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Nature of the HRM Function includes various tasks and activities such as understanding employee needs and organizations expectation from the employees and creating a balance, by ensuring that the employees benefits and compensation, records and various policies in place. To carry out these activities organization required an individual management practice known as Human Resource Management (HRM). Individual management or HRM can be cost effective. Where, big organizations involving individual HRM Department, which is responsible for day to day practice and update personnel policies which conform to current regulation but small businesses carrying out these activities by themselves. Both ways the human managing policies are often in the form of employee manuals, which all employees should have from their employer.
Developing and keeping an up to date Employee Manual or Handbook is very essential as regarding rules and regulations are constantly changing, as well as supporting the business and to achieve high performance people management to improve efficiency. The main goals of 'HR Function' remains review own activities. Below discussed Dimension Estates London's (DEL) employee hand book and how well it relates with various HR Function and current rules and regulations.
2. Identifying role of the HR Function:
The role of the HR function involves initiatory activities to provide supportive direction and creating bridge between organization and its employees. The function safeguards all the HR activities such as strategies, policies and introduction and maintenance everything concerning the employment, development, people and their relationship between management and their required performance. The overall goal is to enable people's capabilities, recognise the potentials and benefits of both organization and people, to improve working environment, and satisfaction.
According to Armstrong, M. (2009), "Increasingly the role of the HR function is seen to be business-oriented - contributing to the achievement of sustained competitive advantage".
HR is responsible to ensure that its stakeholders perceive that it produces value, deliverable time value money concept and able to resolve all the latest legal issues that relates to the business and its people.
3. Evaluating the HR Function:
In order to guarantee an effective strategic level and service and support evaluation of HR function is a necessity. The key issues for evaluating the work of the function are to define whether the operation is strategic and have the capacity in terms of delivering the required levels of service.
Researched by the Institute of Employment Studies, Hirsh (2008) recognized the three reasons for evaluating the HR functions:
To clarify how quickly, efficiently and effectively a HR response.
Ability to understand the workforce and help management balance employee and business needs.
Ability to spot issues ahead of time and address them.
In realism people prefers to see HR as Business Partners, and indeed managers what professional advice from HR who understands their business context. From a customer perspective, however, the term Business Partner is something of a misnomer. Managers want HR to provide them with a people partner - someone who works with them to address their people issues.
4. Key HR Functions:
In order to understand and evaluate a fully functional HR to review its task is very much important. There are many approaches to follow up to see how effective the HR policies and procedure have been. Below diagram highlights eight key functions, which creates a better understanding of a perfect Human Resource Management.
4.1 Training & Development:
Education is the preparation in order to carry out actual work, and training is the process to develop attitude, knowledge, skills to perform certain task. In business world employees get trained to develop their individual ability, understanding and awareness. To undertake higher-grade tasks, increase efficiency and standard, health and safety and sharing knowledge information, it is necessary to train and develop employees.
UK retail industries require constant training and development to in order to cope with the challenging businesses. Looking into various training and development process by three top UK retailers:
4.1.1. T. M. Lewin:
T. M. Lewin has a training manual on all their designs and products giving information on product fabric and quality and product benefits. T. M. Lewin also allows employee to try on clothes, to be comfortable with the products; as well as before start working with Lewin they provide an introductory training for all employees to understand and familiarise with the layout of the stores, procedures of the company and the quality of customer service required. (T.M. Lewin, Employee Handbook, 2007)
4.1.2. Moss Bros. Group Plc:
Moss Bros. Group Plc believes in career potential and they aim to create and working environment where they support employee every moment of the working hours in order to develop and achieve personal career ambitions. (Moss Bros. Group Plc, Employee Handbook, 2008)
4.1.3. The Restaurant Group Plc:
The Restaurant Group Plc provides training and feedback to helps employee to do the job and improve their performance. (The Restaurant Group Plc, Employee Handbook, 2005)
4.1.4. Dimension Estates London
However, according to Dimension Estate London, they understand the importance of investing in the people, and acknowledge that in order to achieve their goal they must motivate, develop, train, inspire, support, and trust and overall respect to the employees.
Remuneration is the process to ensure the integrity and legitimacy of the company system and remit the requirement of the employee. Determining remuneration and recruiting highly talented people within the provided budget is one of the most challenging tasks for any HR. Financial incentives is not the same in terms of the blue-collar and white-collar workers. Remuneration is a confidential subject, it is quite impossible to clarify the differences in various jobs payment. However, job evaluation is the process which determines internal value of the job.
