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The main purpose of this essay is to explain the purpose of strategic human resource management in Metro Manila Retreaders, Incorporated and evaluate the contribution of strategic human resource management activities towards the achievement of the company's objectives.
Strategic human resource management is the proactive management of people. It requires thinking ahead, and planning ways for a company to better meet the needs of its employees, and for the employees to better meet the needs of the company (Armstrong, 2003).
Human resource management is defined as the process of making the most efficient use of an organization's personnel which involves the acquisition, training, motivation and reward of human resources staff within the business, as per Surridge, (2000).
CASE STUDY ( METRO MANILA RETREADERS, INCORPORATED -MMRI)
Metro Manila Retreaders, Incorporated is a retreading company based in Manila, Philippines. It used to be ranked as a leader in retreading industry for several years but because the company is facing a problem specifically in human resource, it affected the productivity of the entire organization. The management used to hire highly skilled individuals for the Sales Department. However, having the culture of nepotism within the organization results to corruption that made the company suffer.
Nepotism is said to be a favour granted to relatives or friends regardless of merit, as stated in the Modern Language Association. However, Nelton, (1998) suggests that, if nepotism is practiced fairly, it can be a true asset. In connection with this, he cited Thomas Publishing Company as an example, wherein during the year 1998 there were seven third- and fourth-generation family members working for the company and the third-generation president, Tom Knudson, encouraged nepotism among their independent sales contractors because he believed it resulted in high performance, stability, and long-term commitment (Nelton,1998).
In contrast, as cited by Wong and Kleiner (1994), nepotism often leads to disaster, thus, taking the Line Bothers in Britain as an example, once a highly prosperous Triang toys maker, was declared valueless in just several years through its subsequent descendants of leadership. As indicated by Wong and Kleiner (1994), chaos often occurs when family and business needs conflict because of the fact that a family's objective is to care for and cultivate family members and relatives, whilst, a business must generate quality goods and services efficiently and profitably. If the organization employs and gives promotion to an ineffectual member of the family or relative, other employees may look at this as a gross inequality that leads to lots of impediment.
Aside from nepotism, corruption is present due to ineffective procedure in the sales department as well as lack of motivation from the management.
PURPOSE OF STRATEGIC HUMAN RESOURCE MANAGEMENT
Strategic Human Resource Management plays a crucial role in an organization because the responsibility of staffing, recruitment, training, and the management of people for the organization to perform its maximum capacity in an extremely gratifying manner is at their hand. Its purpose cannot be underestimated because it aids the organization in the process of transformation. Besides, it helps the organization to attract skilled individuals to fill up vacant positions as organization cannot exist without talented individuals for the operation. In addition, amongst the purpose of Strategic Human Resource Management is to formulate policies for the benefit of the organization and the employees.
Strategic Human Resource Management involves associating initiatives concerning how employees are managed with the consideration of the mission and vision of the organization. Effective management of people is not that dismaying if one is equipped enough with the knowledge and skills on how to carry out the best qualities of each individual. Strategies in human resource aid the organization to be effective in achieving the organizational objectives. Since according to Martin, (2009), strategy has been described to be a form of organizational learning, creating an understanding of the various environments that the organization is embedded within. That understanding then, forms the basis of change within the organization as it seeks to continually adjust and adapt to the evolving understanding of the future that emerges from the strategic process, (Martin, 2009).
In connection with this, the following four primary models of strategic human resource management have been materialized in the academic context:
Best Practice Model
As stated by Martin, (2009), this model is based on Guest's perspective model which contains the following HR policy objectives; integration of HR into strategic planning process, commitment of employees to the organization and high performance working, flexibility in organizational structure, and lastly, the quality in the output of goods and services achieved through high calibre employees.
Resource Based Model
The organization's internal means and their contribution to competitive advantage are given emphasis. The distinctiveness of these resources is preferred to uniformity and it's the role of human resource management to develop human resources that are worthwhile, infrequent, hard to imitate and which are systematized effectively.
It has similarities with the best practice and contingency models according to Martin, (2009), also, it recognizes that there are situational factors which impact on the HR strategies choices that exist, but is narrow in that it visualizes a predetermined set of HR outcomes that are universally valued.
Martin, (2009) stated that this model visualizes two aspects that need to be incorporated into the assessment and these include the degree of 'fit' between the HR strategy and the business strategy as well as the degree of integration between HR policies and practices.
Apparently, it is a great challenge to human resource specialist to maintain the effectiveness and the efficiency of human resource management. Activities such as staffing, training and supporting in people management for the advantage of the organization is very crucial to work in a fruitful means. Naturally, one of the functions of human resource it to monitor data points on every personnel which comprises the experiences, competencies, expertise, individual's data, as well as employee's histories and records pertaining to payroll. In a general sense, they are the one responsible in time and labour management, along with benefit administration and human resource management.
