In an organization, employees are the ones who are responsible for carrying out work activities involved in operational process. It is the key job of managers and HR professionals to organize the employees in order to bring effectiveness in their performances. This can be done only if the employees are viewed as invaluable assets and not just machines. Considering employees as assets is an integral part of modern HRM and human capital management.
In the absence of good human resources, an organization cannot build a good team of working professionals. HRM’s prime functions comprise of recruiting, training, performance appraisals, employee relation, cultivating workplace communication, workplace safety etc. HRM advices the management how employees can be managed strategically as business resources.
1.1. Differentiate between personnel management and human resource management giving examples in two suitable organizations
Basis for Differentiation
Personnel Management
Human Resource Management
Personnel Management is the approach which is concerned with management of manpower and their relationship with the organization. Example, PM is followed generally in small size organizations such as Archipelago Restaurant, London
Human Resource Management is the approach which is concerned with optimum use of manpower to achieve the objectives of an organization effectively. Example, HRM is followed in Harrods, UK. (Armstrong and Taylor, 2014)
Approach and Focus
It is traditional in nature where manpower is treated as resource.
It follows modern outlook to build manpower where they are treated as assets.
Routine function is followed by employees in Archipelago Restaurant with less scope of any challenges at work.
Strategic function is followed in Harrods with tactical decisions undertaken to cope with challenges.
Task is delegated in a generalised manner. Employees in Archipelago Restaurant handle multiple roles with no clear specialization.
Task is delegated as per specialization of manpower. Example, at Harrods there are different Front Desk Teams, Customer Care Team, Store Management team, Marketing Team, HR Team etc
Decision is taken by central authority. Example, in Archipelago Restaurant critical decisions are taken by management only who are founders. (Armstrong and Taylor, 2014)
Decisions are taken by engaging employees and analysing the different aspects of skills gaps and scope for improvement. Examples, in Harrods different forums are present where employees can voice their opinions or concerns regarding any decision or change.
Job is classified by involving only individual teams
Job is classified by integrating different cross functional teams
Role of Management
Management performs transactional role to deal with employees.
Management performs transformational role to deal with employees.
Basis for Compensation
Compensation is based on role and responsibilities.
Compensation is linked to performance.
Communication between employees and management is carried out indirectly leading to poor job satisfaction and analysis of employee needs.
Communication between employees and management is emphasised directly which build positive satisfaction and understanding in employees. (Armstrong and Taylor, 2014)
The HRM functions practised at Harrods helps in achieving the organizational purposes by effectively distributing and controlling the various managerial and operational activities. This effectiveness of the functions can be assessed as:
Human Resource Planning: The HRM functions include identifying and assessing the current manpower inventory and forecasting future need for coping with purposes of Harrods and demands in market. According to this Harrods plan and organise activities such as recruitment, promotion and transfers etc to fill the requirements. (Anderson and Anderson, 2010)
Recruitment and Selection: after the skill shortage is identified, a recruitment and selection function is carried out by HRM where internal as well as external prospects are analysed. An alignment of responsibilities needed in proposed vacancy and skills required is made which helps to match the best talent in the fitting position to achieve outcomes for Harrods. Also when skills and needs are aligned then it ensures satisfaction and retention of talent resources saving cost for Harrods.
Reward Management: compensation management at Harrods is linked to performance of employees and is provided to value their contribution at work. These include pay packages, benefits such as insurance, medical, travel allowances etc. These contribute to achieve employee’s motivation and involvement at work to increase their productiveness. (Anderson and Anderson, 2010)
Payroll Administration: it is the HRM function to determine the job analysis and salary, benefits, tax deduction, leaves etc linked to employees. This helps to maintain proper administration of employees in Harrods with adequate reward management.
Performance Management: it includes monitoring, recording and assessing employee’s performance by observation, peer review, meetings etc against set parameters of Harrods. Those who are performers are apprised with incentives, higher responsibilities, promotion etc while those who lack are given training and mentoring to improve.
Training: this HRM function is provided for skill development of employees to cope with environment changes and new demands such as technology, customer trends. This helps to empower and build employee in Harrods to improve their productiveness.
Employee Relationship: this function of HRM helps to maintain strong working with leading people style between management and employees of Harrods to support innovative and integrative culture, cohesive teams and participation by maintaining fair policies, treatment and working conditions within Harrods. (Anderson and Anderson, 2010)
The line managers at Harrods are assigned with various roles and responsibilities to manage the core level teams, monitor and control them to achieve the set organizational objectives. They support various HRM functions to delegate and supervise team activities. These are:
Routine work management:line managers at Harrods are responsible for performance management of team for which they plan regular activities, work coordination, observe and identify problems, suggest solutions and monitor everyday functions so that teams can achieve objectives.
