Human Resource Management Principles and Standards

The control and guidance of human activities have started with the gathering of human in communities but have become a necessity with the apparition of factories and work centres. The owner or person in charge of the business in order to achieve his smart objectives had to set rules and practices for the control and guiding of his employees. The need to understand and control their workforce had fuelled the emergence of theories and concepts by companies’ owners. HRM is therefore a resultant a long list of management models. As a human concept, human management is set and implemented with a variety of shades, depending of the type of industry, company and culture, but four approaches can always be distinguished on managing employee in an organisation (Haffner, 2010, page 9 handout 1) Appendix 1 is showing these four different approaches HRM strategy Haffner in his handout 1 (2010) cited a definition of HRM by Armstrong as “a strategic and coherent approach to the management of an organisation most valued assets, the people working there, who individually and collectively contribute to the achievements of objectives.” HRM is a hard concept to defined as it is differently interpreted by authors or practitioners (see Appendix 2 Table 1: Textbook definition of HRM) but one fact seems constant in all definitions; the implementation of HRM is part of the business strategy of an organisation (Price, 2004). The integration of HRM strategy in the overall business strategy of the organisation is a paramount requirement for achievement of its smart objectives.

Socio-economic

Technical

Political Legal

Competitive

OUTER CONTEXT (PEST)

INNER CONTEXT (SWOT) Management Style Culture Structure Finances Task-Technology Motivation of staff BUSINESS STRATEGY CONTEXT Feedback BUSINESS UNITS’ STRATEGIES – SUCH AS HUMAN RESOURCE MANAGEMENT HRM OPERATIONS ‘EFFECTIVENESS AND EFFICIENCY OUTCOME OF STRATEGIC OBJECTIVES AND CONSEQUENCES Figure 1: An illustrated Typical HRM Strategy Model (source: Haffner handout 1, 2010, p.18) The implementation of human management can also be described as hard and soft HRM. According to Armstrong (2006) citing Storey and Legge, the hard HRM regards employees as commodity similar to others resources used by the organisation to achieve its smart objectives. For them soft HRM sees people as valued assets that the commitment is required to achieve the smart objectives of an organisation. An analysis of the reality show that most organisations used a mixture of all the approaches except the worker’ control one, in accordance with the environment, the nature of the organisation and the operational strategy (Haffners’ handout1, 2010). PEST AND SWOT ANALYSIS A better understanding of the environment (External and internal), was need during the writing of this paper. The Dairy industry in UK with a value of $16.5 Billion in 2008, seem to be an appropriated choice for a PEST analyse for the external impact of the environment and Dairy Crest with a value of £1,629.7 million for a SWOT analysis for the internal impact (Datamonitor, 2010). Appendix 3 shows how the PEST and SWOT analysis were conducted The outcome of the PEST analysis shows that the Dairy industry stills in good condition despite the economic crisis and with status of its products in the UK population diet, it will remain a good investment for many years.

The SWOT analysis of Dairy Crest seems to show that despite the positive state of the Dairy industry in UK, Dairy Crest seems to have some issues which threaten its position in the market. The management of Dairy Crest need to make some changes regarding its debt and lack of involvement in new products. ACTIVITIES TRAINING AND DEVELOPMENT It is well recognised allowing employees to develop skills and attitude help most organisations to achieve their smart objectives and enhance their competitiveness (Bratton and Gold, 2007, p 307). In successful organisation the provision of training and development of the employees is set up, planned and monitored by the Human Resource Development (HRD) within the HRM department. See appendix 4 page 22 systematic training model and role of HRM and Line manager. Regarding the importance of training and development the Chief executive Sir Terry Leahy of the successful supermarket Tesco was quote saying “We are not doing it at Tesco because it makes us feel good. Among apprentices we have higher employee satisfaction levels, which lead to higher retention levels and an increase in staff performance” (www.hrmguide.co.uk, 2010). The training and development approach in Tesco is flexible and structured in such way that it suited the individual needs of the employees (www.thetimes100.co.uk, 2010). See appendix 5 explained the models used by Tesco for training and Development for its employees.

Figure 2: Shows the different training paths available to Tesco’s employees For the Eresearch (2010), Human Resources Development is the framework that focuses on the organisations competencies at the first stage, training, and then developing the employee, through education, to satisfy the organisations long-term needs and the individuals’ career goals and employee value to their present and future employers. The evolution of the HRM function and consequently the one of HRD, have seen the role of Line managers increased.

