Human Resource Strategic Philosophy for MzVann’s Clothing
It is indeed a sweet burden to have taken on the new post of Director of Human Resources Management of MzVann’s Clothing. To manage your expectations and mine, I feel that it is important for me to share with you some thoughts and principles which I intend to use in managing the human resource assets, processes, and departments of the company, on the whole. The report shall cover the following topics: strategic HRM, HR planning, job analysis, compensation system design, equal employment opportunities, HRD, recruitment and selection, and benefits.
The concentration on the synthesis of HRM practices and policies with strategy has been depicted as a paradigm shift from a tactical to a strategic thrust or orientation (Thomason, 1991). Unlike conventional personnel management that is characterized as reactive, parochial, and concentrates on rank and file employees, HRM is proactive in finding and establishing practices and policies which are consistent across all organizational policy areas. The HRM orientation necessitates that personnel practices and policies address and adapt to organizational needs (Schuler, 1991). Moreover, HRM considers employees as valued strategic resources rather than as overhead cost. A main thrust of HRM is the potent and effective management of people within the organization – when carried out, this is expected to yield competitive advantage. When compared to conventional personnel management which regards employees as passive , HRM considers people as strategic assets who should be developed to optimize their potential (Kamoche, 1991).
There is only one point which I would like to make with regards to strategic human resource management, and that is, let HR be a strategic partenr at MzVann’s Clothing. Gone are the days when HR was perceived only as a police or an administrator. This time, we want the relationship to become more strategic: we want to contribute to the company’s bottomline. I envision doing this through the company’s performance management system as a good take-off point. How? HR will spearhead the phases of strategic alignmnent, performance planning, monitoring, evaluation, and rewards. In establishing stringent measures across these phases, HR will be able to plan, measure and track whether company objectives are indeed being achieved. This is the value-added role of HR.
HR Planning is indeed a very critical phase, as this will dictate what strategies shall be monitored, measured, and against which people’s performance shall be gauged. There is only one word which I want you to remember as my dogma in HR planning: alignment!
Guest (1987 in Legge, 2005, p. 104) provides the following definition of human resource management (HRM):
The main dimensions of HRM [involve] the goal of integration [i.e. if human resources can be integrated into strategic plans, if human resources policies cohere, if line managers have internalised the importance of human resources and this is reflected in their behaviour and if employees identify with the company, then the company’s strategic plans are likely to be more successfully implemented], the goal of employee commitment, the goal of flexibility / adaptability [i.e., organic structures, functional flexibility], the goal of quality [i.e. quality of staff, performance, standards and public image].
By alignment, I mean that HR should be able to directly contribute to MzVann’s real bottomline. We do not think of initiatives off the top of our heads, but instead focus on those which are supportive of the organization’s overall strategic plans. We are here to support people. Planning is done moreso for the people component – do we have the right numbers, skills, and competencies?
Underpinning personnel management are the twin ideas that people have a right to proper treatment as human beings while at work, and that they are only effective as employees when their job-related personal needs are met. Underpinning human resources management is the idea that management of human resources is much the same as any other aspect of management, and getting the deployment of right numbers and skills at the right place is more important than interfering with people’s personal affairs.
Compensation System Design
It is imperative for us to ensure that our compensation system design is sound. It must be equitable and yet performance-based. I want to migrate from a culture of entitlement to one of high performance. By this, I want each employee of the company to see the clear linkage between what they do and what they receive as rewards in return for their efforts.
From equity theory, we conclude that employees who perceive they are being treated fairly will be more satisfied with their jobs than employees who do not perceive such fairness. The same holds true for motivation: employees who feel that they are not being treated fairly will feel less motivated than those who uphold such a feeling.In an interesting study, O’Reilly and Puffer (1989) found that employees’ motivation increased when co-workers received appropriate sanctions for their behavior. That is, when a high performing group member was rewarded or a poor performing group member was punished, the satisfaction of the group increased.
The degree of inequity that an employee feels when underpaid appears to be a function of whether the employee chose actions that resulted in underpayment (Cropanzano & Folger, 1989). That is, if an employee chooses to work harder than others who are paid the same, he will not feel cheated, but if he is pressured into working harder for the same pay, he will be unhappy.
