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Global changes have greatly affected the organizational overall strategies now the competitive advantage is no more lies in the lower costs of the production but it depends upon the abilities of the firm to rapidly learn and change (Porter, 1990). As the importance of knowledge has raised so much in the success of the organization the importance to create new knowledge, learning and change has also become key factors contributing towards the achievement of sustainable competitive advantage for the firms. In the learning process the involvement of uncertainty is always very broad. Most of the time organizations get new knowledge due to the occurrence of any problem or on the basis of trial and error. This is the age of knowledge and the speed with which new knowledge is being explored every day is much more than ever before so in this age it is a base for organization to achieve competitive advantage.
Now just like any other organization with goal to achieve sustainable competitive advantage, NIB (NORDIC INVESTMENT BANK) is also very much concerned to align its human resource capabilities with overall strategy of the organization. Now a clear shift can be seen in the thoughts of the management of the NIB Bank to integrate the human resource functions strategically. Now the NIB is aware of the importance to align the internal human resource strategy with the overall business strategy. Now, NIB is investing to develop its human resource to have a sustainable competitive advantage in financial services industry.
Targeted training and development
NIB has developed an organizational policy to systematically evaluate the capabilities of the workforce and provide training programs according to the needs identified for development of staff.
NIB is also providing a good sufficient amount of its research and development department to adopt keep organizational pace with the global scenario.
Staff policies of NIB are based on four fundamental principles that are supremacy of Laws, predictability, transparency and equity. The staff policy reflects the equitable and transparent treatment of the organization with the employees.
Developing peopleâ€™s awareness
In this area also NIB is putting extensive resources to keep its workforce up-to-date with the global changes. Regular programs are designed to provide them information about the current industry as well as organizational events.
Putting together an HR strategy
Once organization has developed its overall business strategy than human resource strategy is developed that best support the overall business strategy to have sustainable competitive advantage, So organization needs to develop a strategy that best meet the overall policies, philosophies, practices, programs and processes in ways that ensure the optimum contribution of workforce to achieve the overall goals of the business (Schuler, 1992).
Aligning HR strategy with organizational strategy and human capabilities
In 1975 NIB was established as a common financial institute by member countries to support their economies by developing mutual cooperation. Its mission is to support the sustainable growth of the economy of member countries by providing the finance options for longer period of time for projects to increase their economic competitiveness and to better their environment. The strategic goals of the NIB are based on the member countries. Bank offer finance facilities for projects related to environment protection and strengthen the economy.
To meet the expectations of member countries on NIB to effectively execute its mission, NIB needs to hire, develop, and keep a highly diverse human resource with unique knowledge, high skills and competencies. So in order to meet the overall objectives, Bank offers professionally motivating work tasks with a friendly working environment for its employees. It has a competitive compensation program with highly attractive terms and conditions along this it offers a very attractive social security plan in which medical and health care program, secures working environment, insurance protection and a very good pension plan. These all prerequisites make NIB a highly competitive employer with top rating.
NIB has developed a very well briefly explained long term and short term human resource strategies.
Features of short term HR strategy
In order to achieve overall objectives of the organization NIB has designed short term strategies very professionally. Key features of its short term human resource strategy are it promotes a well balanced diversification in human resource to achieve its objectives to meet the expectations of all member countries. Bank prevents the discriminatory behaviors and treats all staff members equally. Bank understands the dual responsibilities of employees for their work and personal life so it facilitates its employees to put their optimum efforts at work.
Features of a long term strategy
NIB has overall organizational goals to strengthen the economy of the member countries so in order to meet expectations of the member countries it has developed its human resource strategies. In long term its strategy is that human resource capacities should be able to convey the aim of the bank and to facilitate the manpower for their motivation and personal development by using best strategically aligned appraisal system.
How well do you manage each strategy?
The NIB ensure the work according to the long term as well as short term strategies for setting a regulatory framework for staff policy and other rules and regulations. According to that framework each superior has primary responsibility to manage all staff related matters that come within his or her work area by taking the support of HR unit working to handle human resource. Each member of the NIB human resource team is expected to take duty to ensure the working according to the overall organizational objectives and achieve targets. Seniors are responsible to clearly communicate the organizational goals to their subordinates and help them to align their tasks with these organizational goals.
The human resource strategy mix in NIB is very carefully designed that is very well aligned with the overall organizational strategies.
