The critical analysis of the case study about 'Fashion Stakes' attempts to review the practices of the HRM functions within the organisation in the retail industry of Sussan. The retail industry is a dynamic industry and as the case describes, is short of skilled labour especially in NSW where this organisation has maximum operations. HRM functions only when integrated as a whole with the strategic objectives of the company and will contribute to bottom line performance and facilitate the implementation of effective methods to attract and retain talent within the company by improving productivity and employee relations within the firm. This report will look at the different HRM functions that affect this organisation like recruitment and selection, training and development, performance review and feedback systems, employee involvement strategies and analyse which functions contribute towards the overall objectives of management. Evidently, as the case describes, this industry has different backgrounds of people working from different generations, like the baby boomers to generations X and Y and it is highly essential for employee relations to be stable for the organisation to progress effectively. This report also includes recommendations for this organisation to improve its HRM function and suggests methods that will improve organisational performance before concluding the report.
2. Recruitment and selection:
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Recruitment and selection strategies have been an important function of Human Resource Management and it is critical for organisations to analyse the job to be filled before devising a strategy for recruitment and selection because effective recruitment is critical to organisational success. Organisations that use at least five targeted staffing approaches, including the use of follow up studies, determine the most effective recruitment sources, and show greater annual profits thereby higher firm performance (Carlson, Connerley, & III 2002). Milia(2004) also believes that management selection practice has the potential to make a strategic contribution to organisational performance. The attraction of successful candidates directly affects firm performance but it is imperative to attract qualified candidates, aid the retention of productive employees, increase tenure and this requires a delicate balance between organisational promotion and realistic expectations to be instilled in the candidates. In the case of Sussan, the retail industry is definitely short of skilled labour and the retention of this type of labour is becoming extremely difficult due to the generation gaps between young employees and their managers.
There are a multitude of factors to be considered while determining the appropriate candidate for the job and human resource managers need to strive to be able to use selection practices as a form of competitive advantage in the global market. Furthermore, within the retail industry, the selection practices of these employees will determine their performance and retention, whether it is employees in the managerial positions or staff at the entry level. Although this case does not describe in detail recruitment and selection practices, certain basic principles of the selection process need to be enforced to maintain job performance and reduce turnover within the industry. As Zotolli & Wanous (2000) and Morse (2009) observe, employee referrals will yield more effective employees and the cost of recruitment can be maintained at a minimum level. In order for applicants to be effectively recruited, a thorough update of all the necessary information within the job analysis is essential. Job analysis is a means of identifying the important job tasks and human behaviours necessary for adequate performance in those tasks (Ployhart, Schneider & Schmitt 2006) and this is the most basic analysis to be done by any organisation looking to recruit an appropriate candidate which is also the case for Sussan. With careful consideration of the Job Analysis, this organization can determine whether the skills necessary to perform the job already exist or can be developed within the organization (internal recruitment) or whether the position requires specialist skills that can only be extracted from a wider population (external recruitment). A successful recruitment and selection strategy will find the best person organisation fit for the positions that need to be filled at Sussan whilst being cost-effective yet standardised and comprehensive so as to achieve competitive advantage within the firm. This process starts with a traditional job analysis although Sanchez and Levine (2009) argue that competency modelling has the potential to fill in the void left by a tradition job analysis. Research also suggests that competency modelling which is the influence of performance of a job and its alignment with the organisational strategy is to be used along with a traditional job analysis. Recruitment sources have been researched in depth by Zottoli and Wanous (2000), who say that there has been decades of academic research on the inferiority of newspaper ads compared to referrals, re-hires, and even walk-ins, but many human resources practitioners continue to believe that ads are the most effective source of new recruits. The main advantages of using external recruitment are a wider reach of potential applicants, whilst also offering a source of fresh talent and new ideas (Deshpande & Golhar 1994). In spite of these advantages it is important to attract the right pool of talent because maximizing the recruitment pool may yield a minimal number of applications in practical terms when the entire labour market consists of very few interested individuals, but statistically an increased pool of external talent will result in an increased number of applications while recruiting externally (Ferris, Berkson, & Harris 2002). In the case of Sussan, the talent pool needs to consist of employees who are willing to be retained within this industry and contribute to employee engagement practices while abiding by the performance review system to be able to prevent turnover and disputes between management and employees. Recruitment and selection literature has been researched in-depth, however it demonstrates limitations based on samples used and an assortment of strategies adopted by firms. These limitations make it significantly difficult to draw conclusions about recruitment method effects and almost impossible to achieve a standardised strategy for recruitment and selection. Some researchers have examined realistic job previews; others have studied recruitment methods and the problem of compartmentalised research such as this fails to recognize important interactions that may help explain research results. There is a need for more nuanced research in the recruitment and selection literature so that it aids the adoption of a suitable strategy that can be utilised for recruiting candidates for specific positions. In this case within the retail industry and the analysis of the organisation, its values and objectives will definitely assist with the adoption of suitable strategies for recruitment and selection.
