Performance management poses special challenges for a retail organization with outlets nationwide.
Robyn Batson has been people and development manager at women's fashion retailer Susan for two years. Before that she worked with Coles Myer, lectured in Human resource and spent periods in career counseling and project management in the not-for-profit sector.
Batson describes her company's performance review system as participative, simple and forward looking. 'it looks at financial results and key result areas for the previous year, and establishes business and personal goals aligned to the business strategy for the next 12 months'.
Susan's 210 store managers in Australia and New Zealand report to business managers with responsibility for 15 stores each. Batson says CEO Felicity McGahan is passionate about building a high performance culture. 'she visits stores regularly, connects with staff and engages them so they understand that they are listened to.'
The quality of relationships between managers and employees influences recruitment, performance and retention, says Batson. In retail, employee engagement is critical to providing good services and minimizing staff turnover. 'But often managers find it difficult to articulate what an employee is doing well or not so well. They struggle with providing timely and constructive feedback and speaking to employees openly and honestly. Employees expect to be recognized and rewarded, and this is the key to retention.'
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She acknowledges that managers are a mix of people. 'Some are very task-focused and concerned about getting the stock out and the money in the till. If they were good at having regular discussions with staff, providing feedback, developing people and setting development plans, there would probably be no need for a formal performance review system.'
She knows form her broad experience that dealing with young workers can be confrontational. Generation Ys are very good at giving feedback to their managers. They will tell you if they don't like something or disagree with you. If they are not happy, they will leave. A lot comes down to their day to day experience with their manager and team, and whether they feel there are opportunities for on-going growth and development. They are not just thinking about today.
In an industry short on skilled staff, especially in NSW, it is vital Susan trains its store managers to deal with people effectively. 'We have to educate them to understand how expectations of the workforce have changed, some people might want to be with you six months, others may leave, work in different careers or industries and eventually come back with new skills. It's therefore important that they have a positive experience during their time with us.'
Work on these areas in particular: _ reporting in Performance Management System _ communication is important in building a high performance culture _ leadership is important in building a high performance culture _ recruitment is linked with relationships _ performance is linked with relationships _ service quality and retention is linked with relationships and engagement _ feedback should be constructive and timely _ good performance should be recognized and rewarded _ reward and recognition is linked with retention _ informal performance management is good _ retention is important due to lack of skilled workers _ people want training and development _ unhappy employees leave
In the current era of high business competitiveness in which we live now, business organizations operate in an ever-changing dynamic environment, and so must be able to adapt to circumstances in order to stay ahead of the aggressive competition. In today's business organizations, human resources are the major asset to gaining an edge over the competitors and the achievement of organizational efficiency and success. This paper will critically analyze human resource management functions like staffing, executive relations, performance, training and development. Human resource management has been described as "a strategic approach to the management of employee relations which emphasizes that leveraging people's capabilities is critical to achieving sustainable competitive advantage, this being achieved through a distinctive set of integrated employment policies, programs and practices. (Bratton, J. & Gold, J. 2003)
Thus, Human resource management handles not only recruitment, payment and discharge, but also tries to maximize the use of the human resources in an organization in a more strategic level, human resource management provides managers with the tools and skills to enhance their own performance and that of the employees. This paper also focuses on the tasks required of human resource management and the manner in which employees and human resource managers are supposed to work together in order to achieve organizational efficiency. Some current theories and concepts of human resource management will also be discussed here, highlighting their merits and demerits
ANALYSIS OF Human resource management FUNCTIONS
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Proper functioning of a human resource management system entails the creation of values and involves acquisition, development, motivation reward and maintenance of the human resources (staff) of an organization. This includes activities such as human resource planning, job analysis, employee selection, employee recruitment, performance appraisal and human resource development. (Stone 2001, p.13) The basic human resource management functions generally include the planning and forecasting of an organizations short term and long term human resource requirements, and performing analysis of the jobs in the organization in order to determine staff duties, purposes, knowledge skills and abilities that are needed. The staffing of an organization includes the identification of job applicants and selecting the most appropriate staff for any available jobs. It is also inclusive of performance management and remuneration, evaluation and appraisal of employees' performance and analyzing and motivating employee behavior. Other staffing functions of human resource management are the improvement of work environments and effective working relationships (Kramar, R., McGraw, P., Schuler, R.S. 1997 p.6)
The secondary aim of human resource management involves job design/organizational design, which has to do with interdepartmental relations and organizing and defining jobs. This also includes systems of performance management which are used for the establishment and maintenance of accountability throughout the organization, and also information and research systems which enable management to make informed human resource decisions. "These Human resource management functions should not only be handled by Human resource managers but by all managers, regardless of their functional area and their position in the hierarchy. These top personnel must be able to deal effectively with Human resource issues because they should be responsible for the effective utilization of all the resources at their disposal (Ivancevich, 2001, p.14).
