Organizations are made of among others, human resources (HR) which is the most valuable asset in today's dynamic world. Indeed, it is people and not organizations that constitute an organization. Achievement of organization's objectives depends on the individually and collective efforts put in by its work force. Human resources management (HRM) may be defined as the coherent as well as strategic maximization of human resources capital in an organization towards making a return on that investment (Gold & Bratton, 2001).
The practice, in its efforts, effectively attempts to maintain a ‘fit' between the employees and the organization's overall strategic direction. Unlike technology and processes, people have a soul, aspirations, feelings and emotions. As such, the concept of people as an asset, do not indicate perceiving them as commodities. In managing people, the manager must practice disciplines based on psychology, sociology, industrial relations as well as industrial engineering and economics. In achieving an organization's objectives, it is possible to adjust the technology employed by increasing production speed as well as reducing the machines' downtime. For a person, who has a soul, ability to reason and act in response, it is hard to alter the person's working speed as well as the duration. Proper management of human resources leads to a motivated workforce, a development to loyalty and an assurance of survival and success of an organization.
This paper pays a close look at the practice management of human resources in an organization. This will encompass the importance of the practice, functions within this office and some of the motivation techniques that can be used as well as their role in achieving organizational objectives. Furthermore, the paper will focus an attention to a reputable organization in determining the applicability of incentives and compensation in HRM. Every organization has its strategic future which is broken down into objectives that are measurable and comprehensible, so that the workforce can implement (Snell & Bohlander, 2009). The sensitivity and value placed on organizational strategic plan cannot be left in the hands its employees if they are incapable or not motivated. The organization has a responsibility not only to invest heavily in technology and detailed professional processes but also on its workforce and strategic management policies.
Importance of HRM
HRM as a practice significantly offers support and advice to the line management within an organization. Management of human resources must ensure an attraction, preservation, loyalty and development of highly profiled caliber of people/workforce in order to provide a competitive advantage necessary for the survival and success of the organization. The image of an organization, which develops the goodwill, is largely dependent on how well its human resources are managed (McCoy, 1999). The management of the human resources assumes the following roles. First, HRM manages the demand for human resources. Economies in which organizations are based are dynamic. There are economical shifts of growth and decline that require counteractive measures within an organizations workforce. The said measures demands both quantitative and qualitative procedures within the workforce. The practices of retrenchments, hiring, early retirements and the contract renews for the experienced are all structural adjustments that responds to economical changes affecting organizations.
Second, HRM is responsible in managing social pressure in provision of the desirable environment for the workforce. The hygiene and safety of the working environment must be always maintained as it is a motivation factor in employees' performance. The provision of appropriate protective gear while working, pollution free environment and other working conditions is a paramount concern for the HRM office Berger, 2008). Third, HRM is important in managing political pressure usually generated by calls to hire from local labor market irrespective of the resultant factors of cost and knowledge/skills. Though it is ethical to hire from the contextual economy, political pressure should not compromise the quality and quantity of organization's production and a resulting failure in achieving the organization objectives.
HRM also manages the technology by hiring the right workforce or alternatively developing/training the existing workforce in response to technological change. Changes in technology can contribute to obsolescence of the working force which would spill over to the organization not achieving its objectives (Jackson, 2007). HRM office must always find the most appropriate method of counteracting a technological shift by either hiring people with the needed expertise or by training the existing one. In developing an organization culture the later would be more appropriate. If the earlier alternative is adopted, the competition pressure in compensation must be properly dealt with. HRM is also important in designing and management of strategic HR planning. Strategic HR planning is the informed projection of the organizations needs for the appropriate employees, both in quantity and quality, and balancing off this with the organizations ability to sustainably meet the demands of those employees for a substantial period of time in the future. As such, the budgetary constraints associated with right hiring are cheked.HRM needs to make these projections in agreement with the line/functional management's assumptions.
