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HRM is the organisational function that emphasises on the intake, management and directing the people who work for the organisation. Main issues dealt with in the HRM include, but are not limited to, intake, monetary and non-monetary benefits, motivation, training, personnel development, communication, wellness and performance management.
Characteristics of HRM approach
The main characteristic of the HRM approach is to discover, polish and improvise the potential and talent that people working in the organisation have in them but are unaware of that, thus improving the quality, efficiency, productivity and satisfaction. HRM also aims to resolve any problems and conflicts that employees are facing. Moreover, maintenance of discipline is also characterised by HRM.
Models of HRM:
Following are some renowned models of HRM:
Contingency model: advocates of this model believe that there is no ONE best way of leading an organisation. A style that is effective in one situation may not be of use in another and the best style to be applied depends on the situation being faced and that in turn depends on the internal and external constraints.
The best practice model: suggests to identify best practice, give HR a high profile, get commitment from top management level, implement the best practice and then make that best practice a bench mark for rewarding employees.
Harvard Framework: this model provides that HR policies are affected by situational factors and stakeholder interests. It also states that managers can affect numerous factors by the policies they choose which includes the four Cs i.e. competence, congruence, commitment and cost-effectiveness.
Guest's Model: discusses six factors which are HRM strategy, HRM practices, HRM outcome, behavioural outcomes, performance outcomes and financial outcomes.
Activities of HRM include the following:
Staffing Planning (pipeline development)
Recruitment Information Processing, and
Employee Assistance Programs.
Personnel and HR management:
The difference in personnel and HR management is merely philosophical. Administrative nature to a far greater extent of personnel management than HR management makes it different from HR management. Personnel management mainly includes dealing in payroll, ensuring compliance to employment laws and other administrative tasks. However, in contrast to this, HR management considers the employees one of the most important organisational resource and deals with improvising it.
HR consultancy aims to abridge the gap between the HR competence of the organisation and the complex HR needs. HR consultants' main function is to provide the organisation with the adequate staff it requires. It is a kind of outsourcing.
Role of HR practitioner:
The role of HR practitioner is to develop a skilled work force that contribute to the organisational success, resolve the issues within the human resource and the between human resource and the organisation, to reconcile and align the individual and the organisational goals, to motivate employees and keep their morale at an acceptable level.
Models of HRM roles:
Legge's Model: Legge has divided the models into four main types including normative, descriptive functional, descriptive behavioural and critical evaluative.
Tyson and Fell: defined organisational role as a collection of activities representing a mode of functioning by managers and professionals in HR organisations.
HR activities include the following:
Development of work force,
Resolution of issues of work force,
Alignment of personal and organisational goals,
Integration of organisational objectives, etc.
Functions and roles of HR planning:
The rational process, frequently advocated in strategic planning texts and apparently by many practitioners, emphasizes purposeful activity through a logical formulation of goals, examination of alternatives, and delineation of plans prior to action. It tends to have long-term orientation and focuses on measureable forces affecting the firm, as well as quantitative activities and procedures. The process of the comprehensive strategic planning is topically composed of the following steps:
Development of organizational philosophy and mission statement
Analysis of SWOT
Formulation of strategic objectives
Generation of alternative strategies for achieving objectives
Evaluation and selection of the strategy
Strategic Planning at Corporate Level
Competitive strategies at business level are very relevant to human resources and the development of human resource strategies. Porter's five forces provides good basis for understanding competitive strategies at business level. Porter has argued that there are five forces that can affect the potential profitability of an industry. The five forces are:
The ease with which he new competitor can enter an industry
Bargaining power of the customers
Bargaining power of the suppliers
Rivalry among the competitors
Availability of substitutes for the industry's product and services
In addition to these forces we also have the strategies that allow the firm to compete in the industry by applying one or mix of the following strategies.
Low-cost leadership Strategy
Niche or Focus Strategies
Planning in Strategic Business Unit
Human Resource management can play an important role in strategic planning at the level of the strategic business unit and, as noted, is one of the in value chain analysis. The role may examine the context of human resource input in the development of strategic alternatives. It also called the planning at the different functional units of the organization like, Marketing, Finance, R&D, etc.
Recruitment methods involve setting of requirements for the individual to be hired, primarily. Such an individual may be present in the organisation, in such a case internal recruitment will be done. Thereafter these requirements are advertised.
Advertisement: advertisement can be done in different modes that include giving advertisements in newspapers, journals, web sites. Application can also be made to the recruitment agencies of HR firms.
Selection: once the advertisement has been made, selection is the next phase. Selection can be based on interviews, written tests, presentations, role playing, group discussions, report writing, etc.
Human Resource Development Definition:
Human Resource Development (HRD) is a framework to help employees develop personal and organizational skills, knowledge and abilities. Human Resource Development includes such opportunities as employee training, employee career development, performance management and development, coaching, mentoring, succession planning, key employee identification, tuition assistance, and organization development.
