Strategic Elements of HR Management Term Paper

Strategic Elements of HR Management That Impact the Efficiency of Workers

Conceptual Framework

Organization of the Remaining Chapters 3

Boudreau’s PeopleVantage Model

Cultural Change and the Role of the HR Professional

Leveraging Technology in HR Management Process & Strategy

Towers Perrins – HR Service and Delivery Report

Oracle’s Human Resources Management System

Tele-workers and Outsourcing: Why the Reluctance?

Expanding Role of HR and Outsourcing

STRATEGIC ELEMENTS of HR Management THAT IMPACT the EFFICIENCY of WORKERS

The objective of this work is to prepare a proposal for research relating to the strategic elements of Human Resources that have an effect on the efficiency of workers.

Introduction

Research has shown that: “Human resources (HR) departments play a critical role in contributing to the overall productivity and strength of an organization.” (E-HR: Increasing Human Resources Efficiency with a Proven Portal Solution, 2006) in fact, it has been noted by the Oracle Corporation that efficiency in the organization “begins at the point of impact -where a worker performs a job.” (Incorporating Human Capital Management Strategies for an Effective Workforce, 2006) Management of the human capital within an organization is one specific strategy, which empowers workers and leads to efficiency and productivity among workers in the organization. Today’s business world is characterized by technological applications that streamline work resulting in worker efficiency. There are various solutions offered by various vendors for Human Resource strategic management to promote worker efficiency. Oftentimes the employee as well as the Human Resources personnel are entrapped in lengthy meetings filling out paperwork and going over options concerning worker insurance and benefits as well as reviewing vacation and sick leave accrual. The implementation of a HR management system has been found ‘key’ by Oracle for efficiency of workers, an important finding that this study will review in Chapter Two of the Literature Review in this work. Study findings reviewed also show that there is a great reluctancy on the part of Human Resources management to top the fertile field of talent represented by tele-workers. This work proposes research in order to answer specific questions related to HR Management Strategy that affects worker efficiency within the organization. Different organizations are finding different technology solutions to be effective with variations in systems used for efficiency. This work will review some of those systems in use and will compare and contrast the systems and their various applications. Further, this work seeks to answer the following research questions.

Research Questions

Questions of the research include the following research questions:

What solutions may be strategically implemented by HR management in promoting worker efficiency?

What present functions exist that actually impeded the efficiency of workers?

What specific tools, technologies or strategies may be employed by Human Resources to drive the efficiency of workers employed by the organization?

Conceptual Framework

It is held by the researcher in this present research study proposal that technology has enabled workers to work from remote locations such as homes or businesses however, there has not been a utilization of this very fertile field of talent by HR managers or in other words there is a disconnect between HR management and utilization of tele-workers in promotion of worker efficiency. Organizational efficiency is very unlikely to be realized if Human Resources within a company is not efficient in its processes. Globalization of commerce has been possible through information technology systems and HR is also enabled through the solutions provided through information technology. Globalization of business and commerce certainly can only result in the necessity of Human Resources to utilize this technology if efficiency and effectiveness in the organization are realized.

Methodology

The methodology utilized in this study will be qualitative and be conducted through a review of the relevant and available peer-reviewed literature in this subject area. Qualitative review of literature is inclusive of reviewing all relevant literature in this subject area that may be found in libraries, journal articles, books, and documents of an academic peer-reviewed nature online via the Web.

Organization of the Remaining Chapters

Chapter Two will contain a review of the literature in this study and Chapter Three will elaborate upon the research design and venture further into the methodology employed in this study. Chapter Four will state findings of the study and Chapter Five will conclude by stating any recommendations that may arise during the course of this study.

Overview of the Study

Traditionally, Human Resource Management (HRM) has been the “formal system devised for the management of people within an organization.” (Human Resource Management, 2007; p.1) There are three major areas of management relating to HR including:

1) Staffing;

2) Compensation of employees and 3) Definition and design of work.” (Human Resource Management, 2007; p.1)

Edward Gubman wrote in the Journal of Business Strategy that the:

basic mission of human resources will always be to acquire, develop, and retain talent; align the workforce with the business; and be an excellent contributor to the business. Those three challenges will never change.” (Human Resource Management, 2007; p.1)

Several principles are widely acknowledged by and among business professionals as being that which guides modern management of human resources of the organization. Stated as the: “…paramount principle is a simple recognition that human resources are the most important assets of an organization, a business cannot be successful without effectively managing this resource.” (Human Resource Management, 2007; p.1) Second, as stated by Michael Armstrong in the work entitled: “A Handbook of Human Resource Management” is that the business is more likely to realize success:

if the personnel policies and procedures of the enterprise are closely linked with, and make a major contribution to, the achievement of corporate objectives and strategic plans.” (Human Resource Management, 2007; p.1)

The third principle related is that it is the responsibility of HR to:

find, secure, guide and develop employees whose talents and desires are compatible with the operating needs and future goals of the company.” (Human Resource Management, 2007; p.1)

Management responsibilities relating to HR department have been classified into three areas of:

1) Individual;

2) Organizational; and 3) Career (Human Resource Management, 2007; p.1)

The HR department should be “near the theoretic center of the organization, with access to all areas of the business.” (Human Resource Management, 2007; p.1) Furthermore, the HR department should be “situated in a way that it is able to effectively communicate with all areas of the company.” (Human Resource Management, 2007; p.1) Important to know as well is that the structure of HR management is of a wide variation, which is shaped “by the type, size and governing philosophies of the organization…” (Human Resource Management, 2007; p.1) it is related that John Johnston wrote in the Business Quarterly that:

