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Human Resource Management (HRM) came into popular term over the past decades as a top managerial approach aimed at re-ordering the employment relationship to ensure employee efforts were strategically focused on achieving superior individual and organisational performance and competitiveness in increasingly volatile markets. All companies including British Gas are now paying considerable attention to make strong bond between HR practices and employees and organizational performance. The main purpose of this unit essay is to discuss about HRM as an approach to managing human resources such as labour in British Gas.
1.1 Explain Guest's model of hard-soft, loose-tight dimensions of HRM. (P1)
The most widely acceptable models of HRM are the soft and hard versions. The soft model is associated with human relation and the hard model on the other hand sees employees as human resource (Gratton et. al. 1999). The soft model assumes that employees respond better when an organisation recognise their individual needs and addresses them as well as focusing on the overall business objectives. The hard model primarily focus to promote human resource planning strategy, align with business strategy, outsourcing, flexibility, performance management and downsizing or work intensification.
Some HRM models have been developed by UK academics including Guest and Storey. Guest has identified key features of personal management and HRM that allow for comparative measurement and acknowledging the close links between human resource strategy and general business strategy (Bratton and Gold 2003). The Guest model of HRM is given below:
Organisational job design
Policy formulation and
implementation/management of change
Appraisal, training and
Manpower flows - through, up and out of the organisation
High job performance
High problem solving
Low grievance level
(Adopted diagram from Guest 1997)
The model highlights the below key points:
Linking to the strategic management of an organisation (Bloisi 2005)
Seeking commitment to meet organisational goals and quality of work
Focussing on the individual needs rather than the collective workforce to decrease turnover and absence
Enabling organisations to devolve power and become more flexible
Focussing people as an asset to be positively utilised by the organisation (Bloisi 2005).
1.2 Review the differences between Storey's definition of HRM and personnel and IR practices. (P2)
There are some differences between HRM and Personnel Management (PM) and Industrial Relation (IR) practices as there are a lot of different views and contradictions. HRM is a new managerial discipline that has different perspectives of PM and IR, but create a new and broader disciple as a results of different views and contradictions of these two (Beardwell and Holden 1997). The main aim of PM and IR is to serve the objectives of the employer, towards an approach which seeks to gain the commitment of the employees and aims to satisfy the requirements of stakeholders. On the other hand, HRM is a theoretical strategic approach of competitive advantage or organizational success factor of tomorrow and it should be strategically integrated and aligned with the business strategy.
Storey (1992) has established a theoretical model based on how an organisation has evolved from PM and IR practice to HRM practices is called 'a model of shift to HRM'. Storey has underlined 27 points of differences between PM and IR against HRM. These points are grouped into four categories:
beliefs and assumptions - e.g., PM and IR requires the careful delineation of contract while HRM seeks to encourage employees to 'go beyond contract'
strategic aspects - e.g., PM and IR takes time to take decision while HRM takes customer oriented approach with fast speed of decision making
line management - e.g., management role with line managers in PM and IR is transactional while it is transformational in HRM
key levers - e.g., communication in PM and IR is restricted while in HRM it is increased; and pay is evaluation based in PM and IR while in HRM pay is performance based.
If these two strategies are not closely aligned, the organisation will find itself pulling in different directions and not making any progress toward meeting goals.
1.3 Analyse HRM from a strategic perspective and its implications for the role of the line manager and employees. (P3)
For competitive advantages, an organisation should change old ways of doing business where most of the burden and responsibility of change will fall onto first-line managers of HR. They share the burdens and responsibilities with other line managers and employees. The first-line managers play a crucial role in making strategies for HRM because they are responsible for executing HR practices at the workplace (Nehles et. al. 2006). If these strategies are not identified and created consistency across business units to ensure closely aligned towards the attainment of corporate objectives, the organisation will find itself pulling in different directions and not making any progress towards meeting goals. The challenges for line managers are given below:
Rapidly changing of technology that lead to the changing of business environment
Pressure to "do more" with fewer resources to minimise production and other cost
Downsizing of the employees to cut labour cost
Greater workforce diversity as customers expectations are too high
Increasing gap between available skills and required skills for a job.
The line managers need employees with up-to-dated skills, multi-skilled, committed toward organisational missions and visions and competency for role play. The line managers also need tools and information systems to make quick and effective decisions. The line manager is directly accountable for the program impact of HR decision, while the HR team or employee is directly accountable for the compliance of the action.
HR managers and employees must need a range of skills to cope with the change and make a productive environment. In this case, HR department provides full support and takes the lead in helping managers identify the core knowledge, skills and abilities required to support the company's competitive advantage (Buhlel 1999). For example, for a specific task, HR department may need to conduct an assessment and identify particular training needs. Then HR training specialist will be called up to actually deliver the training program. The HRM should do the following for managers and employees regularly otherwise business objectives will not be met in the long term.