During the financial crisis of 2009, According to financial service authority, Astbury Marsden (2010), "Many Employers have worked hard to retain staff with change management and compliance skills, so if competitors do want to attract staff in these areas they have to offer very attractive packages".
Examples bellow highlights how various company values their employee by evaluation:
4.2.1. Goldman Sachs:
Despite the fact 2009 major economical disaster, companies such as Goldman Sachs making billions of profit within a little growth. According to Prynn, J. Cecil, N. And Goodway, N. (2010), within the first quarter of the year Goldman Sachs revealed making a profit of £2.25 billion and planning to distribute average £400,000 and £500,000 bonuses to its employees. Although this remains contradictory but one thing is clear Goldman Sachs does values its highly tenanted employees.
An organization's top level change with a higher band of remuneration is highly noticeable; this allows performance increment, profitability growth or creates existence. City A.M. (2010), Travelex, the world's largest foreign exchange provider hiring Peter Jackson from Lloyds Banking Plc to become its new chief executive, the main objective regaining the profit that dropped by 14 percent (Profit before interest and tax, end of year 2009).
4.2.3. Other Job Evaluation Systems:
According to Marchington, M. and Wilkinson, A. (2006), few significant job evaluation systems are:
4.2.4. Dimension Estate London:
Dimension Estate London in their Employee Handbook mentions that, they reward their people for their commitment by giving them personal awards, recognition and incentives. However, there is no guidance what kind of evaluation system they have and if not they should design a Job Evaluation System.
4.3. Fare Treatment & Promotion:
When employees feel their firms treating them fairly, they are more flexible with the companies decisions and they response more quickly to the competitors actions. According Dessler, G. (2003), "Fair process turns out to be a powerful management tool for companies struggling to make the transition from a production-based to a knowledge-based company, in which value creation depends increasingly on ideas and innovation."
In order to manage and keep satisfy thousands of employees Toyota HR introduced a 'speak-up program' software, where employees will be delivering their message confidentially and HR will review and investigate all Hotline inquiries. (www.allbusiness.com)
Similarly FedEx uses an anonymous 'opinion surveys', that allows employees express feelings about the company and their managers. Managers then discuss with the subordinates to resolve the matter. (www.casestudyinc.com)
Companies such as ZIPCARS uses automated telephone systems or weekly live feedback process to acquire information such as how satisfied you with their employees and overall systems from both customer and employees. (www.zipcar.co.uk)
4.3.4. Dimension Estates London:
According to their employee handbook DEL believes 'respecting individuals and their differences'. Where they also talk about bullying and harassment and provide guidelines regarding relationship with others.
However, there is currently do not have a system where the employees can speak openly and fairly. To create a better environment they should build two-way communication system. Which will allow them to introduce fairness towards employees.
There are other concrete things the company can introduce to increase employee satisfaction and increase performance level such as one to one conversation, managerial conversation, confidential opinions, feedback form etc.
Recent successful and modern organization depended on how well the people have developing various skills such as confidence, initiative, innovative, self-motivate and over all the catching up with the trends of success. Every person in the world is working hard for a better life and self improvement. Abraham Maslow's 'Hierarchy of Needs' motivational model explains various positions where human self-motivated to remit their own needs:
maslow's hierarchy of needs.JPG
4.4.1. Maslow's Hierarchy of Needs
This human natures self motivation gives the opportunity to organization to offer various packages to motivate their employees. Rose, E. (2001) defines motivation as action tendencies which benefits both parties (employer and employees) is a motivational approach.
Some other common motivational approaches are bonuses, rewards, incentive, and recognitions.
Google employees are highly creative and self-motivated, in order to keep them satisfy and gain competitive advantage Google offers its employees ravenous facilities such as unlimited sick leave, private onsite doctors, free lunch, Wi-Fi accessible bus etc. (www.google.com)
4.4.3. Air Asia:
People carrying company Air Asia (Easyjet), if offers luxury holidays as reward including bonuses to its employees to motivate them to achieve targets and they are quite successful. (www.airasia.com)
4.4.4. Dimension Estates London:
Understanding the motivation theory and its importance DEL offering flexible working hours, rewards, bonuses, commission and incentives. However, the best practice is to let the employee decide what motivates them within the company's budget.
