This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.
To analyze the impact of strategic human resource management on organizational performance, this article uses certain concepts, theories and a jewelry company in NZ as an example, which has more than 10 years history since it established. First the article introduces the company's background, features to indicate the effectiveness of the company that HRM brings. Then it explains the ethical codes in this organizational environment and influence, in addition, existing training and further education in the company are analyzed and evaluated. In these three steps, all the evaluations are based on the real cases. Also, it gives recommendations for improving the organization performance.
The jewelry limited company used in this article is a New Zealand owned company, in more than ten years' history, it used to have eight retail shops in different shopping malls and main street with around thirty part-time and full-time employees. With many years successful sales history, this company is well-known for its fair price, friendly service and life-time quality guarantee. Human resource management is an important part in the company's development. Employees' hard work, passion and loyalty contribute to the organization's performance as well as the satisfying products.
Table of Contents
the factors involved in measuring the impact of given HRM strategy could be the financial situation, products, customer feedback and the difference& improvement in organization's performance from HR management. HRM strategy should align the organization's strategy to help it achieve its objectives by offering competent work from employees. In this jewelry company, financial situation could be affected by result of marketing and promotion plan and shows if the revenue meets the target to support the whole organization's operation. From the financial factor, company could adjust its marketing strategy and improve the customers' satisfaction of the products by arranging tasks to the marketing and sales teams. The impact of HRM strategy could be seen into different aspects. For example, reports should be followed to record the data related to these factors once the HRM strategy adjusted for improving the organization's performances. There is a real case in this jewelery company about the impact of HR management. One week after a Christmas day, the sales in retail stores was lower than any week in the whole year, because people normally spend much money to buy gifts before Christmas and do not need to buy any gifts after Christmas. There was a big loss in the retails stores which affect badly on financial situation. Then the HR manager advised store managers to gather information from sales assistants about why the number of customers dropped dramatically. Sales assistant get ideas from customers that there were two main reasons, first, they already spent a large amount of money before Christmas for gifts, so they have less money left after Christmas. Secondly, they think all the big discounts in every shop already finished. Then sales managers changed the display of window, putting much more products which were still on special price, especially low-priced small pieces of jeweler. Then more and more people are attracted by the display window and find there were still many items on special price and even more styles than they expected. Once the more customers get attracted, the sales were getting more and more increase in the following weeks. From this case, the sales managers and sales assistants' helpful information and flexible decision created a positive result of the sales and gain more customers' attention. The sales situation changed which shows the factors-financial situation and customers' feedback are contributed to measure the impact of HR strategy.
To measure effectiveness of human resource management strategy, balanced scorecard and bench marking show the data and comparison for organization to review if they can meet the strategic goals and reach the good position in the same industry compared with other businesses.
First, balanced scorecard used for shareholders to review if the organization reach the expected objectives. It shows into four aspects, financial, customer, internal business processed and learning & growth. The balanced scorecard indicts the company's performance in four steps, objectives, measures, targets and initiatives (Balance scorecard institute, 2012).
In this jewelry company, take only financial part in balanced scorecard as an example:
Increase 20% revenue
Expand market share
The financial target is to get more revenue, but need to achieve the objectives of increasing sales by promotion. Once the strategy made, the HR team should be able to manage employees to work for the organizational objectives. In this jewelry company, they made the marketing team to finish the summary about the past sales history to analyze the target customers' requirements and the fashion trend for different age group customers. Then when the new arrivals have already in the retail shops, marketing team make the plans for promotion methods like discount, special priced items, set jewelries on sale and the target sales to the sales team. Therefore sales assistants could understand the task they need to finish. HR management sees the employees as the resource to contribute for the organization's performance and balance all the aspects in balanced scorecard to meet the objectives.
Benchmarking is another tool which many companies use to check the performance of their company and their human resource management effectiveness. In industrial field, benchmarking helps the organization to measure and assess their business performance by comparing their business with the same other industry. (Industrial Benchmarking, 2011)
For example, the jeweler company could make papery documents to shareholders to analyses the data for making the comparison, through which the management level could get the result of organization's performance. If there are some points need to be improved, HR managers could make plans for employees to be motivated in certain aspects to improve effectiveness of the whole organization's performance. Through data collection, company could know if they can meet the level that other competitors could reach in the same industry. The company could adjust their strategic plans to catch up with other companies. This jeweler company investigated to compare with other companies about the target sales and the number of customers in particular period. Therefore the company could improve their marketing plans in time to keep competitive position.
