Organizational Structure And Human Resource Practices Commerce Essay

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This report presents an evaluation of the HRM related practices of the selected organization. For this purpose, MDS Oman (Mideast Data Systems Oman) has been selected. The data to understand the organizational structure and practices were obtained from the administration.

The company provides its services in the domain of Information Technology and Systems. Some of the major areas covered are software solutions, systems integration, computer systems and networking, data center, infrastructure consultancy, stand-by power systems etc. (MDS, 2010 & Midest Data Systems LLC, 2011).

Organizational Structure

Organizational structures are an important aspect to depict the functions of the organization. Proper organizational structures are crucial for the efficient and effective performance of the organization. Daft (2007) highlights the three important components of organizational structures including number of hierarchal levels, grouping of individuals in departments and the process of communication. The organizational structure of MDS Oman has been presented in the appendix - A. The structure of the MDS Oman is 'Functional' in nature with both horizontal and vertical linkages. The company is headed by the President with a Deputy General Manager (DGM) supervising different functional departments of the company such as i.e. Systems & Storage Department, Site Department, Unified Technologies Department, Finance Department, HRM Department and Procurement Department. Each Department is then headed by a Head of Department with different employees working at different levels. The front line employees are then working at different levels under the supervision of their managers. Overall, the organizational structure can be considered to comprise of 4 hierarchal levels.

The functional structure of the MDS Oman can be evaluated in different perspective. For an Information Technology services provider such an organization structure is helpful as the high level coordination is required and this structure facilitates the vertical and horizontal coordination among departments. Each department has its own complete set of guidelines and procedures which can be followed to provide the services to clients. The decision making in such a structure is decentralized with all departments functioning according to the set standard operating procedures (SOPs). The goals and visions are directed from top to bottom. Organizations with this type of structures are flexible to change according to the unstable environment. Different department working in the organization can easily change the practices owing to the changing needs of the markets. However there are some loopholes that hinder the effective functioning of the company's operations in such a type of organizational structure.

One of the major drawbacks in this organization structure is that it is very difficult to achieve economies of scale. As the functional departments are not integrated, the standardization across the product lines become difficult and organization is unable to produce customized solutions to large number of clients. For an IT based company, customized services are very important depending upon the needs of the clients. Therefore it is necessary that company should manage to add the role of 'project coordinators' who can perform to integrate the activities among these different departments.

Part 3: Organizational Activities

Strategic Planning

Today's organizations understand the importance of strategic human resource management approach to carry out the organizational activities. With the frequent and continuous changes in the business environment, organizations now look towards human resources as the key players to achieve the competitive advantage in the market (Seyedjavadin & Zadeh, n.d.). Being a strategic partner HRM strategies are aligned to the rest of the business strategies. This ultimately helps the organization to execute its business strategy effectively. Our aim in this section is to analyse that how MDS Oman is able to carry out its HR functions which are aligned to organization's business strategy and thus play a role of being a strategic partner.

Link between HRM and Strategic Planning

The association of strategic planning with the human resource management concerns the important areas such as: how the HR functions build their HR strategies? How are these strategies linked with the organizational goals, policies and procedures? Are the HR hiring and recruitment policies aligned to meet the organization's work needs? How the HR plans to have job analysis and job design for the employees working in the organization. These all areas must adhere to the organization's nature of business and field of work.

HRM has an integrative link with the strategic planning in an organization. In this the employees of HR department give strategic planners information about the company's human resource skills and capabilities. These capabilities are a direct response of the HRM strategy integrated with the business strategy. HRM policies are developed which make the employees to work according to the company's business strategy. Previously HRM had an administrative role to play in an organization. Then this followed with one-way link which includes the strategic planning giving the instructions to the HR department. Another approach practiced in organization was 'two-way linkage' in which organization's strategic planning and HR department were able to include the element of feedback regarding the policies and procedures. In the current scenario the strategic planning division is the part of the HRM function which work together to meet the organization's human resource needs. All HR policies i.e. job analysis, job design, task design, selection and recruitment etc. are prepared according to this strategic planning. The figure below shows the four approaches with integrative linkage (HRM function merged with the strategic planning) as the most effective one.

Strategic Planning at MDS Oman as an HR activity

One of the main challenge that HR department of MDS Oman faces is to hire the most competent and experienced people who are capable to manage the technical work. For this reason, the HR employees involved in the hiring and recruitment of new employees have strong knowledge and understanding of the company's business. By this they are able to hunt the people with the right calibre, right skills and talent that fits to organizational needs.

MDS Oman consists of 80 employees and the HR department during the recruitment process makes it sure that the right person is being hired for the right job. This is because the company is proud of its experienced and highly capable employees who are working to achieve the goals and targets. The business strategy of MDS Oman consists of the goals for which the highly capable human resource is crucial. Some of the important points of this strategy are given as follows:

Financial responsibility and Entrepreneurship

Regional coverage and local presence

Strong market development and support capabilities

A dedicated family of focused companies

Efficiency, experience and expertise

It is clearly comprehensible that such a strategy can only be carried out with the help of capable human resource. During the selection and recruitment, HR department is required to make sure that the job analysis, job design and task analysis are prepared in proportion to the actual requirements for the job. This helps to recruit the right person with right skills to carry out a job. For example, to carry out the operations of the Finance department, the right person should have sufficient knowledge about financial analysis and budgeting. For this purpose HR department carry out the job analysis which details about the nature of the job, the right set of skills required to perform that job and the working conditions. Once they have been designed the recruitment strategy is planned accordingly. The need for accurate and thorough job information lies at the centre of every human resource activity therefore job analysis is considered as the prerequisite for the effective human resource practices of any organization (Singh, n.d.).

