Study into the Four Audit Phase of Human Resource Management

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Human Resource Management is the integrated use of systems, policies and management practices to recruit, maintain and develop employees in order for the organization to meet its desired goals. Effective Human Resource Management plays an important role in the formation and alignment the working staff. Providing the proper working guideline and the training is the foundation task of the Human Resource Management. Organization with strong and active HRM, have organizational culture, training and grooming sessions, multicultural environment, working guideline and much more a person think of in a huge organization.

Human resource management played a key role in the organizations success if applied properly. The Four Audit Phase of HRM are Ranking Importance of HRM Services Portfolio, HRM Team Self-Evaluation, Measuring Current Service Levels and Developing Action Plans.

The case study is about the hiring of non HR specialist, Marcus Randolph, hired as the chief Human Resource position at BHO Billiton. The foremost task of the Human Resource personnel in the corporate world is to create the work place environment where employees want to work or in other words, where employees enjoy work. The case study also covers enhancing the role of HRM in the organization, Strategic partnership in organization goal achievement and the characteristic of HRM manager as a change agent. HR manager also motivate employees at all level to enhance productivity and developed performance management system, Periodic performance review and continuous training and development.

Few criticisms from the author Hammonds also included in the case study. He argues that the best and brightest MBA students are not drawn to working in HR upon graduation. Again, if HR is kept at a marginalized level within organizations, this reinforces the notion that HR is a dead-end career path. One should understand the history of HR to more fully understand why MBAs are not typically drawn to HR and why HR professionals tend to lack in specific business skills. The training for ILR experts, however, has historically focused on labor-management relations from the perspective of labor, not the organization or management.

The area of linking HR practices to firm performance is at the cutting edge of academic HR research today. Business strategy changes so rapidly, it is difficult for HR departments to keep pace with those changes due to the complexity of compensation and training and development systems.

Introduction:

Human Resource Management is the integrated use of systems, policies and management practices to recruit, maintain and develop employees in order for the organization to meet its desired goals. Effective Human Resource Management plays an important role in the formation and alignment the working staff. Providing the proper working guideline and the training is the foundation task of the Human Resource Management. Organization with strong and active HRM, have organizational culture, training and grooming sessions, multicultural environment, working guideline and much more a person think of in a huge organization. In comparison to this, in the small and medium sizes business where the HRM is ineffective and dormant, have improper working environment, employee benefits issues, inability to adjust in the multicultural environment etc.

Aim and Scope of the study:

The aim and scope of the study is to solve the case study provided in such a way that it covers all the HRM material studied in the subject. The assigned task is to provide the solution of the case study, linking it with the theory and the practical examples.

The aim of this assignment is to get involved in the study and generate the outcome of the given dilemma. The conditions explained in the case study is practically now applying in the corporate world and how to professionally cope up with the situation is the main object of this case study.

How HRM benefits the organization and the employees:

Human resource management played a key role in the organizations success if applied properly. Provided below is the snap shot of how the HRM is the beneficial to both the organization and the employees.

To the organization

To the Employees

Increase organization's capacity to achieve goals.

Increases employee's performances.

Efficiently use of employee's skill and knowledge.

Save cost through employee's efficiency and productivity.

Improve organization's ability to manage change.

Impartial distribution of responsibility and the benefits to the employees.

Help them to correlate their task with the organization's mission.

Increases job satisfaction and work place motivation.

Four Audit Phase of HRM:

The practical and procedural model for auditing, measuring and improving HRM services is provided by the Bargerstock in his article "The HRM Effectiveness Audit". The generic model springs from Ray Borbidge's The HRM effectiveness Audit written during Borbidge association with the author overtime, this model has been shaped and refined as the result of numerous audits conducted in a variety of public and private organization.

The HRM audit unfolds four phases:

Phase I: Ranking Importance of HRM Services Portfolio.

Phase II: HRM Team Self-Evaluation.

Phase III: Measuring Current Service Levels.

Phase IV: Developing Action Plans.

(Bargerstock, 2000)

Case study solution: BHP Billiton, Marcus Randolph

The case study is about the hiring of non HR specialist, Marcus Randolph, hired as the chief Human Resource position at BHO Billiton. Marcus was an MBA and specializes in the field of business administration and knows how to effectively utilize the company asset into the best possible return but does not have any idea of how to manage the human asset and allocation of human asset into the company mission achievement. Similarly, Marcus Randolph does not have an idea of training, distribution of work assignments, hiring and firing procedures, legal issues involved in the personnel management and benefits distribution.

