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Page 1: Human Resource Mgmt

TABLES OF CONTENTS

1.0 Introduction

2.0 Literature Review

2.1 HRM Perspectives and definition

2.2 The importance of SHRM

3.0 Case Studies on Sears and Herman Miller

3.1 Analysis of HRM at Sears

3.2 Analysis of HRM at Herman Miller

3.3 Finding on the Case Study

4.0 Corporate Appraisal

4.1 Company history and background

4.2 HRM in SSCS

4.3 Recommendations for improvement

5.0 Conclusions

APPENDIX

REFERENCES

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1.0 Introduction

The human resources functions constantly face problem for demonstrating its value to

the organization. Especially during economy crisis, the basic strategic of HRM

component (Figure 1) shall be the earliest cutbacks from expenditures list (Patrick et.

Al., 2001). Recently, there is a growing awareness that human capital is perhaps a

most critical asset for an organization, but it is a frustrating to measure the ROI for

their considerable expenditure on people. Mercer Human Resource Consulting and

CFO Research Services (2002) have conducted a survey to acknowledge the

importance and responsibility of managing human capital. The survey (Figure 2)

showed 92% think that human capital as a key driver for customer satisfaction, while

82% think it has great effect on profitability and 72% for innovation and new product

development. Many research literature and among practicing manager are coming to

see human capital as a source of value and competitive advantage.

Nowadays, most HR department implementing strategic human resource management

(SHRM) by integrating HRM into planning process, emphasizing HR activities that

support goal and building strong relationship with employees to accomplish

organization’s goal. This paper identifies the key challenges facing SHRM going

forward and new directions in scholarship and practice of SHRM. Secondly, it will

attempt to discuss, analyze and contrast the SHRM deployed by Sears and Herman

Miller. It also highlights the significant of a differentiated SHRM practice across the

firm but also within firms. Finally, we will assess the state of SHRM practice in SSCS,

both remarkable progress and the challenges facing.

2.0 Literature Review

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2.1 SHRM Perspective and Definition

Strategic human resource management (SHRM) cannot be discussed comprehensively

without understanding the concept of HRM. HRM mainly emphasis on planning,

monitoring, and control human resources to be provided and deployed at the

management needs (Torrington et. Al, 2002). Whereas, SHRM is about having a

department on top of the planning that deciding the human resource needed by the

company rather than react to the need of the company (McMahan et. Al., 1998). It

also an extension of HRM with depth insight of the environmental analysis and

organization direction for organizational strategy implementation and evaluation

(Bratton et. Al., 1999). Therefore, SHRM pursue an earlier involvement of HR

department in planning stages which allows to be adjusted to fit new or change of

company strategy (Van Donk, 2001)

Contemporary SHRM is the confluences between diverse streams of academic work

which systematically coordinate human resource policies and practices based upon the

context of the organization as well as the relevant external environment. The need of

this transformation was based upon the challenge in complexity of managing human

resource and Brain Drain phenomenon in global environment. Despite there are a lots

of SHRM literature, there still some struggling to identify the meaning of SHRM.

SHRM is more than just planning, monitoring and controlling human; it is also a

relationship management. Relationships which is well take care and nurturing may be

translated into loyalty, engagement and trust, thus create higher level of productivity

for the organization (Theresa, 2003). For example, the company listed in Fortune

Magazine’s “100 Best Companies to Work For” – Adobe Systems offers frequent job

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rotations and Friday night beer bashes to improve employee relationship. Good

relationship exhibit greater motivation to excel in work activities. Therefore, it must

be built among individuals and within groups of an organization.

2.2 SHRM Model

Many researchers have identified their best SHRM model that can support business

strategy and as sources of competitive advantages for the organization. MacDuffie

(1995) asserts that a successful organization should employ these six HR practices.

Firstly, there shall be a comprehensive employee selection system in deployment;

enhancement on training and development; follow by encouragement of employee

participation; information sharing throughout the organization; considerable job

rotation to adapt uncertainty and finally rewards and compensation system.

Ericksen et al. (2004) developed a behavioral model of SHRM by taking a closer look

at High reliability organization (HROs). The SHRM model inclusive of eight

principles of reliability-oriented employee behaviors (ROEBs) to foster organization

reliability and six principles of reliability-enhancing HR strategy (REHRS) to

facilitate the manifestation of reliability-oriented behaviors (Figure 3). Ericksen et al.

suggesting that ROEBs and REHRS is likely more beneficial for firm pursing

reliability under trying condition.

There are other similarly SHRM model been introduce which has summarized in

Figure 4. Apparently, the models are vary from study to study. However, best

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SHRM model may be differs between companies depending on factors such as type of

industry, country of ownership, company size and unionization (The Equality

Authority, 2008).