Mentoring and Support: the line managers support employees in Harrods to fulfil their roles for which they provide assistance, technical and skill knowledge etc. If an employee has specific need then line managers also provide training by identifying problems and then designing solution. (Farndale, Scullion and Sparrow, 2010)
Delegation: line managers assess individual skills of employees and then delegate responsibilities to achieve best outcome from optimum use of talent management at Harrods. They also maintain flexibility at work by maintaining flexi work schedules, duty rosters etc.
Monitoring and performance management: line managers at Harrods monitor employees to record and observe individual performance at work. This helps to identify achieved levels and expected outcomes and then design rewards to appraise employee’s performance. Subsequently, it also helps to identify training needs of employees who are lacking and then supporting their development activities to motivate and deal with task management. (Farndale, Scullion and Sparrow, 2010)
To maintain effective goal fulfilment, performance and reputation of organization, certain laws and regulatory framework are maintained which helps to achieve effective outcomes and impacts positively on organizational policies. Some of the legal frameworks that are maintained in Harrods for effective employee and work management are:
Equality Act 2010: at Harrods anti-discrimination laws are practised to ensure fair treatment and equality of work for all irrespective of employee’s race, religion, age, gender, disability, nationality etc. Thus diversity of workforce is maintained at Harrods and equality is ensured based on merit.
National Minimum wage ACT 1998: this law helps to ensure fair treatment and compensation management at Harrods depending on nature of work and performance. It states that an employee above 21 years is entitled to minimum wage of 6.50 pounds daily working on an average of 8 hrs irrespective of gender. (Harzing and Pinnington, 2010)
Employment ACT 2008: this law ensures a structured payment, policies and entitled benefits for employees working in Harrods. Example, an employee is entitled to standardised pay, insurance, child care leaves, work time flexibility etc to ensure safety and job security.
Working time directive 1998: this law ensures that employee at Harrods are eligible to get 28 days paid leave annually, work 8 hours/day. Employers cannot force employees to work beyond working time and beyond 40 hours/week an employee is entitled to receive overtime payments.
Trade union and Labour Relation ACT 1992: this law states that strikes are legal if announced to observe trade disputes. Thus, in Harrods efforts are deliberately made to ensure strong employee relationship to avoid trade disputes and maintain a smooth running of organization.
Work and Families ACT 2006: this law states that in case of emergencies or illness an employee can avail 12 weeks paid leave annually and in case of maternity employees can avail 18 weeks of paid leave.
Data Protection ACT 1998: this law states that any company information, trade secret and personal information of employees or client is subjected to be confidential information to be used for purpose of trade only by Harrods. These cannot be disclosed to any employees and any attempt of misconduct is treated as offence without consent or authoritative rights. (Harzing and Pinnington, 2010)
Human Resource Planning is the function that determines current inventory of employees within an organization and forecasts future manpower needs to meet its established objectives. It also maintains the match between employee’s skills and job role so that employee’s expectations and desired outcomes are achieved smoothly. (Choi and Ruona, 2010)
Some of the reasons for Human Resource Planning are:
Forecasting need for manpower: as changes in labour market varies with retirement, termination, transfer, cessation or employee turnover, there arises need to predict future manpower need with changes in demand.
Uncertainty management: to manage sudden breakthroughs or uncertainty situations such as machinery breakdown, emergency, strikes etc human resource planning is maintained so that employee’s concerns are heard and dealt properly without any mismanagement.
Change Management: Human resource planning is required to tackle change management such as changes in labour market, new technology, market demands, customer changes or policy changes. HRP identifies and assess the changes and formulates plan to cope with them such as recruitment of new employees, training for development etc to manage changes efficiently. (Choi and Ruona, 2010)
Skill Management of employees: human resource planning identifies current skills and abilities of employees so that they can be developed in shortcoming areas to tackle changes or new challenges at work efficiently to improve their performance and productiveness. HRP designs Training and Skill Enrichment programmes to ensure skill development of employees.
Maintains balance of manpower: to meet with supply and demand of labour according to market changes and maintain the operational cost of organization without any deficit HRP ensures that a balanced flow of manpower is maintained through need assessment, hiring, promotion, transfers etc.