Providing training for such as problem solving, decision making and change management
Creating positive environment
Providing feedback and counseling on the options available to accomplish particular task/program with timely and professional manner
Providing assistance with timely manner
Supportive attitudes shown by the HR teams
Collaborative relationship between line manager and HR team to effect needed action.
2.1 Review and explain a model of flexibility and show how this might be applied in practice (P4). Show how the case company might identify and apply this model to solve their workforce issues (M1).
Flexibility refers to adjust and deploy the skills of its employees to match the skills required by its changing workload and production methods. Professor Chai Feldblum said "We believe workplace flexibility is good for employers and employees, so it's worth the effort to get it right for employers and employees" (Gurchiek 2009). HRM can design a job where employees can work with flexibility considering the issues such as scheduling of hours work such as nontraditional start and end times; the amount of hours worked such as job sharing, phased retirement and part time work; the place of work such as a remote location or home; and changing work hours over the month or through the year depending on the demands of the job such as working more hours during busy periods and taking time off in quiet times. Review and explain a model of flexibility and show how this might be applied in practice (P4) Show how the case company might identify and apply this model to solve their workforce issues
Workforce flexibility increases productivity and job satisfaction. It helps the company to become top in the markets maintaining the culture of diversity and tolerance. The flexibility depends on the nature of the job. HRM will need to ensure that the organisational culture is tolerant of alternate work schedules.
The British Gas can provide 24/7 services to its customers and distribute its workload throughout the day as part of diversity and good customer services. More staff can be scheduled to work at peak time and less staff for off-peak time. The company can employ some staff who can work from home or remote area to reduce cost and provide better services to its customers within possibly less waiting time. The company needs to provide adequate training and support including equipment so that staff can work from home or provide services on demand to its customers. As a result, the company may need to pay less salary to such staff. For example, staff working from home or working on demand doesn't need to travel and/or can look after children home at the same time and as a result, they can work at cheaper rate than staff working at office.
The company can employ local and nationwide staff on demand rather than employing them permanently to provide a maintenance and breakdown service for electrical goods and home wiring. The staff can be paid depending on number of services they provide. In order to provide quick and quality service to its customers, many staff working from home or staff working on demand should be employed and trained and reviewed their performance regularly. The company should randomly record and review staff telephone conversations and services provided to its customers operating a customer satisfaction online or postal survey. These resources can be used to train staff as well.
2.1 Review and explain a model of flexibility and show how this might be applied in practice (P4) Show how the case company might identify and apply this model to solve their workforce issues. (M1)
2.2 Describe the need for flexibility and the types of flexibility which may be developed by an organisation and give examples of how they can be implemented (P5).
The employees need for flexibility at workplace. As a result, they can work better and more productive way than others. The need for flexibility at work place is given below:
employees can look after children at home or spend more time with children and can reduce childcare cost
older workers could remain longer if number of hours are reduced
makes positive difference in retention and stress among lower-wage employees than their more advantaged counterparts
increases moral, job satisfaction and higher level of engagement (Drucker 2010)
decrease stress or turnout
attract talent people in the organisation
reduce consumption of employee commuting time and fuel costs.
Flexibility can be different types such as flextime- allows employees to select their starting and ending time within a range of hours, reduced time, flex-leave- allows time off during the workday to address personal and family issues and flex-career- allows multiple points for entry, exit and re-entry.
A company like British Gas needs to decide the scope of flexibility and make a plan considering all possible options for flexibility at workplace. The company can implement flexibility in the following ways:
develop a business case looking at comparable companies like nPower, EDFEnergy and Southern Electric and their experiences with flexibility (Friedman D. E. 2010)
reviewing existing and past programs and company policies to see how well they are working and what needs improving
determine flexible work options, negotiate with employees if possible and review.
introduce a pilot scheme to see how they work before fully implementing them
help supervisors and managers to learn new ways of managing, including how to solve problem and look for win-win solution (Friedman 2010).
2.3 Evaluate the advantages and disadvantages of flexibility working practices from both the employees and the employer perspective (P6).
Flexibility is a management tool that can benefit employers and employees but it may not be welcomed by all employees of an organisation. Research shows that 78% of respondents reported that having access to flexible work options contributes to their success as employees to a moderate or great extent (Pitt-Catsouphes 2009). So flexibility should be applied creatively and it works best when all employees and customers are involved in the process of developing flexibility.
Flexible workplace helps organisation - if employers and employees get flexibility while they take decisions, they can do much better way and can save a lot of cost and bring a lot of revenue for the business.
Flexibility in workplace help the employees - providing flexibility like working from home and limited employment could ensure that employees are at their optimum working level.