3.0 Case Studies on Sears and Herman Miller

3.1 Analysis of SHRM at Sear

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Sear, Roebuck, and Company is a leading retailer offers wide range of home

merchandise, apparel and automotive products and services throughout the United

States and Canada. In early of 1996, Arthur Martinez, CEO of Sears recognizes that

the company needs to re-organize and his people need to be re-educate in order to

remain competitive advantage in market share. Thus Sears developed “three Cs”

(inclusive of Compelling place to work, Compelling place to shop and Compelling

place to invest) - a conceptual model of firm performance linking employees,

customers and shareholders.

The first and most important step in HR function to facilitate the implementation of

3Cs is to create awareness of corporate mission, vision and goals to all level of

employees by using variety of communication tools. Assessment on 3Cs model will

be carry out on quarterly and annual basic. Measurement indicator for compelling

place to work is on employee associates’ satisfaction on the company and job; while

Compelling place to shop is on customer satisfaction and customer retention; lastly

Compelling place to invest measure on revenue growth, operating margin and ROI.

Secondly, HR has initiated a series of 12 leadership competencies throughout the firm

to all level of employee. This development significantly has motivated the employees’

potential or capability and to perform competently in the workplace. By the way,

other training, multiple perspective performance appraisal and even individual

attention also will be provided to ensure employee accountable for their behavior in

order to achieve 3Cs. Beside that, Learning Maps used to reinforce the economy

literacy on Sears’ strategy, mission and performance which helps to promoting self-

responsibility within employees and also workforce become engaged.

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Sears is introducing educational programs in Sear University to foster and develop the

abilities of individuals who play a prominent role in the company’s future. Sear

University offered extensive list of courses which integrated 3Cs and 12 leadership

dimensions to transmit its culture and strategy to the new and continuing workforce.

Sears also like many other organizations recognized the importance of performance

management and incentive compensation systems to facilitate 3Cs and 12 leadership

competencies. In order to increase corporate value and to retain good performers in

the company, Sears has reviewed and increased the percentage of incentive

compensation. Furthermore, HR also competently using advance computerized

system and extensive of structured interview for development and deployment. There

is no doubt that the HR has competently delivers a world-class manner of HR basic to

gains legitimacy with employees and others throughout the firm.

3.2 Analysis of SHRM at Herman Miller

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Herman Miller, Inc.(HMI) is one of the world’s largest manufacturer of office

furniture and equipment, as well as modern furniture for home. HMI has been

recognized as the "100 Best Companies to Work for in America" in the year of 2010,

2009, 2008, 1999, and 1998 in Fortune magazine (http://www.hermanmiller.com/).

HMI has adopted “Open Book Management” which creates employee ownership by

encouraging employee participation in decision making then share the financial gains

when goals are met. Therefore, HMI implemented Economic Value Added (EVA) to

update ongoing financial condition of the business throughout the organization. The

primary goals of HR comprise building employee capabilities, secondly is to built

employee commitment and finally to improve HR function itself; this move is

intended to facilitate corporate goals and strategy.

Firstly, HR has developed a competency model to identify workforce competencies,

and provide development and training required which helps to built employee

capabilities. HR also promotes Lean thinking throughout the organization in order to

create economic and customer value at HMI. Moreover, business literacy training on

EVA and meeting such as Monthly Business Exchange (MBX) will be held frequently

to update on corporate business condition which encourage participation in decision

making. Thus, participation has becomes an obligation and opportunities for everyone

in HMI.

Secondly, HR incorporates “Blueprint for Corporate Community” in to the

organization to become a good corporate citizen in the communities and as a service

to employee-owners and other stakeholder. The activities included contribution to

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student scholarship, partnering with local schools and participate in environmental

protection activities. To further facilitate employees’ commitment to the organization,

HR has adopted ESOP and instituted the Scanlon Plan by giving company stock or

bonuses as a reward to employees. In additional, HMI also enacted Silver Parachute

Plan by paying generous severance allowances for employees in the event of a hostile

takeover.

Without a doubt, HR has done a good job to improve the fundamentals of HR

infrastructure. They have developed a competency based selection process, New

Employee Orientation Program and set a series of “nested objective” for each

employee to create awareness of corporate strategy and goals which to help all

employees working towards the same goal and to have greatest impact on firm’s EVA.

Furthermore, HR has improving Electronic Data System (EDS) by using EVA system

to enhance the performance measurement and compensation system. Other

improvement such as diverse workforce to exercise in good corporate responsibility,

initiate welfare to work and comply with Equal-employment Opportunities (EEO)

will helps HMI to attract and retain key talented employees.

3.3 Finding on the Case Studies

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Sears has been the venue of innovation in knowledge management; it is indeed a

knowledge based organization. HR creating an ownership culture at Sears which

involves each employees staying informed the progress of 3Cs and related

information. In additional, HR also develop Sears University to educate employees

and transmit its culture and strategy into the workforce.