The Human Resource management is an art of managing the work place labor and employees in such a way that it produces the best possible result to the management and it must align with the organizations mission. According to the Rodney Hanratty, global banking head at HSBC Hong Kong, accepted that "Acquisitions can fail if the people aspect is not well thought through. A good human- resources person is essential in that and they can demonstrate added value quickly". This also means that proper HR guidance and planned statement can change things quickly and effectively. The mergers and acquisitions of giants might be failed simply because of inability of effective management of available resources. The organization invested huge amount of funds to create change, capture market and many more future predictions but it all veins when the organizational human assets are not properly guided or in a position of create change.

The foremost task of the Human Resource personnel in the corporate world is to create the work place environment where employees want to work or in other words, where employees enjoy work. In multinationals, the multicultural work place environment is common and the manager's core object is to make them feel like a home where every one is equal and have same dignity and honor at work place. The discrimination of workers on the basis of nationality and race is damaging rather than discrimination on the basis of productivity and work performance.

In order to establish strong HRM policies and systems in the organization, the key issues considered by the head of staff are:

Enhancing the role of HRM in the organization.

Most of the employees limit the role of HRM to just salaries, benefits, job description, policies and procedures and training only. The administrative role of HRM is always ignored and unseen. As an strategic HRM, the administrator must also consider theses objects as well:

Strategic partnership in organization goal achievement.

Act as an administrative and management expert in the formation of policies, procedures and structures.

Be a change agent

Support and represent employees at all level.

Motivate employees at all level to enhance productivity.

Another key task of the manager is to motivate and encourage employees at all stages of work so that a better and healthy response generated from them. This also helps in generating the loyal bonding between the organization and employees.

Development of performance management system

Another important task of the management is to generate the performance management system so that each employee can gauge his/her performance. The best example followed by many organizations worldwide is the employee of the month/year.

Such system motivates employees towards the work. The distinction make them feel proud and these feeling encourage them to work even harder to sustain the position. Few most important elements are:

Defined supervisory relationships.

Regular planning and meeting.

Periodic performance review.

Training and development.

Responsible super visionary system to be installed.

Cross check or supervision is most important. The management communicates the larger goals to the department head and employees through planning process. The HRM manager has the task to bridge the gap and support the employees to fulfill the assigned goal.

Individual and group supervision whether the goals are accomplished or not, the HRM manager need to take steps that shows the presence of some supervision. The e.g. is the time punch machine for keeping an eye on the working hours of labour, targets achievements, monthly reports etc.

An effective supervisory system includes:

All role and guidance need to be given in written.

Awareness of systems and procedures.

Trained supervisors.

Provides adequate time and resources to meet the assigned task.

Supervisory system need to be fully integrated with the strategic policies.

Continuous training and development of employees.

Continous training and development procedures for the employees are essential in order to meet the challenges of changing world and work place environment. The adaptation of the modern technology and gadgets saves time and increases performance. Multinationals and huge organizations keeps on investing in the training and development in order to educate their work force labor about the latest innovation and methods of doing the same thing in a better way.

Training sessions are to be held at some periodic interval and the course of the training must not only about how to increase productivity but it may also include some session of corporate finesse, personal grooming and societal values.

Few criticisms on HRM:

(Hammonds, 2005) The author Keith H. Hammonds wrote an article on the HRM where he pointed some valid practical criticism on Human Resource Management and these are directly linked with the case study. The reason for mentioning them is to cover both aspects of the subject so that strategic analysis can be drawn.

The impact of marginalization on attracting and retaining appropriate talent.

Hammonds argues that the best and brightest MBA students are not drawn to working in HR upon graduation. Again, if HR is kept at a marginalized level within organizations, this reinforces the notion that HR is a dead-end career path. After spending upwards of $50,000 on an education, not including lost income for the two years that one studies for an MBA, why would an ambitious business student chose a dead-end career?

Further, the soft skills, HR and organizational behavior, have become minimal topics in MBA education in lieu of the ever-growing focus on functional expertise. However, because MBA education is about training future leaders, it becomes even more imperative that students understand how human behaviors and human resource management can help an organization achieve success, even if that MBA program graduate may never work in an HR department. HR practices are becoming more and more decentralized, and it is the current functional managers who will be doing performance appraisals, recruitment and selection. An organization is inherently a social enterprise, and minimizing within MBA curriculum the challenges human behavior brings to an organization reinforces to MBA graduates that the people stuff doesn't matter relative to functional expertise. Human interaction is the fabric within which the functional areas must exist and survive. In the immortal words of Alice of Dilbert fame (Scott Adams, United Feature Syndicates, Inc. 1996), who has just met a newly minted MBA who has no people skills but yet is highly skilled in finance, accounting and economics, "So, you're a highly qualified leader because…you're good at math?"

Why HR professionals historically don't have business skills.