TRAINING AND DEVELOPMENT
The human resource management department is responsible for supporting the top personnel's human resource responsibilities. One way in which the human resource management department can support the top personnel's duties is by carrying out training of the personnel in certain human resource skills, to enable them to properly analyze the people side of productivity, rather than complete dependence on technical solutions to organizational problems. These can also be actively involved in the formulation, implementation and review of the organizations human resource strategies and plans in order to increase commitment to the effective implementation of these strategies and plans.
It is important for the top personnel in the organization to be knowledgeable about human resource issues and such a background would be an asset to the organization. This enables human resource managers to become part of the business team, as they also became strategic partners with top personnel and assist in determining a strategic direction for the organization. This can be done by ascertaining the specific organizational needs. According to Garrat (1990) "for an organization to survive, learning in the organization must be greater or at least equal to the degree of change" (Garrat 1990)
Nowadays, human resource managers must be more strategically focused and business oriented. Human resource managers must endeavor to be sensitive to market changes and the need for flexibility and adaptability in their organizations. "Hence, human resource managers now practice four key roles namely the strategic partner, administrative expert, employee champion and change agent. This means that Human resource managers now become an essential part of the management team, running an organization and contributing to the achievement of the organization's objectives by translating business strategy into action. It also means that Human resource managers have to be more efficient and effective in managing Human resource activities like selection and appraisals. Lastly, Human resource managers are also required to be the employee's voice in management decisions and to act as a catalyst for change." (Stone, 2001, p.11) This can be done by ascertaining specific organizational needs in order to use its competence. Use and satisfaction are evaluated in other departments, management and employees are educated about the availability and use of Human resource management services (Ivancevich, 2001, p,.15).
Human resource Mangers are supposed to be the administrative experts, in an organization, the employees' champion, strategic partner and change agent. Human resource managers are essential part of the management team who are running an organization and thereby contributing to achieve the organization's objectives by translating into action the business strategies outlined. This implies that the Human resource managers need to be more effective and efficient in the running and management of Human resource activities like selection and appraisal. Human resource managers are required to be the employee's voice in management decisions and equally act as agents of change.
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To create a competitive advantage. This will enhance the employee's productivity and quality towards the company's goals and objectives on a) Employee's knowledge of foreign competitors and cultures.
b) Basic skills to work with new technologies c) To understand the company's cultures, innovation, creativity and learning.
d) Ensure employment security e) Prepare employee's to work more effectively with each other, particularly with minority.
Compensation - Developing an attractive pay structure according to the proper job structures by attaching other benefits like incentives, allowances, overtime, increments, well insured on workmen compensation, benchmarking the pay structures according to the market competitiveness, a proper future plan for the employee's and finally a retirement benefit.
Performance Management - Is a process for the managers to evaluate their employees' activities and output is congruent with the organization's goal on gaining competitive advantage.