3. CONNECTION BETWEEN HRM AND ORGAIZATION PERFORMANCE
Even though human resource management is not shown directly in balanced scorecard and benchmarking, HR management makes the people become valuable resources to the company to gain competitive advantage. HRM practices help organization to select competent employees with good skills and provide related training to develop them for the improvement of organizational performance by increasing their skills, promoting good attitudes, motivation and offering more responsibilities (Univercity of Canterbury, 2013). For example, in one retail store of this given company, the HR team selected a candidate who was recommended by the other sales assistant. This candidate has good sales ability and lovely appearance always has a smile on face. But her Curriculum Vitae showed she did not last long time in any other past jobs, the longest job she did is just five months. The HR manager still gave her the chance for that position, but then they found this lady got late every morning which make the whole store could not open on time. Even the manager talked with her and she felt very sorry, but she still kept being late. This is an example of wrong selection, the candidate has good skills but without good attitude which affected the company's performance of opening on time.
In an organization, if the HR management could align with organizational strategy to offer clear codes, related training and rewards, employees could behave expectedly, therefore, HR management motivates employees to contribute to the organizational performance.
4, 5 . ETHICAL CODE OF CONDUCT AND ETHICAL DILEMMAS
Another essential part in HR strategy is ethics. Every company needs ethical codes equally for everyone. Besides law and regulations are the guides for people in the organization, ethics codes could affect people's behaviors as well. There are 5 principles for ethical judgment, utilitarian, rights, justice, care and virtue (Vice-Chancellor, 2010) Take care and virtue principles for examples in the given company, one of sale assistants in a retail store suddenly got divorced and she became very upset every day. Without a smile on her face, she could not be competent to provide good services to customers. For weeks, her sales record was always the lowest and also got some workmate's complaints, even some workmates guessed she was going to be fired very soon. But HR manager followed the care principle, spending time to talk with this employee everyday to help her get rid of bad mood and encouraged her to release her emotional burden. Then with time moving, she felt appreciated to the manager, and got recovery to go back to her normal condition again. In fact, this HR manager's reaction was not only helpful for her, but also useful to create the sense of security in the job for other employees. Second example is for the festival celebration. On a Mid-Autumn day which is the family reunion day in China, the HR manager suggested the company to give the Chinese employees some moon-cakes to release their home-sick thought, also give moon-cakes to other non-Chinese employees to make them understand this festival in Chinese culture. This surprise created a very good atmosphere of "home" for Chinese employees, and this care action met their emotional need to motivate employees.
Virtue principles in this company are focused on being friendly, helpful and honest. Employees are encouraged to help each other and treat workmates friendly. The HR manager tried to make the work environment both motivated and enjoyable for employees. HR manager regularly talked with other employees about workmates relationship, communications, advices, complaint and does the record. Once the manager finds some existing misunderstanding, she talked with the people who were involved and give valuable advice.
Also, being helpful to customers are important to create a friendly and positive business environment. Sales assistants were encouraged to greet to customers and be helpful to choose product for different customers' preference. Being honest is an essential code in Jewelry Company, if some items got damaged or lost, without reported in time, it is hard to tell whose responsibility it belonged to. In some case, there could be possibility that sales assistants cover up their or other intimate work mates' mistakes. There used to be a sales assistant who broke a necklace, then, she asked the workmates not report the issue to the store manager. So the other workmates had to face the ethical dilemmas. Their workmate will get punished and break the relation with them if report to the manager, but if not report, then the store will fall into trouble to investigate. Then no one report this issue. Therefore, the company discovered the broken item and could not figure whose responsibility it belongs to. Then HR manager advised the store manager to get the inventory record in every retail store more detailed, to make sure every day the sales assistant check all the numbers of items and sign their names. This policy helps the employees who work in the retail stores form the habit of being honest to report any problems in time and avoid similar ethics dilemma.
In addition, fairness and motivation in salary could motivate employees and create smooth workmates relationship. There used to have some ethical dilemmas in the compensation system. There was an old store manager who had ten years experience within this company, so she got three fourths commissions from the sales. Other sales assistants just share together just one fourth commissions. At the beginning, the HR manager considered that it is ethical to give more commission to the old stuff who had been working in the company since it started so she needed to get more salary than other stuff. But then they found other sales assistants are not motivated to sell because of such little commission. To motivate the other young sales assistants and still give the old store manager higher salary, then HR manager changed the compensation system: All of the sales assistants share the same amount of commission, but the old store manager get more hourly pay than the young stuff. Then this method solved the ethical dilemma to make all the sales assistants and old store manager motivated. Therefore, in this example the motivation of employees' salary could contribute to boom the sales of the company's performance.