Victor Vroom’s expectancy theory refers to three factors: (1) valence (value placed on the expected reward), (2) expectancy (belief that efforts are linked to performance), and (3) instrumentality (belief) that performance is related to rewards. Porter and Lawler built on Vroom’s theory by proposing a model of intrinsic/extrinsic motivation. People are extrinsically motivated if they do something they find interesting and from which they derive satisfaction. Also people are extrinsically motivated if they do the activity because they are satisfied with the tangible or verbal rewards attached (Gagne & Deci, 2005).
Motivation can be used to improve employee performance and productivity at MzVann’s Clothing. Employees can be motivated to do their work better, that is, improving their work performance, and working more effectively to improve their productivity. One way is to share information (like profit and loss or quality of service) on how the employees’ department is doing in comparison with others in or out of the company. Getting MzVann’s employees warmed up is good, but it is not enough. After getting them initially motivated, the manager has to help each one establish and achieve higher goals. Motivation can be a useful tool in goal setting by pointing out targets that will bring employees out of their comfort zones. With goal setting, each employee is given a goal, which might be a particular quality level, a certain quantity of output, or a combination of the two. For goal setting to be most successful, the goals themselves should possess certain qualities. First, they should be concrete and specific. Setting more specific subgoals can also improve performance. Second, a properly set goal is high but reasonable.
Equal Employment Opportunities
I want MzVann’s to be an equal opportunity employer that hires on the clear basis of competence and experience rather than on factors such as race, religion or gender. To this day, it is recognized that Whites still hold racist views despite their vocal claims of being egalitarian. These biases are implicit and have profound roots within their psyche. In current American communities, it is unacceptable to show conspicuous signs of discrimination. On the whole, there is a public clamor against racist or discriminatory practices (Billig, 1988). And yet, Howitt and Owusu-Bempah (1990) indicate that there are clear instances of racism among communities that claim to exercise equity on the basis of race.
There are clear instances when individuals of color are not given equal employment opportunities, not only in our community, but across most American states. Racism is not only perceived as mere social discrimination or prejudice. It redounds to very tangible and observable behavior, such as when employers deprive members of minority communities of employment. It may be tantamount to being extremely ethnocentric. For instance, while employers may accept the applications of Native Americans, they will still not be selected over their White counterparts because they are stereotypically perceived as lacking dependability or reliability. There have been initiatives to change these deeply rooted stereotypes through education, but this seems to be quite futile considering the still large employment gap between Native Americans and Whites (Billig, 1998).
There are clear implications for policy formulation in regard to the rights of the minorities. The predominant state economic policy reinforces the drafting of a profitable business climate. Necessarily this implies low labor costs, which makes it hard to members of the minority to gain access to decent employment to save enough capital. Brunt of this problem on discrimination lies in the shoulders of policy makers. MzVann’s would like to contribute to this thrust of providing equal opportunity to minors.
Human Resource Development
Motivating MzVann’s workers well in these times of change demands a balanced combination of emotional and intellectual levers. Any manager should learn to use and combine as many needs, factors, modes of reinforcement, and outputs into their message as may be necessary to motivate their employees. A manager can become a good motivator by knowing two things well: first, which tool or level of motivation will work for each and every employee, and second, how to motivate and communicate effectively with the use of positive reinforcement. Management practices which can serve as effective reinforcers include self-esteem work shops, flexible work arrangements, customized benefits packages, individual and team performance-based reward systems, among others. Each employee is different thus their motivating factors vary from one and other (Ridley, 1999). The manager’s task should be to locate motivational factors of each individual or group in order to develop a motivational environment. This will assist the manager in creating a better working environment enhancing productivity and job satisfaction (Gerstner, 2002).
Among MzVann’s HR’s strategic objectives are as follows, in line with the company’s often stated dictum “Putting People First”: enhancing critical business competencies, people and leadership development, promoting a conducive organizational climate, and emphasizing a culture of performance.
People and leadership development is pursued by fast tracking the development of those in ‘critical few’ business positions, not only in technical tracks but also those which deal with organizational competencies such as project management and problem solving. Strengthening our leadership bench through training of top performers and high potentials is being focused on, for effective succession management. This is our way of ‘growing leaders from within’. A competency tracking tool shall also be designed to monitor the pace with which strategic skill gaps are being closed.
