HRM 325 – Strategic Human Resource Management (University of Sunderland).

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Introduction

Human resource management is an inevitable function in any organisation that employs people. As research evidences, a good practice of managing employees always leads to their comfort and satisfaction while working for the organisation. A point of contention though is the direct performance implication that is attained on effective HR functions. A report by Tamkin, Strebler and Reilly (2006) shows the existence of this gap. However, Hailey, Farndale and Truss (2005) in their report note the financial performance cannot be sustainable when there is no focus on human capital and employee experience. Regardless the concept of HRM strategy appears as imperative to every organisation. This report seeks to critically assess the HRM practices of Trust-mart – a Chinese chain supermarket – and offer recommendations thereafter. To achieve this, the report analyses the HRM practices in under the categories of strategic perspectives, recruitment and selection, performance and rewards, employee learning and workplace relations. The report relies of theories and models on human resource to both assess and offer recommendations to Trust mart.

Strategic Perspectives of HRM

The objectives of Trust-mart include expansion, effective service delivery, portfolio diversification and to become the best employer. These objectives are both defined as per their short term and long term implication with expansion and portfolio diversification being the long term objectives. Ogedegbe (2014) in his research how to attain organisational objectives through human resource management practices notes that critical to the success of the organisation are employee attitudes and behaviour. Further, he notes that human resources form part of the overall resources of the organisation and thus need to be embraced and aligned to strategy as much as the rest of the resources are. This phenomenon is termed by Armstrong (2009) as the beast-fit approach.

Trust-mart, in regard to aligning the HRM practices to organisational objectives, hes not attained the expected level of excellence. Firstly because the overall culture of belief in the organisation’s management at Trust-mart is that employees form part of the variable cost. Secondly, the first perception of employee hinders the management from viewing them as strategic assets. As such, although there are express claims of strategic human resource management which basically is a claim that employees are aligned to the overall goal, the practice of such is secondary to the firm – after considerations of cost minimisation. Although most arguments leaning in favour of the strategic fit perspective, Araimi (2011) notes that such as approach as the one taken by Trust-mart – where HR functions are not the only strategic priority – is allowable. The attribution to this is the fact that linking HRM to the strategies of the firm ic a complicated process that would require time and effort that could be applied elsewhere. Additionally, the business strategy consists of divergent elements which are hard to align to HRM easily. Secondly, HR has a responsibility towards employees and consumers and thus aligning it to investor interests only would be inconsiderate. Lastly, changing business environments would render any alignment made obsolete once business conditions necessitate changes in strategy (Araimi, 2011).

Nevertheless, it is important that Trust-mart aligns its HRM practices to strategy due to the accruing benefits. The best fit model would be advantageous if adopted. In a study done by Kelliher and Perrett (2001) the concept of the contingency (strategic fit) approach is well elaborated. According to their study, there are cost-reduction, quality improvement and innovation strategies. The nature of Trust-marts objectives necessitates the innovation and quality improvement ends. As such, the firm needs to adopt what Kelliher and Perrett (2001) term as accumulation and facilitation strategies of HRM. The accumulation strategy is the long term management of people based on careful recruitment and investment in them. Facilitation on the other hand is where employee development is valued and encouraged as the individual’s responsibility.  These two facilitate innovation and quality enhancement. Lastly, the firm may adopt the analyser strategy under contingency approaches which is a combination of the prospector and defender strategies. It combines elements of aligning HR strategy with organisational goals of a stable market and of an expanding market which is the case for Trust-mart.

Recruitment and Selection

Recruitment and selection practices at Trust Mart are done on need basis. This means that new employees are only hired when there emerges a need for them. In addition, the organisation endeavours to hire the best there is in the market with the only constraint being the remuneration package. Further, the there is a careful selection process that involves rigorous interviewing of applicants and assessing their worth to the organisation with key preference to special or additional skill possessed by the individuals being interviewed. These standards apply to the in-store staff and the extended staff such as lawyers, accountants, managers et cetera. However, critical points to note on the recruitment and selection process at Trust-Mart is that firstly when an internal job opportunity arises, suitable candidate for promotion are screened for internally, then an internal advert is placed. If such fails then the advert is taken externally to the public where interested parties apply and go through several interviews before getting the job.

