The advantages of Human Resource Management

Human resource management is defined as a strategic and coherent approach to the management of an organization’s most value assets- the people working there who individually and collectively contribute to the achievement of its objectives.

Human Resource Management is resource-centred, directed mainly at management needs for human resources (not necessarily employees) to be provided and developed. Demand rather than supply is emphasised There is greater emphasis on planning, monitoring and control, rather than mediation. Problem solving is with other members of management on human resource issues rather than directly with employees or their representatives. It totally identified with management interests, being a general management activity, and relatively distant from the workforce as a whole. (Martin & Jackson, 1997, p-9)

AIM OF HRM:

The main purpose of human resource management is to ensure that the organisation is able to achieve success through people. As Ulrich and Lake (1990) remark: ‘HRM systems can be the source of the organisational capabilities that allow firms to learn and capitalize on new opportunities.’ Specially, HRM is concerned with achieving in the areas as bellow-

Organisational effectiveness

Human capital management

Knowledge management

Reward management

Employee relations

Meeting diverse needs

Bridging the gap between rhetoric and reality.

(Armstrong, 2006 Page-9-10)

Strategy has been defined by Johnson and Scholes (1993) as ‘The direction and scope of an organization over the long term, which ideally matches its resources to its changing environment, and in particular, to its markets, customers and clients to meet stakeholder’s expectations’.

STRATEGIC HRM:

‘All those activities affecting the behaviour of individuals in their efforts to formulate and implement the strategic needs of the business’. (Schuler, 1992)

(Armstrong&Baron-pg-41)

Strategic HRM is an approach to making decisions on the intentions and plans of the organization in the shape of the policies, programmes and practices concerning the employment relationship, resourcing, learning and development, performance management, reward and employee relations. (Armstrong,pg-115)

The definition characteristic of strategic HRM is that it is integrated: HR strategies are integrated vertically with the business strategy and horizontally with one another. The HR strategies development by a strategic HRM approach is essential components of the organization’s business strategy.

AIMS OF STRATEGIC HRM:

The aim of strategic HRM are to:

To generate the techniques in the process of which critical issues which are related to people can be addressed.

Generating strategic capability by ensuring that the organization has the skilled, committed and well-motivated employees it needs to achieve sustained competitive advantages.

To provide a sense of direction in an often turbulent environment so that the business needs of the organization, individual and collective needs of its employees can be met by the development and implementation of coherent and practical HR policies and programmes:

Provide ‘unifying frameworks which are at once broad, contingency based and integrative’. (Armstrong, 2006 Page-116-117)

CONTEXT OF HRM:

Human resource management takes place on the circumstances of Internal and External environment of the specific organisation it deals with. It is greatly dependent on the environmental factors which affect the organisation.

Contingency theory

It is a class of behavioural theory that there is no best way to organize an organization or make decisions. It helps us understand the aims,policies and the strategies and analyse the role of HR department are valid only if it with in the circumstances of the organization. Some of the factors this theory deals with are :

Size of the organization

How the organization adapts itself to its environment

Assumptions of managers about employees

Strategies and technologies used.

It defines and concerns the management of the employment relationship The nature of the organization and the way it is managed therefore constitute significant threads that are interwoven to form the context with in HRM is embedded.

(Beardwell&Holden,pg-33-37)

HRM POLICIES

Human resource policies are systems of codified decisions, established by an organization to support the administrative personnel functions, performance management and resource planning and employee relations. Each company has a different set of circumstances so accordingly the human resource policies are set.HR plocies are divided into two types based policy.

Overall policy

This policy defines how the organization will fulfil the social requirements of its employees. Some of the concepts in this policy are :

Equity

Consideration

Performance through people

Work life balance

Quality of working life

Working conditions

Organizational learning

These values are adopted by most organizations in one or the other form.

