Most organizations need people to accomplish their mission, vision, goals, and strategy that allows the organization to exist and be viable.
Typically, human resources is a major functional area of an organization that is responsible for developing processes to support:
Attracting high quality applicants (types of jobs/opportunities as well as compensation and benefits packages)
Hiring the best applicant to fulfill roles in the organization
Developing human resources that includes training (providing knowledge and skills needed to do a job) and development (providing new knowledge and skills needed for the individual as well as future needs of the organization, e.g., leadership).
Managing the actions/interactions/needs of employees as it relates to performance, reinforcing culture, disciplinary actions, and other behaviors in the workplace
The major functions of human resources are explained in more detailed in the book chapter reading, entitled Human Resources Management: An Overview. As noted in the reading, it is essential to adequately manage human resources to achieve organizational effectiveness (e.g., meeting desired outcomes). One of the main reasons this reading is shared is so that you have a understanding of what activities and actions should be occurring in organizations for effective people management in that it provides an outline/checklist from which to evaluate organizations and make recommendations/corrective actions when they are not being performed. Generally, when these functions are not being performed, it is reflected in organizational issues such as turnover, performance issues, and other workplace behaviors that need to be addressed.
In sole proprietorships or small, family-owned businesses, the HR function may be handled by owners or a manager that may also be serving in another role for the organization. As organizations increase in size, it is typical to have an HR functional workgroup that can develop, implement, and manage the systems needed to be in place to accomplish the organization’s needs as it relates to managing people. Many of the activities and functions are shared between HR and other management teams in the organization.
It is not always necessary to have a separate HR functional area, but it is important to ensure that a firm has dedicated resources to perform the needed functions.
Traditional Focus Areas for Human Resource Management
While this reflects the typical areas of focus in HR, there are many tactical steps and day-to-day operational practices that have to take place. Generally, HR is responsible for designing the systems (e.g., hiring tests and tools, training programs, performance appraisal methods, reward structures, and other facets of managing the employment relationship.
Recruit & Hire High Potentials
Manage Performance & Reward Workers
Retain Workers & Manage the Environment
Challenges in Managing Human Resources
Poor quality hiring decisions that failed to capture the competencies and “fit” of individuals based on the needs of the organization
Items needed – job classifications, job descriptions, inadequate screening processes and untrained staff
Inexperienced managers and HR staff to successfully accomplish the needs concerning people management
It is important to have jobs and performance parameters clearly defined and managers and staff with the requisite skills to manage these functions
Inadequate systems in place to manage the various functions/work activities of employees performing various roles in the organization
Systems are varied and include attendance policies, performance standards, job design, performance feedback, and managing employee relations in the workplace
Recordkeeping/managing databases are critical for HR management. Organizations should have sufficient information about the backgrounds and competencies of its employees but also data on important outcomes such as meeting performance expectations, cost-per-hire, overall cost of the workforce balanced against the competitive advantages they provide.
This is not an exhaustive list of needed HR functions and activities, but provides a general summary of some of the critical functions regarding people management.
Emerging Trends and Practices in Human Resource Management
We’ve already learned that HR practices in organizations are emerging that focus on alignment with strategy, measurement and feedback, and employee engagement.
We’ve also read about “best practices” in organizations that reflects HR being more agile such that organizational practices shift in response to the need to attract/retain quality workers, employee needs and demands, competitive pressures, and overall employee engagement.
Organizations are increasing using data/analytics to measure and track many aspects of people management activities.
In the reading, Indicators: Helpers or Hindrances?, it is noted that it is important to have measurement systems in place to capture Selecting, Designing, Implementation and Deployment, and Utilization of data. The data referred to extends beyond what we typically measures in terms of return on investment, profitability, return on assets to processes/costs used to influence the outcomes.
From the earlier readings and notes, we’ve learned that it’s important that HR/People Management practices are aligned with organizational strategy (and mission, vision, values, and goals). Measurement should be precise enough that we know the areas we are performing and areas that do not meet organizational needs; feedback is expected to be more reciprocal rather than just top-down. Lastly, employee engagement refers to the extent to which employees are actively engaged in the work they do as well as the needs of the organization; employees are empowered to give feedback and make recommendations for change.
21st Century Approaches to HR, termed People Management
I am providing readings and cases in this class with this approach in mind. Where you have to actively engage is to outline the findings from your readings that reflect these three areas so that you can apply that information to subsequent assignments addressing people management issues.
HR practices aligned with strategy
Measure productivity and create feedback mechanisms
Create practices for high employee engagement
A Workforce of ONE
In the reading, Define Broad and Simple Rules, you will learn that it requires a shift in culture and operational practices to implement and benefit from the emerging trends in HR.
As stated in the reading, “broad and simple rules allow employees and managers to customize people practices by granting them structured freedom that is constrained by clear, organizationally determined and sanctioned boundaries and limits.”