Grimshaw (2009) defines recruitment as the entire process of bringing new employees to the company, selection on the other hand is defined as the process of deciding on the suitable candidate amidst of a group of candidates. Kumari (2012) in his study on recruitment and selection offers insights as to the ideals of recruitment and selection. He notes that recruitment not only creates a pool of potential talent that can benefit the organisation but does so at minimum costs. In addition, recruitment eases up the selection process by reducing the no of visits the applicants would have made to the organisation. Lastly it is more effective than random sourcing of employees. A critical point Kumari (2012) notes on a preplanned selection process is that it not only serves to get the right candidates but strikes a balance between what and employee wants to do and what the organisation needs. Further, selection saves on cost, checks on performance and ensures legal obligations are met. This is for example in the case where a firm gets sued for negligent hiring due to misbehaviour of employees. There are also non-discrimination procedures that Kumari (2012) note should be followed in hiring to avoid legal consequences. Such are ensured through selection.

Essentially, Trust-mart observes most of the positions presented by management theories on recruitment and selection. However, their process is much jumbled up as the sequence of recruitment and selection is not predetermined and is often deliberated arbitrarily. To solve this, it is important that a standard way be developed. This report recommends the perspectives of the flow of events held by Martin, Jackson and Martin (2010). The following figure 1 illustrates the recommended process.

The black arrows show the best flow of event while the blue arrows show the points to be repeated in case of failure in the progression.

Employee Performance and Reward

Rothwell and Kazanas (2003) define job performance as observable action taken to achieve results according to a set of standards. The importance of performance measurement is therefore for ranking employees on merit and rewarding them appropriately as well as for lay off purposes. At the Trust-mart, performance of employees is measure, firstly, using customer comment cards. These are cards that are filled by customers where they answer questions evaluating the performance of employees. The cards are later assessed and the total score determined. In some of the Trust-mart stores, the alternative employed is a 360 degree feedback circle where evaluation is done by fellow employees regardless of position in the organisation structure. The end result is that everyone gets to know where they stand in terms of performance. On average employees scoring above 70 out of 100 on the customer comments card are rewarded with bonuses. The firm has an ‘employee of the month’ and ‘employee of the year’ programs were the ultimate best employee are recognised and rewarded with financial benefits. This is mostly a percentage addition on top of their salaries.

DelPo (2005) offers insightful theory on the prerequisites on performance evaluation and rewards. For starters, DelPo (2005) believes the end goal of employee performance should be developmental other than monetary as in the case of Trust-mart. Secondly, divergent ways of reward are suggested such as due recognition in the newsletters of the firm – recognitions beyond bonuses. The basic recommendation DelPo (2005) offers on measuring performance is documentation through feedback from other parties – as is the case in Trust-Mart. Njanja et al. (2013) adds to this by noting that performance should be measured on elements such as working overtime, personal intiative, teamwork, attendance, customer feedback, time consciousness and productivity. The rewards suggested include compensation, benefits, recognition and appreciation options such as car loans, insurance covers, club memberships, bigger offices and parking slots. The main emphasis by Njanja et al. (2013) is for fairness on the evaluation system used and for the rewards to cover short-term, middle-term and long-term aspects. Critical in the study by Njanja et al. (2013) also is the need for desirable benefits by employees and an awareness of the relationship between their actions and reward.

Njanja et al. (2013) suggest the Vroom’s theory of expectancy as a way of designing the reward system. Koontz (2010) elaborates that Vroom’s theory basically places the wants of an individual as the rewards of good performance. However, the downside to this is the fact that individuals have divergent needs and thus coming up with a harmonised reward system can be hard. Regardless, the management of Trust-mart may have better outcomes applying Vroom’s theory to design the reward system since it puts into play motivation and the element of managing by objectives. Lastly, besides focusing on short-term rewards which are basically monetary, it is apt to design long-term rewards which Njanja et al. (2013) believe have developmental value on the end of employees. The basic cycle of a reward model that will lead to satisfaction is as illustrated in figure 2.

Learning and Development

Trust-mart is devoted towards being the best employer as per is objectives. This has created a necessity for a training program for employees who are brought on board. The basic training program on the first instance for subordinate staff is a 24-hour, 4 session process that entails the employee being taken through the usual routine for the specific job description they were hired for. After this process, the employee is placed under a mentor (usually an experienced employee) that will assist them until they become proficient enough. Most of the employee though get skills though on-job training Long term development of employees is encouraged but not accorded enough attention. For the senior staff, the process is much rigorous as they are taken for training sessions once in awhile as they continue acquainting themselves with the organisation. They are presented with clear duties and responsibilities and are assigned a senior staff to see them through. There are yearly training programs for senior staff. Exceptions are made when an employee is due for promotion and needs training.