They are encouraged to be mentor and coaches, integrated in the HRM strategy of Training and Development. Several reasons justified the involvement of the Line Manager: Training and development occurred more and more at work place Effectiveness of training and development at the working environment The Line manager can intervene more rapidly when help is needed Much cheaper for the organisation as the employee remains productive and applied immediately what he is learning Training and development occurred also off job site, employees are sent to centres where they learn specific skills such as team building, leadership development, etc. The choice of the centre and the content of the learning are made by the HRD, after the employee and its line manager have identified gaps in skills and knowledge. The decision made is always in line with the overall strategy of the organisation (www.thetimes100.co.uk, 2010). The development of ICT has been notice by the HRD managers and been taking upon as training and development tools. RECRUITMENT AND SELECTION The recruitment and selection process is part of the operational strategy of in any successful organisation. A well conducted recruitment and selection can provide many benefits for the employees and the employer but most importantly for customers.

For an organisation such as Enterprise, the customer satisfaction is correlated to an effective and efficient recruitment which also lead to a low workforce turnover (thetimes100, 2010). Various models of recruitment and selection existed but they are all subjected to the rules and regulations of the organisation geographical location. The organisations operating in the UK are under UK legislation, mostly on sex, race, disability and recently age discrimination which are depend on the EU directives. See appendix 6 Table 3.1: a list of Acts and they application in the UK. In HRM oriented organisations, while the Line manager in case of vacancy decide the need for filling it, change part of it or shared among others role, the HRM department which over-see the operational and strategic smart objectives of the organisation, will insure that the recruitment is contributing to them (www.hr.wiltshire.gov.uk, 2010). The involvement of the Line manager in the job and person description is important as he is one receiving the selected person into his team, in charge of the induction and training. The role of the HRM manager regarding the recruitment and selection process should be limited to advising the Line manager or recruitment team on legal aspect of the process and to the respect of the overall smart objectives of the organisation. In reality, some organisations with a centralised HRM department, it is the responsibility of the HRM manager to conduct most aspect of the recruitment and selection process, while the Line manager has a passive role of involvement (www.acas.org.uk, 2010). The evolution and integration of the HRM role in the strategic operation of successful organisation have change the nature of the recruitment and selection approach. It is now understand that the recruitment and selection policy and process of an organisation will reflect on the way it managed its workforce (Bratton and Gold, 2007 pag. 269). It also a process which subject to external influences such as the state of the economy, the skill or competency of the national workforce like in the UK, a shortage of qualified IT professionals saw people from outside coming in with the consequence of a rise in the salary on that sector. See appendix 7 figure 3.2: an illustration of demand and supply of labour.

The adoption of HRM strategy in successful organisation have seen the workforce considered as the most important resource, therefore their recruitment and selection is seen by the HRM manager as part of the organisation’s strategy. It can be used to strategically steer the culture and competency of the workforce toward the smart objectives set by the senior managements. The recruitment and selection in an organisation can occur internally or externally. Depending on the operational and strategic aims of an organisation, the recruitment and selection is mostly base on three approaches (Price, 2004). See appendix 9 Table 3.4: Recruitment strategies). The best candidate approach The culture fit approach Flexible person approach The recruitment which is the first part of this process, consist of acknowledge a need for a new employee, draft a job and person description, advertising the vacancy (several methods existed) and reception of application forms. The second and final part consists making a choice of best candidate among a pool of applicants using different type of technics (interview, psychometric test, graphology, selection test, etc..) depending of the organisation strategy (thetime100, 2010, Haffner handout2, 2010, pag. 12). See appendix 9 figure 3.3: Model of recruitment and selection stages) EMPLOYEE WELFARE According to Priti Shah (2010), “Employee welfare is a comprehensive term including various services, benefits and facilities offered to employees by the employers.

Through such generous fringe benefits the employer makes life worth living for employees.” It is statement in line with the philosophy of HRM, which see the employees of an organisation as its most valued assets, therefore need protection (Haffner handout1 pag. 10, 2010). The Employee welfare can be incited by the state, categorised as statutory and /or by the organisation which is non-statutory. The statutory welfare such as the Health and Safety at Work etc Act 1974 (HASAW or HSW 1974), EU directives and the Social Charter, influence the management of employee welfare in most successful organisation, inciting the HRM managers to set up policies and rules for compliance (Bratton and Gold, 2007). They also trained and advised senior managers and line managers on the welfare of the employees not only on the legal aspect of the scheme but also on the beneficial aspect regarding the strategy of the organisation. According to Armstrong (2006, pag 846 10th ed.) the implementation of an employee welfare scheme increases their loyalty and motivation. See appendix 10 figure show the relationship between management and employee wellness The implementation of employee welfare by an organisation consist of making sure the work place is safe for worker (equipment, working environment, shift pattern, etc) and it also concern issues such stress, counselling, trust fund and many other schemes like the one set up by G4S for its employees in Kenya. In early 2008 as a result of the post-election violence in Kenya, over 60 employees were left without homes when they were burnt down during the violence. The local (G4S) company quickly put in place a programme of support and assistance for those affected which included counselling for those suffering from post-traumatic stress.

