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This report consists of how the personal management got evolved to the industrial sector, how this managerial process got evolved into what we practice today known as the Human Resource management. The steps that got involved in the evolving process, the differences and the similarities between the two processes are also included.
In addition to this, how company practices human resource planning procedures are also included in this report. In order to compare the practices for effective judgment two companies namely T&T Ltd a medium scale Travel and tourism operator and Best for less Ltd which is the market leader of this industry are selected and analyzed thoroughly. Moreover, the job evaluation procedure, interview evaluation techniques are also mentioned along with the recruitment selection procedures of both the organizations.
Additionally the job evaluation procedures and performance evaluation procedures within both the organizational context are being discussed in details with the exit strategies that both the companies practices to lay off employees once there is excess supply. Also suggestions are made to improve the strategies practiced by the firms.
Human resources management is an important part in every organization, in the sense of getting things done through people. It is crucial part of the management to have a separate HR department to ensure that the human resource function is performed efficiently. Human resources management is often referred to as "strategic HRM" and has numerous goals such as:
To meet the needs of the business and management
To link human resource strategies and policies to the business goals and objectives
To find ways for human resources to add value to a business
To help a business gain the commitment of employees to its values, goals and objectives.
As organization vary in size, aims, functions, complexity, construction, the physical nature of their product, and demand as employers, so do the contributions of human resource management. Although, in most the ultimate aim of the function is to "ensure that at all times the business is properly staffed by the right number of people with the skills relevant to the business needs" that is, neither overstaffed nor understaffed in total with respect of work grade.
The report is based on medium scale Travel and Tourism organization (T&T Ltd) based in Sri Lanka. At present the organization functions without a dedicated department for HRM. Therefore the report includes the current HRM best practices based on different factors.
1.1 Personnel Management and Human Resources Management
Personnel management is a form of human resource management which concerned everything about the staff and workers of the organization. It is traditional process which includes training, motivation, reward management, employee relations and performance review task lacking. On those days when the personal management was present it paved the solutions for problems which were faced by the employee. But later it put path to create new and numerous issues among the employees and the employer such as a poor relationship, lucking of understanding, uncaring of targets, unaware about the latest technologies, satisfaction etcâ€¦ this showed a poor and even a fall of degree in the growth of the organizations.
Human Resource Management
Human resource management involves all management decision and practices that directly affects or influence the people, who work for the organization. The human resource management has the methods of the training, motivating, rewarding, relating employee, reviewing of performance and the process of recruiting.
The management of human resource is being accepted worldwide as it as a successful administration. All most all the organizations live out the management of HR to achieve the goals and objectives smoothly.
Difference between personnel management and human resources management
Human Resources Management
Personnel management is an independent function with different sub-functions.
HRM follows the systems thinking approach.
Personnel management is reactive, responding to demands as and when they arise.
HRM is proactive, anticipating, planning and advancing continuously.
Personnel management is the exclusive responsibility of the personnel department.
HRM is a concern for all managers in the organization and aims at developing the capabilities of all line managers to carry out the personnel functions.
In personnel management important motivators are compensation, rewards, job simplification and so on.
HRM considers work groups, challenges and creativity on the job as motivators.
The personnel management and human resources management has many differences as mentioned above, therefore I do not agreed with the general manger regarding this issue. Moreover, human resources management has come a long way from the traditional version (personnel management). Personal management is a concept that can be conveniently related to the old model of organization, is bureaucratic in nature, with less flexibility and higher degree of centralization. On the other hand, HRM is compatible with the organic design of new organization, such organizations have cross-functional and cross hierarchical teams.
1.2 Human Resource Management functions
Human resource management functions are:
Human resource planning
Training and development
Health and safety administration
These functions help to achieve the objectives of HRM and ultimately achieving the objectives of organizations. Some of the HRM objectives are:
To ensure the employees satisfaction at every level,
To inspire team spirit in employees,
To explore employees capabilities for performing a given job,
To ensure maintaining the quality of work life,
To equip the employees with proper resources,
To keep the employees motivated,
To increase employees loyalty to the organization,
To ensure a positive environment of mutual trust and understanding in the organization.
1.3 Roles and responsibilities of the manager in the Tours Department
Tour managers organize and accompany groups of holiday makers on package tours to Sri Lanka and overseas locations. They are responsible for ensuring travel arrangements for holiday makers run as smoothly and enjoyably as possible from beginning to the end. The roles and responsibilities evaluated for the tour managers are:
Development of domestic and international packages by visiting destinations and suggesting interesting travel routes;
Designing flexible tour packages to meet the needs of different clients;
Exploring and identifying new business opportunities in a competitive and rapidly changing industry;
Checking tickets and other relevant documents;
Helping with passport and immigration issues;
Making sure all the travel arrangements run according to plan,
Handling all the issues comes in the travel;
Writing reports and maintaining records;
Organizing and attending tourism events, conferences, workshops, seminars and exhibitions.