Ho, Tsai and Day (2011) suggests a theory of Planned Behaviour as a determinant of the employee likelihood for participation in training. This is the first recommendation to Trust-mart as it can help determine the outcomes of a training process. Further on training and development, Shipton, Zhou and Mooi (2013) in their study found out that an organisation that is constantly learning always get to improve performance. However there is heterogeneity is learning that results from different organisational orientations. The same sentiments are shared by Zhai, Liu and Fellows (2014) who note that the cumulative effect of individual employee learning and development is organisational learning and performance improvement. Zhai, Liu and Fellows (2014) see learning as a mediating effect of HR practices and performance as in figure 4 below.

Learning and development in an organisation takes different forms that depend on the nature and tasks involved in an organisation. However, Islam (2006) suggests a basic form of steps that need to model the learning process as analysis of needs, design of a guide, development of the process, implementation of the design and evaluation of the results. Further, a better contemporary model suggested for the development and learning needs of employees is the Sigma Six approach – an approach that constitutes a step by step handling of the training process. Lang Cheng (2012) in a study of the applicability of Sigma six notes that it resulted in the improvement of the performance of managers and they were more satisfied with their jobs as well as motivated. Islam (2006) advocated for sigma six due to its phase of control that ensures whatever employees have learnt is not temporary or irrelevant and tha it is congruent with the objectives of the organisation. The recommended Sigma six model for Trust-mart is the improvement model which address on how to improve processes – in this case lack of training.

Workplace Relations

Trust-mart in their objectives indicate that they endeavour to be among the best employer. To facilitate this, there is an implementation of an employee relations program titled ‘listen and respond’ that is intended to keep communication flowing between employees and their seniors. One of the ways of airing out grievances is through a direct approach to a supervisor and communicating the concerns directly. An additional way is though an anonymous portal where employees can write down issues of concern. Further the same can be done through feedback boxes inside the every firm’s premises. Communication from the management is aired directly to the employee through memos or direct communication with the employee involved through their supervisor. Cases of discipline are handled by the management through supervisors as per the code of conduct established in the firm. The main thing employees are encouraged to do is communicate constantly with the management. Lastly there is a periodic one-on-one meeting between the managers and supervisors that is meant to assess the satisfaction levels of employees.

A critical factor absent in the employee relations program at Trust-mart is the ability to conduct collective bargaining or reliance of unions to facilitate such. However, such provisions are expressly provided for in the law and thus applicable. Berg et al. (2014) in regard to the concept of intervention by trade unions notes that there is a possible negative implication on the flexibility issues at work. Such include the balance between work, life and pay. As such, the recommendation offered by Berg et al. (2014) is for the employer to partner with unions standing for employees and create flexible work-life balance policies. The basic idea is to create a harmonious relationship between unions, employees and employers. Venkataratnam (2004), in regard to employer-employee relations, emphasizes the need to two-sided relationships as necessitated by contemporary business practices. Employees need to be offered with clear roles, responsibilities and expectations from the employer in the form of contracts. These contracts form the basis of their interrelationships. Gilbert, Sels and Winne (n.d.) further suggest that the human resource department needs to employ a leadership approach as opposed to a disciplinarian stance in order to positively affect the relations of employees and managers.

On a different perspective, Bond Baker (2009) offers a different approach to manage the relationship of employees and managers. The model termed as ‘new employment relationship model’ is an outline of the new orientations of the relationships between employer and employer. It also summarises the accountability on the end of the organisation as well as the end of the employee. Figure 6 below represents the ‘new employment relationship model’ simmarised.

Baker (2008) recommends the above model citing its broadened view of the organisational relations as opposed to the singular view presented by tradition human resource development models. This report suggests an application of the model to the case ofTrust-mart as it will offer a multi-dimensional eclectic approach to employer-employee relations beyond the current employee relation practices being observed. Appendix 1 shows the probable application model.

Conclusion

As established in the introduction of this report, the nature of human resource practices’ contribution to the general performance of the organisation may remain vague but much of the empirical evidence points at a positive relationship between the two. The manner in which the human resource department approaches the management of employees is critical to the resultant employee behaviour and subsequent contribution to the objectives  of the organisation. Similarly, the management of employees predetermines the employee relations model prevalent in an organisation. This report from such a background aimed at offering a critical analysis of the human resource approaches at Trust-mart. It is apparent from the analysis that the firm has excelled in some of the areas of employee management such as employee relations, recruitment and selection and rewarding but not to the expected levels. Other areas such as employee development are also in adequately developed in the firm. In order to address this, there is need to refer to management theories and models that can offer insight on the best course of action.

