanation of the company's mechanism as a whole:
Business Facilitation Act 2006 and Finance Act 2006 under which the Development Permit and Building Permit required under the Town and Country Planning Act have been merged to obtain what is now called "Building and Land Use Permit".
Environmental Protection Act 2002 is about the norms to be complied with and various procedures to be followed for Environmental Impact Assessment (EIA) to obtain an EIA license.
Equal Opportunities Act 2005 promotes equal opportunity between persons of different sex, race, marital status, religion, origin and disability and to prohibit discrimination on those grounds particularly in the fields of employment, education, provision of accommodation and goods, services and facilities, admission to private clubs.
Labour Act 1975 affecting the management of employees & the remuneration given to them according to their respective jobs as well as prohibition of child labour. (Remuneration order which is applicable to textile industry)
22.214.171.124 Political Environment
In Mauritius firms are accustomed to a relatively stable political system, and although presidents, vice-presidents, prime ministers, ministers and representatives may change, the legal system is well-established, and firms like Aquarelle can depend on continuity and consistency.
126.96.36.199 Socio-cultural Environment
Mauritius has a population of over 1.2 million, people being of Indian, African, Arabic, Chinese, European or mixed origin. Since it was first settled, the island has been a melting-pot of cultures and people.
Multiculturalism is hence a non-negligible advantage because it helps to understand the values and beliefs of each and everyone. It also enhances communication as well as widening the horizon while searching for new markets to conquer.
188.8.131.52 Economic Environment
In Mauritius we have an open-market economy, functioning in accordance with international trading norms. Our country is ranked 17th in the World Bank's latest survey on doing business, is specifically ranked 10th on procedures for starting a business and 12th for protecting investors and paying taxes. Economically speaking huge progress has been made since our independence in 1968 to facilitate business transactions.
As for Aquarelle it has already positioned itself well on the African, European and US market by producing high quality clothes at low prices for trademarks like J Crew, Express, Gap group, Ebauer, Nautica, Massimo Duti, Zara, Esprit, M&S and Woolworths. With its factories located in India and Madagascar including Mauritius, it becomes easier for the company to secure the investment and anticipate any unexpected events which might interrupt production for a while. However, great attention should be paid to currency fluctuations and restrictions on transfer of earnings because it will have an impact on the company's well-being meaning the people working for it.
184.108.40.206 Technological Environment
Nowadays technology changes quickly, more powerful, rapid and sometimes bigger or smaller machines come onto the market while others might be developed and created from scratch. That is when research and development comes into play and as costly as you might think the process is: the return on investment will be huge and Aquarelle is one of the few companies in Mauritius which can afford to have a department dedicated to such activities. Being competitive also means adapting to the latest technologies and in this case machines designed for activities like knitting, weaving and dying are normally here to increase productivity in addition to detect defaults in clothes being produced and exported. Hence much time is left to focus on other important issues.
220.127.116.11 Stakeholder Environment
Stakeholders are a very important aspect of a company not to say vital asset as they comprise individuals who mold the company's image gradually through time and affect its existence. Please see Appendix I for a list of the various stakeholders running CIEL Textile and hence Aquarelle and as you will see they all bring in their own contribution to the smooth and daily running of the business through a comprehensive teamwork.
4.2.3 Organizational Motivation
Sometimes before starting a business it may be a good thing to think twice as to why we decide one day to do so. The expression "Think before you act." makes much sense here because it is always wiser to ask ourselves the right questions but also to focus and be determined on an idea that may become reality and change into gold with time. Aquarelle saw an opportunity and seized it to fill a need and that is the primary motivation of all the companies around the world. More details about Aquarelle's motivation are to be found later on.
To start with Aquarelle's history is to talk about the division CIEL Textile Ltd itself which belongs to CIEL Group. Actually CIEL Textile Ltd was founded back in 1972 and has not stopped growing ever since. With a rich past not always glorious the company has managed its way through time.
18.104.22.168.1 Milestones (For 2010 only)
17th February 2010 CIEL Textile Ltd announces that the Beau Champ Holding Company Ltd will not be a shareholder anymore in the company and will leave its place to I&P Capital (II) Ltd, selling its shares in order to reinvest in other sectors.