Employee Management: Human resource planning identifies and assesses the skills and performances of employees against set parameters to design structures of appraisals, salary revisions, promotions, rewards etc that helps to meet employee expectations and acts as motivational factor for their contributed efforts. (Choi and Ruona, 2010)
Budget Planning: human resource planning analyses the costs maintained against training, recruitment, operational functions etc and then formulates a budget for organizational planning.
Human Resource Planning has three primary stages:
Forecasting: Human resource planning identifies the shortage or surplus of labour and changes in labour market by matching the current employee inventory and predicting future need. For this requirement of manpower HRP analyses the skill gap and the objectives to be achieved by determining shortage or surplus of labour due to transfer, promotion, resignation, staff turnover etc. After this is determined forecast of future manpower needs, strategic changes and development is planned to cope with change management and achieve organizational purposes. This change in labour market can also arise due to uncertainty of market factors like economy, politics, technology etc which influences manpower changes. (Goetsch and Davis, 2014)
Goal setting and Strategic planning: in this stage, human resource planning assesses the set objectives of organization and then assesses the skill requirement that has to be input to achieve those. After this is done, HRP plans recruitment, training and development, budget allocation etc to decide on organizational planning.
Program implementation and evaluation: in this stage, HRP implements the strategic human resource planning that is determined to achieve the goals sets. For this human inventory is assessed and if there is need of recruitment then it is planned. Also if there is need of skill development then training is planned for development of special skills in existing employee. Further budget is allocated after monitoring and assessing all costs included and finally a decision is made for implementation. Next, implementation is followed by evaluation to identify the success and loopholes of planning so that corrective measures can be done to achieve desired outcomes. (Goetsch and Davis, 2014)
The recruitment and selection process in our organization consist of two rounds:
The R&S process in Harrods consist of four rounds:
Application to jobs: the vacancy for potential jobs is announced in Harrods both in their stores and on their company portals. The applicants have to fill the online application where they need to answer few competency questions which are based on general topics, teamwork, customer service etc which helps to assess intelligence and eligibility of applicants.
Personality test:the shortlisted applicants are asked to take personality test where assessment of personal traits such as behaviour, aptitude, honesty, dedication, suitability to the job role is checked.
On job evaluation:the candidates who clear personality test are invited to Harrods store to perform real tasks or simulation exercises on various fields depending upon nature of job role such as handling customers, taking orders, preparing bills, complaint handling, store management etc. The candidates are then assessed on their scores, practical skills and aptitude to logical understanding.
Final interview: the candidates who are selected in evaluation test are invited for final face-to-face interview with operation manager where their technical expertise is assessed. The final selection is made in this phase and the candidate who is finalised is offered joining letter within 10 days to join Harrods. (Snape and Redman, 2010)
The recruitment and selection technique being followed in our organization maintains a simple process where telephonic screening is done to assess the communication and agility of applicants. It also helps to evaluate the listening ability of candidates. Finally, the face-to-face interaction helps to assess the expertise and competency of candidates. Thus this dual filter process applied in our organization helps to identify best fit for specific nature of job but it lacks proper human resource planning structure which helps to align right person for right task. (Ferguson and Reio Jr, 2010)
On the other hand, Harrods recruitment and selection technique is more structured to measure practical abilities, behaviour, attitude and personality of candidates. The application process helps to screen the applicants based on eligibility and thus eliminates surplus applications which are not suitable for job role. Then the personality test helps to examine personal traits and behaviour which followed by evaluation test helps to evaluate situation handling of candidates base on real practices on job. This helps to examine decision making and promptness of candidates to perform routine activities. Lastly the final interview call helps to examine conceptual knowledge and suitability of candidates to Harrods culture. Thus Harrods recruitment technique is more prominent to examine minutely the best of talent who can be more adaptive to various changes or challenges of industry as it includes more detailed elimination process to reach to right candidate who can hold the reputation and value of Harrods for long term. (Ferguson and Reio Jr, 2010)
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Virgin Media has motivation instilled in its genes. The employees are spread all over the world and work in coordination because of effective teamwork. Virgin recognizes the importance and need of motivation that is prevalent amid the employees for achieving the objectives of an organization and thereby, Virgin provides a constant support to the desirable behaviours at work by the advantage of offering two bonus schemes. (Pearsall, Christian and Ellis, 2010)
There are various motivational theories but at Virgin, one can see the application of Maslow’s theory of motivation where five levels of needs are been emphasized. The first and basic need of an employee is the fulfilment of Physiological needs such as food, shelter, clothes etc. and the second stage covers the safety needs such as job security, integrity etc. The third stage of need is belonging needs which includes of friendship, family, recognition etc. and the fourth need is the esteem need such as sense of achievement, self respect, etc. The final stage is of the self-actualisation need where it is assumed that an employee has attained its maximal potential.
