Introduction The purpose of this report is to give a critical analysis of the People Management and Development policies and practices at Construct It, with particular reference to how they integrate their “fit” strategy under the pressures of the impact of change, whilst managing their primary source of organisational competitive advantage – people. This report will have the reoccurring theme of the importance of the Line Managers whose role is directly involved with employees, given the trend of devolution of Human Resources practices and procedures.
The extent of organisational performance is very well dependent on the quality of leadership behaviour and satisfaction with Human Resources Management practices. People Management and Development can be defined as the management of people to achieve individual behaviour and performance that will enhance an organisation’s effectiveness. This effectiveness of the workplace depends heavily on the level of engagement with, and influence on, employees in order to maximise their performance on the added value to customers.
Its approaches aims to, amongst other things recognise people as a strategic resource for competitive advantage, give ‘people issues’ the right level of consideration as a form of strategy formulation and implementation of how they can add value to the business, and thus proving a connection between people management practices and organisational profitability.
There are various schools of thought as to which approach is the best strategy, but various aspects of them are usually found in every organisation, whether by accident or deliberate strategy, and at Construct It they seem to be using a combination of these strategic situational contingencies. The Universalist or best practice approach suggests that there is a one best model approach, regardless of the competitive strategy of the organisation (Torrington 2008).
This model is based on four Human Resources policy goals including Strategic goals, Commitment, Flexibility and Quality. Based on these premises Construct It has fairly assumed these approaches for instance in their development schemes. Unfortunately the schemes enacted to develop workers might not be working effectively if the lesser employees are not up to the standards of the job requirement. This will impact heavily on operational level of organisation, and it will be difficult to train such employees to grow in the organisation as human assets.
On the other hand, there can be seen a strong binding system of processes in the method of hiring workers which initially gained the firm the advantage of competent workers to get most of the jobs done properly and in time. However this strategy has been useful up to the extent of the capacity of the managers to keep the increasing workforce working efficiently and effectively. This shows that the effect of best practice will be maximised when the right policies are used properly(Torrington 2008). The best fit or Contingency theory believes that what works best depends on the circumstance of each organisation.
Construct It may not have properly adopted this approach as can be seen from the culture of a laissez-faire environment, where there are few rules and regulations. With a workforce that has multiplied to four times its initial size, even the incentives of a cheerful teamwork and a large bonus is eventually weighed down immensely by economies of scale. Also, the company is currently relying on a relatively inflexible method of recruiting skilled professional workers. Although this is a cost-effective method of getting their work done it is at a larger cost to the company of losing these workers to larger wages.
This means that the company currently has no competitive edge over other recruiting companies as labour markets gets tighter in the economic conditions. Resource based view has it that Section one. Best practice versus best fit With a contingent approach, the managers at Construct It are not restricted to a specific type of personnel management and development practice of particular approach to their management. Instead it offers them the insight to make informed judgements about employment resourcing activities (Corbridge 1998).
Contingency theory is basically about the need to make a strategic or vertical integration between the development and operation of human resource management policies and practices and the business strategy. It is otherwise a ‘fit’ between what the firm is and wants to become (in terms of its strategy, culture, employees and external environment) and what it actually does (in terms of its structure, processes and practices that it puts into effect) (Armstrong 1999). From a strategic perspective one can understand the tendency of Construct It to adopt a mixed approach- with relation to the best fit/practice (Beardwell 2004)
At Construct It, it is necessary to put in place the right policies, as it can be shown that their current policies and practices are not very effective over time. Adoption of this ‘fit’ should make the business more focused on improving the quality of the performance of the employees and in turn the quality of the goods and services for customers. As convenient as it sounds, the problem with the contingency theory is that it based on the assumption of intention (Mabey 1998) and so is not easy to for the theory to match the practice.
Contingency theories are modelled around ideas of quality and excellence, empowerment, delighting the customers, etc. but there is in reality a struggle to fully understand these issues in their relevant context and translate them into reality and practice to achieve the intended purpose. (Corbridge1998). This means that knowing the need for contingent strategies does not necessarily mean that Construct It can adapt its system to consistently and collectively fit brand new organisational goals (Mabey 1998).
The company must be fully aware of how these issues can be incorporated into their own system in order for it to work effectively. The horizontal or best practice view is important to note because it incorporates Harvard model of human resource management (Torrington 2008) which recognises the framework for different stakeholder interests that have an impact on the behaviour and performance of the employee. Construct It as a company is involved with various suppliers, financial institutions, shareholders, etc that it would like to avoid unnecessary actions that would jeopardise their economic interests.
It would be in their best interests to integrate certain aspects of the contingent ‘best fit’ (which is a range of human resource tools) and certain aspects of the universalist ‘best practice’ (for the areas that involve high commitment to ***XXX***) for optimum effects. Organisations through their culture and the employees within the organisation operate on the basis of a set of assumptions, and these assumptions are often implicit. But whether implicit or not, assumptions about the nature and role of human resource strategy has an influence on what organisations really do.
Construct It has a fairly lax culture which is impacting on its performance. Understanding these theories help to interpret the current position of the human resource strategy in the organisation. This is necessary to understand the organisational analysis of the company and to know which HR strategy can best be applied. Construct It needs the right balance of initiatives to set up appropriate methods of systems to ensure performance. Culture As in corporate culture, this is where people come in, selection Competitive advantage
Businesses are focused on opportunities to gain a fundamentally advantageous position to compete from. This competitive edge requires one to assess its situational analysis relative to competitors and its opportunities for innovation (Walker 1992). Competitive advantage model arises when a firm creates a niche market, differentiates quality and continually improves its position from competitors. In modern organisations it is the quality and behaviours of the employees that generate competitive advantage (Beardwell 2004).