It is also the responsibility of HRM to initiate, alter and manage job design. Job design is the arrangement/rearrangement of work that is aimed at checking or overcoming employee's job dissatisfaction and alienation resulting from repetitive tasks. In curbing this state, the HRM office should conduct job enrichment, job rotation, job enlargement and job simplification exercises. All these procedures are aimed at raising productivity levels which is the ultimate goal of the HRM's office. In cases of mergers and acquisitions, it is the sole responsibility of the HRM's office to rationalize, orient and harmonize the human resources in the involved organizations. The fundamental issues behind mergers and acquisitions are, more often than not, undesirable and unwelcome by employees (Bilsberry, 2005). The task of making an otherwise unpleasant issue acceptable lies squarely at the HRM's office. Moreover, since work environments are different across organizations, the HRM must orient the various workforces involved to the new objectives and/ or organizational culture.
Finally, the HRM is responsible in managing implementation of change. Change may be in terms of process, organizational structure, systems and culture among others. Changes are the inevitable twists that affect the normal and known paths through which an organization operates. Some of the aforementioned twists arise internally from the organization's need to achieve new status. Others are externally experienced due to the shifts in the business environment. The issues aforementioned under the discussion are achieved through the functions of the HRM office.
Functions of HRM
Generally, HRM management can be subdivided into three interlinked phases. The practice functions include recruiting qualified human resources, managing the employees in the working environment as well as preparing and enforcing exit of the employees from the organization. The process of recruiting employees arises from the organization's need to properly position itself in the economy. Ideally, recruitment should follow an order closest to; vacancy advertisement, selection of potential candidates, interviewing and contracting the successful candidate(s). Once in the organization, new employees are inducted and trained. It is during work performance that issues such as motivation, compensation development, disciplinary actions, performance appraisals, career planning / development, counseling, talent management, safety management and staff communication are conducted (Gold & Bratton, 2001).
The employees continuously offer their service to the organization under the existing HRM measures until they exit. Exit may result from retrenchment, obsolescence, retiring, resignation or termination of employment. The HRM at this phase has a responsibility to counsel and prepare the exiting employee for the challenges and opportunities awaiting the employee in the future. The office should ethically hand over all the legal documents and benefits to the exiting employee for positive development of the organization's goodwill/reputation in the corporate world. If need be, the HRM should have a succession plan for implementation at this phase. Motivation as a HRM activity can completely change the perception of employees while in the work environment. Different people in the workforce are motivated differently across and longitudinally with time. Compensation and incentive is a major motivation element that is easily applicable in many organizations since, almost every employee joins an organization with a sole/major purpose of earning.
Compensation and incentives HRM
An incentive can be defined as any factor, that can be financial or non financial that accounts for preference or stimulates/enables a specific course of action. It can as well be said to be the bonus paid on successful achievement of performance objectives. Compensation is the art of offering/giving money or something else, which can easily convert to money, for purposes of paying for work done. In general, compensation and incentive can be referred to a compensation package. A compensation package is the value placed on an employee as presented to that employee. Compensation can be categorized into three categories. First, there is non monetary compensation. This is the benefit received by an employee which cannot be tangibly valued. Such can include social and career rewards. Job security, recognition, opportunity for growth, flexible working hours, subsidized housing, magazine subscription, laundry services, elder care, are some of the non-monetary compensations (Berger, 2008). Second, compensation can be direct which is the employee's base wage/salary expressed as salary or hourly wage as profit sharing bonuses paid based on performance. Finally, compensation can be indirect. The later includes facilities like health insurance, paid leave, moving expenses and child care being provided by the employer.
There is a corporate general consensus insisting on relating pay with performance for effectiveness. This may not necessarily be applicable in sectors such as agriculture where many performance results are dependent on factors beyond organization and employee control. Whichever the compensation used, it should also be fair with the market and not discriminating against some employees (Campbell, 2006). A job evaluation should be conducted in placing a value on employee. In such an evaluation, compensable factors such as experience, education level and job responsibility should be considered. Moreover, employees should be involved when considering their indirect compensation needs such as paid vacation, retirement planning, childcare among others. The HRM officer should regularly review the compensation package from time to time to maintain its fairness, equitability and competitiveness.
