What HRM approaches need to be taken to ensure competitive advantage

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The immediate objective of any HR policy should be to retain the existing employees and prevent them from leaving the company. The medium term strategy would focus on how to incentivize them to stay with the company while the long term strategy will be aimed at making them believe that the company values their contribution.

In order to discourage employees from leaving, first the root cause should be identified and accordingly be addressed. Employees are dissatisfied for many reasons which include stringent management policies with regard to punctuality, close monitoring, and sudden shift to a new system (Mathis & Jackson, 2004). Since most employees are leaving due to inconsideration from the management towards their personal issues and job flexibility, Bill should first and foremost introduce the flexible hour system.

Bill can make use of the various theoretical concepts to structure an HR system in the company. Practical application of theoretical concepts can help in the construction of an HR strategy. The goal setting theory states that there exists a relationship between the difficulty and specificity of a goal and an individual's performance of that task. Goals should be specific, measurable, attainable, relevant and time-bound. Bill also needs to use this goal theory and give each team specific goals to achieve. This will aid in team building while at the same time making employees competitive and performance driven.

An HR strategy needs to be designed that will accommodate the needs of all the employees. There exist various motivation concepts and theories that can be applied in this situation. One main reason for the disgruntlement among employees was the lack of fulfillment of their basic needs. According to Maslow's hierarchy of needs, an individual is self satisfied once all his needs are met (Robbins & Judge, 2004). In the case mentioned, employees did not feel autonomous as they were constantly being monitored which affected their self esteem making them believe that they were irresponsible or incapable of fulfilling their jobs appropriately. This constant watch was not only de-motivating; it was rather humiliating for those employees to be watched over who had been in the company since its inception and were partly responsible for its success. Bearing this issue in mind, a HR plan will cater to all employee needs. Not only do employees need to be provided with basic motivators, the higher they climb the hierarchy, the more sophisticated their needs become and they have to be addressed in order to prevent them from leaving.

Therefore, to facilitate the transition to a structured HR system, a change management plan will have to be initiated. According to reactance theory, individuals tend to react in a contradictory manner if certain guidelines and policies are forced upon them. Since the employees are not accustomed to following guidelines, it will take time for them to adjust to the new system (Heller, 2007). They might feel resistant as was the case with Bill's company; employees felt that the implemented system was too strict or was not aligned with their working habits.

In such a case, change management plan plays a pivotal role. Employees need to be explained as to why the change is being taken place and how it would benefit them. Their benefits then need to be aligned with the organizational benefits. A change agent also needs to be assigned who employees can refer to every time they have confusion regarding the change. Bill should then move forward with implementing a comprehensive HR plan that will comprise of different HR strategies to ensure employee involvement and retention in the company.

As a part of medium term strategy, Bill can implement an HR policy that will ensure employee satisfaction. Bills HR strategy should focus on implementing a performance management system that monitors the performance but does not interfere with employee empowerment (Fletcher, 1992). Employees need to be given the freedom to make their own decisions and do their work according at their own convenience.

Furthermore, flextime should be introduced to give employees the comfort level. As long as employees are delivering on time, the flextime can be implemented. Moreover, the company should provision for emergencies and be considerate towards the employees in such situations extending them support. The more management support an employee has, the faster will be his ability to get back to work and make adjustments. Also, since previously there was no proper HR system intact at the company, employees had a hard time getting used to the new policies (DeVries, Morrison, Shullman & Gerlach, 1981). However, for any company to advance and grow, presence of HR department is essential as it guides employees to do what will benefit them and the company.

The employees at Medtech are finding this hard. Since it is a change that they will have to experience, it is important that the HR implement a change management plan and take employees into confidence before making any decisions. Also, the medium term HR strategy will clearly define the job description for each employee; clarifying his role in the organization and allowing him to exercise his authority within the specified scope. The HR department's role will be to identify areas of improvement and share them with employees to apprise them of their job performance (Dowling, 1999). This process will result in a transparent mechanism and enhance employee confidence in the management.