23rd October 2010 Arnaud Dalais, President of CIEL Textile has been distributing prizes to the different units that form part of the company which has exhibited the best performance this year as well as to employees too (as seen on the picture).
Aquarelle Clothing Ltd [Shirts Division] - Tana has won the Quality Excellence Award for the best quality performance along with another unit.
Aquarelle Clothing Ltd [Shirts Division] - Grand Bois has won the Most Improved Factory Award.
Please see Appendix II for more details with respect to the awards distributed to the best employees individually.
Aquarelle Group's production has grown over 20% in 2007/2008, from 6 million to 7.3 million pieces while turnover increased from Rs 2.2 billion to Rs 2.6 billion, mainly on account of our international expansion in India which has experienced significant growth and excellent profitability.
The 2008/2009 financial year has seen a strong emergence of our international operations. India has grown from 1.5M to 2M pieces, with a high profitability and excellent customer satisfaction for both Aquarelle India Limited.
As seen above Aquarelle Clothing Ltd has been successful the past two years and is trying its best to keep up and respect the commitments made to the stakeholders.
In 2008 Aquarelle's factory found in Madagascar as well as the other branches belonging to CIEL Textile had to face unstable external factors seriously affecting the production; mainly an unstable political situation. However the management tried its best to manage the crisis and continue the production with engaged and motivated employees.
The mission of Aquarelle clothing Ltd, as per the website, is to:
"deliver fantastic unbeatable values to all our customers through product innovation, great quality product, speed and flexibility, service and communication, delivery on time and competitiveness."
As far as we know, the company has not deviated from its own mission statement and is pursuing its activities in an attempt to satisfy customers as always.
At Aquarelle people are treated fairly and accepted as they are that is with their personal past experiences norms, values and beliefs as long as they fit the organizational culture. Determination, commitment, ownership and welfare of the employees are the main pillars to be dealt with while working there.
Salaries and bonuses are distributed based on performance related pay and productivity bonus. Not to forget additional benefits such 13th month salary or maternity leave for pregnant women, psychological support for employees whose morale is not so good maybe because of personal problems affecting their performance. Emergency unit for those badly injured during working hours. As mentioned earlier awards are distributed to employees displaying the best performance for the ongoing year.
4.2.4. Organizational Capacity
22.214.171.124 Strategic Leadership
Strategic Leadership is currently described as the manager's potential to express a strategic vision for the organization and to motivate and persuade others to acquire that vision. In other words, its main objective is productivity and is mainly concerned with the development in the environment in which employees forecast the organization's needs in the context of their own job. Also Strategic Leadership refers to components like leadership (to set direction and ensure completion of work while supporting resource development), strategic planning (comprises the ways the organization is thinking ahead and responding to its environment to achieve its goals), governance (to support the organization's survival and development), organizational structure (to provide balance between control and flexibility) and niche management (to ensure unique or value-added roles in the economy).
126.96.36.199. Human Resources
Human Resources, a relatively modern management term, can be described as the name of the function within an organization charged with the overall responsibility for implementing strategies and policies relating to the management of individuals.
Human Resources (HR) are highly valued at Aquarelle Clothing since it not only caters for its customers but also for its employees. It provides a neat and healthy environment for its employees to work in without putting their lives at any sort of risks. HR activities in this international shirts company support its efforts with respect to its productivity, quality and service as well as acting as a support service when recruiting and training people.
188.8.131.52 Financial Management
In this age of industrialization, Financial Management is described as the effective and efficient utilization of financial resources. In any organization financial management is mainly concerned with facts such as how much of capital will be required, from what sources the finance will be collected and how is this going to be invested in the organization.
According to J. L. Massie, "Financial management is the operational activity of a business that is responsible for obtaining and effectively utilizing the funds necessary for efficient operation."
Similarly, Financial management plays a significant role at Aquarelle as its primary financial objectives and measures consist of making the most profit possible and minimizing its cost.
Infrastructure mainly comprises of the basic conditions which help carrying out the smooth running of the organization that is the facilities, transportation and technology. Even though much emphasis is not given on this particular component and is often taken for granted by many, yet it does occupy a reasonable space in any organization since each and every organization has its own infrastructural assets and liabilities.
