This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.
Human Resource Management is becoming increasingly important for many organizations regardless of their size or location. Employees are recognized as a firm's biggest asset, similarly, employee development is also written off as a major expense in most companies. A number of studies have predicted that a firm's strategic business plan is dependent on its current and potential human resources. It is safe to assume that Human Resource Management is a key to create a competitive advantage, especially when aligned with a firm's competitive strategy. ( Begin, 1991; Butler, Ferris & Napier,1991;Cappeli & Singh, 1992; Jackson & Schuler, 1995; Porter,1985;Schuler,1992; Wright & McMahan,1992).
It would be a mistake to assume that human resources alone can provide a source of competitive advantage, this theory only holds true when the following four conditions are met:
Human Resource must add value to the firms production process
Skills sought by the firm must be rare,
A firm's combined human resource investments cannot be imitated
A firm's human capital should not be replaceable by technology
The need for effective Human Resource Management is evident in the case of UniBank, which suffers from a multitude of Personnel related problems. The bank's personnel problems can be solved by devising a carefully thought out Human Resource Strategy and implementing effective employee motivation, development and retention techniques.
Human Resource Strategy
It is of primary importance for firms to develop effective Human Resource Strategies as it will guide the way the firm develops and deploys deploy human, social, and organizationalcapital to enhance it's competitiveness. The goal of an effective Human Resource Strategy will be to create and maintain a workforce that is well motivated, appropriately trained, equitably rewarded and which performs effectively in pursuing a firm's objectives.
Snell, Youndt and Wright (1996:62) noted that in the past executives tried to "take human resources out of the strategy equation by substituting capital for labor where possible, and by developing organizational structures where there is a dividing line between those who think from those who do the work.
As Quinn (1992: 241) noted, "with rareexceptions, the economic and producing power of the firm lies more in its intellectual and servicecapabilities than in its hard assets;land, plant and equipment.
However, there is no one theory that fits all, every organization's need differs and so does their required strategy. It is quite difficult to achieve a correct balance between motivating and employee, developing and rewarding them, as there is always a fear of employee turnover. Firms should be careful not to over-invest in their employees, similarly, they should avoid under-investing in their employees as well, as this leads to poor motivational levels and in turn affects performance.
UniBank, needs to reassess its human resource strategy, as it seems the current one is not effective. The Company suffers from low employee morale,(which is their primary problem), skill-gap, low employee involvement and performance. The Company seems to be unable to meet its human resource needs with the needs of the changing environment, as a result, it cannot satisfy either.
An effective strategy can be devised through 3 key steps:
Diagnosis: Conducting a comprehensive and systematic evaluation of the current practice and performance to identify where improvement is required and where policies are working well. In the case of UniBank, the diagnosis stage will identify the following improvement areas:
Employee job security
Employee involvement and decision making ability
Aspiration: A vision of effective Human Resource practices , producing outcomes that contribute to achieving the firm's strategic objectives. For UniBank, an aspirational outcome will be where its employees are motivated , adequately trained and positively contribute to the change to Online Banking.
Developmental :A plan to progress and bring about change in the future. Uni Bank should focus on long term strategy development and should forecast changes whilst adequately equipping its employees with the necessary skills and expertise to overcome and future challenges resulting from the upcoming change.
If UniBank keeps the above elements in mind, it can develop an effective strategy that would solve the problems it is currently facing whilst at the same time be flexible enough to deal with any future problems. Corporate Strategy, or even Human Resource Strategies cannot handle drastic adjustments, they have an effect of an earthquake on the firm's foundation. Drastic Human Resource changes often result in redundancy, this is never good news for a company or its employees and can have lasting effects in the future.
The detrimental effects of drastic Human Resource Strategy changes are evident in UniBank's case, where its decision to switch its operations to phone banking resulted in the need to fire and relocate a number of employees. As a result, current employees are in a constant fear of change, thinking that their fate might end up like their predecessors, not to mention, they resent their current situation of work as it seems more impersonal than before.
A key element of an effective human resource strategy is planning. Planning can be defined as; A conscious process by which an institution assesses its current state and the likely future condition of its environment, identifies possible future states for itself, and then develops organisation strategies, policies and procedures for selecting and getting to one or more of them"(Petersen, 1999).
Planning allows a firm to ration its resources and prepare its employees for the future, through training and developing their skills. UniBank had encountered problems with its employees because it had not planned the change to phone banking. Had it been better prepared, it would have ensured it had adequate staff to cope up with the demands of phone banking, and as a consequence would have laid off very little if any of its staff.
