The issues behind Strategic Human Resources


In order to explain the strategic human resource management, the company chosen as a case study is Mobilink, which is a leading organization in telecommunication sector of Pakistan, providing voice and data services. Like other areas of business Mobilink set an example of best human resource practices by treating the employees as assets of the company. The best human resource management of Mobilink has been the competitive advantage for the company since its launch. When Mobilink was launched in 1998, there was only one competitor of the company named Paktel and the company did not require changing the policies and procedures rapidly in order to cater the market needs. However in the last one decade, telecommunication sector of Pakistan has seen several changes and the environment has become highly dynamic and competitive as now Mobilink has 4 other major competitors in the same market providing the same products and services to the customers. In such scenario the company's policies has to be very flexible and competitive to meet the market needs. The human resource strategy refers to the activities and actions which are followed by an organization to achieve its goals and objectives. The following HR plan will elaborate several human resource activities which are followed at Mobilink to achieve the organizational goals and to formulate and implement the HR policies, procedures and practices.

1 Resource Based Strategy

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The internal capabilities of the organization are emphasized in order to achieve the sustainable competitive advantage in telecommunication sector of Pakistan by using resource based strategy. By configuring or reconfiguring an organization's resources and capabilities, competitive advantage in the market can be obtained. In this way the resource based strategy is an inside out approach as the internal capabilities of the company determines the strategic choices, which are required for the competition in the market. The capabilities of an organization allow it to add value to the customers and to create new markets. Mobilink has a widespread network/coverage all over the Pakistan, which makes it the holder of largest market share. The profitability of an organization is determined by the position of the company in the structure of that particular industry developing and outside-in approach (Porter, 1980). However, resource based strategy is opposite to this, as it suggests that it is not the industry rather it is the unique cluster of an organization which determines its position in the market and the profitability.

Identification of Resources

Resources refer to those inputs which are required for the operations of an organization. Resources are almost same for all the organization in the same industry, but the difference occurs in their utilization. Resources are of no use themselves, but their utilization determines the difference in performance from the other organization having similar resources.

Tangible Resources - The financial resources, physical resources and human resources come under the category of tangible assets. Mobilink possesses hundreds of cell phone sites, offices owned by the company and financial assets, moreover the company has more than 7000 employees all across the country serving in different departments. The physical resources are flexible enough to respond to the market change.

Intangible Resources - The resources like technology and reputation comes under the category of intangible resources. The technological resources include the ability of an organization to innovate and the speed in which the innovation occurs. Mobilink is equipped with latest technology and the company's innovation ability can be determined by the different products and value added services which are being offered to the customers. Mobilink has been the pioneer in offering new value added services to the customer; the biggest example is balance share from one customer account to another. The reputation or goodwill is one of the major intangible resources of the company. Mobilink brand name itself is the huge asset of the company.

Identification of Competencies

Competency refers to the attributes required by an organization for competing in the marketplace. In this way all the organizations possesses certain level of competency. However, competency does not enable an organization to obtain competitive advantage. Mobilink possesses the knowledge and technology to provide the telecommunication services to the customers.

Core Competencies - The most critical task of the management is to enable the organization in way that it produces the product fulfilling the need of the customer, but has not been imagined yet (Prahalad & Hamel, 1990). The core competency of Mobilink is to provide the post paid services to the customer. Mobilink post paid service named as "Mobilink Indigo" is very popular and is unique as the company also provides blackberry services to its "Indigo" customer.

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Distinctive Capabilities - The distinctive capability refers to the ability of the resource to provide a competitive advantage to the organization. The capabilities of an organization are only distinctive if they possess the capabilities which the other firms do not have (Kay, 1993). The distinctive capabilities of Mobilink are innovations, its architecture and reputation. The internal architecture of the company refers to the relations with the employees and between the employees, which Mobilink has maintained in an efficient manner. The external architecture refers to the relations with the suppliers and the customers (Grant, 2005). The company has maintained the relationship with the customers efficiently as Mobilink customer care is benchmarked by the other organizations in the country. The company has been providing the innovative services to the customer since its launch and that is the reason that company holds the highest market share and reputation of a customer oriented company in Pakistan.

