Strategic Human Resource Management

Introduction

Many people in organizations are not very comfortable with how the HR departments operate. This department is always involved in cutting payroll and other expenditure at the whim of the chief financial officers (Jackson and Mathis 2008, p. 3).

Despite of this common perception it has been noted that HR is essential especially in light of the legislation that has been passed in the previous decade. These legal requirements are complex and require HR to be handled with caution.

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The main role of HR is to protect corporate assets from continuous law suits thus requiring HR to play the unsavory role of ‘bad cop’. However, in the best case HR should assist the organization in taking advantage of its core competency.

When an organization identifies any capability that creates high value and differentiates it from competitors this is sometimes referred to as the core competency (Jackson and Mathis 2008, p. 6). It is not uncommon to find that an organizations human resource is its core competency and as such this resource needs to be properly managed for increased performance.

It is due to this core competency that HR effectiveness needs to be assessed and improved constantly. This effectiveness can be increased through measurement and technology (Jackson and Mathis 2008, p. 7).

This can allow HR managers to measure what the future labor demand for an organization are and prepare for any eventualities. In addition to that HR can use this knowledge in advance to incorporate ideas and strategies that can help the organization retain employees.

It has been reported that in reality every manager in an organization is a HR manager. This is clear as they all handle a specific team of individuals who form part of the organizational human resource (Jackson and Mathis 2008, p. 8).

However, it is unreasonable to expect every manager to know about employment regulations and applicable compensation requirements within that geographical location (Jackson and Mathis 2008, p. 8). It is for this reason many organizations have a department with people who deal specifically with these issues.

Data available from the US and many parts of the world indicate that small businesses are very vital to the economy and their numbers are growing rapidly. For example, it has been reported that in the US and many parts of the world, small businesses employ above 50% of private sector employees and also create 60-80% of all new jobs annually (Jackson and Mathis 2008, p. 8).

However, despite the good statistics it has also been noted that the greatest concerns in this sector are HR related. The concerns include; shortage of qualified personnel, increasing costs of benefits, rising taxes and compliance with government regulations (Jackson and Mathis 2008, p. 8).

It should be noted that three of these four main concerns are HR related. This position indicates that even in small organizations that may not be able to incorporate a HR department it is important for the employee concerned to keep abreast with current issues to ensure the organization can remain profitable.

For smaller organizations as well as those large organizations in the process of revamping or bringing their HR departments or personnel up to speed there are a number of approaches that can be attempted.

One of these approaches is HR measurement and benchmarking. This entails making a comparison of specific measures and comparing this against data on the same measures from other organizations (Jackson and Mathis 2008, p. 61). These diagnostic measures can be used to check effectiveness of the HR function. In addition to assessing the performance measures of HR it is crucial that an organization use this data to understand the contributions HR makes to the organization.

Another approach that can be used to assess HR is through a HR audit which is in many ways similar to a financial audit. Such an audit often helps smaller organizations without a formal HR department identify issues related to compliance, administrative processes, record keeping and employee retention (Jackson and Mathis 2008, p. 61).

Employee Retention and Development

As it has been mentioned in the previous section it is crucial that the organization put in place mechanisms that can assist in nurturing its human resource. The organization can make serious reductions in the rate of employee turnover through investing in training and development (Gitman and McDaniel 2008, p. 211).

Through such programs that involve learning situations where employees can increase knowledge and skills required to complete a task. The training objectives should specify performance improvements, error reduction and job knowledge or skills to improve job performance.

This includes training of new employees which is carried out on the job and includes activities such as orientation. These orientation programs that sometimes are performed as half day activity provide information on company policies, regulations, salaries and benefits and even parking (Gitman and McDaniel 2008, p. 211).

Another good approach to improving employee retention is through off the job training. As much as on the job training is effective many organizations have recognized the need for providing employee training away from the workplace (Gitman and McDaniel 2008, p. 212). This normally requires the provision of leave or can be after hours.

The main setting for this type of training is usually in classroom setting. The material for learning is sometimes passed on through case studies, lectures, films, videos and computer demonstrations. This training both on and off the job are good management and risk management practices that need to be in place in any organization (Sharma 2009, p.265).