The constraining boundaries include: strategic, values, time/money, result/outcomes, abilities, and operational scope.
The Broad and Simple Rules
Define results, not time or place
Broadly define jobs and careers
Hire the whole person, not just their job-related skills or experience
Broadly define pay and benefits
Cascade your performance goals
Let the manager allocate rewards
Define competencies by values or outcomes
The purpose of outlining the “broad and simple rules” helps organizations create structure if it doesn’t currently exist or ways to adapt from the more traditional HR practices that generally do not reflect the strategic alignment, measurement and feedback, and employee engagement that these practices hold promise to do. Make note of the companies listed throughout and what they were experiencing to facilitate change and the outcomes attained as a result of adjusting to practices that focus on people management. You can extract “lessons learned” from these organizations that can be used to make recommendations for other organizations that are experiencing issues concerning its human resources.
Lessons Learned from Royal Bank of Canada (RBC)
As noted in the case, RBC was dealing with several challenges as it relates to people management and to identify strategies and practices that would be needed to move the organization forward.
RBC did not have specific challenges that were noted, but rather they were taking the proactive approach of evaluating the organization to identify gaps between strategies and initiatives BEFORE they become problems/issues.
RBC has decided to use mostly objective measures (e.g., data) to identify what’s going well and areas that may require attention. To create a unit on analytics is a decision that reflects their commitment to continuous improvement.
RBC using analytics to drive strategic thinking regarding people management and provide information for decision-making concerning workforce planning, employee engagement, recruitment, and culture.
Organizational units work as teams with an overarching focus on ROI, which requires a critical analysis to understand and know how actions result in a return on investment in every aspect of the business.
This short case was meant to model the types of decision and activities that should be occurring in organizations that choose to be more progressive and proactive in managing its business. This case reflects how the viability of the organization, focus on its customers, and need to better capture effective people management strategies are all interrelated and need to be managed to attain desired outcomes.
Lessons Learned from Royal Bank of Canada (RBC)
For members of the organization to work well together, there are many facets that need to be in place for a collective as shown in Exhibit 1:
Values to be espoused throughout the organization (what we expect of people)
Strategy – how the work is structured to accomplish the mission
Define the parameters for success – while they focus on ROI, it is all driven by the need to attract and retain customers (note that 3 of the 5 metrics focus on how well RBC connects with its customers). Throughout this short case, RBC focused on: (1) strategic alignment, (2) measurement and feedback, and (3) employee engagement.
A financial institution does not have a tangible product, but rather it is the interaction between employees and customers that are its delivery (customer service driven industry setting). It is critically important to hire the best people and have them engaged in ways that help the organization meet its goals.
From Exhibit 1, every member of the organization should have a clear understanding of RBC and how it is positioned in the marketplace AND what’s expected of all employees in the organization in accomplishing the mission. Organizations that do not have these aspects clearly articulated and shared with employees generally reflect an organization that is not working as a collective where members and workgroups are working together toward a common goal. You will be able to recognize this in a future case.
Case: A.P. Moller-Maersk Group
This case describes the talent management challenges and initiatives of A.P. Moller-Maersk Group, a firm headquartered in Denmark with 110,000 employees.
With this case, you have a more in-depth view of an organization that is challenged to define what they expect of workers and what they need to do to “shift” the current workforce in a desired direction.
The company has identified five (5) major “people management” challenges:
Creating a training and development strategy
Recruiting experienced talent
Rehiring former employees
Increasing diversity and creating an inclusive culture
Case: A.P. Moller-Maersk Group
Impetus for reviewing this case: There are no “cookie cutter” approaches to managing people and this case allows you to examine some of the complexities and challenges occurring in organizations as they try to determine the best course of action to meet current and future needs.
There are two (2) overarching challenges facing A.P. Moller-Maersk as I see it:
Need to shift the culture by redefining what’s expected of its members and managing the change process
Determining the best the approach to hiring, managing performance, and retention such that the organization can develop a concise strategy for implementation.
Note: We are not designing HR systems for this case (e.g., specific hiring models or training models), but rather, you will be asked to extract some best practices that can be applied to the stated challenges of this organization.
Thus far, you have read/will read this week: People Management replacing Talent Management, New Rules for Talent Management, An Overview of Human Resource Management, Indicators, Helpers or Hindrances?, Define Broad and Simple Rules as well as lessons learned from RBC in addition to your course notes to help you think about what best practices can be drawn to provide recommendations to A. P. Moller-Maersk. There is one short reading for next week entitled, How Netflix Reinvented HR, that may provide useful information. When you are aske to “evaluate, discuss, or critique” an organization and its challenges, you need to provide an “informed” analysis that reflects that you have engaged in the process of extracting best practices, not your opinions or initial reactions.