Specific policy

These policies cover the following areas of the organization

Equal opportunity

Managing diversity

Age and employment

Promotion

Employee development

New technology

Discipline

Health and safety

Employee relations

Redundancy (Armstrong,pg148-155)

EVALUTION OF HR FUNCTION OF BT:

BT is one of the worlds leading providers of communication and services which operates in 170 countries. Its origins date back to the establishment of the first telecommunications companies in the United Kingdom. Among them was the first commercial telegraph service, the Electric Telegraph Company, introduced in 1846. As these companies amalgamated and were taken over or collapsed, the survivors were eventually transferred to state control under the Post Office. They later became a privatized company, British Telecommunications plc – the forerunner of today’s global communications company, BT Group plc, which serves customers in 170 countries. (www.btplc.com)

In every organization Human resource plays a vital role for the achievement of its performance and goals of the organization .BT has a very active HR department which is always working to achieve their goals. The main goals of the HR department of BT are to build long-term partnerships with their customers and provide excellent service through out. With their support, BT’s aim to maximize the potential of their traditional business, through a combination of enhanced quality of service, creative marketing, innovative pricing and cost efficiency. (www.btplc.com).

Strategy & Development

The main aim and responsibility of BT is to drive the planning and process and implementation of BT’s network, IT services strategy through out global services. Some of the responsibilities include:

To establish appropriate quality processes practices and methods for transforming global services into a customer-led organization.

To analyze, develop and execute M&A activities in support of the strategy.

To design and implement an efficient process for its portfolio management.

(http://www.btplc.com/Thegroup/Companyprofile/Ourvalues/Ourvalues.htm)

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To achieve the goals BT has expand their HR services.  BT and Accenture have signed a 10-year, £306 million (US$575 million) business process outsourcing (BPO) and transformation contract for human resource (HR) administration services.  The contract significantly expands the geographic reach of services that Accenture has been providing to BT under a previous five-year contract.

Accenture currently provides HR services to BT’s 87,000 employees and 180,000 pensioners in the United Kingdom.  Under the new contract, Accenture will provide services to those BT employees and pensioners, as well as to another 10,000 BT employees in 37 countries around the world who were not covered in the previous contract.

Training and Culture

BT’s HR department provide training program for their employees to improve their organizational activities. Route 2 Learn is BT’s own online e-learning portal. This extensive learning resource provides all their employees with access to online and offline training program for their own personal, technical and professional development. (www.btplc.com)

A Code of Practice was issued to BT people in the UK. E-learning courses, based on the Code were launched on 12 December 2005. These are designed to ensure that BT people are familiar with the Undertakings and their associated responsibilities.

The following reports the percentages of BT people in the UK who have completed their e-learning module, or, in the case of engineers, a customized telephone based programmed, which was launched in February 2007.  The latest available results show that BT has achieved a very high level of completion.  At the 2nd April 2007 the figures stood as follows:

BT Managers: 98%

BT Team Members: 97%

This shows a 3% increase on the Team Members figure over the previous quarter.

Annual Employee Survey:

Views on two statements were sought in BT’s annual employee survey in February 2007. The statements are:

‘I believe that BT treats all its customers, internal and external, in a fair and equal manner’, and ‘The company helps me to comply with our legal and regulatory obligations.’

Positive responses were received from 70% and 78% of employees to each of these statements respectively.  This compares to 71% and 80% in the 2007 survey. Given the size of the population (all employees are polled) the very slight fall is not viewed as statistically significant. (www.btplc.com)

Recruitment: Every year BT is recruiting people to improve their organizational functions. The last five years data of BT’s employees are as follows:

Year end 31 March Number of employees

2003 104,700

2004 99,900

2005 102,100

2006 104,400

2007 105,200

By analyzing the data, it can say that BT has recruited more people in the last two years. (www.btplc.com).

BT has created a new human resources post (Group talent and HR strategy director) to improve the effectiveness of the company’s talent assessment and career development. The main responsibility of this post will be talent acquisition, identification, development, management and retention practices across the company.