One can relate the physiological needs of an employee by providing various motivational benefits such with competitive wages, health benefits, educational support etc. as these are the very basic needs which must be fulfilled. Other motivational benefits for example training programmes, life insurance etc. can be linked to an employee’s safety needs. The need of belongingness at Virgin can be related to the workplace relations with co-workers and superiors, pay hike, discount lunch etc. further determining employees loyalty towards the company. By offering benefits like appraisals, paid vacation, stock purchase plan, bonus schemes etc. Virgin cultivates a sense of achievement within the employees which can be linked to the esteem needs. Motivational theory also stresses on establishing secure environment where employees’ contributions are recognized in the form of rewards. At Virgin Media, employees are furnished with both facilities and flexibilities thereby, fulfilling the norm of providing a safe and secure working atmosphere. In addition, reward in the forms of promotions and incentives are offered. Rewarding is not just an encouragement for a certain employee but is a motivation for the underperformers to work more hard. Winning a reward can be linked to the need of self-actualisation. (Pearsall, Christian and Ellis, 2010)
Gaining Acceptance: ahead of performing job evaluation, Virgin’s management must get a clear picture regarding to expectations, aims and objectives of all the positions eventually conveying it to the employees. (Snell and Bohlander, 2010)
Creating Job Evaluation Committee: the committee must comprise of the HR department, senior line managers, management and stakeholders like union leaders
Finding Jobs to be evaluated: at Virgin, all the positions available are evaluated except the jobs in IT department
Analysing and Preparing the Job Description: preparing the JD is the key role of the committee formed at Virgin. Every job is evaluated according to the management’s mandate which is further broken down in regard to the requirements, roles and responsibilities, optimal candidate details, allowance etc.
Selecting the method of evaluation: the best method for evaluating a job is comparing with competitors. Moreover, the evaluation can also be done by outsourced professional agencies or by observing the current market rates
Classifying Jobs: at Virgin, jobs are classified by bringing in together similar JDs and pay structures.
Installing the Program: at Virgin, this exercise is conducted through surveys, which is practiced as an annual routine and is further updated annually
Reviewing Periodically: it also is an annual exercise done for updating and modifying the existing pay structure
At Virgin Media, factors like seniority, experience, value added and employee motivation determine the pay. The pay range of the senior employees is different at Virgin. One can see that the pay scale of employees with a minimum 10 years of experience changes and their invaluable contributions are acknowledged and recognized. Furthermore, the pay structure of all employees are been altered repeatedly. The HR Manager in consultation with the management designs special pay packages for certain employees who are capable of playing multiple job roles. Moreover, the pay structure is designed by considering factors such as bringing change in workplace, inputs, employee’s prospective growth, their versatility towards changes, new roles, zest for taking risks etc. are the factors determining pay, which eventually is evaluated by the line managers and HR department. (Snell and Bohlander, 2010)
Reward systems and its effectiveness in Virgin Media It has been observed that the reward system at Virgin has been categorized into two key sections namely financial and non-financial
Financial rewards
Non- Financial rewards
Effectiveness of rewards in Virgin Media
The key purpose behind initiating a reward system is to recognize and acknowledge the employees contributions in driving the business towards its desirable goals. Virgin provides its employees with monthly incentives added in the pay for reaching the given targets and ensures that hardworking employees are praised at work so that feel motivated and inspire the others. Virgin encourages healthy competition amid the employees for winning the rewards as it not only is related to a monetary value but also is a matter of pride for the employee. An employee, who is promoted for undertaking higher responsibilities, is also considered as reward and the employees feel promotion as a recognition which they are seeking to achieve. (Gittell, Seidner and Wimbush, 2010)
Methods of monitoring employee performances at Virgin
Set clear policies on time and productivity: it is important to plan the tasks to be allotted in advance eventually providing employees with direction and an idea of the performance standards expected from them. (De Jong and Elfring, 2010)
Regular check-ins and reporting needs: it is important to ensure that check-ins and reports are not demanding but rather should be encouraging for both employees and management bringing them together on the same page. Moreover, evaluation of the work described in a report or while check-in must be done
Apprehending motivational levels: can be done with the surveys where employees can voice their opinions and concerns.