As a part of his long term strategy, Bill will have to take a number of steps. He should replace the cost driven system with an output based system. He should incorporate a new performance management system. Employees should be rewarded on the basis of the output they produce rather than the process they use to produce it.

Also, since these employees had been working at Medtech since the beginning they have certain implicit expectations from the company. According to the expectancy theory, individuals are quick to form a linkage between effort and outcome. They believe that by performing a certain way, they will be rewarded in the expected manner. Failure to comply with such expectations by the management leads to dissatisfaction among employees as in the above case. Therefore Bill should ensure that the expectations of the employees as well as the management are clearly communicated.

In order to understand employee expectations, Bill should emphasize on open communication. Employees should be encouraged to voice their concerns and grievances. Since no structured HR system exists at Medtech, Bill should proceed with developing feedback forms (Nohria, Groysberg & Lee, 2008). The feedback forms will ask employees to give their opinion on different factors such as the organization culture, job satisfaction, perks and benefits, career growth etc.

This feedback will allow the management to understand employee concerns and address them accordingly. Not only will this remove barriers between the employees and the management, it will also help in laying the foundations for a strong and concrete HR policy. Employees should not be discouraged from asking questions rather be incentivized to give their opinion to make them feel like they are an important part of the company.

Furthermore, it becomes the management's responsibility to remind the employees that the company values their presence and contribution. Bill's strategy should therefore be accommodating towards employee problems and help and support them instead of making it hard for them to remain in the company. In this case, Sarah's problem could have been addressed by allowing her to come late for the specified period or giving her the provision to work from home. The company should have focused on the quality of work done by Sarah instead of her punctuality. Temporary employee problems should be addressed and accounted for in an effective HR policy (Fletcher, 1992).

The HR strategy should comprise of a strong performance management system that will replace the flawed monitoring system currently in place. The objective of this performance system will be to evaluate employees based on their output and then provide them training and other growth opportunities in line with their expertise and areas of interest. The new HR system should constitute training and mentoring sessions. Training can help in honing an individual's skill set while mentoring will allow him to learn through experience of other senior employees. Mentoring will make the employees realize that there is always someone who encourages their development (Briscoe & Schuler, 2004). The environment needs to be supportive and management should extend appreciation to employees for their success at any work. This will not only motivate them but encourage them to take up more challenging tasks in the future and perform in the best possible manner.

Moreover, Bill will have to incorporate a reward system in the new HR policy. Employees should be given perks and benefits based on the number of years served, their performance and their experience. In addition to recognition, employees also want diversity in work and projects. After a certain time period, work becomes monotonous and it is essential for their growth for them to be given different and challenging projects to work on. This will add to their learning and experience while simultaneously shaping their personality for executive positions. The role of HR will be to ensure that employees are assigned tasks that they are proficient at (Rose, 2006).

The management should encourage employees to give in their input on key decisions and managerial policies. This will empower employees while allowing them to engage with the top managers incentivizing them to perform better. Performance standards need to be clarified and communicated to employees and they should know the acceptable attitudes and behaviors. Their values should be aligned with the organizational values and they the HR should ensure that they feel comfortable in the existing organizational environment.

The HR's utmost responsibility should be to create a positive environment that reinforces employee commitment to work hard and deliver. They should feel valued and worthwhile. Also, the environment should be stimulating (Mathis & Jackson, 2006). This is possible if fun and enjoyment are also made a part of the culture. This will help in keeping the employees energized and enthusiastic about the work. Therefore, the HR's role is critical to an organization's success. The more structured the HR mechanism, the better will be the results. Bill will have to incorporate all the above mentioned strategies in his approach to be able to build that relationship between the employees and the company that existed earlier. In order to remain competitive in the market and secure from all threat from new competitors, Medtech will have to retain its skilled resources and retention will only be possible if Bill adopts the right approach and implements strategies that will motivate and incentivize the employees to not only stay with the organization but also improve their performance.