1.4 Key aspect within the legal & regulatory framework when designing HRM
The most valuable resource of an organization is its human capital which means the resources, talent and expertise of its workforce. Therefore, the human resource policies are key elements to provide workforce structure and guidelines for the most effective use of human capital. To use this precious capital within the legal and regulatory framework the key aspect are:
Recruitment and selection: policies concerning recruitment and selection are the framework for making decisions in the hiring process. The recruitment and selection policies must shaped based on federal, state and local regulations pertaining to fair employment practices.
Training and development: the human resource department has to offer training for skills improvement, professional development and leadership training that accompaniment the company's succession plan. By providing training and development to every level of workforce T&T can able to experience greater levels of workplace job satisfaction.
Workplace safety: the implications of workplace safety policies cannot be overstated. Employees need to be comfortable with company policies designed to protect their well-being. So it is important to develop policies to protect employees at work.
Performance management: the management is responsible for providing employees with the necessary tools and information in order to understand the T&T's performance expectations.
Implications: Developing and implementing human resources policies are important HR responsibilities. The importance of human resource policy development cannot be ignored.
2:1 Human resource planning
Human Resource Planning is the process of anticipating and predicting the future human resource requirement for an organization to achieve its set goals, objectives and targets. This process takes into account whether an organization has the correct number of staff (excess or shortage) for future or the staffs have the sufficient skills to perform the assigned tasks. In other words making sure they have the right number of staffs for the right job at the right time.
This process involves retention of current employees, conducting training programs to increase the skills required, develop an efficient human resource procedure, and recruit new employees for future demand and employee termination to decrease the workforce. There are various gains from a proper human resource planning. These include:
Company gains competitive advantage over competitors.
Training creates a more skilled and motivated staff which increases the performance.
Reduce the staff costs as company carries the required amount of staff always.
The company always ready for any situation as they have already predicted and planned for it.
Proper planning decreases costs of recruitment and training of new staff as company the company will not lay off employs without researching about the future requirement of staffs.
The main processes involved in human resource planning are:
Forecasting labor demand
Analyzing current labor supply.
Balancing the predicted demand and supply (action decision).
2:2 Human resource planning process
Closing the Gap
Figure: 01, Stages in the human resources planning process
Human Resources planning attempts to determine the supply and demand for various types of human resources and to predict areas within the organization where there will be labor shortages or surpluses.
While analyzing the situation the HR Manager first studies the objectives of the organization and then writes down a complete list of all activities that are needed or required to accomplish the objectives or goals of the organization. HR Manager should understand both internal and external environments. Data on external environment includes the general status of the economy, industry, labor market regulations, technology, trends, competition, unemployment rate, skills available and the age and sex distribution of the labor force. Internal data includes short term and long term plans and strategies and the current status of the organization's human resources.
In the second step, the HR Manager forecasts the demand or the labor requirement of the organization based on the information he got from the situation analysis stage. He also analyses the jobs of the organization to understand the utilization of the current labor force and the productivity of the labor force. He studies whether the objectives of the organization can be achieved by the current work force or if the organization needs more labor to accomplish the goals. He sees if the organization can reach to goals with an increase in the work rate of the existing labors.
In the third stage he gathers information on manpower supply. He finds out how many managers and employees are available in the organization.
In the last step the HR Manager compares the labor requirements and the labor supply to close the gap between demand and supply of labors.
2:3 Recruitment and selection process
Recruitment is the process of attracting eligible people to the organization when a vacant post is identified within the organization. This process involves announcing job opportunity, screening the applicant and creating a group of applicants with the best qualifications for the post.
Selection is the process of picking the best candidate for the job from the applicants. This process involves checking the skills and qualities of the candidate by using different methods of analysis.
Recruitment and selection in T&T Ltd
Recruitment and selection in Best for less Ltd
The recruitment and selection procedure for this Ltd can be propose as like this: First a job vacancy for example if an marketing executive is required to marketing department the department head informs to HR department (when the HR department creates). Then HR department creates the job analysis which includes job description and job specification. After that the job is advertised through media and when application forms are received the best applicants are called for interview. The interviewees are thoroughly face to face and tested, afterward best applicant is assigned for the post. Then the employees can be informed about the employees to increase the staff relations and motivation.