Organisational learning and learning organisation:
It is the study of ways in which the organisation learns and adapts. Whereas learning organisation means an organisation that encourages its employees to learn (be innovative and dynamic) and transforms itself to changing requirements.
Learning cycle: the learning cycle model is based on five Es, including engagement, exploration, explanation, elaboration and evaluation.
Transfer of learning: it means that the skill and knowledge obtained during the training or the learning phase is implemented when performing job.
Effective training methods include the following:
On the job training,
Performance monitoring methods:
Once the selection has been done and the candidates have been taken in as employees they are assigned specific tasks after initial training / orientation. Once an employee starts off with his routine work his performance needs to be monitored in order to ensure that he is delivering what in fact is expected out of him and to reward him as well. Performance can be measured in a number of ways out of which performance appraisal is the most commonly used method. In appraising performance of an employee people who interact with him are asked to comment on the benchmark criteria, generally set in advance. After the appraisal is done the appraised is provided feedback in both monetary and non-monetary terms. Most commonly used performance appraisal methods include the following:
Management by objective,
Graphic rating scales,
Essay evaluation method,
Paired comparison analysis,
360 degree performance appraisal,
Performance ranking method,
Behaviourally anchored rating scales,
Behavioural observation scales.
The main aim of reward management is to establish a relation between pay and performance. Moreover, reward management defines the philosophy / rationale behind the remuneration or the benefits and employee is entitled to reap from the organisation after his performance has been measured.
Factors determining pay:
Following factors determine the pay:
Productivity of employee,
Demand and supply of employees,
Condition of product market, and
Business brought in by the employee.
Job satisfaction and motivation towards working hard does not solely depend on the monetary benefits (hygiene factors) an employee is entitled to, personal growth, self actualisation, work environment and freedom has main contribution towards employees' motivation and job satisfaction. If it is noted that the morale of the work team is not at the desired level then strategies should be put in place to ensure that dissatisfaction is removed which may include stringent discipline and grievance procedures after fully taking the employees in confidence. Frameworks like ACAS can be followed to remove grievances between employees and employers.
Staff satisfaction can be measured from the behaviour they exhibit unintentionally that includes absenteeism, poor work quality and high turnover rate. The dissatisfaction can be eliminated in a number of ways that include improving the work atmosphere, increasing monetary rewards, counselling, giving reasonable autonomy to the employee, etc.
For the purpose of this assignment, I selected the Standard Chartered Bank (SCB) for the practical application of the theory.
Investigation as to how HRM contributes to the achievement of organisational goals:
Three main activities performed by SCB's HR department related to HRM were:
Job analysis: Job analysis provides the foundation for good selection and identifying the knowledge skills abilities and other requirements that need to be performed on the job.
Interviews: Interviews are the universal feature of selecting feature of selection system. Research has shown that interview can have substantial validity, particularly when they have shown more structure and are conducted appropriately, and,
Redevelopment and retraining: With the increased rate of technological change and potential for skill obsolescence, retraining may become more important. As a result many companies provide retraining for manager those skills have become obsolete. A critical determinant in the success of such program is manager's self-efficacy beliefs, or that they will be successful in mastering the new skills.
Meeting Organisational Objectives:
By careful job analysis it was observed that the people selected for the relevant posts possessed adequate level of skill and competence that is needed to fulfil the tasks of the job.
Smart interviewing panel of the SCB ensured that only those people are selected for the jobs that are capable of performing the relevant tasks as required by their jobs.
Systems and procedures are changing in with the development of technology and introduction of new and stringent risk management procedures. In SCB it was noticed that to equip the personnel with the latest job knowledge effective retraining procedures were in place that led to the employees' continual professional development, thus generating a better level of service and performing in an up-to-date manner.
Reference to HRM Models:
Contingency model (that suggests there is no one way of leadership and management, a situational model)
The best practice model (suggests to identify best practice, give HR a high profile, get commitment from top management level, implement the best practice and then make that best practice a bench mark for rewarding employees).
Examination of HR planning and development methods:
Human Resource Planning is the process of assuring that right type of people with right capabilities are available when required. HRD of SCB has to take care of all the important activities. It is engaged in the process of hiring, firing, training, development and all other related activities. HRD is also engaged in process of designing and evaluating the jobs and determining a pay structure for the jobs.
During planning company analyze its goals, its current strategies, its external environment, and its strengths and weaknesses, in terms of whether or not they can be achieved with the current Bank's human resources. Then Bank begins to look at what skills, knowledge and abilities are available internally and where shortage of terms of people skills or equipment may exist. This analyzes leads to the new planning phase and as a result Bank recruit people with specific skills Bank required to organizational development. Its HR department duty to create a link between the organizational goals and ensuring that the company can meet the objectives with which structure in determining skills, knowledge and abilities of jobholder.