This involves treating employees as valued assets, there is need for management to see them as proactive rather than passive inputs, and their trust should be gained, participation as well as their collaboration (Legge 1995, p 67) In the process of transmitting theories and models into practice, employees lack commitment, communication and motivation when hard approach is employed by management. It has no become obvious that hard approaches no longer work or favor employees today as people are well informed and enlightened and everyone know their rights and as such demand for a better treatment. On the other hand, when the soft approach is used by organization, the results are completely different. In a case study conducted in the united state, it was discovered that a on standard deviation increase in the use of people first practice is associated with a 7.05 percent decrease in turnover. $ 27,044 more in sales and $ 18,641 and $ 3,814 more in market value and profit (Ivancevich, 2001, p.10)
There are advantages and disadvantages in every approach, the hard approach, rules, and goals are well defined and strictly adhered to and this means employees are not involved in decision-making, and this is likely to result in decrease in motivation and commitment. On the other hand, the soft approach which may increase motivation ands commitment because the employees see themselves as part and parcel of the organization, but this may be unorganized if rules and goals are not made clear and this in turn will affect the firm's profit
Human resource managers have to be sensitive to changes in people, competition and market since they have become more business oriented and strategically focused; they also have to be aware of the need for an adaptive and flexible organization (Harvey and Bowin, 1996, p.21) Human resource management models and theories are usually based upon values, assumptions and beliefs about the nature of relationships between employees and their employers and the various human resource functions involved (Nankervis et al 1999 P.16). There has been quite some debate concerning the issue about whether human resource management is essentially pluralist or unitarist in its perception of the employment relationship. A pluralist approach recognizes that employees and their employers will inevitably experience conflicts of interest that will have to be resolved by the human resource management department in order to meet organizational goals. A unitarist approach on the other hand, assumes common interests between employees and their employers, and tries to encourage both by an inclusive (communication and rewards) system, and an exclusive system of discouragement of membership to unions.
There are two extreme theoretical approaches to human resource management. These are the instrumental (hard) approach and the humanistic (soft) approach to human resource management. The hard approach stresses the quantitative, rational and strategic aspects of human resource management, with the highlighting of competitive advantages and performance improvement. Contrastingly, the soft approach emphasizes collaboration and development of employees. (Stone, 2001, p.10)
Different models have been developed to accommodate the diverse industry and workplace environment in which they operate. The Storey model: this was developed by Storey, and it centers on four parts and they include beliefs and assumptions, line management and key levers, strategic aspects, this goes to show that Human resource management attempts to increase trust and employee commitment and it aims to go beyond the contract, Human resource management that is central to corporate planning gives the specialist of Human resource management some kind of transformational leadership role in the organization, general managers and line key managers have come out in most cases as the key players on Human resource issues (Bratton and Gold 1999, p.26).
The Michigan was developed by Fombrum, Tichy and Devanna, this focuses on four major key components and they are selection, appraisal, development and rewards. The interrelatedness and the coherence of Human resource development activities is emphasized by it, and it aims to increase organizational effectiveness Human resource management policies. The interest of stakeholders are ignored (Bratton and Gol;d, 1999, p.18).
The Guest model was developed by David Guest, and it has six components and they are a set of Human resource management plicies, Human resource management strategy behavioural outcomes, a number of performance outcomes and financial outcomes. This happens to be a more prescriptive theoretical framework that reflects the view that superior individual and organizational performance can be achieved by a core set of integrated Human resource management practices. Guest central hypothesis is applied in a coherent fashion with the view to achieve normative goals of high commitment, high quality etc it will result to superior individual performance. It has a weakness and it is the fact it defines Human resource management as a particular style (Bratton and Gold, 1999, p.20)
The Harvard model was developed by Beer and Spector, laid emphasis on six basic components like situational factors, Human resource management policy choices, stakeholders' interest, Human resource outcomes, long-term consequence and feed-back loop issues like management philosophy, workforce characteristics, it recognizes the importance of trade-offs and high employee commitments to organizational goals etc. its weakness is that there is lack of coherent theoretical basis Human resource management Input outcomes
The Warwick model developed by Hendry and Pettigrew and it has five elements, they are outer context, business strategy context, inner context, Human resource management context and Human resource management content, this one takes into cognizance both Human resource management business strategy and Human resource management practices, the context in which these activities take place both internal and external and as well as the process by which such change take place, that includes interaction between changes in both content and context. Its weakness is that the process by which Human resource management practices are linked to business output or performance is not developed. ( Bratton and Gold, 1999.p.23)
To summarize these models, the hard ones like Warwick and Michigan lay emphasizes on the calculative , quantitative and strategic aspects of business and of managing head count resource in the same way rational a way as any other economic factor, close integration of Human resource policies systems etc are stressed and the achievement of such an effect by their own coherence. On the other hand, soft models like Storey, Harvard and Guest emphasize importance of integrating Human resource policies with the objectives of business.