Identifying Sustainable Competitive Advantage

A sustainable competitive advantage occurs when an organization is implementing a value creating strategy that is not being implemented by the current or potential competitors and when these competitors are unable to duplicate the benefits of this strategy (Barney, 1991). Mobilink has several sustainable competitive advantages, which has been giving the value to the organization. Following are the basic attributes of the Mobilink resources which enable them to give a sustainable competitive advantage to the company.

Valuable Resources - To give a competitive advantage to the organization, the resources must be valuable and the resources are valuable of they enable the organization to formulate and implement strategies that improves its efficiency and effectiveness.

Rare Resources - IF the resources which are valuable, but reside with the competitors as well then those resources will not be able to give a competitive advantage to the organization, the reason is that the competitor will have the same capability to exploit that resource in the same way.

Difficult to imitate - The valuable and rare resources can provide the organization a competitive advantage, but for sustainable competitive advantage it is necessary that the resources are difficult to imitate by the others. If the resources are easy to imitate then the other competitors will follow the same and adapt that resource and will eliminate the competitive advantage of the firm.

Sustainability - It refers to that there must be no strategically equivalent valuable resources that are themselves not rare or that can be imitated. Two valuable firm's resources (or bundle of resources) are strategically equivalent when they can be exploited separately to implement the same strategies.

2 Human Resource Strategy

The idea of Human Resource strategy and its alignment with the business strategy came in to practice by most of the organization in 1980s, after the launch of the book named "Human Resource Planning" by Jim Walker. The idea given by Walker gave birth to the human resource systems and human resource development. HR strategy is the pattern of decisions and practices associated with HR system. At Mobilink different HR systems and HR development techniques and practices are followed which are described below.

2.1 Human Resource Systems

2.1.1 Recruitment and Selection - At Mobilink the process of recruitment and selection is initiated by the concerned department's HOD or manager. The requirement of the resource along with a report of purpose and expected job responsibility is justified by the manager with the approval of his/her HOD, is submitted to HR department. HRD then arrange the resource internally or externally.

2.1.2 Employee Training - Mobilink is very aggressive in employee's training. For the newly trained staff, orientation or probation period is conducted in which the employees are made familiar with the organizational culture and the style of working. For the old employees the company conduct on-job and off-job training programs to enhance the skills and knowledge of the employees.

2.1.3 Performance Appraisal - Each employee at Mobilink know his/her key performance indicators. KPI's enables the employee to understand that how he is being judged at the job.

2.1.4 Rewards and Benefits - Performance appraisals are inked with the rewards and benefits. Each employee is rewarded according to his/her performance throughout the tenure (usually one year). Rewards can be of different types such as extra annual leaves, bonuses, enhancement of fuel allowance etc.

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2.1.5 Career Development - At Mobilink special career paths are chartered for individuals for advancement in the organization and these paths are communicated to the employees.

2.1.6 Health and Safety Management - At Mobilink safe and healthy environment is created. Different activities are conducted to educate the employees in case of any contingency or disaster.

2.1.7 Discipline Management - At Mobilink "Zero Tolerance Policy" is placed in case any breach of code of conduct is reported on the part of an employee. Mobilink intimate and educate the employees regarding the disciplinary policy.

2.2 Human Resource Development

2.2.1 Conducting Job Analysis - Job analysis is conducted to get the content and resource requirement for a job and how the job is performed. The information gathered from job analysis is useful to redesign the job and the primary focus is to identify the capabilities required to perform a particular job.

2.2.2 Defining Job Descriptions - After job analysis Job descriptions are defined. It is very important activity in an organized working environment. It illustrates all those responsibilities which are on the part of the employees in daily routine work.

2.3 Human Resource Relationship

Mobilink HR relationship refers to handling the employees individually and collectively as members of the organization in order to increase cooperation, trust and to involve employees actively in company's affairs. HR relationship also includes employees problem solving, disciplinary causes and grievance handling.