The need for employee training both on or off the job can be determined by observing certain factors such as employees requests and suggestions, employee survey results, deficiencies in evaluation, individual development plans, change sin legislation, new equipment, new machinery, etc (Sharma 2009, p.265). At the same time it should be noted that the financial resources required for training maybe limited or unavailable. This can be solved by using schemes such as increasing the duration of leave, offering paid leave or

Benefits of Employee Training

Apart from making your organization a desirable place to work through training and development of employees there are other benefits that can be expected after training employees. According to Noe,

‘Studies of what factors influence employee retention suggest that working with good colleagues challenging job assignments and opportunities for career growth and development are among the top reasons for staying with a company’ (Sharma 2009, p. 267).

Another advantage of employee training is that the employee is better placed to aid the organization achieve its goals. As it has been mentioned earlier among the things that motivate an employee is training (Sharma 2009, p.267).

This training is motivating because the employee can gain skills which make carrying out his/her job easier. In addition to that, the employee upon completion of training will normally be better placed with regards to promotion. Therefore, the employee will be motivated to work hard and achieve personal goals while working for the organization.

Another advantage that the organization can benefit from is the availability of more productive staff to carry out routine duties. The knowledge of legislation, taxation and all factors that influence the completion of a task ensure that there is less error in completion of jobs (Sharma 2009, p.267). This reduction in error can directly be translated to an improvement in productivity.

It has been noted that a well trained staff are likely to require less supervision in accomplishing tasks (Sharma 2009, p.267). This is advantageous to the organization in that the organization will save on money that would otherwise be used in employing staff who act as supervisors. In addition to that staff who engage constantly continuous learning are better able to meet challenges and changes in the organization (Sharma 2009, p.267). It is as a result of training that the organization will come to be known as an attractive place to work. In addition to that the organization is bound to find it easier to retain the people who make up its workforce.

The Role of developing Learning Environment within the Organization

It has been noted that a positive environment for learning is critical for success within an organization. A career refers to a sequence of jobs one holds throughout their working life. Though many times an individual plans activities for their career individually the organizations can also embark on career planning for its staff (Sharma 2009, p.275).

In such cases the organization may arrange both on or off the job training for its staff as it prepares some employees to take up positions of other in case of departure. This when accompanied by an organizational policy on learning is a very useful and effective method for retaining employees.

An organization that focuses on providing learning opportunities shows the employees a part of its organizational culture (Sharma 2009, p.267). It should be noted that organizational culture means the values, beliefs and attitudes reflected goals, practices and mission of the organization.

Such an approach indicates that the organization supports learning at all levels (Sharma 2009, p.267). Another approach that can be useful in human resource management for all organizations is subscription to local or international human resources management bodies.

Among the human resource management bodies that will be considered in this report is the Chartered Institute of Personnel and Development. The organization can trace its roots to the Workers Welfare Association (WWA) around 1913 with a membership of just about 34 people.

Today the same organization boasts a membership of 135,000 from many different parts of the globe (CIPD 2011). Of the initial members 29 were women, a reflection of the concern over welfare of workers which was just beginning to emerge in a few companies between 1890 and 1914 (CIPD 2011).

In parallel to this the same duration was characterized by an increase in enlisting of the services of labor officers. These officers were mainly concerned with management of recruitment, discipline, dismissal and labor relations. By 1916 the employment of labor officers was made compulsory by the ministry controlled establishments (CIPD 2011).

Due to this it has been reported that by 1916 when the war ended there were almost 1000 labor officers employed, 600 of those were already members of WWA. One major role of these labor officers was to interpret the complex legal framework governing employment of civilians after the war. Many of these labor officers came from engineering and works management backgrounds and many had direct experience with life on the shop floor.

In 1939 the institution changed its name to Institute of Personnel Management. During this period involvement in industrial training and relations had began to expand before the Second World War. After the war both these areas of personnel work expanded considerably (CIPD 2011). Following the continued expansion in 1955 the institute began to restrict entry to full membership by using an examination (CIPD 2011).

This saw the introduction of an education program which had to be completed prior to undertaking the final examination. In 1994 the Institute of Personnel and Development was formed following a merger between the Institute of Personnel Development and the Institute of Training and Development (CIPD 2011).

Currently it is reported that CIPD is among Europe’s largest HR and development professional bodies. This body has become an internationally recognized brand with a membership of over 100,000 from almost 120 countries (CIPD 2011). The recent recession has seen many organizations asking and searching for solutions that CIPD promises are closely attached to the role of HR within the organization.