Lower wage workers are more likely to report that using flexibility will negatively affect their advancement (Richman 2006)
If the employees are not responsible enough and/or they are not monitored regularly, the business might actually face lack of productivity
During the hiring of the individuals or employing someone, flexibility options should be discussed in detail and care should be taken into consideration to ensure that only candidates who are serious about their jobs, careers and professions will be employed by the company. Indeed, the success or failure of the implementation of flexibility depends on how well the employees take it, how they use it to become more productive, instead of finding ways to shirk work and how the management assists them to implement it. The company should consider a range of workplace factors such as extent of access to flexible work options, supervisor support of flexibility, negative work-family culture and extent of utilisation of flexible work options to bring full advantages of flexibility at workplace (Pitt-Catsouphes et. al. 2009).
3.1 Describe the forms of discrimination that take place (P7)
Recruitment and selection have been considered as areas for discrimination. In general the following two forms of discrimination take place (Bratton and Gold 2003) during recruitment and selection process:
Direct - where employees of a particular gender, race, age, colour or ethnic group are treated more favourably than other employees. For example, a policy to recruit only young persons to field workers.
Indirect - where particular requirements treat everybody equally but discriminate to a particular group where the requirement cannot be justified. For example, applicants for field workers should be 1.85 metres tall could result in a low proportion of female applicants.
3.2 Review how the legislative framework and any proposed changes relating to discrimination in the workplace can be applied by an organisation (P8). How has the above case company designed their recruitment policy to apply relevant law to avoid discrimination (M2).
All organisations should be aware of legislation concerning discrimination in employment and have a duty to protect their employees from any discriminatory behaviour. According to the law, it is unlawful to discriminate against anyone on the grounds of their sex, age, race, disability, religion or martial status in recruitment, selection, promotion, pay, training, hiring, transfer, dismissal and all other activities and responsibilities related to HRM.
An organisation like British Gas should avoid discrimination during recruitment and selection process. This is not only a legal requirement but also it gives the best chance of getting the right person for the job. The following changes can be proposed relating to discrimination in the workplace to avoid discrimination during recruitment:
Ensure that best people are recruited on merit and the recruitment process is free from bias and discrimination
Application form should contain minimum of personal details and some specific questions to avoid discrimination during selection process such as asking candidates to indicate special requirement to attend interview
During interview, certain questions that are relevant to the person's ability should be asked only but must not be asked something that discriminate from other
Assessment such as skill test and interview should be fair, reliable and valid throughout the recruitment process
Fully investigate if a complaint of discrimination is made against selection
Monitor recruitment process and update and review all policies regularly to meet employment law requirements fully
Must take care while carrying out necessary checks such as checking necessary documents to ensure that the candidate has right to work in the UK.
3.3 Explain a range of current initiatives and practices which focus on equal opportunities in employment (P9).
The HRM should follow rigorous and fair selection process to recruit suitable employees to ensure equal opportunity is everywhere. After employment, each employee should get equal opportunities to get promotion, development, training and to get all other facilities provided by the organisation, and terms and conditions are based solely on job related ability and merit. The British Gas should consider the following initiative and practices which focus on equal opportunities in employment:
All managers and employees should have training on equal opportunities
Review the effectiveness of the policy and identify practices that may lead discrimination
Advise and take swift action if it is expected that discrimination is taking place
Make arrangement so that employees can make complaint easily regarding any issue of discrimination and they are kept well informed the progress of the complaint
Look creatively at new work patterns, employee practices and flexible working and promote the idea of equal opportunities throughout the organisation
All staff should be treated with dignity and respect at work
Employers should make an environment to prevent bullying and sexual harassment as they lead to job insecurity, illness, absent from work and even resignation (ACAS 2009)
Equal pay and disability discrimination policies should be implemented seriously at workplace
Because of ill health, dismissal from job must not be taken place and if it does, it can be considered as discrimination.
3.4 Compare and contrast equal opportunities and managing diversity (P10).
In order to promote equal opportunities and diversity at workplace, first thing is to have equality and diversity policy, then it is backed up by action plan to promote the policy at workplace and ensure that it is understood and followed across the business including areas such as recruitment, training and pay to avoid discrimination (Web1 2010).
In order to minimise or avoid the chance of discrimination over equal opportunities and managing diversity, the organisation needs to monitor the process following the steps:
Collect monitoring data providing separate monitoring sheet with application form, through appraisal, performance evaluation and direct complaint and filling direct monitoring form
Analyse collected data confidentiality
Review policies and action plan where necessary.
4.1 Explain performance management in practice (P11). Using examples describe how organisation organize and manage performance appraisal activity (D2) and communicate these findings to the relevant human resources manager (M3).