In the case of MMRI, human resource management needs to be strict in recruiting and selecting people. Hiring immediate family and relatives should be avoided because it creates biases in the organization. The company should make the rules and regulations clear to all employees upon the job commences. In that way, the culture of nepotism will be prevented and staff will be aware that if something happens against the company's policy, further action from the management will be undertaken. Providing support like on time release of sales allowances and quick response to all requests pertaining to the operation will make the sales force motivated to show high performance.
To achieve company's productivity, organization should provide support and training to their employees because in that way, work atmosphere necessary to boost performance can be cultivated. To retain skilled employees, there is a need for the human resource management to think in advance the needs of their employees. Moreover, motivating the people to stay in the company increases retention rate that would somehow help the organization minimize the expenses particularly in recruitment of new staffs. Likewise, working out on hiring strategies and recruiting policies, as well as dealing with payrolls and wage administration are what human resource department is accountable of. It's a department that deals everything that concern employee's relations and benefits and at the same time they work for favourable action.
2.1 HUMAN RESOURCE REQUIREMENTS ( Metro Manila Retreaders, Inc.)
The organization needs skilled people to for the operation to be productive that will somehow help the company to increase sales and will remain liquid. Since because of many complaints from the employees, good working environment has been affected, human resource management needs to develop some activities and programs to promote effective communication among the employees so as to avoid confusion and grudges within the workplace. A need for autonomy must be considered for the employees to have the freedom to come up with their own initiatives and use their own ideas.
Business factors that underpin human resource planning:
Currently, MMRI can be considered as having an organic growth when talking about the growth of the business since they have developed first the market within the city of Manila before expanding to the provinces. Location of operation needs to be measured as well because based on the company's human resource requirement, the need for sales consultants will be based mostly in the province.
Moreover, an increase in productivity is also one of the needs of the organization momentarily because of the fact that profitability deflated for quite a long time already. Considering the business competition, since tire retreading companies are emerging in the Philippines, it is important for the company to stay liquid and engage in the competition accordingly.
MMRI has experienced a fluctuation of sales performance due to the fact that they are currently in need of sales personnel for the vacancy of sales position specifically sales consultant. Several people were terminated due to a very sensitive case which is malversation. Provincial areas require a lot of attention and services from the company through sales consultant as they are quiet far from the city where the plant is being located. Consequently, human resource needs to be keen in choosing candidates for the position giving emphasis on the relationship of the applicants and the present employees as it was considered as one of the causes of corruption. In other words, human resource management must prohibit in employing somebody who is directly related to one of the current employees. An urgent need of 10 Sales consultants is required to cover the areas in the province throughout the northern part of the Philippines.
2.2 HUMAN RESOURCE PLANNING
As defined by Bulla and Scott, (1994), human resource planning is the process sets out to ensure that an organization has the right quantity and quality of employees doing the right things in the appropriate location at the correct period and at the right cost to the organization.
It entails two components which are requirements and availability. Talking about the prognosis of human resource requirements, includes defining how many employees are needed, as well as employees of skills and the location. On the other hand, forecasting availability, human resource manager must take into consideration both the internal which comprise the current employees, and also the external factor sources that which pertain to the labour market.
Recruitment and Selection
This part of the resourcing process is about bringing forward an appropriate pool of potentially right candidates from which a specific selection of individuals will be interviewed according to Martin, (2009).
Pertaining to selection process, Martin,(2009), argued that from the organization's point of view, there are three levels of 'fit' that are being evaluated during the selection process, and that includes 'fit with the organization, fit with the department and team, and fit with the job itself'.
After two weeks of advertisement, selection process is going to be performed by the human resource management department. To be certain that the right candidate will be chosen, after accomplishing the shortlist, candidates will be contacted for an examination. Subsequently, those who pass the exam will be moved to the next level which is the first interview by the Sales Manager. Moreover, a final interview by the General Manager will be conducted if successful in the first one. Those who meet the qualifications will be asked for a reference to ensure their integrity and reliability being a person. Thus, an appointment letter will be provided to the successful candidates.
To keep hold of the skilled and trained sale people, company must provide enough motivation both in financial and non-financial aspects. It is a nature of individual to expect some motivation from anybody to be encouraged to perform well and be productive that would somehow help the organization to be profitable.
Trainings and Development
As stated by Harisson, (2005), in the field of human resource management, training and development is the field concerned with organizational activity aimed at bettering the performance of individuals and groups in organizational settings and it has been known by several names, including employee development, human resource development, and learning development.
Metro Manila Retreaders, Inc. should always provide trainings to their newly hired staff prior to the commencement of their job, and make sure that, employees especially the sales people are knowledgeable enough to go out in the market to sell the products. Henceforth, skills and learning development is also being offered to each and every employee to ensure effectiveness in their own field for the benefit of the organization.