This first step involves determining and defining the key strategic objectives that are vital to the survival, success and growth of the organisation. These are similar to the “strategic elephants” described by Argenti (1989), those key issues or problems that the organisation must deal with in the next two to three years if it is to survive and prosper. They include the vision and strategy of the organisation and the external and internal factors that drive the decisions of the organisation (e.g. changing market share, return on capital, lack of human resource skills in a particular area, etc.).
One of the biggest criticisms of many management development programs is that they do not contribute to the business objectives of the organisation. They may develop managerial skills but they do not substantially contribute to business success. It is often incorrectly assumed that if managers gain a skill they will use it to improve the business. It is important for strategic issues to be clarified and agreed on prior to the design of the leadership development program since they should determine the objectives of the program as well as the key competencies that need to be developed in the participants. To achieve such a linkage, MzVann’s shall use the Balanced Scorecard as an HR strategy to ensure that objectives from the organisational level are meaningfully anchored on and aligned to the objectives at the departmental and individual levels.
Part of people and leadership development in MzVann’s is education in and practice of the corporate values. Each business unit in the company may be unique, but we assure that everyone adheres to a single, shared values system.
Promotion of a Conducive Organizational Climate. Turnover includes the arrival of new employees and the departure of existing employees, but most research on turnover focuses on leaving rather than on entering the organization. Turnover can be classified into two categories: voluntary and involuntary turnover. Voluntary turnover occurs when the employee terminates the employment relationship. Involuntary turnover is when the employee wants to stay but the employer decides to terminate the relationship. Price (2001) found that most turnover is voluntary and is, therefore, potentially avoidable and controllable, costly, and disruptive to an organization. Wiley (1993) thought that voluntary turnover could be caused by a number of factors including poor job feedback, job dissatisfaction, unmet job expectations, performance problems, situational constraints, socialization difficulties, greater degree of job stress, and a lack of career advancement opportunities.
Thus, in an effort to maintain a conducive organizational climate, MzVann’s shall emphasize on worklife balance initiatives. Moreover, each employee’s stay in the company shall be made worthwhile by emphasizing on skills development and employability. In addition, the rewards system of the company shall be performance-based rather than tenure or entitlement-based. This ensures that rewards are given out equitably to those who contribute more to organizational bottomlines.
Building a Culture of Performance. As a banner program for performance management, MzVann’s shall launch and implement the LEAP, or the Leading Edge for Accelerated Performance. The LEAP is the main vehicle through which a performance-based rewards framework is implemented across the company. Under this framework, employees have shared goals and responsibilities. By ‘shared’, we mean the alignment of corporate objectives to division, department down to individual objectives and the allocation of corresponding weights to these objectives across levels. That the system is performance-based suggests that pay-outs are dependent on performance ratings; thus, the actual pay-out rating is determined by the budget, corporate scorecard rating and the individual’s performance rating. The LEAP also determines the annual pay-out (i.e. incentives).
As an effective tool for promoting a performance-based culture, the LEAP provides focus and alignment to corporate objectives, department objectives, and individual objectives. A critical portion of the system is the cascade of BSC objectives to all employees. Moreover, it eliminates the mentality of entitlement, and promotes stakeholdership. It also encourages employee / team performance that directly contributes to the bottom line of the business. Finally, it shall promote the rewards system as being strongly linked to performance management. It also provides a basis for annual pay-outs and fosters a culture of continuous improvement.
Another retention factor is giving project employees the full range of benefits accorded to regular employees after they have rendered one full year of service. This means that they receive more than the mandatory government mandated benefits usually provided for the nature of their work and employment status.
An important step in selecting MzVann’s employees is recruitment: attracting the right people with the right qualifications (as determined by job analysis) to submit their applications for a particular vacant position. One issue which needs to be resolved as regards recruitment and selection is whether to hire internal candidates or to source from outside. According to Johnson (1997), one means in which to increase the morale of employees is to give present employees the chance to fill out vacancies, preferring them over external candidates. But there must be some caution in carrying this out, since hiring from within constantly and over the long term would cause some sense of staleness in the organization. Over time, the company may need new blood to revitalize itself and thus would need to hire from without. Moreover, if internal hires are repeatedly preferred over external candidates, the company may run the risk of promoting discrimination, and breed a workforce with the same gender, race and age make-up. The ideal set-up is for the organization to strike an effective balance between growing and hiring applicants from within and hiring external applicants (Johnson, 1997).