For the future, UniBank should anticipate excess traffic on its website and consequently on it's call centre's. hence, it should ensure that it's call centre staff are technically adept at answering questions and resolving technical issues on the spot. The banks should also plan for staff development by training its staff on online banking applications.
Recruitment is another main aspect of resourcing, after planning. Managers should effectively communicate to HR executives about the type of employees that are needed, the number of employees that are needed and their required skills set.
Recruiting staff is very costly in terms of time and money , therefore it is important to ensure that the recruitment process yield positive results As Mullins (2010, p 485) notes: 'If the HRM function is to remain effective, there must be consistently good levels of teamwork, plus ongoing co-operation and consultation between line managers and the HR manager'.
Recruitment goes hand in hand with selection, according to Bratton & Gold (2007, p239),"'Recruitment is the process of generating a pool of capable people to apply for employment to an organization. Selection is the process by which managers and others use specific instruments to choose from a pool of applicants a person or persons more likely to succeed in the job(s), givenmanagement goals and legalrequirements.'
Although these two processes are interconnected, they can be fulfilled by different persons. In fact, it is advisable that they be carried out by seprate people, in order to avoid bias. Given the current nature of UniBank's situation, it is important that one team (or individual) undertake mass recruitment campaign in order to fulfill its requirements for its online banking division and its phone banking division as well. Alternatively, the recruitment activity can be outsourced to an agency. After a pool of candidates are shortlisted, another team (or individual) should conduct personalized interviews for the selection process. A second look would ensure that any missed qualities or elements are picked, more questions are asked, and the risk of improper selection are minimized.
Ideally interviews should be conducted or supervised by trained individuals, be structured to follow a previously agreed set of questions mirroring the person specification or job profile, and allow candidates the opportunity to ask questions. The interview is a mechanismthat is capable of communicating information about the job and the firm to the candidate, with the aim of giving a realistic job preview, providing information about the process, and thus can minimise the risk of job offers being rejected.
It is important to note that the recruitment and selection process should be conducted in a timely manner as it helps to ensure that not only isthe 'best' candidate attracted to apply and subsequently accepts the post, but also that unsuccessful candidates can respect the decision made and possibly apply for future vacancies, along with other suitable candidates.
When selecting employees, it also important to look at the cultural aspects of both the organization and the employee. Organizational culture influences selection decisions, and this should be the case with UniBank, as it should select employees who are adept to a culture of change and customer service, as they are key to the banking organization.
A drastic example of fitting organizational culture to employee culture can be found in Mullins (2007, p 727) work that provides the example of Garden Festival Wales, an organization created to run for a designated and short time-period. This organization's managers wereparticularly concerned to create a culture via recruitment of suitable employees.
Alternatively, a more strategic view of recruitment might be undertaken, especially in the case of UniBank, which is witnessing increasing rates of employee turnover due to external competition, when a vacancy arises, managers can take the time to review the work done by the departed employee and ask the question, can this work be undertaken in an alternative way, i.e part time basis, outsourced, automation etc.
Performance & Reward Management
Once appropriate candidates are selected, it is important to devise reumuneration and incentive schemes for them. A system of performance evaluation should be devised and clearly communicated throughout the organization, this increases transparency and projects the message of " you get what you work for".
Given the nature of work it is important for UniBank to take another look at its remuneration technique as it may seem out of date given the changing trends of similar organizations in the industry. Employees should be rewarded not only according to their level in the organization but also according to the number of calls they answer, the number of satisfied customers they leave and their overall performance throughout the year.
Employees should also get the change of appraising their managers and vice versa, this eliminated the feeling of favoritism and encourages more transparency. Employees can also be given non-monetary incentives such as quarterly staff field trips, this would give them a well anticipated break from their everyday work whilst encouraging more interaction amongst themselves. Other incentives can be annual best employee of the year awards, free family trips, company shares etc.
Some companies go to great extents in motivating their employees , the privately owned SAS Institute, a leading software company, has taken a broad-basedapproach to obtaining and retaining talent. It is frequently cited as one of the best placesto work. The company offers a number of attractive benefits to its employees, including afree health clinic, two day-care centers, private offices for everyone, flexible hours, apianist in the subsidized cafeteria, year-end bonuses and profit sharing, a 35,000-squarefoot recreational facility, and a thirty-five-hour workweek in an industry that is knownfor its long work hours. SAS also ties individuals into the community of Cary, NorthCarolina, where it is located. SAS offers 10 percent discounts on land in a subdivisionthe CEO has developed; employees also get discounts on memberships at the countryclub he owns. Finally, employees get a tuition break if their children are admitted to aprivate academy in Cary. One of the effects of this generous, reward-rich environment isextremely low turnover. According to one report it hovers at around 4 percent-much
lower than the industry average, which is probably closer to 20 percent.