4.5. Health and Safety:
According to Torrington, D. And Hall, L. And Taylor, S. (2002), "There is always a conflict between the needs of the employer to push increased output and efficiency and the needs of the employee to be protected from the hazards of the workplace".
There is no doubt about that employers are the one who is responsible for making sure health and safety of their employees. This is also important for the employers or HR to make sure that, it is safe and secure before they allocate any task to an employee. Over decades work related health and safety law has been developed and it has become a serious issue for organization. A small negligence can cost thousands of pounds compensation. Below list major work related act or regulations:
4.5.1. The Factories Act 1961
Briefly covers, General Health and welfare provisions; general safety provisions and measures relating to young people. (www.opsi.gov.uk)
4.5.2. The offices, Shops and Railway Premises Act 1963
Briefly, an extension to the Factories Act 1961 added with premises protection. (www.opsi.gov.uk)
4.5.3. The Fire Precautions Act 1971
Briefly, this act explains the minimum requirements in work premises relating to fire safety.
4.5.4. Health and Safety at Work Act 1974
According to Cheatle, K (2001), "of all the legislation that affects HRM, arguably none is more important to the wellbeing of individuals than this landmark piece of legislation". Briefly, this law covers the employers' duties, employees' duties and out of all manufacturers, designers and suppliers duties.
4.5.5. The Control of Substances Hazardous to Health (COSHH) Regulation 1988
Briefly, "The employer must prove that a sufficient step has been taken to prevent the emission of the substance damaging the health of employees". (www.theiet.org)
4.5.6. The Working Time Regulation 1998
This act covers "The EC Working Time Directive, which requires Member States to set limits on the length of the working day and working week and to set a minimum amount of paid annual leave". (www.parliament.uk)
4.5.7. Dimension Estate London: According to their employee handbook DEL highlights a big list of health and safety related issues and produces; health and safety training and notices throughout the premises. However, some of the recent act or updates regulations was not been covered. The HR should update the employee handbook and keep up to date.
4.6. Equal Opportunity:
According to Rose, E (2001), "Discrimination at work is concerned with the unequal and inequitable treatment of some employees irrespective of their ability to perform their jobs."
Out of the major functions of HRM, which would distinguish the work of today's manager or practitioner from his or predecessor of thirty forty years ago, is the often emotive and complex subject of equal opportunities. From decades, for better understanding and adopting good practice in the management and promotion of equal opportunities rests on below legal framework:
4.6.1. The Equal Pay Act 1970 (EPA) (amended 1983):
If man and women involved into same work or the work is rated equal, this act introduced in order to allow women get equal pay as men. (www.gos.gov.uk)
4.6.2. The Sex Discrimination Act (SDA) 1975 (amended 1986):
This act introduced to stop sex discrimination towards any one, at work, education or even service facilities. (www.gos.gov.uk)
4.6.3. Rehabilitation of Offenders Act 1974
This act has been added to help offenders after finishing their conviction period and rehabilitation period allow working with some exception. However, the offender is not obliged to mention their conviction while applying for a job, if not necessary. (www.gos.gov.uk)
4.6.4. Disability Discrimination Act (DDA) 1995
This legislation has been added for not to discriminate disabled people. (www.gos.gov.uk)
4.6.5. The Asylum and Immigration Act 1996
To control and add restriction for recruitment for illegal immigrant or workers who are not holding a right work permit to work the Asylum and Immigration Act has been added. (www.gos.gov.uk)
4.6.6. Human Rights Act 1998
"Anyone who is in the UK for any reason has fundamental human rights which government and public authorities are legally obliged to respect. These became law as part of the Human Rights Act 1998". (www.direct.gov.uk)
4.6.7. Race Relations Act 1976 and Race Relations (Amendment) Act 2000
Cheatle, K. (2001) explains, "Good employment practice in the sensitive area of race and ethnic origin therefore requires the creation of organizational climates that seek represent the community from which the workforce is drawn or served."
4.6.8. The Employment Equality (Sexual Orientation) Regulations 2003
Gerry Sutcliffe, DTI Employment Relations Minister (2003), "The Employment Equality (Sexual Orientation) Regulations are designed to outlaw this kind of unacceptable treatment. They cover employment and training across England, Scotland and Wales, whatever the size of the organization, whether in the public or the private sector. They represent a significant addition to our domestic equality legislation and they will make a practical difference to the lives of millions of people."