Some of the problems that Susan faces, and which most managers also face, include the fact that she may have a tough time recruiting the right specialists who possess the right skills (including language skills) because of the fierce competition in the private sector and its bonus culture. Secondly, she might have a big struggle if she tries to turn the technocrats and other related specialists in the company into decision makers. The staff may tend not to generate the type of enthusiasm that leads to an adoring followership from the staff. So that even without the specialization factor, the overall people challenges faced are quite similar. The challenges are also intensified by the multicultural mix that is inherent in most international corporations and it is quite tasking to manage and motivate this kind of cultural and multinational creed mix effectively, as change does not come easily within a short period of time. The only way, then to effect change in these organizations is to strongly apply pressure to any institutions in which there is some progress made.
In the past, corporate institutions solved their problems through analytical methods of breaking down the problems into smaller divisions, fixing components and carrying out an assessment of the expectations of familiar sequences of success or failure, and determining the loss, if any. In today's global economy, problems of this nature are seen as tame problems. Tame problems enjoy a larger consensus, as most people in an organization reach an agreement on why a particular action should be taken, and also agree about how best to go about doing this.
In order to solve tame problems, systems are developed for gathering and analysis of data, so that a solution can be formulated and properly implemented. Some of these tame problems may not be simple, as some tame problems are still quite difficult to solve. Although these days the use of computers and other business machines have enabled multi-cultural companies and their staff to carry out international business processes faster, there are still some situations in which dramatic failure results because things have actually become more complicated than they were in the past. Managers are increasingly faced with problems of organized complexity, clusters of interdependent or inter-related challenges, or even a whole system of problems.
Some of these problems usually referred to as 'messes' cannot be solved in relative isolation from each other. Messes are sorted out through a system of modeling and methods, and by concentrating on inter-disciplinary approaches and processes. Here, it is better to examine the interaction patterns among various parts, instead of simply breaking the problem down into parts and tackling the necessary components
Managers will do well to carry out a business SWOT analysis which will highlight the strengths, weaknesses and opportunities their corporations have, as well as any threats that they might be facing. The SWOT analysis is recommended because it helps managers to ascertain opportunities that can then be exploited, even with very little thinking. Also managers are enabled to eliminate any possible threats to the business by gaining an understanding of the weaknesses of their companies in an international market
In order to achieve success on an international level, mangers have to recognize the gaps that have to be addressed, and identify the strength of skills and perspective among the current leaders in the firm. It also essential to identify the factors that can impede the success of the corporation, and investigate the specific leadership skills required to ensure organizational success.
A properly functioning Human resource management system is an invisible asset that creates value and involves the acquisition, development, reward and motivation, maintenance and departure of an organization's human resources. This includes activities like job analysis, Human resource planning, employee recruitment, employee selection, performance appraisal and Human resource development, among others. Human resource management consists of 4 important functions including staffing, selection placement, and compensation and performance management. Human resource managers have to be sensitive to changes in people, competition and market since they have become more business oriented and strategically focused; they also have to be aware of the need for an adaptive and flexible organization.
There are many discussions about effectiveness of Human resource management in an organisation, and not all of them agreed with each other, although their main point is same. As part of the overall change in the nature of Human resource management, the extent of involvement by the Human resource management function in the lives of individuals and the community is increasing. Traditionally the focus was limited to employees in the organisation. However, in last years with a greater awareness of the importance of well-being and the role of family and community in determining well-being, the Human resource management function needs to be involved more widely than before. This impact reaching the broader community and includes involvement in socio-economic activities and legislation issues. This might be witnessed in some companies today, their employee benefits include family health insurances, family vacation trips, and so on.