The differentiation by quality is the hardest to imitate because it is not a program of sorts; it is achieved through people services with the aim of customer satisfaction, and so is usually the most effective advantage. The HR function works to give managers non-substitutable expertise in the key aspects of making quality work effectively through people (Armstrong 1999). The tools used here are performance management and reward. These are the key activities for managers to increase the benefits gained by the applying labour power. (Beardwell) Performance management
Performance management is about planning the review and appraisal of employees in order to understand their competencies, and either improve on them or make do without them. It has been noted that the performance management process of a company discloses the extent to which the organisation has identified its strategic goals reflecting what the business needs and the degree to which these needs are communicated to and shared by the employees. Theorists have thus developed an idea of a performance management cycle to audit the effectiveness of the strategic objectives in order to develop the continuous improvement.
In other words the cycle illustrates a system in which objectives are set. The SMART framework is a popular method of setting objectives, but a problem with setting objectives within Construct It is for certain jobs for instance workers of a particular professional field, may not have the opportunity to improve their performance, and so might not relate to the setting of these objectives (Beardwell 2004) Outcomes of these objectives can be measured in relation to the employee’s success in integrating and improving their competence in the identified field of study or the appraisal schemes (Beardwell 2004).
One problem with this is that employees no matter how good they are are usually at some point promoted to a higher level than their competence, at which this technique would be useless for determining how much further they can push themselves in the organisation. Some employees and managers may respond negatively with distrust, suspicion and fear, but an integrated and effective process should lead to higher organisational performance and employee motivation (Beardwell 2004) Results are fed back, rewards are linked to outcomes and changes are made before new objectives are set, for which the outcome can now be measured.
Two types of performance management schemes that can work for Construct It: 360 degree appraisal where the employees get feedback from everyone including non-employees about their performance, and self-assessment which is an internal reflection to understand one’s abilities and hindrances at the job. Such kinds of appraisals are usually at a low cost, and would put the company one step forward towards achieving improved performances when they know the strengths and weaknesses of their workforce. Performance schemes can be disadvantageous because they are dependent on human judgement hich is prone to unreliability, invalidity and bias. In other words appraisers may not adequately identify and measure the distinct contribution of each person. This links in to line managers who lack the required technical and people management skill to appraise effectively. Lack of time and resources is the most practical problem. But with the processes themselves, they can only secure (i. e. manage the boundary between acceptable and non acceptable performance) what they measure, it does not offer higher levels of commitment. Beardwell 2004) Construct It from these appraisals can find out what motivates their workers more than money, in order to understand how to compel them to stay on and work contentedly. Reward Reward management is about how employees are rewarded in accordance with their value to the organisation. (Armstrong 1999). To achieve the objective of resourcing the organisation effectively there has to be an agreement of a ‘total package’ (Corbridge 1998) for the employee, because rewards expectations include a range of other benefits, more than just money.
The problem with Construct It was that they had no other type of benefit, and when money could no longer allay the issue of conflict, the workers turned on themselves and had no reason to dispel the grievance. Content of the most commonly provided benefit package: occupational pension. Private health care, life insurance, severance payments, financial assistance, etc. They can also be allowed to choose from a range of flexible benefits; (Corbridge 1998)
Competitive advantage is to be gained by developing the main competencies within the workforce by traditional service for instance recruitment, reward, employee development, etc and by effectively managing external issues such as corporate culture, management development and organisational structure. ARMSRONG It is understandable that Construct It has a low take up of the relevant HR practices. Porter 1958 believes that the ability of an organisation to sustain this differentiation depends on the quality of its human resources. (Armstrong 1999). In reality, the time, resources and costs hat come with adopting such strategies usually causes managers to prefer to try a few methods and assess their impact. It is also because changing the way people are managed is the not the only means of competitive advantage a firm has in this day and age (Beardwell 2004), but it is still an important aspect of the business.???? Impact of change Section 2 Recommendations Gradual, practical and effective change of rules/procedures: the organisational culture must more disciplined, bureaucratic as number of workforce increases, in order to control the employees.
Management and organisational change must adapt to environmental, geographic and economic forces so as to win back the confidence of stakeholders and to improve business prospects in time for better working conditions and thus better quality of service. Make workers to regain faith in the management again by making them more involved in the decision making process, giving them better remuneration and improving their standards of working conditions and their psychological contract.
This is to revive the reputation of the company, and avoid future legal claims. Balance dealing with people’s problems with doing the real job; if time and resources are managed efficiently this will give them competitive advantage. More flexible workforce, in terms of skilled professional workers: if they are rotated properly on the basis of coming in only when needed, with the right benefits, such essential workers need never leave, and it will cost the company less to keep up the replacements. More focus on Quality, in terms of employees and the job done.
It would be better to jobs in smaller packages or hire less people in order to manage quality for the foreseeable future before the company can safely expand again. Line managers should be made to use their discretion to weed out bad employees as the company would be working at a loss with any HR tool for improvement if the people working at the operational level cannot be improved on to rise within the organisation. Hiring experts to employ the right workforce will be more cost effective in the long run.