People as a resource
Rapidly changing economies have changed the organizational views about human resources. NIB considers its human resource as important business asset that is source of long term competitive advantage for the bank.
People and behavior
NIB considers the importance of motivated human resource to the success of organization so it pays extra efforts to take steps that help it to keep its employees motivated. Bank understands that family life greatly affects the professional efficiency of the employees so bank has designed the strategies to ensure the well standard of their personal life.
NIB considers the human resource strategies as a very effective tool to control the people and combine the core capabilities of the organization of the human resource capabilities and develop different combinations of working environment to organize the human resource in a best possible way to achieve competitive advantage.
Key issues and proposed solutions for the effective implementation of human resource strategy mix of NIB bank.
Key issues for HR strategy mix
Key issues that are affecting the smooth applications of human resource strategy in NIB are:
Communication is one of the major issues. The communication system is not that much effective to communicate the organizational goals clearly to the each member of human resource team of NIB.
As NIB is a development financial institute, most of the time skilled workforces do not prefer it as first option to choose it as employer. Due to a common thinking that development financial institutes do not offer good compensation plans to their employees.
Although NIB is promoting the diversity of the human resource to meet the diverse expectations of member countries but diverse staff also comes with diverse views, expectations and values so, it is very much difficult for the bank to design a common human resource strategy acceptable for all.
Possible solutions to issues
The issues faced by NIB in implementation of human resource strategic mix are not so big they can be controlled by taking some areas under special considerations.
Developments in information technologies have developed many technological solutions for the organizations to make their communication system much faster and efficient. So NIB also taking that option in consideration to take any solution for any good communication service provider.
Bank should make its compensation program more attractive in order to attract highly skilled people from the market to join its human resource team.
Bank should decentralize the human related matters as much as possible and try to get maximum input from diverse groups of staff in order to develop best strategy acceptable by all diverse groups of human resource of the company.
The prevailing organizational structure of NIB bank has four basic components that help the organization to translate its corporate strategy into efficient performance. First basic component of that structure is the work tasks that need to be performed in order to run the whole body. Second and most important component of organizational structure is people who work on tasks. Next are organizational arrangements that provide a mechanism for processes, structures and practices that are required to organize the work flow in organization. Last are informal organizational arrangements that reflect the culture of the organization in terms of behavioral norms and values to shape the process of social interactions. This whole structure works very effectively in order to implement the organizational strategy as whole. People selected for the organization has very important role as they are in the central character, they will perform the work tasks within formal and informal organizational arrangements.
The current organizational structure of NIB has a very deep reflection of 3P approach to organizational structure. It gives key role in the people, who work to contribute to the development and maintenance of portfolio through systematic processes.
The process of HR planning
The human resource planning process used by NIB is very much effective as it totally reflects the overall strategy of the organization. First of all the overall organizational strategy is defined then internal human resource inventory and external labor supply are analyzed. After that on the basis of analysis forecasting is done by conducting a survey to know the organizational needs of people and people available. The on the basis of this all human resource strategies and plans are developed.
Section2: Attracting, recruiting and selecting talent
NIB understands the significance of diversify human resource in order to achieve its organizational objective to meet the diverse expectations of member countries. It has goal to achieve level four in equity quantum in next 3 years. For this it attracts people to join it from all member countries. But it needs to do some more acts to ensure the move towards the goals. It needs to take input from all major groups of employees in order to remove the discriminatory feelings so this action in return will increase the diversity in the organizational staff.
The total reward system is strategic in nature and based on the system of Armstrong and Brown. It shows a good combination of financial as well as non financial rewards. Financial rewards are not given that much importance they need to be given more consideration to attract highly skilled human resource for financial industry.
Marketing plays a very vital role to attract highly efficient diverse group of manpower as it presents the image of the organization to the outer world. The goal to attract highly competent human resource is only possible to effective marketing plan. In NIB I will propose to increase financial rewards and concentrate on them to market the positive image of the bank and it will also be effective by word of mouth.
Recruitment is one of the most important functions performed by the HR department, so NIB considers it as first step to achieve competitive advantage. In NIB it involves a continues process of vacancy identification, preparation of job specification and description, vacancy advertisement, response management, short listing, interview arrangements and at last interviews and decision are taken. In this process I can help NIB to make its process of job identification more effective because the success of a recruiting process is depends upon it I also propose to use internal hiring process. It uses the application measurement method to assess the effectiveness of the process.