Although it is said that there is no particular set of policies about Human resource management, which can suit to all organisations, that Human resource management approach may vary from country to country, company to company, but after reading some academic literature, I came to a conclusion that there are some major frameworks about increasing the performance of an organisation, and MAP (http://www.mapnp.org/) seems to have summarized those as followed:
Administrative systems for the management of Human resource should be simple to use, easy to understand, continuously improving, and cost effective;
The quality and effectiveness of Human resource management administrative support should be measured by their contributions to achieving the organisations mission, goals, and priorities;
Human resource management staff advisors should be viewed as part of the management team, not servants of management or the system's police. Creating a flexible and responsive hiring system, improving performance management systems, creating objectives of employee training and development, and targeting those objectives, improving workplace due process, focusing on equal employment opportunity to achieve results, establishing employee-management partnerships
Also, Human resource advisors should have basic knowledge about all other different fields of organisation, for instance, as part of their responsibility they have to deal with different benefits such as insurance coverage, bonuses, etc. While all these benefits can be called as compensation and compensation has its financial costs, therefore Human resource specialists should have basic knowledge of Finance.
These above issues may require dramatic changes in the roles and responsibilities of line managers and their Human resource management advisors, and in employee-management relationships. Managers must have access to quality, responsive advice, and assistance from Human resource management professionals who truly understand the organization's Human resource management needs. Personnel officers must shift from processors of paperwork to responsive consultants and advisors. This shift requires Human resource specialists to view the manager as a customer with needs to anticipate and meet with responsive service. These changes in roles and relationships must include similar orientation toward the workforce. Cooperative relationships with organized employees must be established and maintained, and also, unions should participate in this as partners. Usually smaller size businesses have to carry out these activities themselves, because they can't yet afford part or full time help. However, they should always ensure that employees have and are aware of personnel policies which conform to current regulations. These policies are usually in the form of employee manuals or company policies, which all employees should have.
Due to the increasing complexity of Human resource management, most of larger size organisations today have established a Human Resources Department, but not all of these organisations perform all of the Human resource functions and activities. The organisational context in which Human resource management finds itself at present is one of rapid change and considerable uncertainty. This is explained with various internal and external barriers such as, lack of Human resource managements status within an organisation, top managements attitude to Human resource management, lack of knowledge and skills of Human resource staff, competitors, government legislations, economical influence, etc.
To overcome those above mentioned barriers and limitations, and to increase the effectiveness of Human resource management in their organizations performance Human resource specialists have to increase their skills and knowledge which are necessary to undertake all tasks and prove the necessity of Human resource management in order to be effective in today's competitive market.
The human management field has emerged as one of the most important assets for organizational success, as Human resource management is now strategically focused and business oriented. Thus, managers and other top personnel in an organization should work together to successfully tackle market changes and any changes in the competition. Managers should also be aware of the need for flexibility and adaptability in an organization.
There must be continued appropriate staff training as this enables the staff to get to know how human resource management can boost business and how employee performance can be improved. As Buller (1988) noted, the degree of integration between organizational and human resource strategy is influenced by an organization's philosophy towards people. (Buller 1988)
Relevant human resource theories and models should be integrated into the workplace, as the soft approach to human resource management produces more positive results than the heard approach, due to the fact that a soft approach to Human resource management involves the employees, thereby resulting in more motivation and commitment. More attention should also be given to theories of individual motivation and the organization should develop a more psychological approach to organizational strategies.
Good managers commit to memory that focusing on the simple things will often yield the major benefits. In general, managers are selected based upon their functional proficiency. However, being a good manager is about getting results through people. In other words, a manger must stand back and progressively assign responsibility to the resources - people - around him/her, because the superior objectives cannot be attained alone. Accomplishing through other people is one of the leading challenges in management.
Managers are of course accountable for managing the assignment and complying with the vision and strategy of the organisation, they must understand that the biggest portion of their time will be spent managing people. A manager needs to plan what he/she is trying to do and be creative with the resources he/she has. Organise his/her people, train them and set individual targets. Then assign tasks and if required employ more people. Stimulate his/her team so that they enjoy their work and the environment, and make them feel looked after and esteemed. Of course, a manager must also persistently check that things are moving according to plan. Mangers must not lose touch with the need to accomplish results, but should treat their team with a human touch.
"Manage people as they want to be managed, not how you think they should be managed".
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