Importance of compensation and incentives in HRM practice
Use of compensation and incentives is an importance practice in HRM as it has the following advantages. First, to many employees, the basic purpose for joining an organization is to secure a pay. The value placed in such a pay and not necessarily the amount/size motivates the employees more, and as result higher productivity levels are reported. Second, compensation facilitates hiring, retention, promotion and evaluation of the workforce. Without mentioning aspects of compensation, the HRM office might find it impossible to convince people to join the organization to work or even the existing employees to assume higher responsibilities (Armstrong, 2006). Third, compensation displays legality of a contract/employment. For a contract to be valid there has to be a consideration, which is partly what a pay or remuneration package serves. Compensation, especially bonuses, which practice sharing of profits with the employees, creates a sense of belonging to the employees. This is extremely important in securing employees' loyalty during hard times in managerial practices.
In addition, compensation assists in valuing an organization as well as determining its future. Once the HRM office is capable of properly remunerating workforce, the employees are almost assured of their organization's survival. Usually, when an organization is going under receivership, employees are the first victim as there is reduced employee compensation, which may in acute scenarios deny them their basic livelihood. Finally, compensation and incentives are the easiest motivational practices available for use by the HRM. This is because compensation is directly linked to employee's welfare more than the improvement of working conditions (McCoy, 1999).
HRM at Coca Cola Company
Coca Cola Company is one of the leading beverage production companies. The firm that traces back its existence in 1886 ascribes to the philosophy that, it is people and not technology creates an effective organization. Employees are regarded as assets and as such their health and benefits are highly considered. Benefits compensations and benefits given at Coca cola company include a basic pay, medical facility, bonuses, picking and dropping of employees to and fro work station, gratuity fund as well as social security. The company has never performed downsizing exercise during its existence which displays a good relationship between the company and the employees (Berger, 2008). The company also practices an open door policy. Open door policy provides an opportunity for feedback from employees and vice versa. Compensation package review is objectively done from the annual performance evaluations. At the beginning of every year, HRM office communicates the objectives of the company and reviews their achievement at the end of the same period. The training policy for employees is well established to ensure that employees do not become obsolete. For example, new employees get a three month paid training while existing employees get a full free on new technology before they can use it. Training of employees is a non tangible compensation that assures employees of their job security.
As drawn from the evaluation above, effective management on human resources requires both scientific and a human relations approaches. The emphasis is both goal oriented as well as human welfare oriented. Any successful organization must invest sufficiently on HRM aspect failure to which the wrong organization culture will be developed. In order to effectively invest on the human resources modern firms ought to institute humane employee relations policies, reviews on package offered, appraise performance regularly, build motivation-oriented culture and possibly institute open channels to assist in participative management practices where employees are deliberately engaged during decision procedures. Conclusively, HR practices are crucial for organizational general performances levels and any move to drive the firms towards higher goals ought to be premised on attainable HR strategic goals. As evidenced, strategic policies crafts a decisive goals' path for firm's benefit whilst building effective workforce team.
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The objectives of this report are to look at the Human Resource Management (HRM), Human Resource Planning and Development (HRP & D), and Performance of McDonald's restaurant. Furthermore, it explains the human resource management activities, models of human resource management, effectiveness of organisational objectives, performance monitoring of McDonald's restaurant. The human resources of any organisation are the most important resource that is the direct connected between the quality of the workforce and ultimate goals. The human resource department of McDonald's is responsible for right people, right number, right jobs, right time, right cost with right knowledge, skills, experience in the right place and also responsible for training of all staff and keeping evidence on them. It also indicates us what is the usage of human resource management and how does it work in the company.
McDonald's fast food restaurant began in America in 1954. It is leading food service retailer around the world with more than 30,000 restaurants in 119 countries serving 47 million customers each day. Moreover, McDonalds is one of the world most well-known and valuable brands and increasing share in the globally. Now it is recognised worldwide establishment and first restaurant in the UK. Today more than 2.6 million people of the UK trust about McDonalds and go to eat due to provide good food with a high standard, quick service and value of money.