TASK 2

THE ROLE OF HR PROFESSIONALS:

The Basic Roles

The roles of HR practitioners vary widely according to the extent to which they are generalist (e.g., HR director or HR manager), or specialist (e.g., head of learning and development, head of talent management or head of reward), the level at which they work (strategic, executive or administrative) the needs of the organization, the context within which they work and their own capabilities.

The Business Partner Role

HR practitioners as business partners share responsibility with their line management colleagues for the success of the enterprise and get involved with them in running the business.

The Strategist Role

As strategists, HR professionals address major long-term organisational issues concerning the management and development of the people and the employment relationship..

The Innovation and Change Agent Role

In their role, an HR practitioner are well placed to observe and analyze what is happening in and to their organisations as it affects the employment of people and intervene accordingly.

Internal Consultant Role

The main role of internal consultant is analyzing and diagnosing problems and proposing solutions.

Monitoring Role

Monitoring role ensure that the organization’s HR policies are implemented properly and consistently. (Armstrong, 2006, pp-71-76)

KATHLEE MONKS (1992) MODEL:

Traditional/ administrative: in this mode the personal practitioners have mainly a support role with the focus on administrative matter, record-keeping and adherence to rules and regulations.

Traditional/ Industrial relations: personnel practitioners concentrate on industrial relations, giving their other functions lower priority.

Innovative/professional: personnel specialists are professional and expert. They aim to remove traditional practices and replace them with improved human resource planning, recruitment and development, and reward policies and practices.

Innovation/sophisticated: personnel specialists are on the board, take part in integrating HR and business strategies, and are recognized as making an important contribution to organizational success. They develop and deliver sophisticated services in each of the main HR areas. (Armstrong, 2006, pp-76-79)

Strategic HRM as an Integrated Process

Strategic HRM is essential an integrated process that aims to achieve ‘strategy fit’. A strategic HRM approach produces HR strategies that are integrated vertically with the business strategy and are ideally an integral part of that strategy, contributing to the business planning process as it happens. Walker (1992) defines strategic HRM as ‘the means of aligning the management of human resources with the strategic content of the businesses.

VERTICAL INTEGRATION:

Vertical integration helps in ensuring that the organisation has the best skilled, committed and well-motivated workforce which it needs to achieve its business objectives. This can be attained by linking HR strategies to basic competitive strategies. As defined by Porter (1985), these are innovation, quality-enhancement and cost leadership. Some of the steps involved are:

To develop the required skills of its employees

Allowing occasional failure

Giving them more discretion – using minimum controls (empowerment)

Providing more resources for experimentation;

Assessing performance on the basis of its potential long-term contribution.

An integrated strategy for quality enhancement requires the development of a quality-orientated culture by:

Driving through quality initiatives

Productivity planning- generally considering any means of increasing productivity in terms of the cost per unit of output through organisation, training or reward practices and the introduction of new technology;

HORIZONTAL INTEGRATION:

Horizontal integration is accomplished by developing a coherent- a well-knit-range of interconnected and mutually reinforcing HR policies and practices. This may be achieved by the use of share process, such as competence analysis, which provides a common frame of references and performances management, which is concerned with role definition, employee development and reward.

VERTICAL INTEGRATION OF BT:

BT is the world largest telecommunication company, which is providing telecommunication services about 170 countries in the world. BT’s aim is to build long-term partnerships with their customers. With their support, BT’s aim to maximize the potential of their traditional business, through a combination of enhanced quality of service, creative marketing, innovative pricing and cost efficiency. At the same time, BT will pursue profitable growth by transforming their customers to new wave products and services, such as ICT (information communications technology), broadband, mobility and managed services. (www.btplc.com)

BT has an organized Board, which is always working to achieve BT’s strategic goals. BT established four committees to meet their stakeholder’s expectations. The committees are- Audit committee, Remuneration committee, Nominating committee and Equality of access board. BT’s Nominating committee has taken their HR responsibilities. The main responsibilities of Nominating committee’s are as follows.