3. Training and development:
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In the emerging organisational reality where change, competition, workforce demographic changes and business upheavals are eminent, training and development are becoming ever more important methods that equip organizations with the flexibility, adaptability and durability required for survival (Khayyat & Elgamal 1997). It is imperative thus to design training processes that achieve business goals and transfer knowledge and skills to improve the quality and performance of organisations. The managers at Sussan evidently require training and development to be able to integrate performance management and employee engagement to achieve organisational bottom line and better firm performance. Every individual performs best by following the entire cycle and incorporating all the four bases of experiencing, reflecting, thinking and action and hence it is important to deliver training workshops to managers so that they are better able to track the performance of their employees. The applicability of any model for training design or process should be used to assist individuals in a group to understand a process or practice, train, improve some aspect of performance, and enhance organisational development and performance, and management development on a strategic level ( Driskell, Johnston, & Salas 2001; Inzana, Driskell, Salas, & Johnston 1996; Johnston & Cannon-Bowers 1996). The most important outcome of such a training workshop highlights the significance of preparation, actual training activities, execution (practice) of learning in the field; feedback tools, feedback content, and reflection on use (Lyons 2009). Organisations on the same level must utilise these principles to improve bottom line performance and strategically integrate the training and development to improve the firm's performance. Although it has been shown that more training time can provide the opportunity to ensure sufficient variability in practice conditions to create self-efficacy that will generalize to the full range of situations to be faced on the job (Holladay & Quinones 2003), the organisational needs of time constraints must also be taken into consideration before designing a workshop for the managers at Sussan. As Cole (2008) suggests, training can be delivered effectively within any give situation of a workshop designed to suit the needs of the organisation and the management who require training. An effective training module in an organisation is the key to organisational development and significant detailing must be made while conducting training sessions within organisations so as to enhance not only employee development but also firm performance and achieve their strategic objectives. Furthermore the case clearly demonstrates the need for managerial training and development so as to enhance the delivery of feedback to employees, regular discussions with staff to improve conditions of work and performance, setting goals and training and developing employees to achieve these goals. The appropriate training and developmental programs developed within this organisation will help reduce the costs of formal performance management systems and thus contribute to saving costs and thereby demonstrate the importance of contributing towards the strategic goals of the organisation.
4. Employee Involvement:
Employee relations within an organisation are extremely important within the retail industry where it is imperative to design a process that can empower employees to resolve discrepancies that are appropriate to their level of employment within the industry (Sun, Hui, Tam & Frick 2000). This phenomenon is otherwise known as Employee Involvement (EI) and designed to facilitate employees to make decisions to improve problem solving as they are the staff with the best understanding of the given problem and it empowers employees to be decision makers. EI enables quality management without the intervention of management thus reducing costs and contributes to organisational development (Sumukadas 2006). As the case clearly describes, Robyn Batson, the people and developmental manager, is committed to creating such an environment to nurture the talent of employees and managers alike along with the continued support of the CEO, Felicity McGahan. These individuals within this organisation are committed to building a high performance work culture and as Morgan and Zeffane (2003) suggest, it is one of the most significant benefits of employee engagement. Literature on EI suggests that it must be implemented with performance management strategies to improve the quality of performance of staff. EI is rewarding and provides feedback from employees so that they feel like they are a part of decision making. It permits creative interaction amongst team members and they can tend to contribute significant and innovative ideas to the team. It increases commitment, responsibility and effort, hence employees will like their jobs and they will be retained. It generates improvement in productivity as employees; if they make suggestions to the problem themselves then they are in a better position to implement and hence will be more productive than when a new agenda is just passed through the organization as a memo. EI leads to joint problem solving; EI increases the motivation of workers and helps employees feel more satisfied with their work. It facilitates worker cooperation as employees co-operate thereby getting to know each other better. Efficiency is increased if everyone works together in a coordinated manner (Brown, Geddes, & Heywood 2007). Furthermore, Robyn Batson and the CEO, Felicity McGahan, should concentrate on developing more methods to include EI as a means of effective performance management and improve the relations between employees, irrespective of the generation they belong to; X, Y or baby boomers. As the case clearly describes, younger workers are able to give better feedback to their managers and opportunities for growth and development facilitates the reduction in turnover. Thus strategic HRM functions need to be linked from the time of recruitment and selection, to devising appropriate methods of training development and growth, or employee engagement as a means of understanding the performance review process. These functions must all be linked in such a manner at Sussan so as to contribute to the bottom line strategic objectives of the organisation.