Human Resource Management (HRM)
Human resource management is the people management function where organizational function is fulfilled and focuses on the issues related to people for example compensation, performance management, organization development, safety, benefits, employee motivation, communication, administration ,training and, etc.
As defined by Storey in 1995, ''HRM is a distinctive approach to employment management which seeks to achieve competitive advantage through the strategic development of a highly committed and capable workforce, using an integrated array of cultural, structural and personnel techniques.''
Human Resource Management (HRM) Activities
Human Resource Management (HRM) deals with the 'Human' feature of an organisation. There are many activities of an organisation to achieve their ultimate goals. To cite an example Recruitment and selection, training and development, human resource planning, provision of contracts, provision of fair treatment, provision of equal opportunities, assessing performance of employees, employee counseling, employee welfare, payment and reward of employees, health and safety, dismissals and redundancy, and etc. I am explaining three of them as below
Recruitment and Selection
In an organization, a change happens in the level of employees where HR department maintain the requirement of personnel to meet the demand. For effective recruiting, recruitment process can be costly and takes a great deal of time to set up. It includes on what jobs needs, advertising, application, identifying who best meet the criteria, interviewing candidates, finally selecting the best candidate for the post, and etc. McDonald's advertise their job vacancies on their specialized websites and use their own personnel department to recruit staff.
Objectives of the Recruitment and Selection
The objectives of the recruitment and selection process of human resource management are as below
- To identify the most appropriate candidate to fill each post.
- Keep the cost of selection down
- Making sure that necessary skills and qualities have been specified and developing a process for identifying them in candidates
- Make sure that the candidate selected will want the job, and will stay with McDonald's
- To make the most of the effectiveness of the McDonald's recruitment and selection practices.
Achievement of the Recruitment and Selection
In the McDonald's, recruiting process is run throughout the year. Like other organisations, McDonald's recruit internally and externally, and they for the most part recruit their managers and Assistant managers internally rather than externally, because it is easier and less training is needed due to the candidate is well known about the job. Just about 50% of McDonald's salaried managers are promoted from within McDonald's.
In addition, for preparing the job description, McDonald's describe the job title, department, location, the responsibilities, the job purpose and duties.
McDonald's uses the application form with questions which are typical questions, to know what qualification the applicant has, such as knowledge, skills, experience, and etc. Application form fill-up and make the answer of question is the first step for applicant at crew member level.
For the recruitment process, Interview is the most crucial part for McDonald's potential employee. From the short listed candidate, McDonald's call for interview with area manager or store manager at their flexible nearest branch. From the face to face interview, interviewers can know about applicants, such as behaves, confidence, knowledge, and basically how the applicants come across as a person. At crew member level, interview is the second step for applicant.
At this step, short listed candidates involve selecting a small number of applicants for the next stage. This selecting process will be carried on until the right numbers of candidates are found with the wanted quality. As a result, the recruiting team can be able to distinguish easily the strong applicants from the weak hundreds of applicants. McDonald's inform to the successful candidate over mobile phone or by email within one week. One day, McDonald's arrange an induction for a new employee that may turn him or her into a long term, loyal member of staff. In the McDonald's, the induction process begins even before the candidate is offered the job.
Training and Development
From the initial training that is called skill training, Employee can know the basic job knowledge of each position and can develop. Moreover, ongoing training program provides a more advanced level of job knowledge and make an economical employee. An ongoing programme of training evaluation enables employees to keep training up to date and according to the demand of the business. McDonalds training and development programme is an important part to the 100% customer satisfaction that the company aims to achieve ultimate goal.
Objectives of the Training and Development
McDonald's arranges training and development programme for many reasons. For example, training and development programme may be introduced to:
�Increase job satisfaction and motivate employees, as a result, reducing absenteeism and labour turnover.
