Discuss about the Strategic Human Resource Management and Firm Performance.
According to Mondy & Martocchio (2016), over the years, the aspect of human resource management has evolved to be one of the most affecting and contributing factors in a business organization. It is noted that apart from departmental supervisors, the human resource manager has received an increased amount of attention as well. As stated by Mathis et al., (2016), being referred to as the performance enhancing element, the HR department tends to lend a hand towards developing capabilities and perspectives of the staff members. The HR managers play a vital role in leading a firm to its expected results and further to success. It is through the exercise of an HR`s abilities which helps in enlarging potentiality of the lower level of management. Additionally, the presence of a skilled and experienced HR manager in the organization not only leads to ability and competency developments, but also contributes towards increasing engagement, activity, potentiality and prospective of the lower management.
Further, the exclusive responsibilities of an HR administrator to help in staffing processes, training, development, and carrying out several organizational functions is one of the major aspects of strategic planning. It is with the help of the executive that the top level management can greatly benefit at times of decision making, business environment development, communication, transparency budding and many other aspects (Hendry, 2012). Additionally, in presence of an HR manager, the company heads will also be able to learn about insights thereby taking into consideration the perspectives of the employees. As compared to the supervisors, an HR executive has a much wider view of the future which not only contributes towards an accurate forecast of the brand, but also builds up a better relationship with the taskforce. According to Dias (2016), in order to carry out a profitable strategic planning process, the managers need to work in collaboration with the inner as well as the outer world, which is possible only with the help of a highly skilled human resource manager.
As opined by Armstrong & Taylor (2014), there exists several obstacles in the planning process as well. It is often that the HR manager focuses on innovation and creativity, thereby acting as a guide in solving problematic situations. Along with contributing towards speeding up functional processes in an organization, the new initiatives of an HR manager tends to shape the planning processes in a positive and profitable manner. With knowledge about the objectives, tendency, capabilities and financial matters, involvement of the administrator shall contribute in every other aspect of the method (Bennett & Ho, 2014). It is noted that the human resource department lends a hand towards employee development, clarity, spread of motives and responsibility delegation as well. The top level management will significantly benefit and be able to complete the strategic planning process in presence of a HR manager.
Based on the case study it can be seen that Powermat Inc. has no firm human resource department. It is noted that the company either opts for internal or external staffing process. Further, at times of recruiting from outside, the management tends to depend on a professional recruiter. In the words of Bratton & Gold (2012), one of the most basic aspects of a business is the interdependency of every function, activities and also the people. Despite of recruiting graduates with an industrial management background there is a downfall in competency and also non-fulfilment of results. It can be seen that apart from a problem in the staffing and selection process, there exists several internal issues as well (Purce, 2014). Moreover, along with inadequate training and development programs, there exists a poor business environment in the organization as well. The differentiation of semiautonomous departments in Powermat tends to add up to the list of problems as well.
Analyzing the several existing issues in Powerat Inc. there are several recommendations that can be made. The most primary suggestion that can be made is the installation of a human resource department in the organization. It is noted that, a presence of a well defined and planned HRM will greatly contribute towards building up capabilities and also help in solving problems (Kerzner, 2013). Further, a reconstruction of the several departments is also a must. Being semiautonomous in nature, there develops a sense of opaqueness and unclear motives, which leads to downfall in performance levels. As stated by Stone (2013), a structural reformation will help in developing clarity and transparency in the company thereby contributing to solve problematic areas.
As per the case study, Powermat is confronted with an issue of recruitment and staffing. It is recommended that the top level managers, employ a human resource executive instead of seeking help from a professional recruiter. Despite of being specialized personnel, the HR manager will contribute more and also in a better manner. The manager with his several set of skills and experiences shall prove to be more beneficial, thereby helping in carrying out staffing processes (Heizer, Render & Munson, 2016). With a better understanding of the company objectives, the manager will be able to recruit the most desired candidates. Further, it is recommended that various training and development programs are also organized in the brand. The creation of several initiatives will greatly help in building up decision making skills, abilities, loyalty and further the work environment as well, thereby leading to building up of communication levels (Loshali & Krishnan, 2013). A proper set up of the schemes will also contribute towards lowering exists from work as well.