The recruitment process practiced in this organization is also the same that is they use mass media to get qualified people attention to vacant posts. The company does not practice campus recruitment as they only want to appoint qualified people into their work force. Also the selection procedure practiced within the organization is little bit different compared as only face to face interviews are conducted to hire new employees to the organization this is because they feel then only they can analyze the applicant better. Also the does not bother to introduce new staffs; this causes significant decreases in the morale of the new employee.
2:4 Approach to evaluate the effectiveness of Recruitment and selection techniques
Figure: 01, approach to evaluate the recruitment & selection process
Create a measurement standard. By judging the effectiveness o any business process is difficult without a tough measurement system. Can consider the new employee turnover as measurement standards.
Track measurement data. Measurement standard should be tracked over time as an indicator of the success or failure of recruitment and selection processes. Can consider tracking these measures on a monthly, quarterly or yearly basis.
Review costs. Look at the overall costs that the company expends for all recruitment and selection activities. Review the cost of each type of investment and ensure the expenditures are resulting in quality employee candidates. The effective spending can help target the right type of employees.
Ensure recruitment and selection processes enhance the business image if not it may lead to have negative impact on the business.
Guarantee that processes conform to business and legal requirements.
3:1 Process of job evaluation
Best for less Ltd
T&T practices ranking method to evaluate the jobs. In ranking method the jobs are arranged according to organizational hierarchy and jobs at the top are known to have the highest value. Employees working at the higher levels and middle level have higher salaries compared to the lower levels. But the compensation packages of lower levels are relatively good when compared to the other companies in the area.
Best for less practice job classification method to evaluate the jobs. In this method the job is classified based on the scope and level of the duties and responsibilities, the relationship of the position to other positions and the decision making autonomy of the job. The people with more duties and responsibilities are paid more and it does not depend on the educational qualifications, the person or the skills he poses.
3:2 Reward systems and its effectiveness
Reward management is the process creating and running a system that enables a company to reward the employees by financial and non-financial methods based on their work done. The main reasons that a company practices reward management are:
Retain high performing employees,
Maximize employee performance,
Motivate employees to perform efficiently,
Motivate people to join organization,
Motivate employees to come to work and motivate individuals by indicating their position and importance to the organization.
Reward system for T&T Ltd:
Workers who work hard and produce more or give better quality results would receive greater rewards than poor performers. Also the criteria for receiving rewards are clear and employees know whether they are going to receive rewards for quality performance, innovation, effort or attendance.
The types of reward system used in T&T Ltd;
Incentive and rewards: financial rewards provided for workers who achieve their objectives to provide direct motivation which improve their performance in future.
Competency related pay: this is rewarding people partially by reference to the level of capability they express in carrying out their roles.
Skill based pay: this is rewarding the people according to the level of skills used in the job.
Team based rewards: the reward is given to the team for their specific performance.
Profit sharing: if the Ltd is able to receive higher profit, specific percentage will be shared with the members.
Merit pay: give salary increments to individuals based on their performance.
3:3 Motivational theory regarding rewards
According to the motivational theories the money is not the only method to motivate employees within the workplace. Other factors such as recognition of the work done, more responsibilities at work, career advancement and personal growth are more efficient methods for motivating employees at work.
According to Maslow's Hierarchy and Hertzberg's two factor theory the employees have needs. These needs are needed to be fulfilled in the work environment so that the employees will get motivated. So in order to increase the motivation within the work place the methods such as job enrichment, job enlargement, empowerment and carrier development opportunities need to be introduced to work environment to get best output from the employees.
3:4 Types of methods used for performance appraisal
In T&T the employee performances are evaluated once every two months. The evaluation is done by the manager in the presence of the employee by filling a form in which the employee's performance will be decided for the previous duration. Also in T&T the 360 degree performance appraisal is practiced. In this the employee gets confidential feedback from all the people working around him regarding his performance. This evaluation is done once every 6 months. From these periodical performance evaluations the employees will understand what their strengths are and which areas they need to improve in order to be more efficient.
4:1 Reasons for cessation of employment
There are many reasons to employee for cessation. Employee termination can be voluntary if an employee decides to leave a company for some reason and the employer can also terminate the employee if employee violate the contract or miss behave etc. some of the reasons ere elaborated below:
Resignation: an employee can resign his own employment for many reasons such as he/she might be unhappy about the job, might received a better offer, or may wants to shift some other places.