� Reduce wastage and accident rates by gaining a excellent performance across the workforce.
� Develop the skills of existing employees to cope with labour shortages
�Establish the most effective and efficient working methods in order to maximize productivity and remain competitive
� Use of new equipment and the application of new technology.
Achievement of the Training and Development
We believe that training is the foundation of any success and McDonald's think so. Immediately, training begins with a one-hour orientation in McDonald's. Each branch of McDonald's has its own video player and training room. Step--by --step manuals and video tapes are played every detail of the operation. So, McDonald's is dedicated to the training and development of all their employees, providing career opportunities. So, it is an ongoing process of all McDonald's employees - it is everyone's job, every day. According to the employee position, all employees are to receive induction training followed by a structured development program. After completing the initial training, they are to pass one Observation Check list (OCL) in the particular area with successfully.
In McDonald's has 21 days of employment probationary period. During this probationary period, employee's performance is to evaluate. For example, standard of work, personal attitude, teamwork, focus of customers, hygiene and etc. After completing the probationary period, they must be achieved a competency rating of satisfactory. If they fail to meet the standards of required of performance, they can be terminated at any time during their probationary period.
Human Resource Planning
To achieve the McDonald's goals, human resource planning is concerned with getting the right people, using them perfectly, and training and developing them. In order to meet McDonald's aims and objectives successfully, people using are to identify perfectly and effective way and to identify any problem that are likely to occur (such as recruiting the best candidates) and then getting with proper solution.
''Human Resource Planning (HRP) is the process of ensuring an organisation has the correct staff at the right time, with the right skills and abilities in the right place.''
Objectives of the Human Resource Planning
The aims of Human Resource Planning (HRP) are to
- create the best use of human resources
- look forward to the problems with surplus staff
- build up a well trained and flexible workers
- decrease organisation's dependence on outside recruitment agencies
Achievement of the Human Resource Planning
Like all other businesses, for daily activities carry out McDonald's need the assistance of staff. All the important number of staff in McDonald's fulfils a key role in its operation. Without sophisticated technology McDonald's would not be successful, for setting up properly human being are responsible.
If the manager of McDonald's do not select the potential employees in careful way and do not match against the ability of post that means who are unsuitable, it can create a number of problem, for example
- poor productivity levels
- no good feeling among staff
- job dissatisfaction
- high absenteeism levels
- customer complains
For demand of labour, McDonald's analysis its future plans and estimate the levels of activity within McDonald's. As a result, they can predict that the organisation has right number of potential employee with right quality.
The external labour market is very important for any organisation because of it can make up of potential employees, locally, regionally, who have the right skills and qualification necessary at any time. For McDonald's, local unemployment figures are very important who give the indication of the general labour availability required at that time.
Also, Human resource planning of McDonald's includes searching at how labour is organised within a business or an organisation.
Theoretical Models of Human Resource Management
Generally, human resource strategy is performance or behaviour based. In addition, employees are a main resource for any service organisation.
''Organisations which successfully manage change are those which have integrated their policies with their strategies and strategic change process.''
Johnson & Scholes (1992) Exploring Corporate Strategy
There are a lot of models associated within an organisation. Such as
- The Fombrum, Tichy and Davanna model
- The Harvard model
- The Warwick model
- Guest's model and etc
Two models are explained among them as below:
The Harvard model
According to the Harvard Model, "HRM polices need to derive from critical analysis of: the demands of the various stakeholders in a business and a number of situational factors"
Hannagan Tim, 1995Employees are variable and valuable for any organisation. Moreover, organisations are owned and operated by various employees or people (stakeholders), the task of the management is to balance the returns to every person involved. The Harvard model emphasises on the importance of integration HR policies with business objectives. The Harvard Model is emphasised as the 'soft' approach to HRM, employees like stakeholders of the company. In this model has discussed four areas such as, reward system, employee influences, human resource flow, and work systems, there are also included situational factors such as influence of trade unions, labour market, and laws. These are also relevant to the theory. The effectiveness of the HRM is related to the four 'C's' with the theory. The four 'C's' are "Commitment, "Competence, Congruence and Cost-effectiveness. According to the Harvard theory, employees are an asset rather than a cost.