Performance management is one of the responsibilities carried out by top management to examine actual practice at workplace (Pollitt 2002). The senior managers should carry out a performance review and provide feedback regularly or at least once per year to their fellow employees providing an opportunity for discussion of career objectives and progressions, identifying training needs, assisting to develop individual abilities and help in succession planning to maximise career potential. The performance appraisal should cover issues such as salary, promotion, retention/termination, recognition of performance, layoffs, identification of poor performance, job requirements, legal requirements and analyzing past and present performance.
Performance management is a culture in which individuals and groups take responsibility for the continuous improvement of business processes, standards and quality of products and of their own skills, behaviour and contributions (CIPD 2010). The British Gas should organise and manage the following performance appraisal activities:
Arrange appraisal meeting with employees to discuss training required to improve skills, knowledge, standards and procedures and self-appraisal
Let employees to fill in appraisal form
Identify actions that help lead to improvement including the time and goals for the follow-up meeting
Review the agreed activities
Give and receive feedback
Make effective communication at all levels.
Managers and/or supervisors at the workplace should have communications to ensure that each employee's performance appraisal activities are done on time. They should use a common information system possible an online system or intranet that will allow easy storing and accessing of performance reports and training needs information and generate automatic reminder messages regarding performance meeting and any activities due to complete. Using and sharing such information system at workplace, trainers and supervisors can provide effective and specific training to improve staff performance.
4.2 Critically evaluate different human resource practice in the workplace (P12). Use critical reflection to the above justify whether human resource practices are followed at British Gas or indeed any other company of your choice (D1)
An organisation can use many different human resource practices in the workplace to evaluate employees' performance such as performance appraisal, electronic performance, monitoring of quality services, monitoring competitiveness, calculating employee turnover rate, 360 degree performance management feedback system and reviewing safety incident. These practices promote human resource development of an organisation. For example, monitoring of quality service involves the recording of calls, team leader listening to calls, the provision of feedback, coaching on telephone technique and service delivery and the 360 process allows for multiple points of view to be given on any given individual to improve performance and identify training needs.
A decent company like British Gas practices many from the above and does almost everything to maintain excellent customer services. The company has many call centres all over the Europe and provides adequate training and monitors employees' performance regularly.
The British Gas has launched a website called http://www.britishgasjobs.co.uk/ as 'Careers at British Gas'. The website can be developed further to promote human resource development. In order to make aware potential and existing employees, job descriptions of all posts should be available on the website and these should be updated regularly. Potential candidates can be referred to the website. Once there is a candidate, the online system should conduct behavioral and technical tests first, then need a telephone screening, then bring them in for a face-to-face interview. The company can also use self-learning/service software programs within company website to reduce administrative costs and time, to increase information access for employees and managers and improve information accuracy (Price 2007).
4.3 Evaluate the impact of globalization on issues such as human resource planning (P13).
Changes in the global business environment such as rapid development of information and communication technology (ICT), global dimension, currency exchange rate and takeover or expansion overseas have major consequences for HR managers (Price 2007). As a result, factors outside of a company's control that will affect its requirements for human resources and ways of managing them change as well and the organizational needs human resource planning based on cost benefit analysis in advance to use and manage human resources to meet organisational needs and add greater value (Friedman 2007).
Indeed, the ICT and reduction in communication costs has facilitated the globalisation and increased competition. So human resource planning in any organisation is vital to train and develop employees. It should be strong linked with recruitment, selection, career planning and development, performance appraisal and the remuneration system otherwise the organisation cannot compete.
4.4 Review the impact of different national cultures and practices human resource professionals can employ to manage a cultural diverse workforce (P14). Demonstrate convergent/lateral/create thinking while answering the above questions (D3).
National cultures differ mainly in four areas which are labelled by Hofstede (1980) as dimensions and these are power distance, uncertainty avoidance, individualism-collectivism, and masculinity-femininity. Research shows that a human resource policy can be familiar and effective to a country but it may be unfamiliar and ineffective to another country due to cultural factor. For example, pay for the performance scheme is very popular in the USA and UK but it may not successfully be practiced in another country (Suharnomo 2009). Laurent (1986) found that decision making in Germany is more centralised than in UK. On the other hand, organisations in UK spend more money for employee well-being and middle management development program than many other countries (Suharnomo 2009).
Newman & Nollen (1996) indicated that organisation performance is better in the organisations where there is congruency between national culture and human resource practices. An organisation must adjust its management practice in accordance with the environment or national culture to achieve successful organisational performance. For example, career development is stronlgly related to national culture in UK and USA. An employee who has good character will likely be able to use their capability in a workplace with other people. So cooperation is very important for every employee to meet organisational objectives.
Organisations with better learning, training and development systems, reward and recognition, and information systems can promote human resource development and improve organisational performance. These should be measured, monitored and updated staff skills time to time to meet organisational objectives.