Financial assistance from the G4S Employees’ Trust Fund helped these employees to rebuild their homes and bring some normality back into their lives. (www.magee-ir.co.uk, 2010) When such scheme is put in place the Line manager are in charge of making sure the workforce is aware of it existence and monitor it impact on the employees. PAYMENT AND REWARD OF EMPLOYEE Among all the process analysed during this essay, payment and reward of the employee is the most strategic for the HRM as it is a contractual exchange where the workforce undertake a certain amount of activities and expect a fair level of payment or reward in return (Bratton and Gold, 2007). It is a strategic process as it has a direct and immediate impact on the behaviour and performance of the workforce affecting the public image or reputation and ability to achieve the operational and strategic smart objectives of an organisation. In the organisations that have adopted the HRM philosophy, a reward management system has been developed by the HRM management to use the payment and reward of the workforce to improve productivity, commitment, services and customers satisfaction without a negative effect on the organisations profit. See appendix 11 Model of reward management: elements and interrelationship Most payment of employee can be of a fix pre-agree amount which a salary or wage or a performance related reward which can depend on the quality, quantity or profit (Price, 2004, pag 529). Others types of reward are used by organisations to motivate their employee’s, rewards such as: over-time paid double the habitual rate, commission depending on success, bonus for harder worker item produce profit related pension scheme Trust fund Barclays Bank is an organisation that used bonus reward; they offer an annual discretionary bonus which depends on the performance of both individual employee and their team (www.personal.barclays.co.uk, 2010). The importance of the payment and reward of the employee has been valued as a strategic operation by the HR management which should be aligned or integrated to the organisation operational strategy (Bratton and Gold, 2007, pag 360). According to Price (2007) the reward system consists of integrated policies, process, practices and administrative procedures.

This process has also been encouraged or influenced by government legislations such as in UK the Equal pay Act or National Minimum Wage Act. Act Date Coverage Equal Pay Act Sex Discrimination Social Security and Contribution and Benefit Act Employment Right Act National Minimum Wage Act Employment Act National Minimum Wage Act 1970 1986 1992 1996 1999 2002 2003 Male and female employees to receive equal pay for like work, equivalent work and work of equal value. Removal from the employer’s pay structure, wage regulations, collective agreement, and so on, of any tem that is discriminatory. Enforcement of statutory maternity pay for a maximum of 18 weeks Employer responsible for sick pay for the first 28 weeks of absence through sickness Restricts unauthorised deductions and payments from the wages of employees Guaranteed payment for a whole day Right to an itemised pay statement Notice pay if the employer become insolvent Enforcement of a statutory minimum wage Written statement on wage calculation Enforcement of a statutory paternity and maternity pay Details or rate of statutory pay Enforcement notice requiring an employer to pay the minimum wage to an employee amended in relation to past periods and termination of employment Table 3.4.1: Key UK legislation related to reward management (source: Bratton and Gold, 2007, p.391) According to CIPD website (2010) the HRM management design the reward system but the practice is delivered by the Line manager. The involvement of the Line manager will depend on the type of reward applied by the organisation; as he would be one explaining the scheme to his team, make decision about who deserve a reward and why (CIPD, 2010). The understanding of the diversity of what people as a reward regarding to the job satisfaction a lead to development of new concept such as “Total reward”. The CIPD defined total reward as “a reward strategy that brings additional components such as learning and development, together with aspects of the working environment, into the benefits package. It goes beyond standard remuneration by embracing the company culture, and is aimed at giving all employees a voice in the operation, with the employer in return receiving an engaged employee performance”. The table below illustrated the how the two types of reward (financial and non-financial) combined can maximise the motivation, commitment and performance of the workforce.

Financial rewards Base pay Total remuneration Total reward Contingency pay Employee benefits Non-financial rewards Learning and development Non-financial /intrinsic rewards The work experience Figure 3.6: The components of total reward (source Michael Armstrong, Handbook of HRM Practice 10th Ed. Pag,631, 2006) It is a concept that has been adopted more and more by organisations as it is seen as powerful tool of looking after their valued asset which their human resource. According to the CIPD (2010) two in five organisations have adopted the total reward system and 22% are planning to do so in the next 12 months. See appendix -table of number of organisations that are implemented the total reward concept and appendix show an illustrated model of total reward pag 633 Armstrong.

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