In McDonald's, line managers are responsible for people and store managers are responsible for the day to day running as a mixture of both the hard and soft approach. McDonald's believes that Staffs are an asset for them which are shown by training provision and should provide long term investment for the company.
Devid Guest has developed his model based on the Harvard model and included four outcomes which has developed into four policy goals
- Strategy integration
Guests (1987) theory, is also included in McDonalds policy, Guest believes the organisation should, "aim for high level of commitment from staff, obtain high quality output, continually improve standards, flexibility from staff, no fixed job definitions, working practices and conditions and seek strategic integration through HR policies.''
In McDonald's, improving standards continuously and flexible working times offering for staff. Line managers of McDonald's accept HRM policies and combine them into strategic plans, staff changing roles are allowing within the organisation.
Acknowledged as culture, every organisation has different values, ideas and beliefs that affect the way they operate.
According to Handy, there are four types of culture; Power, Role, Task and Person. McDonald's culture combines two of these. Top management of McDonald's reflects 'power' culture that makes the overall decisions and allowing rapid response to decisions. Other one is the 'task' culture. In McDonald's, the overall aim of the organisation is task orientated and focussing on team culture, and powerful communication between all levels of staff.
McDonald's has integrated the contingency approach by considering the environment culture. Contingency approach suggests that ''different problems and situation require different solution'', for making a sound solution, need both internal and external influences 'fit' together. Also, this approach influences promotions of staff that comes from the company means McDonald's restaurant. It is very helpful for the staff and staffs are offered appraisals that means increasing job opportunities for staff.
For the successful practices of people management, performance management is a holistic process which bringing together many elements of the organizational function. It includes particular learning and development, and gives an overview of employee status.
Performance management is establishing a culture where individual and groups get responsibility for continuous development of business process and their own contributions, skill and behavior. Performance management is about interrelationships and improving the quality of relationship between manager and individual, between manager and teams, between members of teams, and etc. So, McDonald's believe that it is a joint process, not a one off-event, not just managers, apply to all employees. Therefore, McDonald's business manager can make clear what they look forward to individual and teams to do. For example, how they should be managed and what they need to do their jobs.
Human Resource performance monitoring
McDonald's follows the ongoing performance management for employees. For example, setting goals, monitoring the employee's accomplishment of those goads, contributing feedback with the employee's, evaluating the employee's performance, rewarding performance or firing the employee. Performance management includes frequent activities to establish organisational aims to achieve those goad more effectively and efficiently. McDonald's believe that the best approach to accomplish 'value for money' is to monitor the performance levels of staff and want to reduce wasteful actions.
Effective Human Resource Performance
By monitoring improvement, departmental managers or business managers can assess the efficiency of employees and determine which ones are meeting the terms of their agreement and contributing to McDonald's success. McDonald's monitoring is the quality of work being produced that is one of the features and the efficiency levels within departments. Employee's performance helps the manager to know how they have been getting better in their business with the employees. For the future, it is an employee roadmap which increases job satisfaction. McDonald's think that it can help to develop their talent pool, support potential assessment and succession planning.
Suggest ways to make improvements
Sometimes, we see that poor performance lead to dismissal. If without checking, wastefulness is allowed to continue, staff will lose interest, motivation will be concentrated and no encouragement to produce good quality products or services. If the employees know that what jobs are doing, how they are doing, employees will be happier. If they know that they are doing good jobs, that's recognized, generally, they will keep on to do a good work and may make well every effort to do more. Otherwise, if they do not get people feedback, they are not doing good job, company cannot expect them to be either satisfied or productive. From the view of the company, if staffs are inefficient, customers will not return to McDonald's for repeat purchase due to many complaints and uncompleted responsibilities will push up costs to a very high figure. So, need to inform them according to responsibility.
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