The infrastructure of Aquarelle Clothing Ltd has indeed been established accordingly since its manufacturing locations are found in Mauritius, Madagascar and India. It also has its own weaving mill i.e. Consolidated Fabrics Ltd and sources yarn from different regions of the world.
184.108.40.206 Program management
A vital part of Organizational Capacity is Program management, whose quality no matter what, is always affected by the other areas in this particular framework. A well suited description of Program management is "the process of managing several related projects, often with the intention of improving the organization's performance." In other words, the main function of program management is to administer and develop the organization's ongoing programs, services and products in ways to support its mission.
Since Aquarelle deals in the making of clothes, operations like dyeing, weaving, finishing and washing are performed in-house. These operations are meticulously supervised so as to ensure impeccable quality.
220.127.116.11 Process management
Process management is an approach which focuses on the alignment of all aspects in the organization while aiming to provide stability and necessary changes required. It also strives a lot where innovation, flexibility and integration are concerned with latest technology while continuously attempting to improve all the processes. In this approach, the key roles are played by four processes, namely: planning, problem-solving and decision-making, communications and monitoring and evaluation.
18.104.22.168 Inter-Institutional linkages
In Organizational Capacity, Inter-Institutional linkages mean forming or creating some sort of collaborations with other institutions or organizations that have similar strategic importance with the organization in question. The formation of such linkages result in a healthy exchange of resources and approaches as well as help keeping up with the advances and provide access to wide-ranging sources of up-to-date information.
Aquarelle Clothing Ltd definitely collaborates with other institutions since it belongs to the famous CIEL Group which is one of the leading industrial and investment groups based in Mauritius. All businesses in the CIEL Textile work in collaboration with continued efforts to compete with renowned European manufacturers and to move towards the up-market. In the view of achieving success and promoting more of its products Aquarelle works together with textiles like Floreal Knitwear, New Island Clothing and Tropic Knit and commercialise brands like Harris Wilson and Floreal Boutiques.
4.3 Strategic Human Resource Management and Organizational Performance
In order to achieve organisational success, the key is to enhance organisational performance. This can only be attained through human resources activities which focus on goals such as productivity, service, and quality. In addition to these three goals, Aquarelle Clothing also focuses on Speed & Flexibility; Product Development; Service & Communication; Delivery on Time and Competitiveness.
At Aquarelle, the achievement of these goals has been materialised by embracing a major approach namely, the Strategic Human Resource Management. A definition according to The Chartered Institute of Personnel and Development book Strategic HR goes as follows:
"Strategic Human Resource Management is the key to improved business performance."
In fact the Strategic Human Resource Management (Strategic HRM) approach can be regarded as a general approach in line with the intentions of the organisation on the future direction it wants to take. It is concerned with longer-term people issues and macro-concerns about structure, quality, culture, values, commitment and matching resources to future need. At Aquarelle, Strategic HRM involves designing and implementing a set of proactive HR policies/practices that ensures that the organisation's human capital contributes to the achievements of its corporate objectives.
Strategic HRM has also been defined as:
All those activities affecting the behaviour of individuals in their efforts to formulate and implement the strategic needs of business.
The pattern of planned human resource deployments and activities intended to enable the forms to achieve its goals.
Strategic HRM can encompass a number of HR strategies. There may be strategies to deliver fair and equitable reward, to improve performance or to streamline structure. However, on their own these strategies are not strategic HRM. Strategic HRM is the overall framework which determines the shape and delivery of the individual strategies.
Boxall and Purcell [i] argue that strategic HRM is concerned with explaining how HRM influences organisational performance. They also point out that strategy is not the same as strategic plans. Strategic planning is the formal process that takes place, usually in larger organisations, defining how things will be done. However strategy exists in all organisations even though it may not be written down and articulated. It defines the organisation's behaviour and how it tries to cope with its environment.
4.3.1 Strategic HRM and business strategy
Â A good business strategy, one which is likely to succeed, is formed by people factors. In the majority of organisations people are now the biggest asset. This is the case even at Aquarelle which, being a clothing factory, relies heavily on the people to be able to achieve its final objectives.
