The human resource management purposes

Human Resource Management:

Human resource management is considered to be as one of the most important areas of an organization to be properly managed. The main purpose of human resource management is to acquire and maintain appropriate level of employees to achieve the objectives of the organization and to create a productive and safe working environment which thereby creates opportunities for the employees to perform well and develop with the organization (Ferris, R et al 1995). Generally an organization have four types of assets which affects the performance of the organization such as physical assets which are the fixed and current assets, financial assets which are assets which are converted easily into cash, intangible assets and human assets. All the four types of assets are important in different levels to different organizations but among them human asset is most important because it makes all the assets work together and provide competitive results (Mathis, L and Jackson, H 2008).

Generally human resource activities includes the following functions and they are as follows (Mathis, L and Jackson, H 2008),

Strategic HR Management – Strategic HR management is performed to maintain the organization competitiveness. As part of strategic HR management the managers forecast the appropriate level of employees needed to the organization and also the availability of the employees. At the same the managers also gives importance in the retention of the employees.

Equal Employment Opportunity – HR managers are required to follow the Equal Employment opportunity laws and regulations when making decisions. Equal employment opportunity helps to prevent discrimination in the workplace by providing equal opportunity to all its employees.

Staffing – The main function of staffing is to provide an adequate supply of suitable and capable individuals for the organization. The managers before recruiting the individual performs the job analysis and based on this analysis the job description and specifications are prepared for the selection of suitable and most qualified individual among the applicants.

HR development – HR development begins with the induction of new employees. As jobs constantly change over time the employees are also trained according to it. Training of employees including the supervisors and the managers helps the organization to face the challenges which occurs in the future.

Compensation and Benefits – Compensation are rewards provided by the organization for its employees for the work performed by them form of pay, incentives and benefits. The organization rewards the employees based on how much they contribute to the organization.

Health, Safety and Security – HR managers should also give crucial importance to the health and safety of the employees both physical and mental. The workplace should be eliminated from health and safety risk and should also be secured in order to retain the employees in the workplace.

Management of Employee Relations – It is the very important for the managers to develop a good relationship with the employees for the benefit of both the organization and the employees. It is also necessary for the organization to communicate and update the HR policies and rules with the managers and the employees in order for them to know what is expected by the organization.

HR Strategy:

Human capital is the driving force behind the success of an organization and HR strategies is considered as the source of competitive advantage for the organization. Generally for any company to compete in the market place needs to formulate a strategy based on the goals and objectives of the organization and also considering its internal strength and weakness and its external opportunities and threats. Strategic human resource management is a pattern of planned human resource deployments and activities which are intended to achieve the organization goals and objectives. It helps in developing the policies, programmes and practices used in the employment relations, training and development, performance management, rewards and employee relations (Armstrong 2006).

Components of Strategic Management Process:

There are two important components to be considered when developing the strategic management process and they are strategic formulation and strategic implementation. The figure below describes the strategic management process (Noe et al, 2000).

Strategic Formulation – During the strategy formulation process the strategic planning group defines the firm’s mission and goals to be achieved in the future and then it analyses its external and internal environment. In the external analysis the organization identifies the opportunities and threats available in the market place and in the internal analysis it identifies the strengths and weakness inside the organization. Based on this analysis the organization generates various strategies and then evaluates which strategy is most appropriate in achieving the organization mission and goals. The strategic choice is really made by considering the following three questions such as where to compete? That is in what specific market or industry they are going to compete, how to compete? By what way they are going to compete and what to compete? What resource they are going to utilize to compete in the market. Addressing these three questions the strategic choice is made (Noe et al, 2000).

Strategic Implementation – Once the strategic choice is made the next step in the strategic management process is the strategy implementation. The chosen strategy has to be executed in the day to day working of the organization. For the strategy to be successfully implemented the organization should give importance for the following variables which includes structuring the organization, task design, selection, training and development, developing reward systems and also developing a good relationship with the employees (Noe et al, 2000).

Strategic evaluation also plays an important part in the strategic management process. Once the chosen strategy has been implemented the organization evaluates the effectiveness of the organization and based on these evaluations emergent strategies are formed which are executed in the future (Noe et al, 2000).

HRM at the Container Store:

Container Store is one organization which considers human resource management as the main source for their competitive advantage. To achieve competitive advantage through human resource needs a fundamental change in the way managers think about their employees. In the case of container store managers works along with the employees and get involved with them and see them as partners and not just like another cost to be minimized or avoided. The container store also believes that to compete in the business environment is to have high performance work practices. Best human resource practice would result in enhanced organization performance manifested in employee attitudes and behaviour, lower levels of absenteeism and turnover, higher level of skills and therefore higher productivity, enhanced quality and efficiency. The container store constantly tries to improve the skills, attributes and knowledge of the employees by constant training and also tries to keep them motivated which thereby enhance the retention of the employees (Robbins, P and Coulter, K 2005). The container store spends 18% of its sales on employee for training and on other employee benefits.

Recruitment at the Container Store:

In the case of container store recruitment and training is seen as way to achieve competitive advantage. Container store considers recruitment as a source of competitive advantage rather than an administrative function. Generally organizations which are able to attract, recruit and retain qualified individuals will be the most successful and competitive in the industry (Ployhart, E, Schneider and Schmitt 2006).

