Human resource has also come to be known as a resource. Human beings are viewed as assets in any kind of organization.
Graham calls Human Resource Management in the modern organization as the driver of success.
Human resource managers play a very critical role in implementing the best human resource practices in their respective companies.
Human Resource Practices by HR Personnel
Human Resource Practices: 5 Practices by HR Personnel
Let us look at some selected human resource practices, and their strategic nature in organizations:
1. Empowering People:
Empowering has been proven to be an effective way of securing employee participation and development of their creative ability. Due to the changes in the work place and the profile of modern day workers, a new and more respectable way of treating them and managing them may be required. Excellent companies are those which empower their employees for their own growth as well as for enhancing organizational performance.
Empowerment is something that releases individual’s potential in work organizations. Groberg contends that releasing such potential through empowerment is more fun for the employee, less work for those who supervise, and better results for the company. Evans and Russell tend to view that employees’ creative ability and development are realized through empowerment and when such realization occurs, the individual and organizational performance and output are enhanced.
Generally, empowered people feel a sense of autonomy and freedom which makes them explore the environment on their own for better results. In a restaurant when the waiters and waitresses were given freedom (empowered) to generate sales, they engaged in a variety of creative activities to generate more sales not only through excellent service which generated repeat sales but also telling the customers while serving, the incentive plans for repeat visits and other privileges.
They became creative and used the power given to them through empowerment. Tom Peters asserts that there is no limit to what the average employee can do if he or she is fully involved in work activity. In the empowering process, the employees are given greater decision making authority to deal with their own work areas.
Certain groundwork must be done before empowering employees. It may start off from recruitment and selection process. The candidates to be chosen must have certain qualities such as, initiative, interpersonal relations, innovative or creative ability, integrity and sense of responsibility. The employees have to be trained so that they acquire the needed skills to put empowerment into practice. Such training is a continuous process since employees learn from every situation. Adequate financial and non-financial incentives must be provided to sustain the zeal for empowerment.
The needed structural changes would facilitate the empowerment so that the teething problems can be avoided. The role of immediate bosses is critical to make this process a success. They must be able to coach, delegate, facilitate, communicate, and conduct small-group activities. Thus through empowerment, productivity is enhanced, and employees become committed to their jobs and organization.
2. Learning Organizations:
Peter Senge proposed the concept “Learning Organization” has been receiving much attention in the corporate circles in recent years. Great groups, teams, and organizations do not start off as great. Just as a child learns and grows and the learning continues as the growth continues, organizations also keep learning and this process increases their capacity to develop what they truly want to develop.
Such organizations view learning in a cyclical manner keep learning, developing new skills, and capabilities. Once they acquire new capabilities through new learning, their perspective of the world around them becomes totally different. In this process, there may be a fundamental shift in their paradigms.
Senge identifies the skills and capabilities which characterize learning organizations as- aspiration, reflection and conversation, and conceptualization. Aspiration comes through orientation of members of learning organization toward what they really care about and try to change because they want to, and not necessarily because of any need. Reflection and conversation give energy to members and reflect about deep assumptions and patterns of behavior.
As a result of this reflection, they develop skills and capabilities for authentic and real conversations. Before they respond, they hear others’ views, and reflect upon them. Conceptualization is the ability and capability to see things to their entirety and to construct a testable way of conveying whatever they have seen. The concept of system thinking is needed for enabling us to see the whole, when we put descriptions together coherently.
When the above skills and capabilities deepen our confidence, real learning takes place in us. Such skills and capabilities are needed to build learning organizations. These skills differ quiet distinctly from skills of specialization which are required to learn specific subjects and things such as mathematical or finance skills for a particular purpose or need. Learning organizations have to be created before implementing team activities. Cavaleri and Fearon contend that learning organizations have managers who support the work of the forces at play.