The knowledge, skills and abilities have to be deployed and used to the maximum effect if the organisation is to create value. The way in which people are managed, motivated and deployed, and the availability of skills and knowledge all shape the business strategy. It is now more common to find business strategies which are inextricably linked with and incorporated into strategic HRM, defining the management of all resources within the organisation.
Individual HR strategies may then be shaped by the business strategy. So if the business strategy is about improving customer service this may be translated into training plans or performance improvement plans.
The concept of strategic HRM:
reinforcing attention on the need to base HRM strategies and processes on the requirement to create value through people and thus further the achievement of organisational goals
defining the link between HRM and business strategy
strengthening the HRM belief that people are assets rather than costs
4.3.2 Strategic HRM and the interlinked activities
In order to accomplish the goals mentioned earlier on, a set of interlinked activities have been devised:
22.214.171.124HR Planning and Analysis
HR planning and analysis activities have several facets. Through HR planning, managers attempt to anticipate forces that will influence the future supply of and demand for employees. Having adequate human resource information systems (HRIS) to provide accurate and timely information for HR planning is crucial. The importance of human resources in organizational competitiveness must be addressed as well. As part of maintaining organizational competitiveness, HR analysis and assessment of HR effectiveness must occur.
126.96.36.199 Equal Employment Opportunity
Compliance with equal employment opportunity (EEO) laws and regulations affects all other HR activities and is integral to HR management. For instance, strategic HR plans must ensure sufficient availability of a diversity of individuals to meet affirmative action requirements. In addition, when recruiting, selecting, and training individuals, all managers must be aware of EEO requirements.
The aim of staffing is to provide an adequate supply of qualified individuals to fill the jobs in an organization. By studying what workers do, job analysis is the foundation for the staffing function. From this, job descriptions and job specifications can be prepared to recruit applicants for job openings. The selection process is concerned with choosing the most qualified individuals to fill jobs in the organization.
188.8.131.52 HR Development
Beginning with the orientation of new employees, HR training and development also includes job-skill training. As jobs evolve and change, ongoing retraining is necessary to accommodate technological changes. Encouraging development of all employees, including supervisors and managers, is necessary to prepare organizations for future challenges. Career planning identifies paths and activities for individual employees as they develop within the organization. Assessing how employees perform their jobs is the focus of performance management.
184.108.40.206 Compensation and Benefits
Compensation rewards people for performing organizational work through pay, incentives, and benefits. Employers must develop and refine their basic wage and salary systems. Also, incentive programs such as gains sharing and productivity rewards are growing in usage. The rapid increase in the costs of benefits, especially health-care benefits, will continue to be a major issue.
220.127.116.11 Health, Safety, and Security
The physical and mental health and safety of employees are vital concerns. The Occupational Safety and Health Act of 1970 (OSHA) has made organizations more responsive to health and safety concerns. The traditional concern for safety has focused on eliminating accidents and injuries at work. Additional concerns are health issues arising from hazardous work with certain chemicals and newer technologies.
Through a broader focus on health, HR management can assist employees with substance abuse and other problems through employee assistance programs (EAP) in order to retain otherwise satisfactory employees. Employee wellness programs to promote good health and exercise are becoming more widespread. Workplace security has grown in importance, in response to the increasing number of acts of workplace violence. HR management must ensure that managers and employees can work in a safe environment.
18.104.22.168 Employee and Labor/Management Relations
The relationship between managers and their employees must be handled effectively if both the employees and the organization are to prosper together. Whether or not some of the employees are represented by a union, employee rights must be addressed. It is important to develop, communicate, and update HR policies and rules so that managers and employees alike know what is expected. In some organizations, union/management relations must be addressed as well.
i BOXALL, P. and PURCELL, J. (2003) Strategy and human resource management. Basingstoke: Palgrave Macmillan.
In conclusion it is to say that many academic studies' findings (see reference list) back-up the hypothesis that progressive HRM practices, including selectivity in staffing, compensation, training etc. are definitely positive related to organizational performance. Human resources management comprises several processes and together they are supposed to achieve organizational goals. These processes can be performed in an HR department, but some tasks can also be outsourced or performed by line-managers or other departments. When effectively integrated they provide significant economic benefit to the company and thus enhance its performance, which can be evaluated using assessment tools/framework.