Business Have An Hr Department Commerce Essay

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An organisation is an entity structured and managed by a group of people who are working together to meet a common goal and objective which affects and are affected by their environment in ensuring they contribute positively to the growth of the economy. Of all the structures in an organisation, the human resources is the most potent because it is the one that drives the business operations, contribute significantly to enterprise performance and the bottom line.

Types of Organisation.

An organisation consist of different types which are the Public, Private and Third sector. The Public sector which provides free service is usually government owned for example the NHS; it is funded through taxation and government subsidy. The Private sector which is also called the Commercial sector is owned by individuals and they exist to make money, to be sustainable and to generate profit for stakeholders while contributing to the economic growth. They can be Sole Trader, Partnership, Companies or Franchise. The Third Sectors are non profit making organisation who generates funds through sponsorship. These funds are shares among workers as bonuses and are also used to maintain the growth of the organisation. Examples are Charities and Trade Unions.

The Ulrich Model says 'Why should a business have an HR department'?

Recently, HR has been referred to as "Personnel Management" meaning that its only focus is on Staff welfare, needs and desires and therefore, the employees are viewed as cost. During the so -called "golden age" of Western-style planned economies from the 1950s to the oil and currency crisis of the 1970s, Personnel Management appeared to offer most answers to 'people management ' problems in response to relatively stable or expanding business and employment opportunities (Bratton & Gold,2007; Tyson & Fell, 1986).

Human Resources Management is described as the view that employees are resources available to the company. It looks at employees as an asset and a significant source of competitive advantage. It is a 'paradigm shift' that is a shift in emphasis and mindset in respect of what a sufficiently influential cadre of HRM scholars and practitioners appear to interpret generally as ' achieving organisational objective through people' (Armstrong, 2006; Mullins, 2006). Human resources are valuable and therefore a source of competitive advantage (Legge 1995).

People and their collective skills and experience coupled with their ability to deploy those in the interest of the employing organisation make a significant contribution to the organisational success and a significant source of competitive advantage (Armstrong & Baron 2002).

What is Competitive Advantage?

Competitive advantage simply means having assets that are unique to an organisation and which cannot be imitated by others. It is the benefit an organisation has over its competitors which shows it can do what they cannot do, or it can do better what they can do. Most organisations, and in particular commercial businesses, seek to have a greater market share; more customers than their competitors. This is essential for the organisation to survive.

In general business terms, these might include product brands, patents, equipment or facilities. When we think about people as a source of competitive advantage, we are concerned with their knowledge, skills and experience. A key function of HR, therefore, is resourcing - in other words: finding the right people, managing them and retaining them in order for the organisation to be able to make the most of them. In a nutshell, Human resources drives the business operations, contribute significantly to enterprise performance and the bottom line.

The Role of HR in an organisation.

HR has three roles to play in an organization: Transactional, Transitional and Transformational. To migrate up this value chain, each one must be fully satisfied before proceeding to the next one. An HR function that can't get benefits sorted, payroll accurate, or staffing handled won't be able to be convincing as it works to become transitional. Participation and leadership of transformational initiatives will remain out of reach until everyone in the organization perceives HR to be well-executed and central to the organizations success (Richards, 2012).

As HR is seen as Strategic Partner in building an organisation, it roles are therefore regularly linked to change, by which we assume improvement in organisational performance and seek to demonstrate that the people aspects of a business strategy are as important as the financial, marketing, and resource allocation aspect. Grubman (1998) seeks to link HRM practises to different types of business strategies using the labels 'product', 'operations' and customers'. This is therefore a useful perspective as it reminds us that there is not a 'one size fit all' approach to strategy. Each organisation's business plan be it private or public sector has to be the driver for the HRM strategy. (Rowley and Jackson 2011)

In general term, a strategy is a means of achieving medium, or long term objective, setting priorities and allocating resources. (Rowley & Jackson 2010 ; 204)

A strategy could be Deliberate or Emergent. Deliberate in the sense that the organisations' strategy is driven by the mission and vision and it vertically and horizontally aligns to achieving the organisations objective.

Emergent is that strategy which is ongoing; it has expected trend and challenges with planned means of dealing with them. Terms as ' road map' and 'milestones ' are commonly used which shows that the strategy is a journey rather than a destination. But it is a journey in general direction rather than a specific location, so ' strategy direction' is used by some organisation in place of 'strategic plan', which according to Dye and Sibony (2007) are inclined to be focused on too much data and information so that they become hindrance to effectiveness rather than a help to the organisation. (Rowley & Jackson, 2011).

According to Dave Ulrich (1998) for HR to be credible and effective, it will need to adopt the following roles;

HR should become a partner with senior and line managers in executing business strategy and helping to improve planning from the boardroom to the market place. It should become an expert in the way work is organized and executed, and to deliver administrative efficiency to ensure cost reduction and quality products and services. It should become a champion for employees, by representing their interest to senior management, and working to increase employee contribution, that is, their commitment to the organization and their ability to deliver results and finally, HR should become a change agent, by shaping processes and culture that together improve an organization's capacity for a change.