Another institution that will be considered for the purposes of improving Human Resource Management within the organization is the Society for Human Resource Management (SHRM 2011). This institution was founded by 28 individuals in 1948 under the name America Society for Personnel Administration (ASPA). The founding members of the institution had appropriately anticipated a situation that would require the establishment of national body to represent the personnel profession (SHRM 2011).

Among the goals that this institution aimed to assist in achieving include providing a platform that can be used to promote national networking of HR professionals, the provision of continuous opportunities for professional development and generally the advancement of the interests of the profession. Following these initial steps the group prepared for its first national convention which was held in Cleveland.

Prior to 1964 ASPA was strictly a volunteer based organization and had no permanent facilities or staff. In 1964 the organization hired its first national Executive Director and a decision was made to locate the headquarters in Ohio (SHRM 2011). This decision came when the membership was slightly over 3,000 and the staff had reached five members.

The organization kept the headquarters in Ohio until 1984 when they were moved to Alexandria, VA. The organizational staff was seven when the organization was transferred to the new headquarters. Immediately after the transfer an additional 32 staff was enlisted to help in meeting the needs of the 35,000 members (SHRM 2011).

Around the 1989 the name of the society was changed to the Society for Human Resource Management to reflect a broader scope. The organization celebrated its 30 year anniversary in 1998 having enlisted more than 90,000 professional and student members from different locations around the world. The current global membership of the organization is in excess of 250, 000 and the members are enlisted from over 140 countries with offices in India and China (SHRM 2011).

Also worth consideration in this quest for a suitable local or international HR body to join is the Australian Human Resource Institute (AHRI 2011). This body was formed in 1943 and was initially known as Personnel and Industrial Welfare Officers Association (AHRI 2011).

In 1949 the body changed its name again to become known as Personnel Officers Association of Australia. This name was again changed in 1954 to become the Federal Institute of Personnel Management of Australia. In 1992 the body would make another change to the name becoming the Australian Human Resource Institute (AHRI 2011).

The institution began to experience financial difficulty and was purchased by Deakin University in 1999 (AHRI 2011). After overcoming the financial woes the University sold the institution to a group of bidding AHRI members. The winning bidders completed the purchase in 2006 marking the end of the seven year period the institute was operated by the University (AHRI 2011).

To allow for the purchase two companies were initially formed namely AHRI Limited and AHRI Services Company Limited. In 2007 the two companies a proposal was made to merge the two companies. This proposal was adopted following the Annual General Meeting (AGM) that saw the two merge into AHRI Ltd. The AGM also saw the constitution of the new company approved.

This institution is the only professional association that caters for human resources professionals in Australia. The institution provides a mechanism for professionals to indicate their education, commitment to ongoing education and professional ethics and experience to potential employers (AHRI 2011).

The institution has over the years managed to pull in about 15,000 members. It is currently considered as a strong and powerful mouthpiece for the Human Resources profession in Australia (AHRI 2011). For these reasons it is considered a wise move for professionals in various capacities to be members of the institution.

As earlier mentioned this section of the report is dedicated to introducing various local and international bodies that may be beneficial to the future of Human Resource Management within the organization. The organization was formed following a crisis that was caused by a medical malpractice lawsuit (ASHRM 2011).

During the era of the early to mid 1970’s insurance for both physicians and hospitals escalated until it became either unaffordable or unavailable. Following this, legislators began to form state or governments sponsored insurance underwriting agencies to provide professional and general liability coverage for both physicians and hospitals (ASHRM 2011).

This saw the emergence of bodies such a Hospital Association Risk Managers around the year 1973. Due to mounting pressure in 1978 the legislation soon required health facilities to have risk management programs in place to deal with any eventualities (ASHRM 2011). This prompted interest in risk management and the first meeting that saw the inception of ASHRM in 1980. This meeting was attended by almost 300 people and included discussions on planning for risk management within the healthcare profession.

Following this action the organization gained momentum and there was a marked rise in the number of members. The period of 1984 to 88 was marked by a change in the name to ASHRM and the establishment of a program to recognize achievements at various levels (ASHRM 2011). During this era membership rose by 65%.

The institution has continued to make significant achievements and has recorded significant increase in membership. By the time the organization was celebrating its 30 year anniversary in 2010 its membership had risen to over 25,000 with members in Chile and Indonesia (2011).