The structure of future organizations should be such that they facilitate self-learning and team learning and this process would have no end. Warrne Bennis contends that creative collaboration among gifted people led to spectacular results in his study of great organizations such as Walt Disney, Xerox, Apple, and a few others. Managers in learning organizations help their people to discover their inner mental models and values that influence their managing style. In such work environments, people feel free to experiment, innovate, and create new ideas and things.
3. Benchmarking for Better Performance:
Benchmarking also comes under the purview of human resource department. There are some organizations which send a selected group of people to visit some of the “Best in Class” type of companies to study their practices in various functional areas and especially in human resource function. These visits are organized and conducted by the senior people in human resource department. These groups visit the World Class companies where they have best practices or practices which have been benchmarked.
Benchmarking is a continuous process to seek, identify, and implement the best practices that will lead to superior performance, by improving quality and productivity. The main question in selecting a practice to be benchmarked is,” How are we doing compared to other companies in the industry?”
Answers are provided to such questions by examining the company’s own activities and operations and comparing such activities with those of leading companies in the industry and in other industries which are World class. Some companies choose Human Resource Practices to be benchmarked. Although different companies use different approaches in identifying and implementing the best practices from other companies, there are some specific phases to benchmarking.
They are the:
(i) The Planning Phase
(ii) The Analytical Phase
(iii) The Integration Phase
(iv) The Action Phase
(i) The Planning Phase:
The Planning Phase must identify a particular aspect in Human resource management to be benchmarked, say for instance, Executive Performance Assessment. Once the item to be benchmarked is identified, the next thing is to come out with a list of companies where practices to be benchmarked exist. Then pertinent data and information must be collected. Effective and efficient methods for data collection must be identified.
(ii) The Analytical Phase:
In the Analytical Phase, steps must be taken to determine why the current practices are not giving required results. Due to the existing system, there are complaints on the assessment method, feedback given to employees, and other gripes. An analysis will help to determine the current gap in performance, and enables the company to identify further performance levels. The gap can be quantitative or qualitative or both. A careful examination of available data relating to the performance being benchmarked is carried out.
(iii) The Integration Phase:
In the Integration Process, the findings of the study undertaken to identify the practices in performance appraisal system must be presented to the concerned committee of human resource executives and higher level authorities, in the company where the benchmarked practices are going to be implemented. Without their acceptance, the benchmarking process may run into trouble. The potential advantages must be highlighted in these presentations. Once the findings are accepted, it is necessary to determine goals to set the direction.
(iv) The Action Phase:
In the Action Process specific plans and activities are developed to implement the practices identified in the benchmarking process. The resources required, the responsibility ownership, time frame, budget considerations and other details must be worked out specifically, and clearly. Then the Human resource department will take over the responsibility for implementation and carefully monitor the progress.
The entire process must be documented clearly and in a detailed manner. Without the total support and commitment of top management, it is not advisable to undertake this type of assignment. The benchmarking process is a continuous process.
4. Outsourcing:
Until a few years ago, many people in India might not have known what outsourcing meant. But in recent years they have a clear idea as to what it means. International companies in advanced countries get some of their routine and office work gets done through outsourcing. In these countries, it has become very expensive to do the basic input work into the computers.
So countries like the United States, United Kingdom, Germany, and other European countries send the work to get it done where it has cost advantage. As a result of which countries like India, China, and Philippines, where the required skills are cheaper to get and available in abundance get most of the outsourcing work. Most of the routine jobs and activities are contracted to outside vendors that have specific skill and expertise in the required areas.
Cascio cites technology advancement, globalization, cost pressures and changing work force demographics as the driving forces for Globalization. Kevin Kramer, the Director of Human Capital at Accenture, an Outsourcing company states that Human Resource outsourcing is a coordinated usually multi-function, multiyear contract transaction between client organizations to a service provider.
Outsourcing may be a first testing step for multinational companies to try out certain countries and sources. For example, the famous Nike shoe company outsources for all of its products with the exception of one brand, namely, Nike Air System. Some well-known airlines and credit card companies get their financial work done outside their home country because the labor for the work is cheap.