For organization to achieve high efficiency and effectiveness in its operations, the workforce, according to Sanusi (2002) "must be well-trained and equipped and should be made to see itself as a partner in progress with the industry. This is where the strength of the Human Resources Management lies.

Planning: An effective HR should be able to recruit the right kind of people in the organization ensuring that they possess the required skills and expertise to carry out the job, should be able to forecast the future needs of the organisation in the area of staffing and resources and should be able to determine when to recruit permanent staff or contract staff for the business. Also, the HR manager should be able to provide the right tools for work to be done for example, if recruiting Sales people, what tools do they need to carry out the job effectively, what will be the cost of these tools, how does it affect the company's bottom line, what will be the Return On Investment, what will be the cost of maintenance if these tools are acquired or rented?

Development: A HR department should be able to provide employee with additional couching, cancelling, training and education in order to enhance their skills. This will in turn enhance the organisation's development and employees' career growth. The need for the organisation to put in place talents that other organisations do not have is very important as well, this will distinguish the organisation from its competitors. Training should be a continuous thing as the employee needs to constantly move with the trend in the market.

Motivation: Individual employee needs differs therefore a manager should be able to identify and apply the appropriate motivational technique in rewarding employee's performance. This is the point where appraisal, reward system (wages & salary, perks and fringe benefits) job satisfaction, appropriate work environment, promotion, and additional responsibilities comes to play .This enables employee to put in their optimum value and to be commitment to the organisation. When employees are empowered, they are able to tackle challenges in their role by going an extra mile in achieving the organisation's goal and objective.

Maintenance: In order to be successful in a global market place, the organisation must invest in its Human Resource. However, the HR must be committed to the organisation by maintaining a good standard which will in turn benefit both organisation and its workforce, this can be obtained through capacity building, retraining and commensurate rewards for performance .The modern HR function is fast developing into the science of human engineering because HR managers are now developing more systematic strategies to transform the environment of work by enabling people contribute to their maximum potentials. (Inyang, 2011).

As much as you want to understand your business, you also need o understand the factors which influences it.

Hell's Kitchen PESTLE Model

Using the Hell's Kitchen (a well known restaurant) as a case study, the PESTLE MODEL which is an external analytical tool explains those factors that influence the business. These factors have to be critically analysed in order to tackle the issues at hand.

Political:- Change of government immigration rules could be a set back as the organisation employs foreigner as chefs who will need to have a work permit. Increment in taxation could also be a factor as this will affect the price of meals going up, change of government will bring about new rules and regulations which the company may need to adjust to for example, age discrimination may cause the company to start recruiting more talented and qualified hands to do the job. Change in retirement age is also another factor.

Economics- The rules guiding importation and exportation of product could cause the company to adjust its purchasing power to suit the new rules. Farmers cost is always a determinant so this should be considered in the plan at all times Transportation is a key factor that determined how the products are been moved from the farmers to the kitchen. Unemployment in the economy could make the company cut down the numbers of staff and therefore would train employed staff to be multitasking rather than caring out just one particular task. Inflations in the economy leading to high cost of living, rental of retail spaces, energy and power supply are also factors to be considered.

Social- Considering the present situating of Hell's kitchen, longer opening hours may be put in the plan to accommodate late dinners as the company is trying to attract more customers. Income must be evenly distributed. New interesting meals should be introduced constantly so customers have a different choice to make at all times. Change in lifestyle as the kitchen is attracting wealthier customers, the attitude of staff to work must definitely change in order to retain customers. Introducing products for kids where a family's ' night out can be discounted on kids meal. Skilful hands are needed to achieve the new strategy so candidates with knowledge of food hygiene are recruited. Special home delivery can also be considered.

Technology;- Speed of technology transfer would make the organisation to focus on installing a software that will manage all aspect of the kitchen from raw products to cooked meals, to staff clock in time and exit time, to numbers of customers that has visited the restaurant at a particular period and payment made; everything must be technologically monitored by skilled staff who has been trained in this area. A backup server should also be put in place in case of unforeseen problems. Customers should be able to follow on tweeter, facebook and blogs; the company's website must be active at all times and must be user friendly. Carrying out customer surveys and research on how well to improve on the services rendered, Online recruitment, advert on media (television, radio, cinemas, trains, buses, billboards), having in place a technology or installing an App to locate your nearest shop. Employee being able to view their rotas online in order to manage their time.

Legal: Health and safety issues must be appropriately dealt with since it is a hospitality sector. All employees must have firsthand information on food hygiene and training is a continuous process. Each store must have a 'champion / coach' that will review staff training monthly. Employment law and minimum wages also will shape the recruitment process. All kitchen staff must be updated on food preparation standard. Increment in tax and VAT, subsidy policy, foreign trade and investment regulations are all factors that could shape the business and needs to be managed well.