Although such extravagant incentive techniques are not necessary, it is important that all employee know that they are all equally eligible to incentives given they perform well. It is important to ensure that performance is adequately measured and the unit of measurement is communicated to all those involved, targets should be set daily, and those who achieve the targets should be publicly acknowledged, this caters to the competitiveness need of the employees.
As a company develops, so does its employees. Employee development should cover the following elements
Enhance the institution's skills and knowledge base
Important to identify needs at ALL levels
All categories of staff should be involved
Programmes require regular evaluation
It is necessary to develop new and old employees alike and there are a number of methods how this could be done; induction programs, skills programs, management and development programs, training programs for new specialist staff etc.
Recent research suggests that 'highcommitment' human resource practices, such as employee development, affectorganizational outcomes by shaping employee behaviors and attitudes (Whitener,
2001; Arthur, 1994; Huselid, 1995; Woods and de Menezes, 1998).
Studies also suggest that investing in employee development creates situations whereemployees believe that their organizations value their contribution and care about theiremployability. Employee development also facilitates greater obligation by employees towards the organizationand, in turn, a willingness by employees to work hard to increase the organization'seffectiveness (Arthur, 1994; Woods and de Menezes, 1998).
Michael Porter's studies alsocon¬rm that industries that spend the most on employee development and training aretypically the most competitive in every developed country in the world (Reich, 1991).However, there is always the risk that the employee will leave the organization once it acquires the training. One way through this is by having employees sign a contract that they will reimburse the company for the training expenses if they depart before a given date, one drawback is that some companies offer to buy off their training if needed.
UniBank, needs to invest in its employees development, as it is affecting their performance, and because of that they may loose out on their customer base. TO combat the risk of having their employees leave the bank, Unibank can step up its motivational efforts and develop attractive incentive schemes.
Employee Involvement and Participation
One of the main motivational techniques that should be adopted by firms is employee involvement.
The following outcomes of employee involvement initiatives have been identified through empirical organizational research:
Increasedemployee productivityacross industries, even for low-skilled employees that do routine tasks (Jones, Kalmi, &Kauhanen, 2010)
In manufacturing, employee involvement programs are a long term investment, but one that leads to increasedplant performanceover time (Jones & Kato, 2005)
Improvedorganizational decision-makingcapability (Apostolou, 2000)
Improvedattituderegarding work (Leana, Ahlbrandt, & Murrell, 1992)
Substantially improvedemployee well-being(Freeman &Kleiner, 2005)
Reduced coststhrough elimination of waste and reduced product cycle times (Apostolou, 2000)
Leads to employeeempowerment,job satisfaction,creativity,commitment, andmotivation, as well asintent to stay[secondary effect] (Apostolou, 2000; Light, 2004)
In order for employee involvement to be successful, three things need to be present:
Employees need to be given the authority to participate in substantive decisions
Employees need to have the appropriate decision-making skills
Incentives to participate (whether implicit or explicit) must be present
Employees would not feel involved if they do not have the opportunity to participate in the deicisionmaing process, companies can have weekly meetings to discuss the company's problems and open the floor for suggestions by current employess on how to overcome the problems. Alternatively, employees should also be trained and well equipped to make decisions if needed. Without proper training, employees will not be confident to take decisions and they may back out.
In the case of Unibank, it should give access to all its customer service representatives to the system, whether in the call center or in the bank. New employees should be trained on how to use the computer based system, in order to reduce delays, and existing employees should be encouraged to help new employees in understanding the computer based system. Weekly meetings should be held with supervisors where employees discuss the problems they faced, and offer solutions. This can be particularly helpful when coming up with the online banking system. Existing employees know how the system works, and they can offer invaluable solutions to launching the online banking division
It is never too late to invest in effective Human Resource Management Strategies, as they become increasingly important with the passage of time and as a company undergoes drastic change. Effective strategies ensure the company stays focused even in times of change, and its employees stay on the sampe page as the institution they work for.
In case of UniBank, it has to develop an effective Human Resource Strategy , otherwise the future of the bank is bleak. It should ensure that its employees are motivating and performing up to par. Adequate performance measurements parameters should be communicated and employees should be allowed to give their feedback. The current fear of redundancy should be addressed by investing in training employees to help with the online banking division, not only will this cut down on recruitment cost but it will also add to employee loyalty.