Recommendations

This report was divided in to five human resource tasks that are critical to the general HRM structure and performance. Each of them depicts a level of inadequacy that the report has offered recommendations based on theories and models. On Strategic perspectives, the major issue was the lack of a proper model to integrate HRM practices to the strategic aspects f the organisation; the report recommends the contingency approach in this case. On recruitment and selection the report suggests a consolidated structure for uniformity in the entire process as opposed to the arbitrary determinations currently made. On performance and rewards the main issue was the mode of evaluating performance and the nature of rewards to whuch the report suggests Vroom’s expectancy theory to determine rewards as well as documentation of performance for evidence purposes. On employee learning, the report recommends a model – Sigma Six – that outlines the steps for training and the control mechanism. Lastly, on workplace relations, the report suggests the ‘new employment relationship model’ that has a multidimensional outlook on management as opposed to the traditional model used by Trust-mart.

References

Araimi, F. (2011) Power of Human Resources. Bloomington, US: AuthorHouse.

Armstrong, M. (2009) Armstrong’s handbook of human resource management practice. London: Kogan Page.

Baker, T. (2008) The 8 values of highly productive companies: Creating  wealth from a new employment relationship. Brisbane: Australian Academic Press.

Berg, P., Kossek, E., Misra, K. and Belman, D. (2014) ‘Work-life flexibility policies: do unions affect employee access and use?’, Industrial & Labor Relations Review, 67(1), pp.111-141.

Bond Baker, T. (2009) ‘Towards a new employment relationship model’, Leadership & Org Development J, 30(3), pp.197-223.

DelPo, A. (2005) The performance appraisal handbook. Berkeley, CA: NOLO.

Gilbert, C., Sels, L. and Winne, S. (n.d.) The influence of line managers and HR department on employees’ affective commitment. 1st ed. [ebook] Katholieke Universiteit Leuven. Available at: https://lirias.kuleuven.be/bitstream/123456789/271894/1/mo_1004.pdf (Accessed 22 Apr. 2015).

Grimshaw, E. (2009) The Perfect Fit. Eastbourne, UK: Dragon Rising Publishing.

Hailey, V., Farndale, E. and Truss, C. (2005) ‘The HR department’s role in organisational performance’, Human Res Manag J, 15(3), pp.49-66.

Ho, Y., Tsai, H. and Day, J. (2011) ‘Using the theory of planned behaviour to predict public sector training participation’, The Service Industries Journal, 31(5), pp.771-790.

Islam, K. (2006) Developing and measuring training the six sigma way. San Francisco: Pfeiffer.

Kelliher, C. and Perrett, G. (2001) ‘Business strategy and approaches to HRM ‐ A case study of new developments in the United Kingdom restaurant industry’, Personnel Review, 30(4), pp.421-437.

Koontz, H. (2010) Essentials of management. 5th ed. New York: McGraw-Hill.

Kumari, N. (2012) ‘A Study of the Recruitment and Selection process: SMC  Global’, Industrial Engineering Letters, 1(2), pp.34-38.

Lang Cheng, J. (2012) ‘Examining the implementation of Six Sigma training and its relationships with job satisfaction and employee morale’, Asian Journal on Quality, 13(1), pp.100-110.

Martin, M., Jackson, T. and Martin, M. (2010) Human resource practice. London: Chartered Institute of Personnel and Development.

Njanja, L., Maina, R., Kibet, L. and Njagi, K. (2013) ‘Effect of Reward on Employee Performance: A Case of Kenya Power and Lighting Company Ltd., Nakuru, Kenya’, IJBM, 8(21).

Ogedegbe, R. (2014) ‘Achieving Organisational Objectives through Human Resource  Management Practices’, European Journal of Business and Management, 6(16), pp.18-22.

Rothwell, W. and Kazanas, H. (2003) The Strategic Development of Talent. New York, US: Human Resource Development.

Shipton, H., Zhou, Q. and Mooi, E. (2013) ‘Is there a global model of learning organizations? An empirical, cross-nation study’, The International Journal of Human Resource Management, 24(12), pp.2278-2298.

Tamkin, P., Strebler, M. and Reilly, P. (2006) The changing HR functions: The key questions. CIPD researches. London: CIPD, pp.1-39.

Venkataratnam, .. (2004) Personnel Management and Human Resources. London: Tata McGraw-Hill Education.

Zhai, X., Liu, A. and Fellows, R. (2014) ‘Role of Human Resource Practices in Enhancing Organizational Learning in Chinese Construction Organizations’, J. Manage. Eng., 30(2), pp.194-204.

Appendices

Appendix 1