(www.btplc.com)

Ensuring an appropriate balance of experience and abilities on the BT Group plc Board and use this evaluation to review annually the size and composition of the board, recommending any proposed changes to the board.

Keep under review the need for appointments, prepare a description of the specific experience and abilities needed for each board appointment consider candidates for appointment as either executive or non-executive directors and recommend appointments to the Board.

Recommend to the Board whether to reappoint non-executive directors at the end of the terms of office.

Review the time required from the non-executive Deputy Chairman and the non-executive directors generally to discharge their duties and the amount of time required from each non-executive director to discharge his or her duties in relation to board and committee meetings and other commitments to the Company.

Advise the Board, Chairman and Chief Executive on succession planning for the roles of Chairman, Deputy Chairman, CEO and for all other board appointments. 

Delegate any of its powers to one or more of its members or the Secretary.

SELECTION AND DEVELOPMENT OF BT:

BT’s HR department always play an important role to meet their strategic goals. More recently BT has appointed Group talent and HR strategy director. The main responsibilities of newly appointed director’s are talent acquisition, identification, development, management and retention practices across the company. BTs HR department has done this to achieve their strategic goals. Again, BT has taken plans to develop their employee’s efficiency. These plans have been taken to meet their stakeholder’s expectations and to reach their strategic target. BT’s plans are as follows:

CAREER DEVELOPMENT:

Personal and professional development is available throughout employee’s career in BT.  Employee’s personal action plan will be specially tailored to help them do their job today and to progress their career tomorrow. In addition to having regular feedback time set aside with their manager, there are coaching, networking, mentoring, knowledge sharing and ‘buddy’ programmes to give employees the help and support they need. This approach has earned BT accreditation as an investor in people.

BT’S Development Action Plan:

BT sees its employee’s personal and career development as a continuous process of increasing their knowledge and gaining new skills. In addition to the skills anyone will naturally gain in his/her job, BT individually-tailored Development Action Plans provide opportunities that will stretch employee personally and professionally, preparing employees for the next steps in their career.

Employees’ progress, performance and development will be carefully monitored, and there will also be scope for their plan to be updated as their needs and interests change.

BT encourages everyone to make the most of the extensive opportunities a company of our size can offer. Moving within BT is an established means of career progression; and a large percentage of opportunities are advertised internally. (www.btplc.com)

The whole Board appoints new directors on the recommendation of the Nominating Committee. Executive remuneration is set by the Remuneration Committee – made up solely of non-executive directors and chaired by the Deputy Chairman.  The company’s executive remuneration policy is in line with the company’s overall practice on pay and benefits. This is to reward employees competitively, taking into account individual performance, company performance, market comparisons and the competitive pressures in the information and communications industry. Remuneration packages are reviewed annually and comprise a mix of basic salary and performance-linked elements.

BT holds meetings with its major institutional shareholders to discuss the company’s strategy, financial performance, specific major investment activities and its overall remuneration policies and plans. At every AGM shareholders are invited to ask questions on BT’s financial and operational performance and activities plus the other topics to be dealt with at each meeting. BT has also asked its shareholders to vote on its remuneration policy or remuneration report at each of the last five AGMs. (www.btplc.com)

BT provides consultancy services to over 18,000 people on a variety of people-related matters spanning the complete employment cycle. Management Services comprises of Property, Security, and Restructuring. (www.btplc.com)

HORIZONTAL INTEGRATION OF BT:

BT is one of the world’s leading providers of communications solutions and services operating in 170 countries. BT’s principal activities include networked IT services, local, national and international telecommunications services, and higher-value broadband and internet products and services. BT consists principally of four lines of business: BT Global Services, Open reach, BT Retail and BT Wholesale. BT’s organizational structure is horizontal. BT’s whole management are related to each other. BT’s board is always working to achieve their strategic targets. There is good relation in BT’s board.