Layoff: if there is lack of work, if the company faces financial uncertainty or if the particular job is no longer required then the company might be lay off the employees.
Merger/buyout: with the changes of organizational structures some employers offer separation package to employees terminated under these circumstances.
For cause: employer can terminate the employee if he/she violate the company policy or behave in a manner that jeopardizes the company or their coworkers.
Poor performance: the employer can terminate the employee if he/she consistently fails to meet the standards associated with the position.
4:2 Exit procedures
Exit procedures of an organization involve structuring and affecting a system for identifying, analyzing and controlling exit of a worker from that organization. These procedures are used within many businesses to terminate employees in a professional manner. It applies to employees who have resigned and those that have been terminated by the company.
Best for less Ltd
Termination of employment is the end if an employee's duration with an employer. There are two types of termination; they are voluntary termination and involuntary termination. Voluntary termination occurs when an employee's decides to leave the job of his or her own accord due to changes in personal circumstances, dissatisfaction with working conditions, hostile supervisor and new and better job. Involuntary termination occurs when someone is fired from his/her jobs due to poor performance, layoffs, and economic conditions.
T&T Ltd can be used both voluntary and involuntary termination. The Ltd can also encourage to employees to voluntary termination by giving financial and non-financial benefits. If the employee performance is poor or an employee seriously jeopardizes his/her employees or the company, T&T ltd can fire their employee by giving one month notice and three months basic pay.
Best for less used both the method to terminate employees. The company also encourages their employees to voluntary termination by providing financial and non-financial benefits. The company fires their employee if the employee performance is poor or an employee seriously jeopardizes his/her employees or the company by giving same one month notice and three months basic salary.
Temporary job contract
This is the job contract between the employer and employee, hired for certain period of time, therefore the employees must leave the organization within a particular period of time.
Employee can be hired as temporary jobs and if the employee performed better he/she can changed to permanent jobs.
At present Best for less do not follow this strategy, hence their main aim is to build high qualified employees and want to keep their employees within their organization.
Retirement is the point when he/she stops employment completely or leave the entire work force. Many people choose to retire when they are eligible for private or public pension benefits or to get high pension scheme while others are forced to retire when physical conditions don't allow the person to work anymore.
T&T Ltd can pay a high priority to employees who have worked long period of time. And can maintain the same policy of best for less that is employee can work maximum age of 65 and give them a pension for their hard work. The amount is calculated based on an employee's salary, years of services and a fixed percentage rate.
Best for less has a very good retirement policy for their employees. Such policy include an employ can work maximum age of 65 and give them a pension for their hard work. The amount is calculated based on an employee's salary, years of services and a fixed percentage rate.
4:3 Impact of Legal and regulatory framework on employment cessation arrangements
The legal regulation for termination an employment guarantees the right to the stability of the employment for an employee. It guarantees the requirement for the existence of grounds for terminating an employment by an employer with the exception of the institute for terminating an employment within the probation period, which does not have to be justified.
The legal regulation also guarantees the expressed prohibition of forced labour both in international and national regulations. An employee willing to terminate an employment by notice is not restricted by any reasons or conditions. As the termination of an employment depends exclusively on one's will.
The legal regulation also guarantees the right of an employee to resist the invalid or discriminating termination of an employment. It should be noted, however that the decision-making procedure for void employment termination disputes is fairly long.
From the analysis of the practices in both the organizations it was found out that Best for less has better HR practices than T&T Ltd. In Best for less there is more understanding and co-operation between the HR manager and other line managers which creates a very effective and efficient work environment where the employees' rights are more protected and the company is more prepared for any changes that to the work force as they have pre-planned for it. Where as in T&T the practices are much more like personnel management where they are more concerned with maintaining the employee rights within the organization and does not concern about being prepared for the future. Although now the company is changing its procedures in personnel management to more human resource concepts as they realize the difficulties they faced due to expansions in business, introduction of new trend in to the business.
It was also found out that the role of human resource manager within any organization is vital for the success of the firm, as he is the person in charge of creating a well-organized and efficient labour with qualified peoples. This effective labour means the company has generated a competitive advantage within the market and they can blossom within the industry with the effective use of it. This is only achievable if the human resource manager has proper communication and understanding between the line managers within the firm.
In best for less the recruitment procedures within the organization is mainly internal. It is true that this process keeps staffs motivated but external recruitment increases chances of addition of new qualities and skills to work force although the associated costs are higher so it is better T&T to use external recruitment in there process.
T&T can practice performance appraisal techniques within the company, good reward management schemes and also exit strategies within the company.