The employees at SCB are self-motivated and the reason for their kind of motivation is the working environment which has to be conductive for efficiency. The morale of workers in SCB is very high and this high morale is as a result of keen interest and careful supervision of the top management. It is all because of the healthy environment provided at all branches of the Bank and very kind and neat relationship among the employees, and very satisfactory compensation and benefit system. HR department of the company determine what jobs need to be done and how many and what types of workers will be required.
At SCB several approaches are available for the development of workforce skills that are needed:
SCB relates training with the productivity. Training solves the many efficiency related programs in the work place it may also involves the analytical and the thinking skills trainings that help to resolve the problems. These programs are for the middle level manager and the lower level manager.
The Bank continues to follow its strategy of hiring batches of young and energetic Management Trainees who are sent to Training and Development Center for training in all areas of banking. At the same time, short courses are continually conducted to not only enhance their skill level but also increase their performance potential. Training covers broad areas of human resource activities. Following are few very popular and common training methods:
Computer based training or instructional training
Computer assisted instructions:
Job Rotation: After planned intervals of time employees are transferred. To other locations according to the policy.
On the Job training: Three types of employees are subjected to on the job training. Although other type of training programs are conducted for their grooming but the emphasis is gives for on the job training for them. The bank has the latest state of the training facilities and it has its own Training and development Centre. (TDC). Supervisors identify the individuals in the department whether the employee needs training in a particular field or for a particular job. Three types of employees are subjected to on the job training. Although other type of training programs are conducted for their grooming but the emphasis is gives for on the job training for them.
Apprentices b) internees
Off-The Job Training: The newly inducted officers are being trained to help perform their duties in full competence to avoid any error in bank transaction, and boost their efficiency.
Evaluation of the planning and development methods:
Proper HR planning has helped the bank to ensure that right people are on the right desks doing the work in the right manner. It has also helped the bank to identify the service gaps and hire people where shortages are evidenced. By planning the HR department has created a link between banks goals and the right people to pursue that.
The development of HR has ensured that the staff is adequate and technically well equipped to serve that bank's goals. Adequate training ensures that employees are up-to-date and possess necessary skill level to complete the assigned tasks.
Analysis of ways in which performance of HR may be enhanced:
Review of how HR performance is monitored and indicated:
The only basic performance measurement tool SCB has is the performance appraisal system and they are continually making improvements in it to eliminate the bias. Performance appraisal is directly related to the performance description and the work standards. The process of reviewing the individual performance. First of all, bank sets some standards for different level of employees and direct to their employees to do work according to these standards and evaluating their performance.
In SCB Performance appraisals are usually prepared every six months. Every employee is to be received and on the basis of this performance compensation and benefits are determined.
SCB offers very competitive salaries and benefits to both fresh recruits and experienced bankers. Once part of the SCB family you can expect both monetary and non monetary rewards based on performance, some of our benefits are:
Compensating and rewarding employees is very important to motivate the employees and to attain the consistent performance. Reward system provides the ability to reinforce desired behaviours and serve the traditional functions of attracting and maintain a qualified workforce. SCB compensation system is the combination of different practices which are discussed below;
Traditional compensation system
Traditional compensation system used by SCB is the combination of the factor comparison system and point system which uses the job evaluation manual to assign points to each job. SCB has the traditional compensation system as the basic salary which is fixed for every employee beside other compensations.
This is basically for the middle level management for learning and implementing new things which can be offered by the bank or chooses by the individual themselves. Employees know that it increases. The chances of the promotion and the increase in the compensation will increase as well as bank SCB have bonus for learning new skills and doing new management courses. Due to the rapid change in the today's business environment organization need to make-up the employee for the potential jobs and assignments to be competitive in the market.
This approach contains some of the factors of the traditional pay based system but like skills based pay it is directed towards obtaining greater flexibility. With broad banding SCB increases the pay of the employee but don't promote them this is usually done for the more experienced employees to with low education they often are not promoted but they pay is increased.
Team Based Pay
Compensation system is needed to reward team members for behaviors that facilitate strategy implementation. SCB usually forms teams for some projects only. Compensation given to those teams is based on the compensation of the achievement of the objectives of the team. The compensation includes bonuses, stocks, holidays and promotions. In the project management teams employees are also cross trained.
Executive compensation system like other employees have the basic salary but that includes no of benefits besides that, which includes the wide range of conveyance allowance. But same like in many other organizations this is not well-defined in SCB.
Ways to improve:
The appraisals should be 360 degrees in order to ensure that what all different stake-holders feel about a particular employee.
Appraisals should be carried every quarter so that improvements may be made on a timelier basis.
The operations staff should not be appraised on the basis of how much business it has generated.
Appraisals should also take into account the level of innovation an employee has brought in.