One should understand the history of HR to more fully understand why MBAs are not typically drawn to HR and why HR professionals tend to lack in specific business skills. Until only recently, most HR positions were filled with industrial-organizational psychologists (I/OP), industrial labor relations (ILR) experts and liberal arts majors who liked working with people but had no business acumen and were number-phobic. The only discipline that comes closest to having any sense of business process and function is ILR. The training for ILR experts, however, has historically focused on labor-management relations from the perspective of labor, not the organization or management. Unless and until these programs build in a component of understanding business and organizational process and focus less on validation of selection tools and union collective bargaining practices, HR as a function will continue to stay marginalized.

The Industrial Relations (IR) Institute at the University of Wisconsin-Madison is a great example of the problems HR departments face if they choose not to change with the times. Approximately 15 years ago, the IR Institute had the opportunity to be brought into the Business School as one of the school's programs. Unfortunately, this change was resisted because it was felt that it would influence and change the essence of the IR program. Sadly, this outstanding and historically important program folded a few years ago. It seems the most successful IR programs, except for Cornell, which remains the premier program, are either located within business schools (University of Minnesota, Carlson School) or have formal joint ventures with business schools (University of Illinois, Urbana/Champaign) to allow for the importance of business processes to be integrated into IR education.

The need for performance metrics for HR practices.

The area of linking HR practices to firm performance is at the cutting edge of academic HR research today. The work of Mark Huselid and John Delery, among others, regularly focuses on how HR practices can have an important impact on an organization's bottom line. The metrics exist; they are just not being incorporated into academic programs and professional continuing education certification and reading. A greater connection must be made between academic researchers and the professionals who actually practice these skills every day. Perhaps incorporating knowledge of these metrics into PHR/SPHR certification exams would assist in the proliferation of their use. While both levels of certification do cover strategic HR issues, it is unclear whether the use of performance metrics is an important consideration in the certification process.

HR department as messenger or source of message.

Another criticism of Hammonds's is that HR departments play bad cop and sacrifice individuality for compliance and standardization to minimize organizational liability. From reading Hammonds's discussion of this, one would assume that HR made that decision on its own, absent the expressed opinions of senior management and the attorneys who are retained to protect the organization's interests. In reality, HR departments may simply be the messenger, but the directive, no doubt, comes directly from senior management, advised by corporate and employment law attorneys. Hammonds seems to be advocating blame of the messenger and not the source of the message or the message itself. HR professionals focus on compliance and uniformity because they are likely told to do so to protect the financial bottom line, not because they believe uniformity, in and of itself, is an appropriate way to manage the richness and diversity inherent in a workforce.

Complexity of keeping pace with changing strategies.

A profound statement by Lynda Gratton at the end of the article gets little attention, however, it speaks volumes to the challenges organizations and HR departments have in managing people within organizations. Because business strategy changes so rapidly, it is difficult for HR departments to keep pace with those changes due to the complexity of compensation and training and development systems, for example. It is difficult and oftentimes unsettling for performance management systems to change as rapidly as the business strategy from which it emerges. Further, since we can't always operate from the strategic perspective due to situations beyond the control of the HR department, it is perhaps more important to operate from a place of personal values and principles. The problem is, all one has to do is look at the business headlines over the last few years to see that principles, ethics and values have gone out the door in lieu of pursuing the bottom line at all costs. Sarbanes-Oxley has emerged from this morass of ethical dilemmas. Is HR to blame for this? It seems organizations, and Hammonds by proxy, are committing a fundamental attribution error by blaming HR for its inability to keep pace with strategic changes. Again, perhaps senior management should take a look at them first before placing all of the blame on the organizational scapegoat, the HR department.

Examples #1:

The best example of Human Resource leadership is the Cricket Australia. In the World Cup 1999, after the first stage of round, Australia has the bottom most position. They have to won all the 12 matches in order to win the World Cup. The captain Steve Waugh displayed the best leadership qualities at that time by setting the proper guideline amongst the team members. The direct instructions and supportive team work make them able to write history that a team that has the minimum chances to won the Cup, won all the 12 matches in a row along with two times tie against the team South Africa. The aggressive policy, supervision, proper guidance and reward are provided at a same time, there is no doubt about the achievement of goal.

Example #2:

Many organizations attract employees for work through different techniques. The most common example now a day is the vacancy available label on the web page. One of the internal and external attraction examples from the UTS Human Resource website is listed below.

"The university is committed to continue recruitment on merit base. The university provides career base jobs and is considered when determining whether to recruit externally or internally or both. Internal recruitment is the first preference and up to level 6. External recruitment is for SSG (Senior Staff Group) or for academic positions.

All applications are subject to the approval of Vice Chancellor and the director of Human Resources. To be eligible to apply for an internally advertised position, applicants must have been appointed to the University via an externally competitive selection process.

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