Outsourcing work is done not primarily for reducing costs but also for competitive purposes. Outsourcing is a strategic decision to give a task or activity to an outside contractor, either within the country, region, or outside the country who has a good work record. The company and the off-shore partner become partners and may establish long-term relationship. Generally, Information Technology, Human Resource Management, Legal, Accounting, Marketing, and Research and Development are some of the areas where outsourcing proved to be successful.
The primary way for organizations to focus on talent management and high value human capital work is to free themselves of administration and transactional activities. In this manner it is used as a powerful strategic weapon or tool. Chrysler, for instance, gets its competitive advantage by outsourcing nearly two-thirds of its auto-parts. This approach gives Chrysler its competitive edge over General Motors.
In recent years, most of the auto manufacturers are moving in the direction of outsourcing. The developing and underdeveloped countries are reaping the benefits. They offer better terms, and attractive packages for outsourcing companies. In the early 1990s, realizing that the boom is coming, the Indian Government started to reduce tariff barriers and export controls and liberalizing foreign exchange restrictions and regulations. General Electric was responsible for opening the technology center and this encouraged the neighboring countries like Singapore to move in.
5. Competency Based Approach to HRM:
The job description based performance assessment is somewhat outdated and static. It does not provide for the choice of the best candidate for the job. It does not facilitate the identification of those who exhibit potential for higher level jobs. Furthermore, it lacks the thrust in identifying the best performers and rewarding them accordingly.
Instead, it promotes, ineffectiveness, inefficiency and hinders achievement of higher level productivity. It breeds poor morale and disenchantment and the outcome of such experience is burnout among the achievers. Turnover, absenteeism, and poor morale may have devastating impact on the overall productivity and performance of work organization.
On the other hand, the new approach based on competencies will identify the best suitable candidate for the job, reward the best performer based on objectivity, and promote the ideal candidate when the position opening is available. Under this new approach, higher caliber staff with outstanding performance and contributions will have a faster career progression.
Furthermore, the new approach will help to attract, retain, and develop quality people by developing suitable progression plans for various career streams. It will forget a stronger link between reward and contribution. Thus it is an effective way of putting equity theory into practice. When employees see that their efforts and contributions are being rewarded fairly and effectively, they tend to put all their efforts to improve constantly and perform even better.
At the corporate level, the competency-based approach will provide employee satisfaction build partnerships based on equity and stronger employee commitment to achieving company’s business strategies and objectives.
What is competency? According to Collins dictionary, competency is the condition of being capable or ability and competent as having sufficient skill, knowledge, etc., to perform a particular task or undertake an activity. In organizational context, some tend to identify competency with skills and not the physical or psychological aspects. On the other hand, some may contend that skills have a basis on certain psychological make ups. For instance, a generic competency such as leadership may have a basis on the personality of the individual.
The key features of competencies revealed in some research studies are:
a. A competency must be related to realistic workplace practice.
b. It should be based on recognizable work activity
c. It should be expressed as an outcome.
d. It must be capable of demonstration, observation and assessment.
e. It must complement performance criteria.
f. It must be written in a language which makes sense.
g. It should group together activities, using the same criteria.
Since competencies describe specific behaviors that people can demonstrate to achieve high performance results, they favorably impact a person’s ability to accomplish job performance. Competencies look at how a person achieves results and provides useful insights into what specific behaviors a person can develop to enhance his or her performance.
Successful managers exhibit competencies different from those who are not so successful. Competency is a function of worthy performance of a manager which includes general knowledge, motives, traits, self-images and skills.
An extensive study by the American Management Association identified the following clusters of competencies:
1. Goal and Action Management –Includes initiative, image, problem-solving skills, and goal orientation. The competencies included in this cluster are efficiency, pro-activity, concern with impact and diagnostic use of concepts.