4.6.9. The Employment equality (Religion or Belief) Regulations 2003
This legislation introduced in 2003 to prevent miss interpretation, discrimination on ground of religious believe, discrimination by way of victimization and harassment on ground of religion beliefs. (www.opsi.gov.uk)
4.6.10. The Gender Equality Duty 2007
"The Equal Opportunities Commission (EOC) welcomes the new gender equality duty as a powerful tool that will deliver real change and practical improvements in the lives of women and men, through helping public services to tackle gender inequality, which remains persistent and widespread." (www.equalityhumanrights.com)
4.6.11. Dimension Estates London
Despite being a small company, adding an equal opportunities form with their job application DEL practices best equal opportunities acts and also recognizes discrimination as a gross misconduct, and are willing to take disciplinary action according to their employee handbook.
Part of Job Application form used by DEL implements Equal opportunities:
We are committed to equality of opportunity in service provision and employment and welcome applications from all sections of the community.
This information will be used solely for monitoring purposes. It will be treated as confidential and will be retained by the Personnel Department. It will not be shown to the selection panel and will be retained by the Personnel Department. It will not be shown to the selection panel.
Post applied for
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Male [ ]
Female [ ]
How would describe your ethnic origin:
Black - Caribbean
Black - African
Black - Other
Other (please specify)
If you do not wish to disclose the information please tick the box
We are taking positive steps to encourage the recruitment of people with disabilities. Yes [ ]
Do you consider yourself to have a disability that you would like to tell us about? No [ ]
If you have answered yes to the above question please supply any information which would help us to make an interview or employment more accessible for you: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Traditionally the HRM Function has been concerned with the management of good employee relation within organizations and encompasses the management discipline, grievance, consultation and negotiating issues including relationships with trade unions.
However, the main idea behind dealing with trade unions, employee can support their activities in the workplace, and attempt to build close working relationships with seniors so it is less likely to have disruption of business. The legal framework behind unionism is below:
4.7.1. Trade Union and Labour Relations Act 1992:
This act consolidates the provisions of previous legislation including The Employment Protection Act 1975, and the Employment Protection (Consolidation) Act 1978 and explains how unions should be formed and how a union should act towards its members and business organization.
4.7.2. The Employment Relations Act 1999:
Briefly, The Employment Relation Act 1999 sets the rights for trade union recognition in the workplace.
4.7.3. The Employment Rights Act 1996:
Briefly, The Employment Rights Act 1996 explains right for an employee for redundancy and how to protect employee rights.
4.7.3. British Airways:
Recent conflicts between British airways and trade union is a great example how union acts towards organizations decisions. During May 2010 and June 2010 British Airways (BA) members will walk out on a strike for 20 days, over jobs cut, pay cut. This leaves behind the BA passengers in a misery and millions of pounds losses for BA. (www.bbc.co.uk/news)
However, this step must have been necessary for BA trade union to protect the employee rights. Either way, it is HR who is responsible for resolving the conflicts.
4.7.4. Dimension Estates London:
As a small business organization Dimension Estates London directly not involve with any trade union. However, it encourages employees and also do not restrict employees if they join with and trade union.
4.8. Performance Appraisal:
According to Cheatle, K (2001), "Organizational appraisal systems are a means to formalizing activities for rating the usefulness of a contribution towards the future."
Although traditionally use of performance appraisal is limits to access past performance of an employee and it's been used as a personal development tool, a way of maximizing individual contributions and ensuring the individual has the skills and knowledge required to make the contribution.
4.8.1. Various Methods of Appraisal:
184.108.40.206. Traditional Methods: Some traditional methods of employee appraisals are, based on task by grading; task related performance directly rating; comparing with other employees; skill such as leadership, initiative or innovative; followed by rules or procedures; ordinary questionnaires method or checklist.
220.127.116.11. Modern Methods: However, the outcome from traditional performance appraisal could not satisfy modern HR managers, so the developed various successful modern methods, 360 Degree Appraisal, Self Appraisal.
4.8.2. 360-Degree Appraisal:
360 Degree appraisal is an invention by modern HR managers, is a successful way review employees anonymously, internally by management or subordinates or superior or even by self. In retail industry or in many other industry HR managers using mystery shoppers as a technique of appraise employees.