The Dubai Human Resources Forum was founded in the mid 1970’s by a group of HR personnel who were keen on having a network to share experiences. The forum is open for all who are interested in Human Resources and an interest in similar objectives (DHRF 2009).

The forum currently has about 300 members representing over 100 companies in almost every sector in the UAE region. The forum is operated by elected committee officials. The committee meets on a monthly basis to organize about 20 seminars, workshops, site visits and other events annually (DHRF 2009).

The forum also organizes talks by local and international speakers to share on topics such as HR Practices, personal career development, business excellence and other topics of interest (DHRF 2009). The forum also has an online forum that is used to allow the members interact and hold discussions on common HR issues. This online forum is also essential in that it provides an opportunity for members to share CV’s and information on vacancies or any information that could be of relevance to other members.

The forum charges AED 150 once upon joining and a further annual membership of AED 300 for interested applicants (DHRF 2009). There are also separate membership terms for students and corporate members. Upon registration a member is free to attend any of the forum events including the annual general meeting.

Conclusion and Recommendation

In the beginning of this report it was indicated that small businesses are growing rapidly in numbers all over the world. This is corroborated by statistics that indicate small businesses employ about 50% of private sector workers.

IN addition to this it was observed that these same small businesses are responsible for the creation of 60-80% of new jobs on an annual basis (Jackson and Mathis 2008, p. 8). However, despite these statistics it is sad to note that these small businesses face a lot of difficulty due to HR issues. This is because the owner or manager is often charged with all HR responsibilities in addition to regular responsibilities.

In line with the difficulties of regular responsibilities it is easy to see why there is little emphasis played on HR activities. However, it has also been reported in this report that HR plays a major role in assisting organizations to attract and retain good employees (Gitman and McDaniel 2008, p. 211). In addition to that incorporation of effective HR strategies can be useful in reducing the rate of employee turnover within businesses.

Among the most common ways this turnover can be reduced was through investment in training and career development. Through registering to various professional bodies the organization can help its employees build their careers and nurture a crop of competent workers capable to chart the organization through the stormy waters of the current globalized economy.

In line with selecting an appropriate organization a brief survey was conducted on the available information about several organizations. Of these institutions the Chartered Institute of Personnel and Development was found most suitable to assist in HR activities.

This decision was made first of all based on the number of members and countries the organization has managed to reach. According to the information on the institution website the membership is in excess of 100,000. In addition to that the institute is recognized in over 100 countries (CIPD 2011).

This ensures us that the organization is capable to adjust to the different needs of various HR departments and national cultures. In addition to that this indicates that it is likely that this organization can provide a lot of training and learning material that can assist the manager in successfully implementing HR activities effectively even within a small business.

References

AHRI. (2011). About AHRI: History. Australian Human Resource Institute. [Online] Available from http://www.ahri.com.au/scripts/cgiip.exe/WService=AHRI-LIVE/ccms.r?PageId=10910 [Accessed 05 June 2011].

ASHRM. (2011). Celebrating 30 Years: A Brief History of ASHRM. American Society for Healthcare Risk Management. [Online] Available from http://www.ashrm.org/ashrm/about/history/a_brief_history_of_ashrm/index.shtml [Accessed 05 June 2011].

CIPD. (2011). History of HR and the CIPD: CIPD and the HR Profession. [Online] Available from http://www.cipd.co.uk/hr-resources/factsheets/history-hr-cipd.aspx [Accessed 04 June 2011].

DHRF. (2009). Welcome to the Dubai Human Resources Forum. [Online] Available from http://www.dhrf.ae/dhrf/index.php [Accessed 05 June 2011].

Gitman, Lawrence, J., and McDaniel Carl. (2008). The Future of Business: The Essentials. Mason, OH: South Western-Cengage Learning.

Jackson, John, H., and Mathis, Robert, L. (2008). Human Resource Management. Mason, OH: Thomson-South Western.

Sharma, S. K. (2009). Human Resource Management: A Strategic approach to Management. New Delhi: Global India Publications PVT Ltd.

SHRM. (2011). SHRM’s Mission and History. [Online] Available from http://www.shrm.org/about/history/Pages/default.aspx [Accessed 04 June 2011].

Appendix

Figure I: HR Department Activities

(Jackson and Mathis 2008, p. 7)