Different characteristics of the job at the MDS Oman will be analysed in order to see that to which extent they are reflection of the business strategy of the company. These job design characteristics are some of the rules and procedures which newly hired employees have to follow. These characteristics have been designed considering the nature of the work, environment and working conditions at the MDS Oman. As the HR's role has now changed and the HR strategy is aligned with the business strategy, all HR related activities are designed and practices accordingly. For example if the working conditions are dangerous then organization must provide the medical and life insurance facilities in order to compensate for any potential loss.

Working Hours: The Company's working hours are from 08:00 am till 05:30 pm with one hour lunch break. Two days in a week (Thursday and Friday) are taken as off. These are standard working hours which comply with the country's labour laws. Also these are official and formal working hours in which services can be provided to clients.

Performance Evaluation: There is simple criterion which is being followed at MDS Oman to evaluate the performance of an employee over the period of a year. The performance is evaluated by the immediate supervisor or the Division (department) head. However there are no complex criteria such as targets, milestones etc. which help to evaluate the employee's performance. As the company provides IT related services and its business strategy focuses to expand the growth, such an evaluation criteria cannot be considered sufficient. One of the important missing factor is the feedback from client which should be catered in the performance evaluation of the front line employees. Similarly feedback from the subordinates about their supervisors is an important aspect of the performance evaluation of the managers. These factors are missed in the performance measurement.

Medical and Life Insurance Policy: All Oman based MDS employees are entitled to 24 hours group life insurance against given conditions such as death, accidental death, permanent total or partial disablement from accident, temporary disablement and any other repatriation expenses. The life insurance policy also follows the standard labour laws. Apart from the life insurance the company provides the medical coverage to the employee, spouses and three dependents up to the age of 18 years. Medical and life insurance policies comply with the regional and international standards for the HR policy.

Intercity, local and Air travel: Company facilitates to provide the residence and local and international traveling for its employees. Employees are subject to avail the concessions in their local and international travels. These traveling facilities are different for the business and other purposes. Employees are required to make a travel request in order to avail these services.

All employees at MDS Oman follow these rules and regulations as part of the company policy. These rules and procedures as part of the job design are prepared according to the nature of the work performed at the organization. Similarly at the time of selection, new candidates are provided with the requirements of the job, skills required to perform the job and brief scenario of the working conditions and organization's HR policy i.e. pay scales, medical allowances, benefits, etc. The company attracts the potential human resource from all around the world. Keeping in focus the job requirements and the organization's goals, the recruitment and selection activities are carried out which helps to screen out the potential candidates who have the right skills to perform the required job.

Part 4: Conclusion and Recommendations

MDS Oman strives to perform its HR practices which must comply with the organization's vision, mission and goals. The employees who work at MDS Oman are capable to perform their job duties and responsibilities. HR policies are designed according to the nature of the work, the business requirements, working conditions and the job environment. However there are some areas in which organization needs to improve its strategies in order to attract and retain the most efficient employees. This ultimately will lead to a smooth running of organizational activities.

The performance evaluation mechanism at MDS Oman must be improved. Currently the performance is being evaluated in a very simple way in which employee's immediate supervisor or division head works to make an evaluation. This evaluation is carried out on yearly basis. Rewards and bonuses as a result of the performance evaluation after a year doesn't encourages employees to perform well and do extra-ordinary. The motivation level of employees is not increased and they follow certain set procedures and rules to perform their jobs. On the other hand, in modern day organizations, employees are being empowered with certain powers which helps them to stay motivated towards work.

An important aspect for the effective HR planning is that the compensation and benefits given to employees must be fit according to the organization strategy. Compensation strategies effect the organization's growth strategies. A growth strategy's focus on the innovation, risk is directly linked to the HR's pay strategy that shares risk with the employees and gives them opportunity for higher future earnings by having their share in whatever the organization will have. Linking HR strategy with the organizational strategy proves to be really effective as the employees trace a target to follow. At MDS Oman, there are no such practices followed by the HR department. However according to the nature of the business the employees can be given lots of opportunities to make effective contributions which will ultimately help the organization to achieve bigger targets.

To be innovation and creative is one of the important factor for the efficient working of employees in an organization. Different organizations across the globe provide opportunities to their employees in which they come up with the new and creative ideas which can help to make the work more effective. For example, at Microsoft, engineers are given a certain day to create whatever they want. And in this way, employees do come up with new things which organization uses in its business. For an IT related business provide, innovation and creativity are important for the fast growth.

The organizational structure of the MDS Oman hinders to have effective coordination among different departments. In the functional organizational structure employees in each department have knowledge about their own departments. However for a company like MDS Oman, the inter-department coordination is an important factor. The company should add the coordination mechanism in the structure. HR strategies like job rotation and job enrichment can be used to make the employees know and understand the working of different departments.