HMI is strongly believes that relationship management is needed for their business to

succeed and remain competitive as the business landscape continues to evolve and

change. Therefore, HR is putting effort continuously increase the sense of ownership

among employees.

Figure 5 is a detailed comparison of SHRM between Sear and HMI using SHRM

Model by Cornell University.

4.0 Corporate Appraisal

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(This part of report is solely used for academic purposes only and it should not be

disclosed to any third party.)

4.1 Company history and background

SSCS in Malaysia is a member of S Group which serve as logistic solutions provider

to S Group manufacturing plants locally and aboard. The services included a complete

range of logistics solution from receiving cargoes, storage, delivering to customer at

optimum load and cost efficient. SSCS are committed to their mission for timely

delivery, value added and quality services while sharing expertise and resources with

global network partnership.

4.2 SHRM at SSCS

S Group has announced and engaged immediate restructuring and other cost cutting

initiatives during global economic crisis on 2009. HR in SSCS has playing an

important role for the restructuring to streamlining the workforce through work

assignments and outplacement as well as reducing headcount while still maintaining

good relationship with employee and other stakeholders.

a) Employment and Employee Management Relations

SSCS values communication between employee and management which is essential

in conveying corporate policies and encouraging employees to voice their opinion. S

group communicating corporate goals and strategy base on workplace, customer and

shareholder outcomes throughout the organization by emails, intranet and even

through meetings. To further facilitate the communication process, they conducted

town hall meetings which enable senior management to communicate strategies as

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well as exchange opinion with employees on technology and management practices.

HR in SSCS also sought employee understanding of its actions and as well as

conducting interview individually to hear employees’ opinion during restructuring to

enacted voluntary separation scheme (VSS) reducing headcount.

b) Employee Training Programs and Participation

SSCS encourage personal growth through on on-job training (OJT) and various

approaches of training such as e-learning which aimed at enhancing abilities and skill

of employees. The company promotes e-learning technology and technological

solutions to deliver information and skill training to employees at anytime and

anywhere. Management also pursues multitasking skill to further streamlining the

workforce, whereby OJT is designed and being delivered at the optimum time so that

the employees have opportunities to learn, practice and feedback immediately.

Ethical business conduct and compliance with laws and regulations are fundamental

of corporate culture. The code of conduct (COC) sets out the policies concerning on

respect for human rights, safety of products and services, environmental conservation

and information disclosure. Periodically education and training sessions provided and

ongoing dissemination through e-learning, emails, booklets, company intranet to

create awareness the importance of the policies and value set.

HR also has successfully drive lean thinking through the organization. For SSCS, the

employee participant and involvement in Kaizen activities has become a norm. This

move is crucial to facilitating ownership among employees and also provides a

potential of competitive advantages for the company.

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c) Creation of better workplace

As many other organization, SSCS has consistently emphasis on evaluation and

compensation system which linked closely with corporate goals. HR has established

periodic employee performance or KPI review by mangers, that ensuring individual

contribution is evaluated fairly and promotes professional development.

SSCS also undertakes a variety of activities concerning employees’ health and safety,

social contribution, and ethical business practices to create a workplace that inspires

employees.

SHRM initiative of SSCS presented using SHRM Model by Cornell University as

shown in Figure 6.

4.4 Recommendations for Improvement

Based on the review of situational analysis, SSCS has a well-established HR

strategies and framework. Recommendations as below made for further improvement

in long-run.

a) Formulating and communicating company mission, vision and goals

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The company goals and financial performance is lagging indicator, informative about

S group throughout the firm, but providing little information about the contribution of

SSCS to the group. It is important for SSCS to develop a conceptual model of firm

performance linking employees, customers and contribution to the S group

performance. SSCS is recommended to describe the magnitude of the

interrelationship of employee attitudes affected customer attitudes, and both affected

SSCS financial performance which will subsequently be reflected in S group’s ROI.

Sears was able to establish this inter-relationship and has successfully demonstrated

the effectiveness of this concept.

b) Comprehensive training and development

Surely, the adoption of OJT approaches and e-learning system to train a new

employee is a best choice for the organization. However, the desired outcome is

simply to enhance skill and ensure the employee knows how to do their job, with no

personal development. Furthermore, the trainer may pass on sloppy work habits or

unintentionally teach irrelevant or inefficient work methods to other employees.

Improper OJT may cause the employee feel heavy workload due to incompetent to

perform in multitasking job. This may be the root cause of 7% employee turnover in

2009 which create also additional cost during the administration of the resignation, as

well as administration of recruitment and selection process.