The container Store human resource practices have made the company to be ranked by Fortune as the one of the best companies to work for in the America. Unlike other organizations the container store has a different recruitment strategy which makes them so unique. As part of the recruitment strategy the container store does not need an executive recruiter and they rarely publish new papers advertisements about the vacant job position. But they didn’t have any problems in filling the job positions in the organization (Arnold, 2007).

Recruiting Customers as Employees:

In the container store the customers are so passionate about the brand which makes them to apply for the job. The company itself tries to recruit customers as employees as they believe that it is convenient and cost effective and it also provides high quality applicants who are already passionate about the organization products and services which makes easy for the organization to train them rather than having a new employee who does not have much knowledge about the organization. The container store uses a marketing approach in the recruitment process. The organization looks at recruitment as a sales or marketing operation by informing and communicating with the customers about the benefits of employment within the store and directing them to the paper applications and online applications. In the container store the employees itself plays the role of a recruiters. It is believed by the container store that current employees can be an excellent recruiter because they know much more about the work environment and the benefits of the job (Arnold, 2007). Also workers get $500 for every full time employee hired and $200 for every part time employee hired. Successful applicants are called for an group interview which consist of many fellow candidates to select the appropriate candidate with high level of sales skill and the group setting gives the manager a view of how the candidates will work as part of a team (Powers, 2004).

Training at the Container Store:

Training is a process which provides the employees the necessary skills and knowledge to help in the achievement of organization goals and objectives. Many organizations invest large amount in training which are compensated by the benefits achieved by them (Mathis, L and Jackson, H 2008). In the case of container store training is a continuous process. In the first few weeks the new employees are educated about the organization history and philosophy through its six foundation principles. Apart from that a 241 training program is started for newly hired employees which continues for a year. Also new employees are paired up with training buddies who provides training in all aspects of the retail environment (Powers, 2004).

It has been known from studies that organization which provides training to its employee’s results in low employee turnover rate and also increases employee and customer satisfaction rates. This is what the container store also follows. Unlike other traditional retail organizations which offer unskilled order taking and cash register positions container store provides serious training on several things from how to communicate with the customers to satisfy their needs to how to operate the computer systems and the store shelving systems. At the same time the organization also pays 50 to 100 percent more than the industry average along with other benefits. Due to this high level of training provided results in an employee turnover ratio as low as 10% and sales growth rate of 20% over a year. Also it enhances the employee loyalty over the organization (Coffey n.d).

Performance Appraisal and Rewards at the Container Store:

Performance appraisal is a process by which the employee performance is evaluated for a particular period and based on this measurement the organization compares it with the organization standard and makes decisions. The main concept of performance appraisal is to improve the individual performance but there are also a variety of declared purposes and desired benefits for appraisal such as the following (Arthur 2008)

• Improving Motivation
• Clarifying the expectations and reducing the ambiguity about performance
• Identifying training needs and development opportunities
• Determining rewards
• Improving Communication
• Selecting people for promotions
• Managing Careers
• Counselling
• Setting goals and targets

In the case of container store the organization evaluates the performance of the individual based on certain standards and based on this performance evaluation improvement is considered in areas of the employee characteristics such as attitudes, knowledge and communication. The performance appraisal is performed in the container for every six months and in the case of a new employee a performance appraisal is conducted after the first 45 days of their employment. The organization also compensates its employees based on their contribution to the organization rather than their specific job function.

Motivation at the Container Store:

The employees at the container store enjoy several benefits which make the employees feel motivated in their work. The employee at the container store resembles the McGregor theory Y kind of employees and they will make decisions which are best for the organization. Since the organization follows a flat management structure the employees have the authority to think for themselves and decide without checking with the manager. Also the container store job enrichment has made the job so interesting for the employees and helps them to provide better customer service. Communication is considered as the number factor of motivation. The organization openly communicates the financial information such as profits and revenues with its employees and also share their future plans in a way to help each other to do the best job for the organization (Noe et al, 2000).

Conclusion:

The container store considers human resource management as a source of competitive advantage. It has invested about 18% of its sales on employee related expenses rather than investing it in other business. But the cost of investing on the employees has always benefited the organization more than the cost as their sales growth has increased by 20% every year. Container store by following a unique recruitment strategy which recruits the fit, providing training systematically and by providing several benefits to its employees has transformed the company itself into a brand and helped it to achieve a competitive advantage over its competitors.

References:

Books:

• Armstrong 2006, A Handbook of Human Resource Management Practice, 10th edition, Kogan Page Limited, UK
• Arthur (2008), Performance Appraisals-Strategies for Success, American Management Association, United States of America
• Ferris, R et al, 1995, Handbook of Human Resource Management, Blackwell Publishing, Oxford
• Mathis, L and Jackson, H, 2008, Human Resource Management, 12th edition, Thomas South-Western, USA
• Noe et al, 2000, Human Resource Management: Gaining a Competitive Advantage, 3rd edition, McGraw-Hill Companies, Inc, China
• Ployhart, E, Schneider and Schmitt 2006, Staffing Organizations: Contemporary Practice and Theory, 3rd edition, Lawrence Erlbaum Associates Inc, New Jersey
• Robbins, P and Coulter, K 2005, Management, 8th edition, Pearson Prentice Hall

Journals:

• Arnold, 2007, Customers as Employees, HR Magazine, Vol.52, no.4, pp.76-82
• Powers, 2004, Finding Workers Who Fit, Business, Vol.5, no.10, pp.7

Web Page:

• Coffey n.d, Labour Pains: Talent Shortage Drives New Approach to Management, viewed 17th March 2010,