Recruitment and Selection
In gauging the effectiveness of recruitment strategies, one means is to determine the number of applicants that each recruitment method garners. Logically, the method which is able to attract more applicants is deemed more effective than those which yield lesser numbers. One other method which may be utilized is to compute for the cost per applicant, which is carried out by finding the quotient of the number of applicants (as divisor) and the total cost for the recruitment method (as the dividend). While this method seems to be an improvement over the first method, garnering numerous applicants does not guarantee that they meet the qualifications for the job. Thus, a third logical method would be to determine the cost per qualified applicant (Johnson, 1997).
Internal sourcing is more effective than outside sourcing those who were referred by employees working within the company itself were privy to more precise information compared to those who were hired from outside (McManus & Baratta, 1992). One other way of explaining the efficacy of internal recruitment is put forth by Bryne (1971) which suggests that individuals tend to affiliate with similar others. In effect, employees will tend to refer someone who is similar to him or herself. The referring employee is likely to be happy and since he referred someone similar to himself, that employee also has high probability of fitting in and being satisfied in the organization. Aamodt & Carr (1998) and Rupert (1989) have found outcomes supportive of this theory, in which both found that those employees who were hired through internal sources had significantly longer tenure than those who were hired through external sources; however, no such differences were found when performance was investigated.
I espouse growing people from within and hiring internally. It is only when we do not have qualified employees internally shall we opt to hire from outside. One of the strategies of
MzVann’s is to find and select employees who have the right orientation towards work and productivity right at the onset. The company advocates the idea of a right hire resulting to a quick start. Based on strategic objectives and plans, competency requirements are laid down on a per position – per level basis. These competencies then become the basis of all HR systems, linking these systems clearly and logically. These same competency requirements then become the basis for targeted selection, against which potential employees are behaviorally assessed. This implies that right at the start – at the first step – of hiring, that MzVann’s employees blend well into the organization’s culture and business strategy.
Competencies are general descriptions of the abilities necessary to perform a role in the organization. These are usually described in measurable terms. They differ from job descriptions – while job descriptions typically list the tasks or functions and responsibilities for a role, competencies list the abilities needed to conduct those tasks or functions (McNamara, 2005).
Assessing an individual’s specific strengths and development needs as they relate to the success profiles across levels of supervisors, managers and executive is a key component to selection, development, and promotion decisions. Information and data used to drive these decisions must be accurate and objective.
The organisation shall also set up a structured selection system based on Targeted Selection. This ensures that all questions asked of candidates are behaviorally based (Development Dimensions International, 2005).
We will review the benefits that we are currently giving out to MzVann’s employees, making sure that they are appealing, desirable and motivating for them. We see no logic in choosing benefits which are not firmly anchored on what employees want and on what they need. This requires a thorough study of the company’s existing demographic profile.
Expectancy theory supports the contention that people choose the behavior they believe will maximize their payoff. It states that people look at various actions and choose the one they believe is most likely to lead to the rewards they want the most. This theory has been tested extensively. It has been found that expectancy theory can do an excellent job of predicting occupational choice and job satisfaction and a moderately good job of predicting effort on the job. Expectancy theory implies that the anticipation of rewards is important as well as the perceived contingency between the behaviors desired by the organization and the desired rewards. The theory also implies that since different people desire different rewards, organizations should try to match rewards with what employees want (Maczynski, & Koopman, 2000).
Moreover, it is also important to consider the culture of those who are currently employed at MzVann’s. By this, I mean being culturally sensitive to them – while some employees may want “collectivist” benefits, others may want something more catered to the “individual” rather than to the welfare of many. The way in which the social environment is interpreted is strongly influenced by the cultural background of the perceiver. This implies that the attributes that are seen as characteristic or prototypical for leaders may also strongly vary in different cultures (Hartog, et al., 1999). Hunt and Handler (1999) propose that societal culture has an important impact on the development of superordinate category prototypes and implicit leadership theories. They hold that values and ideologies act as a determinant of culture specific superordinate prototypes, dependent on their strength.
Overall, these are the HR strategies that I am proposing be utilized by the company across the phases of the employee cycle. MzVann’s track record of success and in-depth experience in clothing is a living testament that the amount of strategic leadership, human resource planning and focus, and process management led it to achieve very significant business results.
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