According to Angeloni & Faia (2013), like every other organization, the banking sector also tends to perform with a rigid set of rules and regulations. Moreover, employees irrespective of their designation tend to greatly look up to the remuneration and promotion schemes. Based on the case study it can be seen that bank managers as compared to executives does not enjoy any special payment options except for the basic salary and a limited amount of raise. It can be seen that like the other banking firms, the newly inaugurated First Trust Bank also tends to operate in the same manner. As stated by Eufinger & Gill (2016), a presence of rigidity and inflexibility directly affects functional operations and payment structure of the firm. Concerning Jim Bryan, the branch manager of the opened initiative has led the firm to an absolutely unexpected level of success. Despite of ensuring the business with 50% of the market share in the highly competitive situation, there has been no change in the remuneration system. Further, it is noted that the outstanding efforts and deposits have provided Jim with a raise of 10% on his amount of salary.
The case of Jim receiving a maximum allowed raise and his satisfaction greatly depends on his individual perceptions. Unlike the sales executives, being a manager he receives no extra commission on the quality and quantity of sales that was made in the 12 months period. The extraordinary results have been possible only because of the praise able effort put in by Jim. A raise of 10% is neither enough nor satisfactory against the hard work that was performed. On the hand, if Jim tends to have a positive perception of the rigid payment schemes, he should be satisfied with the maximum allowed appraisal. In case the branch manager expects much more and has a negative perception of the inflexibility, he shall not be satisfied by the received payment (Bryson et al., 2012).
Based on the case study it can be inferred that the newly developed First Trust Bank has a very poor sales incentive scheme for its branch manager. Reviewing the case of Jim Bryan, there are several recommendations that can be made towards betterment of the company. Firstly, the presence of a human resource department that focuses on tracking roles and contribution of the branch manager is highly suggested. It is noted that knowledge about their involvement will help the top level managers to develop a much more rational payment structure (Heizer, Render & Munson, 2016). Further, the HR manager tends to help the superiors in building a realistic compensation scheme that will not only contribute towards developing performance and engagement levels of the branch managers, but also shall lend a hand in building up a positive business framework (Bennett & Ho, 2014).
Secondly, it is recommended that along with setting sales goals and targets, the management actively involves in creating a sales remuneration formula as well. It is important that there exists an acceptable and enthusiastic compensation percentage on fulfilment of objectives. Like sales persons, branch managers should also receive commission on amount of sales made. In the words of Eufinger & Gill (2016), it is noted that a presence of a mutually accepted remuneration program will not only contribute towards developing clarity and transparency, but also help in ensuring an increased return from the managers. Moreover, the timing, collaboration with taskforce, plan analysis, change cycles should also be take into consideration for building up a proper incentive structure. Lastly, it is suggested that the integrated metrics and modules are reconstructed in a more effective and impacting manner. A proper construction of the models will help in forming a win – win situation for the managers and the bank as well.
References
Angeloni, I., & Faia, E. (2013). Capital regulation and monetary policy with fragile banks. Journal of Monetary Economics, 60(3), 311-324.
Armstrong, M., & Taylor, S. (2014). Armstrong’s handbook of human resource management practice. Kogan Page Publishers.
Bennett, J. M., & Ho, D. S. (2014). Human resource management. In PROJECT MANAGEMENT FOR ENGINEERS (pp. 231-249).
Bratton, J., & Gold, J. (2012). Human resource management: theory and practice. Palgrave Macmillan.
Bryson, A., Freeman, R., Lucifora, C., Pellizzari, M., & Perotin, V. (2012). Paying for performance: incentive pay schemes and employees’ financial participation (No. dp1112). Centre for Economic Performance, LSE.
Dias, L. (2016). Human resource management. Human Resource Management.
Eufinger, C., & Gill, A. (2016). Incentive-based capital requirements. Management Science.
Eufinger, C., & Gill, A. (2016). Incentive-based capital requirements. Management Science.
Heizer, J., Render, B., & Munson, C. (2016). Principles of operations management: sustainability and supply chain management. Pearson Higher Ed.
Hendry, C. (2012). Human resource management. Routledge.
Kerzner, H. R. (2013). Project management: a systems approach to planning, scheduling, and controlling. John Wiley & Sons.
Loshali, S., & Krishnan, V. R. (2013). Strategic human resource management and firm performance: Mediating role of transformational leadership. Journal of Strategic Human Resource Management, 2(1), 9.
Mathis, R. L., Jackson, J. H., Valentine, S. R., & Meglich, P. (2016). Human resource management. Nelson Education.
Mondy, R., & Martocchio, J. J. (2016). Human resource management. Human Resource Management, Global Edition.
Purce, J. (2014). The impact of corporate strategy on human resource management. New Perspectives on Human Resource Management (Routledge Revivals), 67.
Stone, R. J. (2013). Managing human resources. John Wiley and Sons.
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