Virgin Media can adopt a trimester appraisal system in order to evaluate the employees’ performances further enabling the management in cutting down the costs of the process of evaluation. Tom Mockridge, CEO, Virgin Media has stated that the company’s current process of performance evaluation is too costly when compared with the outcomes and thereby, for reducing the burden a plan must be made for implementing the structure. Practice of a trimester appraisal system is very effective for Virgin as it allows the employees to keep a track on their performances thrice in a year enabling them to avail the opportunities to improve and work attentively around the year. (De Jong and Elfring, 2010)
The owner of Chicken Master, Bob Jones takes into consideration multiple reasons ahead of terminating an employee further allowing the restaurant to keep its position safe. Ahead of terminating an employee, Bob Jones ensures that it has enough evidences and valid reason to proving that the action was legitimate in case the employee drags Chicken Master to the tribunal. Moreover, Bob gets involved on a personal level in every activity whether it is recruitment or termination, to ensure that any kind of reprehensible practice is not exercised in the restaurant and that all the processes are executed in adherence to the employment laws of UK. (Guest, Isaksson and De Witte, 2010)
Faisal, the restaurant manager at Chicken Master was laid off because of his bad behaviour and performance at work. Faisal although having 15 years of work experience in a restaurant failed in maintaining cleanliness in the restaurant’s kitchen and never stocked the store which raised problems while serving the customers. Moreover, he would often take out the restaurant’s equipment for his personal use without the knowledge of Bob, which was a violation of the policies mentioned in the employee handbook which he signed while joining. On investigating Bob found that Faisal would regularly watch pornography, emailing his wife and helping his daughter with her homework, even designing his own restaurant which was misbehaviour and violation of the restaurant’s policies. All these factors eventually lead to his termination on the grounds of unethical behaviour at work. (Guest, Isaksson and De Witte, 2010)
Reasons for cessation of employment
Shrinking Budget: continuous low profits or lack of funds from shareholders gives rise to situations where an organization becomes helpless in maintain the employees and are forced to lay off employees for maximizing their budgets.
Attendance: although employers understand the need of taking a time off citing illness, relatives death, holidays etc. an employee who is habituated in remaining continuously absent at work is subjected of getting terminated as it negatively influences on the company’s overall productivity, profits and morale. (Castilla and Benard, 2010)
Performance: employees with poor performances such as failure in achieving the given targets, missing deadlines, negligence at work etc. despite of multiple opportunities of improving themselves can face termination
Attitude and Behaviour: an organization expects the employees of maintaining a certain standard of respect at workplace with employer, co-workers, vendors and customers. Behaviours like misbehaving with customers, stealing office accessories or leaking secret information, maligning company’s name, drug and alcohol abuse etc. might result into employees’ termination. (Castilla and Benard, 2010)
Employment exit procedure of NHS
Employment exit procedure of Chicken Master: Chicken Master’s employment exit procedure is quick and is eventually is related with the overall growth of the business while a financial crunch. Termination linked to employees’ performance is low and can be related to training, growth opportunities and the reward structure. Employees are given a minimum of 2 months time to look out other job and often at times gives references or when a background check is processed, the Bob gives a positive respond. In case an employee resigns, an interview is organized where the employee gives valid reasons behind the decisions. However, in case an employee is terminated on the grounds of unacceptable behaviour a fast processing is employed without indulging into many formalities. (Kramer, 2010)
There can be a considerable effect on Chicken Master while managing and adhering to the legal and regulatory framework during employment cessation as it is mandatory to adhere to the regulations. One can evaluate the employment cessation with the help of various prospects like annual and sustainability report of the restaurant. On the basis of the study, one can say that the restaurant has been particular with its employment cessation arrangements which might be considered as a sterile exercise by its competitors but Bob ensures that there is zero impact on the restaurant’s performance in terms of costs resulted because of non compliance of the regulatory framework for employment cessation. Comprehensively, the employment cessation arrangements at Chicken Master are steady at large under the legal and regulatory frameworks. It has been observed that Bobs has adopted numerous measures for ensuring that employees’ growth and productivity remain unaffected and are in accordance to the job requirements. Moreover, Chicken Master has never attempted of overseeing the employment laws and its related provisions. (Rubery, 2010)
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At the end, we conclude that the HRM is very important to be practiced in an organization for achieving a long-term success. The report highlights any organization overcomes the various challenges it faces while executing the policies and strategies of HRM. The report also analyzes the importance and role played by HRM as an organization keeps growing in terms of size. The execution of HRM is a planned process, which tends to evolve over a period of time can be analyzed through various aspects like personnel management, recruitment and selection process, reward system, employees motivation and employment termination and cessation. HRM ensures that an organization employs a proactive approach at work further resulting into an improved workforce planning and utilization along with an enhanced opportunities of growth for the employees.
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