2. Directing Subordinates –Includes manager’s freedom of expression in giving directives, and feedback to help develop subordinates. Use of unilateral power, developing others and spontaneity are the competencies included in this cluster.
3. Leadership –Ability to deal with key issues and communicating self-confidence, conceptualization, logical thought, and oral presentation are the competencies in this cluster.
4. Human Resource Management –Deals with human resource skills such as developing positive expectations, having realistic views of one, building networks, stimulate cooperation. The competencies are- managing groups, positive regard, perceptual objectivity, accurate self-assessment, self-control, and use of socialized power.
There is a clear connection between the practice and bottom-line business performance. In order to produce best results, practices must be based on certain proven competencies. Identification of these proven competencies is a laborious but worthwhile exercise. Some organizations adopt a standard set of competencies to meet the specific organizational needs.
Visionary Style:
Highly successful organizations train their managers in visionary style of leadership. This style of leadership is defined as developing a vision and unifying people to realize the vision by creating necessary actions.
Assuming ownership involves creating vision and taking initiatives for ownership. Creating vision requires of a leader to think and perceive like an owner. There are differences between being an owner and an employee. Just as there are differences between owning a car and renting a car. The care and interest that goes into owning a car is quite distinct from renting a car, in terms of how people treat it. The same thing applies to having a feeling of owning a job.
Taking initiative reflects in feeling and acting like an owner. It is not just sufficient to think like an owner, one must feel and behave like an owner. If one just thinks like an owner and doesn’t do much about that feeling in terms of actions, the feeling will remain only as a feeling. The real thrill comes only through action.
Delegating ownership involves a leader developing a shared vision. The leader must have the ability to share the vision with his people by communicating direction and urgency to others. The leader must carry his people, his team toward the vision by communicating the need and providing proper direction.
Empowering the subordinates involves sharing the ownership with them, giving them the needed authority and responsibility. The vision becomes a reality only when people are empowered. Assuming ownership whether on the part of the leader or his people depends on the willingness to take initiative, ability to make decisions, taking necessary and timely actions and taking risks to make his business the best it can be.
Gaining support in the organization involves the leader’s ability to communicate with peers and superiors and influence them to get things done. This requires interpersonal ability and skill. Without such support, the leader may find it difficult to realize his vision. In the visionary style, the leaders and subordinates work together as associates and not as bosses and subordinates.
Stone suggests that the managers must ask themselves whether they are adapting their approach to shared leadership on the basis of the people and tasks involved; they are abdicating decision-making authority within a team; over-involving their employees; encourage employees to believe in their potential and capabilities; talk to employees about what they expect of them; reward employees who make independent decisions and facilitate a culture that encourages shared leadership.
This style of leadership is slowly making its way into corporate world but there may be some problems in implementing it due to creating a suitable climate for implementing it. Assuming ownership in Indian context maybe bit of a problem. Unless there is a climate in the organization to encourage such initiative, managers may not show their eagerness and willingness to assume such ownership.
Human Resource Practices
The human resource department bears the responsibility to see any change adopted in the organization is satisfactorily implemented and yields results.
The term Personnel has been replaced by several other terms before it finally to be known as Human Resource Management. Since then the human resource function went through several modifications, changes, and additions to its meaning, scope, and the function itself.
Like other resources which are essential to the success of an organization, human resource has also come to be known as a resource. Human beings are viewed as assets in any kind of organization. Graham calls Human Resource Management in the modern organization as the driver of success.
Human resource management in a way is considered as a driving force for attaining results by strategic means. Some consider human resource management as a partner in the strategic process of business. It plays a godfathers role for employees. When they confront problems, they know where to go. The human resource department gives the impression that it has the skill and ability to listen to the grievances and problems of employees whether they are major or minor in nature.