However, now the retail stores still existing some slight problems on commission system. Some customers came to choose some items and talked to sales assistants, but some customers did not pay at once, maybe pay several days later, but the sales were still reported into the day when they paid, therefore make the sales assistants who talked to customers first could not get commission, at the same time, the sales assistant who work on the day when customers paid could get all the commission without endeavor. This issue happened on part-time employees. In this way, HR manager should make more detailed papery report for everyday sales details, to keep employees paid fairly, so this issue could not affect work mates relationship and motivation to work.
Company has to provide clear codes of ethics and restricted reports that everyone has to follow in the organization equally. This will make the employees responsible for their work and action. Also organization has to preferred solutions to dilemma situation.
These examples showed above of ethics in HR management indicates that the ethical dilemma happened in work place could be solved by HR manager's good method, however, it is important for employees to report and talk with HR manager in time once they have complaint or confused problem. Companies should take advantage of both hard HR practices and soft HR practices. Not only Keep good communication and value's the employee's need, but also keep strict papery report to get accurate information.
6. TRAINING METHODS &7
Training should be based on the identification of training needs and specific, measurable and realistic targets. And the training need are from the organization, department and individual aspects (page1 10/26/2012). In organization the management can select any training method according to the business environment. These are many types of training like on the job, off the job, refresher, remedial or internship trainings which a organization can adopt to train their employees. (Poddar, 2010) In this company, they used case discussion, to classify the customer's type, and make sales assistant to communicate with different types of customers from different cultures.
This company offers different trainings in different seasons , in New Zealand, normally, in winter the retail market is not as good as in other seasons, without the tourists or the warm weather, retail stores normal more quieter than that in other seasons. So in retail stores the sales assistants could easily feel bored without many customers. HR team could arrange some training for stuff to make good promotion at the cold season; also the training could be good preparation for the busy seasons.
Also, they can adopt the both methods- on the job training and off the job training. In on the job training employees have enough time to know about the each and little thing about the each design and product they have because in winter season customers and the rush of tourists are less. Under the good supervisor, employees learn within the working environment can gain lots of experience and increase their knowledge which makes the human resource management strong. And mainly in jewelry companies employees learn under vestibule training method. They use the same equipments and make the quality product by using the trained and qualified supervisor's techniques.
Case study is also an effective training method, make old stuff to talk about the cases they dealed with in their working experience to train the new stuff. New stuff can tell the cases they experienced to get advice from old stuff. Another one is role playing: old stuff can make new stuff adjust to different customers and workmate. Then, conferences could be designed to summaries the whole performance of organization, tell every employee what they need to do to contribute to the competitive advantage. Also summaries different department and employees' performance. In this jewelry company, they will report all the sales team sales result , and give the consequence for different marketing plans. Make every employee know the direction for his/ her own position need. The company could giving handouts at the beginning of training a new employee, about the product information related with technics and terminology.
Training and development are widely embraced in New Zealand HR practices. To save time for training and not occupy much time instead of work, online-learning could be a good choice. As a jeweler company, it is supposed to have further training to develop employees' career based on enhancing their jeweler knowledge. For the new staff, the company could just offer the knowledge for entrants. But for the experienced staff, company should give more chance to develop their knowledge and expand their vision. For example, sending them to professional courses or getting online courses, making them attending some conferences or exhibitions of the jeweler industry. Developing the employees' career is helpful to build their further skills and match with the company's development.
Through the analysis we observe that in this jeweler company there is always a need of human resource management to control the employees and make the organizational process effective. Company could different tools like balanced scorecard and bench marking to calculate their HR effectiveness and the position of business effectiveness in the market. In HR management, they followed both hard HR practices and soft HR practices to select and tread employees, developing their policies to face different problems. Through their different training methods they trained the employees on different time according to the market demand and employees need. Schedules for training report should be followed frequently to evaluate the result of training goals and adjust new plans with any environmental changes. The company needs more papery documents and reports to follow the employees' performance and needs more discussion of HR team to select candidates.