The board met nine times in 2006. Its principal focus is the overall strategic direction, development and control of the group. Key matters, such as approval of the group’s values, strategic plans and annual budget, are reserved to the Board. It also has oversight and control of the group’s operating and financial performance. (www.btplc.com)

The Remuneration Committee meets at least four times each year. The committee comprises solely independent non-executive directors. The committee sets the remuneration policy for the Chairman, the executive directors, the members of the company’s Operating Committee and senior executives reporting to the Chief Executive. Specifically, the Remuneration Committee agrees their service contracts, salaries, other benefits – including bonuses and participation in the company’s long-term incentive plans – and other terms and conditions of employment.

It also agrees terms for their cessation of employment and their appointments as non-executive directors of non-BT Group companies and other organizations. It approves changes in the company’s long-term incentive plans, recommends to the Board those plans which require shareholder approval and oversees their operation.

(www.btplc.com)

REWARD:

BT always encourages and motivates its employees by providing bonuses, salary increase and many other promotions which are based on the employee’s skills, experience and qualification. Committed to attracting, retaining and developing the brightest and best people. Terms and conditions vary from country to country. Management roles offer a range of reward options giving considerable choice, value and flexibility. Benefits include:

Membership of the BT Retirement Plan 

Interest-free annual season ticket loans

Share-related benefits, including share save and profit-sharing schemes (available periodically)

Discounts on some BT products and specially- negotiated prices on other items such as computer equipment, car products, healthcare and dental work, life assurance, holidays, hotel accommodation and financial planning.

From the above discussion it is clear that BT is strongly practicing SHR in their organization. HR functions are contributing BT’s organizational effectiveness. It is helping BT to achieve their specific goals and trying to meet their stake holder’s expectations.

Interest free annual season loans

(www.btplc.com)

(Beardwell,pg-503)

TRAINING:

The training provided by BT for its employees are of two types that’ is short term and long term training.BT has set a base to satisfy its entire customers for which BT gives excellent training to its staff. By keeping this, BT’s HR department always tries to train up their employees. Recently BT issued a code of practice to BT people in the UK. E-learning courses. These are designed to ensure that BT people are familiar with the undertakings and their associated responsibilities. 98% of BT’s Managers and 97% of BT’s Team Members have completed their e-learning module, or in the case of engineers, a customized Telephone based learning in April 2007.

Moreover, BT has started online learning lessons Route 2 Learn is BT’s own online e-learning portal. This extensive learning resource provides all their employees with access to online and offline training lessons for their own personal, technical and professional development. (www.btplc.com)

RECOMMENDATIONS:

BT should multiply the possibilities of providing the opportunities for fresher’s also. The preference of experience personnel should be eliminated.

BT and Accenture have signed a 10-year, £306 million (US$575 million) business process outsourcing (BPO) and transformation contract for human resource (HR) administration services, which means that BT’s human resource activities are going to out side of the BT’s board. It can be make a problem in BT’s administration.

The working conditions must be supportive. So, that the employee satisfaction in performing job is attained

The quality is to be enriched both internally and externally in aspects of production as well as maintaining Personnel

Retirement benefits like provident fund, pension, gratuity etc should be awarded

22.1% Women (15.8% of senior), 9.2% Ethnic Minority, (7.4% of senior),) had left their job from BT in 2007. This statistics shows the working environment in BT is not suitable for the woman. This shows the weakness of BT’s HR activities. BT should aware about this problem. BT can solve this problem by giving more facilities and making suitable working environment for the woman and disables. 

CONCLUSION:

BT is dedicated to helping customers thrive in a changing world. It believes in progress, growth and possibility, and wants to help all their customers make their lives and businesses better with products and services that are tailored to their needs and easy to use. BT is passionate about customers and is working to meet the needs they have today and innovate to meet the needs they will have tomorrow.