According to Luthans and Peterson (2003), "the 360-degree feedbacks are overwhelming by organizations and the result increases satisfaction with the system as well as enhanced commitment."
Like many other retail companies Starbucks uses mystery shoppers, who will go into any Starbucks Store for 10 minutes any time of the year to any shops and report back to the HR Manager. Later the employee will get appraised, according to Starbucks, the uses mystery shoppers not only to appraise individual employee but the whole organization. (www.starbucksunion.org)
4.8.4. Royal Bank of Scotland (RBS)
Storey, J. (2007), Around 2003 RBS 'talent forums' were introduced to each division in RBS, in order to make collective decisions about who the senior manager talent for the future is and define clearly what will make them ready for such position. This is just another type of appraisal to define the right qualification for the right job.
4.8.5. Dimension Estate London
As a modern organization dimension believe in modern methods of performance appraisal, and uses both self appraisal and 360 degree performance appraisal techniques.
Dimension Estate London - Self Appraisal Form
Score your own capabilities in the following areas in terms of your current role requirements (1-3 = poor, 4-6 = satisfactory, 7-9 = good, 10 = excellent).
Planning & target achieved
Reporting and administration
Problem-solving and decision-making
Team-working and development others
Energy, determination and work-rate
Steadiness under pressure
Leadership and integrity
Flexible and mobility
Note: If appropriate bring evidence with you to appraisal to support your assessment. The second section can be used if working towards new role requirement
Name: _ _ _ _ _ _ _ _ _ _ _ _ _
Surname: _ _ _ _ _ _ _ _ _ _ _ _ _
Date: _ _ / _ _ / _ _
ID: _ _ _ _ _ _ _ _ _ _
Figure: Dimension Estate London Self Appraisal Form
Managers or HR Executives are facing everyday challenges such as economical, performance results, healthcare issues, laws and government regulation changes, etc. in regards managing human capital. Balancing these challenging changes, Managers or HR Executives are creating new policies. Organization success relies on how effectively its people have been managed. Understanding the goal from managing human capital; organizations introduced the best practice in recruiting, performance evaluation system, and developing people, managing reduction and successfully managing difficult conversations. The overall achievement is a successful Human Resource Management (HRM) policy.
It is quite impossible to predict the changes for Human Resource Management (HRM) and employee Law in the next few years, there is a trend of changes so it's best for Dimension Estate London to keep up with changes and try best HRM practice.
6.1. Employee Handbooks:
Dimension Estate London (2010), Employee Handbook.
Moss Bross. Group Plc. (2008), Employee Handbook.
T. M. Lewin, UK (2007), Employee Handbook.
The Restaurant Group Plc (2005), Employee Handbook.
Armstrong, M. (2009) Human Resource Management, British Library, London UK.
Cheatle, K (2001) Mastering Human Resource Management, New Yourk, US: PALGRAVE, pp 159.
Cheatle, K (2001) Mastering Human Resource Management, New Yourk, US: PALGRAVE, pp 202.
Dessler, G. (2003) Human Resource Management 9th Ed, New Jersey, US: Pearson Education, pp 282.
Hirsh, W. (2008) What Customer Want from HR, Institute of Employment Studies, UK.
Rose, E. (2001) Employment Relations UK: Person Education, pp 478.
Rose, E. (2001) Employment Relations UK: Person Education, pp 557
Luthans, F and Peterson, S. (2003) Human Resource Management, Vol 42, UK, PP 243.
Marchington, M. and Wilkinson, A. (2006) Human Resource Management at Work 3rd Ed, UK: CIPD.
Story, J. (2007) Human Resource Management: A Critical Text, 3rd Ed, UK: Thomson Learning, pp 110.
Torrington, D. And Hall, L. And Taylor, S. (2002) Human Resource Management 5th Ed, UK: Person Education, pp 509.
Chesworth, N. (2010) Executive Recruitment: City job vacancies to hit 53,000, Evening Standard, April 20 2010.
Financial Services (2010), Travelex Hires Lloyds Man as CEO, City A.M. 14th January, pp 12.
Prynn, J. Cecil, N. And Goodway, N. (2010) News: Anger over Goldman Sachs 'grotesque' £3.6bn bonuses. Evening Standard, pp 4