Selecting and inducting talent
After the recruitment process final decisions are taken to select the employees for the job. For new entrants it is needed to make them familiar with the operations, values and working environment of the bank. In NIB this is responsibility of superiors to give introduction of responsibilities, powers and tasks to new employees with explaining him his role in overall organizational objective achievements. It can be more effective if individual orientation programs. In reviewing the induction program NIB lies in 3 at scale, in coverage of induction program it lies on 3 as it cover only the specific area or department, in case of mentor it will be on scale 2 as no special appointment is made, in planning it is on 2 as no special planning is done for this, in work area it will be on 3 as it almost cover the work area, in introduction to organization and department it again on 3 as the only source of introduction is his direct superior then at least in emphasizing the organizational policies it will be on sale 4 as it gives it very much importance.
Section 3: Organizational culture and working practices
Culture and its effect on employees
The culture of NIB is very much friendly and welcoming to the new entrants in the BANK. The immediate superior is responsible to introduce the new employees with organizational culture, its values and working environment. Discussion sessions are proposed to conduct from time to time so that new entrants can become familiar with system and get knowledge transfer from old ones. The culture of NIB is very much good and highly diversified but its cultural values based on the cultural values of member countries but in order to become a global financial institution it needs to accept global values as well. That will be helpful for it to make successful collaborations with global institutions more effectively.
Changing Working Practices
The increasing globalization and structural changes in global economies have affected the working practices of every organizational working at international level. In this scenario NIB bank is also accepting flexible working practices to ensure the effectiveness of its projects. By making flexible working hours it not only accepting part time employees to the bank but also doing joint ventures and outsourced many processes to private firms. These practices not only proved cost saving but also bank can now hire the services of best experts and people for its projects. Bank can attract new graduates as part time work offerings. But if these flexible practices have many benefits they also have some issues with them like by outsourcing the operations the control of the bank on projects has been decreased. The high level of care is needed while outsourcing any business process.
The work life balance
Bank is aware of the significance of happy family life for successful professional life of employees, so Bank put its extra efforts to design the human resource policies family friendly and flexible. That includes paid holidays, company sponsored trips, health care facilities for families as well and study allowances for the children of employees these all policies help a lot to achieve happy life for its employees. A lot of extra costs incurred on these facilities and flexible working hours are no doubt very effective to achieve employee satisfaction but also needs more management attentions. Management has to be more active to quickly measure the effects of all these policies as they cost a lot so in case of failure of any policy that should be withdrawn as soon as possible.
Section 4: Legal requirements and external agencies
Legal requirements for HR
Discriminatory behaviors are avoided in NIB in all conditions because the bank is in co-ownership of different member countries so it has to cater the requirements of all members. In order to meet the expectations of all member countries successfully bank tries utmost to prevent discrimination of any kind in the organization. Bank has introduced a quick response system to accommodate the complaints against discriminatory behaviors and encourage the people if they raise any issue about the discrimination issue and solve it as first priority.
But if bank feel an employee is not giving his maximum or not obeying code of conduct, it has to go through with a very rigorous process to fire him or her for the job. This is because the involvement of many member countries and one big issue is they support employees belonging to their country. Bank needs to take steps to strengthen the system and reduce the involvement of member countries in this kind of decision.
Disciplinary and grievance procedures
The board of the directors of NIB decides the terms and conditions on which employees will work in the Bank. In case any issue is not discussed in the terms and conditions provided by the Board of directors then general international administrative rules are considered applicable there like in case of legal status of employees, legislative guidelines, employee employer relationship and common international practices.
In case the Set of Staff Regulations and Rules or decisions of the bank's Board of Directors, do not contain any applicable provisions concerning a question relating to the legal status and employment relationships with the staff, guidance can be sought from the legislation of the host country, however taking into account generally applicable common legal principles of the Nordic countries and common practices of international administrative law. Bank has an internal procedure to resolve the any kind of conflict arises between employer and employees. These are solved by using different methods like to involving voluntary mediator and banks officials etc. But the main objective is the satisfaction of both the parties in all methods. Arbitrator system should also be introduced to solve conflicts and disciplinary issues.
The role of external agencies
The dispute identification system is very good at NIB and they also have a quick response system for issues arise or expected to be arising in future. Top level management takes care of any kind of conflicts arising and regular assessments are done to ensure the smooth working of the system.