5. Performance management:
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The performance management system at Sussan is highly under developed as can be seen from this case. The organisation is committed to building a performance culture therefore one of the most significant areas that needs to be implemented is performance based pay. Performance related pay is a compensation system which brings about a change in organizational culture and seeks to garner employee support (Brough 1994). It is important for an organization as it recruits, retains and motivates employees, brings about innovativeness and culture change and also brings flexibility to organizations (Brough 1994). Also, pay for performance is important as it motivates the employees by providing monetary incentives and thus improves company productivity. It is an all pervading scheme which has to be implemented throughout the organization to ensure fairness (Isaac 2001).
However, pay raises and salary advancements for most organizations do not necessarily depend on meeting or exceeding performance expectations, but rather the tenure of one's service in that organization. This then would make any effort by top management to drive performance oriented strategies send conflicting signals to their employees. Therefore, an organization would require a compensation system that truly incorporates a culture based on performance.
Also, young recruits are more enticed by this compensation program as they feel that their value and contribution to the company is recognized. This method of payment also helps employees to focus and drives the mission statement and policies that companies want to uphold. Companies normally develop goal sharing plans and get individuals to contribute and make the entire team achieve this goal, as rewards trigger better performance and a sense of self worth is also established. This coupled along with employee involvement strategies would help establish a nurturing culture at Sussan to develop the organization which is short of skilled labor; retain employees of caliber and to contribute to the competitive advantage that is desired within this retail industry. There is a necessity for the Organization to have a very good performance measurement system. If the organization is unable to provide suitable standards for measurement, employees may not aim for better performance (Belfield & Marsden 2003). It is no longer sufficient to have just an appraisal form in place, companies have started involving employees in the decision making process and have also ensured that they shoulder some of the corporate responsibility, as should be done in the case of Sussan.
The recommendations that would address issues faced by Sussan constitute an integration of HR functions like recruitment and selection, training and development and performance reviews. The critical analysis of the case study reveals that there are many aspects of the HRM function headed by Robyn Batson, to achieve the standards required by the firm and to facilitate the integration of Strategic HRM with that of the organisational strategies. The first recommendation would be to adopt suitable recruitment and selection processes to ensure that suitable candidates are chosen from the talent pool available who suit the organisational culture and are an appropriate fit within the organisation who will help the development of strategies that will achieve organisational goals. The second HRM function that needs to be redressed is the training and development function, giving not only to the employees to improve performance but also managers to help them receive and deliver the right feedback mechanisms. One of the methods to achieve this is by having programs like 'train the trainer' in performance review processes and devising policies and procedures that are to be followed while delivering feedback and appraising the performance of employees. The cultural and generational differences within the organisation can be minimised by active employee engagement programs that develop and allow the employees to jointly solve problems and contribute to decision making, thereby improving the firm's performance and inducing a sense of importance amongst the employees as they are contributing towards decision making. Introducing systems of performance based pay for employees will help retain talent and reduce turnover which will allow employees to have a positive experience while employed at Sussan and as desired by the people and developing manager, Robyn Batson.
The critical analysis of the various aspects of strategic HRM at Sussan revealed that there are a number of HR functions that need more effective implementation. The recruitment and selection process of choosing the suitable candidate is the first step in attempting to merge the organisational goals and objectives with those of the HR function and improve triple bottom line performance of this organisation. The management at Sussan needs to devise a comprehensive selection tool after careful job analysis to recruit those candidates who are a best fit for the job and the organisation and irrespective of their generation or cultural differences will be excellent in team building. These desirable characteristics present in the employees and management at Sussan will help the organisation devise suitable training and developmental needs not only to train employees to improve firm performance and achieve the targets, but also help managers gain an understanding towards performance review and feedback. Employee engagement is also vital to the development of a performance review program and the Sussan organisation needs to develop a highly articulate method of performance review so as to retain employees in the dynamic retail industry. Performance based pay is probably one of the more adequate methods by which this can be achieved, especially in an industry which nurtures and grows talent and evidently recruits the younger generation to work within this industry. Performance management and feedback delivery systems are needed to be set up in this organisation and managers need to be trained in the appropriate delivery of feedback, whether positive or negative. The HR function must train and develop all levels of employees and management within this organisation to ensure the enforcement of employee engagement which will result in the strategic goals and objectives of the organisation being achieved in a cost effective manner that retains talent in an industry where there is a shortage of skilled candidates. The recommendations if implemented, will address all the issues faced by the Sussan company and will help integrate the strategic HRM function with that of the organisation as a whole, thereby improving productivity, reducing turnover and creating a positive environment within this firm.