2.4 Human Resource Utilization

Efficient utilization of human resource is very important as only hiring people is not sufficient to achieve the organizational goals. To achieve productivity through people employees are required to be treated as partners, with dignity and respect. Mobilink take different steps to increase the motivation level of the employees in order to gain maximum output form the resource. For that several training programs are offered, rewards are given and employees are allotted the responsibilities that match up with their interest, skills and knowledge.

Linking Human Resource Functions with Business Objectives

In order to compete in the modern business world, it is very important to integrate the HR functions with the business objectives. The HR strategy regarding the employee recruitment, deployment, engagement and retention is required to be designed in such a way that the outcome of these activities enables the organization to achieve its business objectives (Bhagria, 2010). For instance by linking the targets with the performance appraisals, will motivate the employees to achieve the targets such as higher sales and improving profit margins etc.

3. Organizational Design/Structure

Every organization to be effective must have an organizational structure. It is the form of structure that determines the hierarchy and the reporting structure in the organization. It is also called organizational chart. There are different types of organization structures that companies follow depending on a variety of things; it can be based on geographical regions, products or hierarchy. To put it simply an organizational structure is a plan that shows the organization of work and the systematic arrangement of work.

3.1 Organizational Structure at Mobilink

At Mobilink, functional structure is used as the organization is divided in to functional worker groups. Each department has individual head that is called HOD (head of department). All the HOD's are reported to the CEO of the company. Figure 3.1 shows the functional structure of Mobilink.

Figure 3.1 Organizational Structure of Mobilink

3.2 Roles of different Worker Groups at Mobilink

Each worker group/division of Mobilink has separate role and functions, which are stated as under:

3.2.1 Marketing and Business Planning - This division has two core responsibilities. First is to undertake all the marketing campaigns for all the product and services of the company and second is the business planning that involves the future market forecasting and setting the targets according to those forecasting and setting the product prices accordingly.

3.2.2 Products and PMO - This division works to ensure the smooth functionality of all processes and activities from sales to product delivery and after support services to the customers.

3.2.3 Consumer Segment - This division is responsible for the sales to home users and SMEs. Sales operations and planning is another part of this division, which analyze the focus area of the sales.

3.2.4 Corporate Solutions - This segment involves the sales to the companies and provide corporate solutions. As like consumer segment, corporate sales and planning is an integral function of this business division.

3.2.5 Administration - The core responsibilities of this business division includes correspondence inside and outside the organization, movement of assets or other tangible or human resources, office cleanliness, construction, repair and maintenance of assets. This department is also responsible for the security of the company's tangible assets.

3.2.6 IT Segment - This division has two core responsibilities. One is to develop and maintain the information systems that are aligned and support the business processes and second is to maintain and install the computer systems and related machinery like desktops, laptops, IP phones, servers etc.

3.2.7 Strategy and Career Services - This division has also two core functions, first is to explore new business ventures, strategic alliances, partnerships in which company can invest and can earn income and second is to manage the corporate and regularity affairs with the legal authorities and other organizations.

3.2.8 Operations and Maintenance - This division's functionality is to maintain the network and plan for the extension in order to meet the customer needs and to ensure the stability of the services.

3.2.9 Human Resource - This division is responsible to manage the human resource and is responsible for all the HR functions which are mentioned above.

4. Human Resource Planning

Human resource department (HRD) is responsible to ensure that the human resources are capable and sufficient enough to cope up with the existing and future business needs. The purpose of HR planning is to ensure that right people are at the right positions at the right time. Pakistan's telecommunication sector consists of several multinational organizations and it is very difficult to keep the employees intact with the organization. The company needs to give more visibility to the employees about the future perspective of the organization. Most of the strategies are designed by the parent company i.e. Orascom Telecom and they are not properly communicated to the employees which is a barrier in the increase of loyalty factor of the employees with the organization. The company also needs to categorize the HR planning in to short, medium and long term.

4.1 Short-Term HR Planning

To meet the short-term organizational goals the company needs to design and implement the recruitment, selection and training programs. These activities should be undertaken by focusing on the short-term future needs probably for few months. These short term objectives provide the foundation for the achievement of long term objectives.