Therefore, a comprehensive, ongoing and consistent training framework is required

for the employee to enhance teamwork, commitment towards company,

accountability, communication and discipline. SSCS is recommended to conduct a

training needs assessment and ask the employee themselves what skill they would like

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to develop. Another approach is to build the training opportunity into the employee’s

performance development plan. The positive outcome of the training shall allow the

employee to develop solid management skills with better understanding of their

position and function and blending of both technical and personal enhancement.

c) Work-life balance

Based on the review, high performance work system (HPWS) in SSCSM generally

gives positive impacts on employees by increasing their commitments in workplace.

However, the job intensity, stressors and excessively long working hours arising from

HPWS could affect some form of employee commitments (Kaushik, 2009).

Considerable supports from SSCS to assist employees maintaining a healthy work-life

balance will offer employers the competitive business edge in attracting and retaining

employees. The work-life balance initiatives recommended inclusive of parental or

family leave, flexible work arrangement and supportive child care program. In today’s

labour market, flexible work arrangements is crucial for every employee to allow for

young people to study; parents to have time with children; and everyone to maintain

their healthy work-life balance and be active in the community.

d) Human Capital Relationship Management (HCRM)

In a workforce that highly diverse today, SSCS may require greater customization of

employment relationship to gain power in job market. HCRM approach can help the

organization to cater the change of employee preferences and to tailor employment

relationships. The foundation of HCRM strategy based on CRM’s best practices

identified by Berry et al (2004) – noticing, remember and learn what its employee

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doing and act on what it has learned can make value added. Firstly, the management

team required to be trained to observe and listen to employees’ unfulfilled need; and

employees need to share information about them in order to improve their

employment experience. Then, all employee information such as work histories, skill

assessments, career aspiration, reward preference and so forth shall be stored in one

HR data warehouse whereby can be easily retrieve by HR or employee themselves.

Thus HR can make decision and take necessary based on scientific workforce

analyses with information collected. Finally, SSCS can use HCRM to transform all

information from employee into action plan such as retirement and health care

program, compensation program, employee development program as well as

performance management. The examples of customized employee relationship

activities initiated through HCRM compare with conventional one-size fit all

employment relationship as shown in Figure 7 (Elissa, 2007).

It is the cumulative result of efforts by each and every employee for SSCS to continue

growing and evolving as a company that is esteemed by society. The company shall

recognize the need to enhance employee awareness, skill and capabilities. Going

forward, each employee shall take initiative to accountable for his or her own action

towards company strategy and goals.

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5.0 Conclusion

Take away my people, but leave my factories, and soon grass will grow on the factory floors.

Take away my factories, but leave my people, and soon we will have a new and better factory.

Andrew Carnegie

Recognizing human resources as a valuable asset of the organization has produced

competitive results for the organization. This study has analyzed various SHRM

practices by different authors, apparently they are working towards the same goals to

produce the employee competencies and behaviors that the company needs to achieve

its strategy goals. In conclusion, there is absent of unifying framework for SHRM

process in terms of practices’ ability across different situations or locations. As long

as, flexibility of SHRM in an organization enables it to achieve fit in a dynamic

competitive environment (Patrick et. Al., 1997). The desired outcome of SHRM

practice should be able to create an environment of respect, acceptance, understanding,

and communication; thus maximize the potential of workforce and creating a place

where new ideal and new perspectives are encouraged.

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APPENDIX

Figure 1

Figure 2

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Figure 3

Figure 4

Figure 5

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Figure 6

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Figure 7

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REFERENCE

Berry, Michael J.A., and Gordon S. Linoff (2004), Data Mining Techniques, 2nd

ed.,

Wiley Publishing

Kaushik Chaudhuri (2009), An Empirical Quest for Linkages between HPWS and

Employee Behaviors – a Perspective from the Non Managerial Employees in

Japanese Organization, World Academy of Science, Engineering and Technology 53

Elissa Tucker, Hewitt Associates (2007), Human Capital Relationship Management,

Using CRM to Customize Employee Relationships and Beat the Talent Challenges of

Today and Tommorow

http://money.cnn.com/magazines/fortune/bestcompanies/2010/

http://www.hermanmiller.com/

Mercer Management Consulting (2002), Human Capital Management: The CFO’s

Perspective

Patric M. Wright & Scott A. Shell (1997), Toward a Unifying Framework for

Exploring Fit and Flexibility in SHRM, CARHR Working Paper Serie, WP 97-13.

Patric M. Wright, Benjamin B. Dunford & Scott A. Shell (2001), Human Resources

and the Resources Based View of the Firm, Jounal of Management, 27:701.

Theresa Welbourne (2003), Strategic Human Resource Management (SHRM): What

is it – REALLY??? www.eepulse.com

Torrington D.,Hall L., and Taylor S. (2005), Human Resource Management, 6th

Edition, New York: FT Prentice Hall.


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