It is defined as the conventional design of communication and coordination created by management to associate the tasks of people and groups in reaching the objective of the organizatio (Bartol and Martin, 1994). It involves various undertakings like allocation of task, coordination and supervision, which are heading towards the accomplishment of the organization's goal. Structure also serves as the viewing perspective where people perceive the entire organization and its environment. Amongst the common organization structures are the Hierarchical, Flat, and Tall Structure.
MMRI is having a Flat Organizational structure wherein according to Stringfellow, (2010), this kind of organization structure has few levels of management between the executive level and the front-line employees with an idea of empowering employees by making them a larger part of the decision-making process. Hence, it is designed to minimize bureaucracy and make employees more productive by encouraging them to participate in decision making.
It is argued by Hill and Jones (2001) that organizational culture is an idea in the field of organizational studies and management which describes the psychology, attitudes, experiences, beliefs and values (personal and cultural values) of an organization. Furthermore, it is also defined as "the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization, according to Hill and Jones ( 2001). A good culture of an organization has the capability to make the most of the resourceful ideas and strategies of the employees. For the organization to be productive, changes is needed and it will always comes from the culture though it's very critical to bring changes and transform the organization, human resource must be determined to fulfil its objective of successfully transformation.
Metro Manila Retreaders, Incorporated was considered an excellent retreading company few years back but because of nepotism, it eventually decline its productivity and now it remains struggling to make a profit. The company needs to invest more time and resources in working to change the culture. Currently, the organization is experiencing bad working relationship due to ineffective communication and lack of motivation. High performance his not being reached because people are demotivated to perform due to limited financial support from the management. Henceforth, management should consider giving employees priority as they are the essential resources of the organization.
RECOMMENDATIONS TO MAINTAIN THE EFFECTIVENESS OF HRM
It is my belief that in order for the HRM's function to be prosperous, managers from all functions must have the knowledge and be involved since the success of an organization is not only for one person. It is the function of the managers to set up the direction and efficacy of the relationship between the employees, the firm and the work performed. To maintain the effectiveness of HRM, one must remember that people who allow the organization to survive are the one who do the work and create the ideas.
Human resource management plan creation does not have to be a difficult duty but it requires time and further thinking. Finding the right people for the position can be a result of the efforts exerted in developing the plan, hence, plan aids the company to ascertain areas where additional staff may be required and also positions that demand definite skills. It is the duty of HRM to help the organization to reach its objective. By doing so, there is a need to employ workforce skills and abilities efficiently and increase job satisfaction, fulfilment and quality of work life.
In the case of MMRI, HRM must implement and anti-nepotism policy to minimize corruption of the resources that caused the company to struggle. A particular procedure must be implemented specially for sales department to enhance effective communication. Increasing employee's satisfaction should be taken into consideration because this is also one of the factors why malversation is happening in the organization. And it is my understanding that satisfied employees are more productive while unsatisfied one tends to be absent and quit frequently and usually unproductive.
"HR policies are written description of rights and responsibilities, they provide guidance for managers and others when deciding what to do in a particular circumstance" (Armstrong and Baron, 2002).
HR policies play a vital role in the organization as these policies serve as a tool for the organization to be clear with the personnel on the following aspects; the nature of organization, expectations on both parties, the way the policies and procedure work, as well as the appropriate and inappropriate behaviour and its consequences. MMRI is currently observing the following human resource policies; Recruitment and Selection, they see to it that applicants provide medical examination result stating their fitness to work, and references are required to ensure reliability. Before the job commences, job induction is always being provided for the newly hired employ for them to be knowledgeable of the organization's background and structure, departments, products and services, and physical layout of the company. Everything that pertains to the employment is being discussed during the induction period.
During employment, policies like health and safety, disciplinary and grievances, maternity and paternity leave pay, absence, and performance management are amongst the policies that the company are implementing. Henceforth, in ending the employment, they are very keen in observing the policy concerning dismissal, retirement and voluntary resignation.
In MMRI's current situation, a policy of anti nepotism should be adapted since it is one of the causes why the organization is struggling nowadays. Moreover, reward policy should also be taken into consideration for the employees to be motivated and productive in such a way that they don't need to use company's cash collection due to lack of financial support from the management.
MMRI requires keen human resource personnel to run and implement all policies. Because in recent situation, policies are there but not being followed strictly. Leniency of the management made these policies ineffective. Furthermore, anti-nepotism policy must be implemented strictly as to avoid further problems in the operation. Meanwhile, to prevent overstepping the right of the workers, the provision of such must be reviewed first by the legal counsel and make the employment decisions based on their skills, competence, and experience instead of other irrelevant concerns.
To finish off, organization will never progress in the presence of nepotism as it will not attract skilled individual because people will be selected based on preference and not on their proficiency that will somehow gives a negative impact in the operation of the organization.