Environmental: To do our bit in saving the environment and reduce global warming, a proper recycle process is put in place for waste disposal. Use of Organic products for higher and better quality meals, suppliers to provide scorecard on dates of supplies, Food preparation standards should be strictly adhered to, Corporate Social Responsibility incorporated into the company's culture, energy availability and consumption are all factors that affect the environment.

Hell's Kitchen SWOT Analysis

A SWOT analysis is the internal analytical process of the organisation.

Strengths':- The fact that the restaurant has a 'Daily Special' keeps customer's coming back. The company is well established therefore it is a popular restaurant. There are two freeholds which the company owns, this is an asset for future plan. The supply chain of the company buyers experience is a strength because he has been with the company long enough to know the market well. The restaurant is opportune to have Bank loans and overdraft facilities which is a good source of funding. The food concept is interesting and inviting and this has kept the business going. The two profit making restaurants are good sources of income to the industry. The branding and reputation too is a strong foundation which has kept the company in business.

Opportunity:- Presently, there are two successful restaurant that can share their Knowledge with other restaurant on ways to improve their services. Another opportunity is the fact that management can be allowed a 'buy-out'. Restructuring, system upgrade, advance levels of employment will also help shape the plan being put in place. Constant training and reward strategies is a good start as well. Since lease agreement is still running for two years, the company may be able to save on cost of renting. The time scale given to bring organisation back into profit is feasible if all other issues are tackled in good time. .

Threats:- Bribery is a bad ethics which could ruin the business. Time scale to make profit may expire without achieving the set goal if not properly managed. Retaining old staffs with bad habits could negatively influence the business; on the other hand, the cost of recruiting new employees is not available. Employee will resign as they will be left with no other choice if the company goes out of business. Lack of stock control is a bad culture which would not give room for growth. Corruption is imbedded in the business as there is no fair dealings when it comes to purchasing and supplies. There is obviously a huge HR issues which may need to be sorted by the tribunals.

Weaknesses:-The loss of 12% on the company's total revenue is a bad sign. Obsolete IT infrastructure that is unable do basic things, A corrupt system which does not abide by the rules of the company. Manual stock take which mostly does not give accuracy. Inefficient staffs that only care about their wages. Bad people management by manager. High staff turnover and retention when profit is low. No rewards in place to motivate employees. Lack of morale, stock wastage and short term business plan are all weaknesses that could shut down the business in a short time.


Using the PESTLE analysis and SWOT analysis as measuring tools by HR, there is a need to put in place a 'Balance Scorecard'. Kaplan and Norton in the 1990s came up with the concept of the balance scorecard which helps senior managers to measure organisational performance by linking current actions with future goals.

Typically, a balanced scorecard looks at four different aspects of the organisation:

The lingering economic downturn will affect business being run in many ways. Hell's Kitchen as a restaurant, its continued existence is dependent on patronage and under the present conditions this is getting more difficult as a lot of patrons are no longer eating out but opting to eat at home. In addition to this, labour is getting costlier as there is a dearth of inexpensive staff as there is a clamp on immigration, affecting students (who will normally work at basic minimum rates) and professional chefs who are mostly foreigners. However, it is the duty of the HR to put a plan in place for the future which will address the following:

Internal business processes: To satisfy shareholder and customers, what business process must be put in place? How will revenue be increased with the use of the appropriate tools? HR needs to set target for every department which must be met at a particularly period. Resources must be allocated for these targets to be met working with the company's budget, each departmental head must be able to establish milestone as a key performance index for all departmental staff during appraisal. All these are geared towards satisfying customers needs, for example a waiter who is expected to go to his customer every 10minutes to see if they are doing fine and enjoying the service must do so because it is part of his KPI.

Financial aspect: What is the target for future budget? How would the company success with this budget? HR must ensure that resources are allocated in such a way that it will coordinate only those initiatives that moves the company towards their long term strategic objectives. For example, training staff in order to take up multitasking roles will reduce staff costs. Purchasing organic products for food preparation in order to increase food quality may also aid this.

Learning and growth: How will the company sustain its ability to grow and improve in order to achieve the vision? This will be achieved through constant training for example, every member of staff must attend at least two hours of training every six month and the line manager must review their performance at the end of each training. Also, rewards should be linked to performance measures for every staff that meets their KPIs either by promotion, increase in wages, recommendation and (or) retention.

Customers perspectives: To achieve their vision, how should the company appear to their customers? Customers must get the best service at all times. There will be a comment box in the restaurant as well as an online survey if a customer's experience was not up to standard. Mystery shoppers will be introduced to visit the restaurant from time to time in order to keep staff on their toes.

In conclusion, the business plan must be communicated at all levels that is from the top management to lower staff. Budget must be strictly managed to ensure an effective financial administration. When the results start coming, it must also be communicated vertically and horizontally that is, from the HR through the top management to the departmental managers and all other staff. Management has to share the end result with all members of staff.