The decisions regarding joint-ventures, mergers, and acquisitions are made in the corporate headquarters but by the time it comes for implementation and enforcement, they face major to minor difficulties. When the company faces such difficulties, human resource department is called-in to help the company to solve such problems.
It is not that human resource department is asked to do some kind of patch up job but to go into the details of the venture, identify the causes of such problems, and provide lasting solutions.
Generally, the traditional human resource managements include the following responsibilities in an organization:
i. Selection and Recruitment
ii. Training and Development
iii. Performance Evaluation
iv. Payments and Benefits
v. Industrial Relations
But in recent years, the scope of human resource management has changed and as a result some more activities are added to it. The above activities may be the same but their scope has changed and they are expanded to suit the changing needs of the company and the environment. Organizational structural changes such as Internationalization, Multi-nationalism, and Globalization have given the human resource function a new facelift.
The following practices which are currently found under human resource function are:
i. The Selection and Recruitment function is loaded with new requirements and activities to enforce strict standards
ii. High level Training with more effective curriculum and training methodology.
iii. Multi-skilling training to train the employees in more than one skill so that they can adapt to changing conditions.
iv. Management-employee communication receives greater attention and special committees are formed.
v. More common facilities for managers and workers which may facilitate better communication and relations.
vi. Communication through internet and other communication techniques.
Generally, multinational corporations or Global organizations sharpen their human resource practices to suit the changing conditions and environments. These practices are either started and tried from the parent company and spread to the subsidiaries if they are applicable. They achieve success not only in their parent organization or headquarters of the company but situation in subsidiaries also leads them to develop and implement the best human resource practices.
They have to be the best to survive as a global organization. Human resource managers play a very critical role in implementing the best human resource practices in their respective companies.
Human Resource Practices – Steps in Developing the Best Human Resource Practices in any Company
i. Philosophy—A Guiding Light:
Founding or creating a sound philosophy is the first step in developing the best human resource practices in any company. Such a philosophy guides the company through its successes and difficult times. Employees also thrive both as individuals in company’s success. The human resource philosophies help to create a good name for the company as the best place to work.
Traditionally, the founders of a company sets the process of forming corporate culture in motion and such culture is passed on to the future generations of the company. Pettigrew says that the founder is not only a creator of the tangible aspect of the organization but also of the cultural aspect of the corporation. There are several instances where the ideology of the founder constitutes the philosophy of the organization from which the goals and objectives of the organization are derived.
Konosuke Matshushita, the founder of the giant electronics corporation, Matsushita, included the thinking into the corporate philosophy. When the philosophy is put into practice, it formed the foundation of Matsushita culture. The concern for the good of the consumer in providing quality electronic products at affordable prices and the concern for the welfare and growth of employees are the unique aspects of Matsushita culture.
According to Kilman, a new company, the business environment and the nature of work to be done play a major role in shaping the behavior of members of the organization. The formal reward systems, policies, and procedures, and rules governing the work, also have an impact on the philosophy and culture of the organization. Schein claimed that a founder’s philosophy, values, and beliefs are taught to new members, either through corporate orientation programs or from day-to-day interactions and activities.
C.K. Tang, a retail business in Singapore, was founded on the basic philosophy of honesty, integrity, and value for money. Corporate training focuses on educating the employees on the traditions and philosophies of the company. People with various skills and experiences work together with single-minded dedication to provide customers with the best goods and services. Management commitment and employees’ involvement seem to be the cornerstones of Nesde’s corporate philosophy. These values form the basis for the company’s culture. The company functions decisively while keeping the company’s overall strategic goal orientation.
ii. Corporate Culture Provides a Foundation:
A sound philosophy or thinking of the founder or the chief executive forms the basis for formation of a strong culture in an organization. A strong culture provides a solid foundation and a positive climate for implementing sound Human resource practices. Corporate culture refers to the way of doing things in an organization. By improving the organization culture, companies can be made more effective and efficient.
Most of the successful companies use a systematic approach in bringing new members into their corporations.