Forecasting Demand and Supply - For short term planning, it is more certain to predict the demand and supply of human resource. The demand refers to the relevant abilities, skills, pay levels and experiences of the candidates for the required job and the supply refers to the availability of such candidates. Mobilink keeps a record of resumes of the candidates, which are not selected or who drop their resumes in the resume boxes placed at different Mobilink offices and this helps to estimate supply of human resources.

Establishing Objectives - For short-term HR planning, establishing objectives quantitatively is much easier. Short-term resource objectives include attracting the candidates towards the organization, improving the qualification of the existing staff or newly hired staff etc. Mobilink also take part in the job festivals held by different organizations in Pakistan like, etc. which helps the organization to keep intact with the candidates from different fields who are interested in joining Mobilink.

Design and implementation of short Term Programs - The programs like performance appraisal and short term training helps the organization to meet the objectives in near future. The changes in compensation and reward system can reduce the employee turnover rate for the short span of time. Such activities can be effective with immediate effect and helps to achieve the short term organizational goals.

Evaluation of short term Human Resource Programs - Evaluation of short term HR planning is relatively easier as objectives are quantifiable such as number of applicants, number of new hiring etc.

Intermediate Term HR Planning

As the short term HR planning moves to the intermediate HR planning the questions like "What is required and what will be available?" becomes less easy to answer. The HR planning for more distant future also raises the question that "how the needs and availability of human resource can be determined?", however, the rapidly changing environment in the telecommunication sector of Pakistan it is not easy to anticipate the future needs and availability in the future and forecasting needs more technical attention.

Forecasting Intermediate term Demand - Forecasting the demand of human resource for achievement of intermediate organizational objectives probably two to three years, needs the analysis of budgeted output expected form an organization. Analyzing the sales forecast and the relevant technology that will be used to achieve that level of sales gives the platform to forecast the demand of human resource (Dumaine, 1989). Mobilink needs to align future demand of marketplace with the HR planning in order to meet the intermediate objectives.

Forecasting Intermediate term supply - Internal and external sources of information give rise to the forecast of human resource supply. Internal forecasting technique involves the replacement planning (Bechet & Maki, 1987). Mobilink needs to list down the skills, experience and knowledge of the existing employees which can be most suitable for the expected positions in the future, which can be later fulfilled by these staff members. Such planning will enable the company to estimate that which position will be vacant in the future and what are the available options to fulfill that position internally and externally (Walker & Armes, 1979).

4.2.3 Establishing Intermediate Term Objectives - after the forecasting of intermediate demand and supply the objectives are established which are to be achieved in the span of 2-3 years. This can be done by adding the analysis of the changes expected in the said time duration in the short term objectives.

Intermediate-Term Programs to Help Employees Adjust to Changing Organizations - Training and retraining programs are conducted to enhance the skills of the employees. The basic skills training is conducted of the newly hired employees and the advanced skills training for the old employees these can be scheduled twice in a year to help the employees adjust in the changing organizational environment (Bolick & Nestleroth, 1988).

4.2.5 Evaluation of intermediate term Human Resource Programs - The evaluation of intermediate HR programs can be associated with the output or performance of the business unit. As the time duration is relatively longer than the short term HR programs so the results for intermediate objectives are more visible.

Long Term HR Planning

Long term HR planning demands the integration of knowledge and skills of the strategic and human resource planners. The changing and highly competitive market does not allow the organizations to fulfill their requirement for human resource for short time period. There is a need of strong and longer employee relationship in order to meet the market competition.

Forecasting Demand and Supply - The forecasting of demand and supply of human resource for long term objectives is mainly concerned with the type of managers with the leadership qualities available and required by the organization.

Program Design and Implementation - Evaluation of available talent along with the future need anticipation of the business conditions a talent pool should be developed that may include the people who have the leadership qualities and greater mental ability to lead the organization towards the achievement of long term goals and objectives (Bentz, 1968).

Evaluating Long-Term Programs - The analysis of massive data gives much knowledge of individual behaviors which helps in evaluating the long terms programs and related objectives.