Pascale, after studying a number of companies with strong culture suggests the following steps in socializing members into the corporate culture:
1. Exercising care in selecting entry-level candidates. Specific traits are sought which fit into the culture of the company.
2. Subjecting the new-comer to humility inducing experiences which will help to question prior beliefs.
3. Practical training leading to mastery of one core discipline.
4. Focus on measuring results and reward accordingly.
5. Adopt to corporate values which will build trust between the employee and the company.
6. Historical events of the company are interpreted to validate corporate culture.
7. Those who move up fast are used as role-models.
According to Davis, in every company there is a company way of doing things which has a powerful influence on the way people behave inside the company. It has a major impact on a company’s ability to carry out its objectives and plans. Generally, excellent companies have a strong and tested philosophy, and a solid culture.
According to Ueno, the common features of these companies are:
1. A spirited atmosphere in the organization.
2. Every employee is committed and positive toward his job.
3. Employees are cohesive in their effort towards achieving corporate goal.
4. There is a free flow of communication among the employees.
5. Delegation of work
6. There is a bottom-up and top-down communication.
William Ouchi in his book Theory Z identifies the best human resource practices and terms it as Theory Z, which are mostly a combination of American and Japanese practices.
Some of these include:
1. A place for criticism and honesty
2. Trust, Friendship, and working together
3. Teamwork
4. Management by walking around
5. Valuing people as resources
Although the above practices are published some time ago, they still prove to be the best human resource practices and put into use in many companies across the Globe. They encourage openness and trust which are essential ingredients of a well-run organization. As a result the value attached to human resources enhances and teams begin to grow.
There is no need for supervision and managers simply walk around to ensure things are going alright and employees are productive. Baxter International has fifty plants in twenty countries and all are managed well. The company maintains certain values which form the basis for its culture.
These values are – Respect, Responsiveness, and Results. These values define how employees should behave towards each other, customers, shareholders, suppliers, and the community. Singapore Airlines embraces a culture which emphasizes the need for continual change, innovativeness, and being the best.
Maintaining strong corporate culture results in a number of benefits to the company as well as to the members. It provides a solid foundation and a positive climate for productivity improvement. Peters and waterman, suggest in their book. In Search of Excellence, that because the companies have certain cultural attributes, other companies can become excellent by emulating them.
Moskowitz identifies the following as characteristics of working places as good companies not found in other companies:
1. Make people feel that they are part of a team
2. Encourage open communication
3. Stress on quality of work
4. Sharing profits with those who contribute
5. Reduce rank differences (do away with things like executive dining room, toilets etc.).
Although corporate culture is an invisible and elusive concept, it significantly affects all spheres of corporate life activities, ranging from day-to-day routines to corporate strategy. How much mileage a company can get out of this culture depends on how it is nurtured and managed. It is a proven fact that companies with a strong culture maintain leadership in their business activities.
Of course, culture per se does not directly increase profits or decrease costs. But it influences the behavior of employees in an organization. Therefore it is considered that having a sound, practical, and workable culture makes a big difference even in today’s corporate world.
In recent years, many organizations have come to realize that among various resources available to an organization, human resource is the most valuable. When an organization acquires physical resources such as machines, it knows exactly what that machine is going to produce, and cost involved in its operation.
But that is not so with human resources. The greatest challenge faced by organizations is the management of human resources. Certain skills are needed to manage these resources. They may not come with education alone but training, and experience. Gone are the days when managers used to rely on intuition alone.
How human resources are treated in an organization depends on the philosophy and culture of the organization and also their attitude toward human resources. Although there were a few noted companies which practiced good human resources, in recent years, the number has increased and newer companies are emerging.
One such company is Microsoft where employees enjoy their work and treated like human beings. The work environment facilitates the efficiency and effectiveness. When the quality of work life is improved in an organization, a “Win-Win” kind of structure emerges.