Previously, companies structured themselves on a centralized and compartmentalized basis=head office, marketing, manufacturing, shipping, etc. They now seek to “Decentralize and to integrate their operations in what is noted as a trend for HR to decentralize the HR functions and make it accountable to specific line management.” (Human Resource Management, 2007; p.1)

Specific tasks of HR within the organization include the following ‘key responsibilities’:

Job analysis and staffing: Job analysis is described as being a process of determination of “the nature and responsibilities of various employment positions. Organization, utilization and maintenance of the organization’s workforce involves the design of an organizational framework that best utilizes the human resources within the organization and that establishes a communication system that assist the organization in operation of a “unified manner.” (Human Resource Management, 2007; p.1) Other stated responsibilities are inclusive of the following: (a) Safety and health; and (b) worker-management relations.” (Human Resource Management, 2007) p.1

Organization and utilization of workforce; and Measurement and appraisal of workforce performance, implementation of reward systems for employees, professional development of workers, and maintenance of workforce.” (Human Resource Management, 2007) p.1

Performance appraisal is the process of making assessments of performance of employees and providing employees with feedback concerning their performance at work. Reward systems also are used by HR as mechanisms in rewarding employees and in addressing problems within the organization’s workforce and as well for instituting measures of discipline. (Human Resource Management, 2007; p.1) Training and development responsibilities include the:

1) Determination;

2) Design;

3) Execution; and 4) Analysis of programs for educating and training employees. (Human Resource Management, 2007) p.1

In the past few years technology has impacted HR management significantly and specifically those technologies related to “electronic communication and information dissemination and retrieval” which have “dramatically altered the business landscape.” (Human Resource Management, 2007; p.1) Stated is that: “Satellite communications, computers and networking systems, fax machines and other devices have all facilitated change in the ways in which businesses interact with each other and their workers. Telecommuting for instance has become a very popular option for many workers, and HRM professionals have had to develop new guidelines for this emerging subset of employees.” (Human Resource Management, 2007; p.1)

STRATEGIC ELEMENTS of HR Management THAT IMPACT the EFFICIENCY of WORKERS

CHAPTER TWO

LITERATURE REVIEW

I. Boudreau’s PeopleVantage Model

The work of John Boudreau entitled: “Strategic Human Resource Management Measures: Key Linkages and the PeopleVantage Model” states that: “The field of human resource management faces a significant dilemma. While emerging evidence, theory and practical demands are increasing the visibility and credibility of human capital as a key to organizational success, the measures used to articulate the impact of human resource management decisions remain misunderstood, unwanted by key constituents or even counter-productive.” (1998) Stated as well by Boudreau is the fact that a body of research exists that is growing rapidly suggesting that “the key to competitive advantage lie with the organization’s human resources. (Boudreau, 1998) p. 3 Widely suggested as an emerging key to the success of the organization is “intellectual capital.” (Boudreau, 1998; p.3) This element is sated to not be: “…effectively reflected in standard accounting and the financial report, and the diminishing correlation between future financial performance and standard accounting measures of value seems to attest the importance of more intangible factors.” (Boudreau, 1998; p.3) HR measurement that is effective will be a system that is capable of providing guidance in “rapid and appropriate decisions affecting employees, in language that is understood by all constituents.” (Boudreau, 1998) p.4 the work of Boudreau explores “four necessary elements of enhanced HR measurement” as well as making the provision of a framework “for understanding and developing better future measures.” (Boudreau, 1998; p.4) Boudreau states that the four components spoken of are:

1) Evidence;

2) Explanation;

3) Purpose; and 4) Method.” (Boudreau 1998) p.4

Evidence is necessary in establishing the significance of the effects of human resources for”… meriting intensive measurement and study.” (Boudreau, 1998; p.4) ‘Explanation’ makes the provision of a reasoning of a logical nature in making suggestions in relation to ‘why’ ad ‘how’ human resources “creative their significant affects on organizations.” (Boudreau, 1998) p.4 Boudreau states that ‘purpose’ speaks of the ‘goals of measurement systems, which extend beyond simply developing and applying new measurement systems, and must consider the effects of measures on key stakeholders within and outside the organization.” (Ibid; p.5) Method makes reference to a mode and framework in making provision of development of support for better measures in HR.” (Boudreau, 1998; p.5) HR measurement typically takes an approach that is the exact opposite in which “the search for better measurement methods is the first, and often the only step. The work of Boudreau related the ‘PeopleVantage Model’, which is stated to integrate human resource metrics and strategic human resources management. The following chart labeled Figure 1 illustrates the ‘PeopleVantage Model’ and how this model integrates HR metrics and Strategic Human Resource.

The PeopleVantage Model

Source: John W. Boudreau and PeopleCOM (1998)

The two arrows in the figure represent the synergy existing between the areas of strategic planning, measurement and execution. According to the work of Boudreau (1998) the development of metrics in planning proceeds downward “from the value proposition to the bundles yet when strategy is executed the causal direction is in an upward direction. Boudreau recalls the example set by Sears, a U.S. retailer whose analysis model “was based on a top-down concept of becoming an attractive investment for shareholders, supported by customers whose behaviors delight the customers…The metrics that Sears developed began with employee attributes and worked upward to measure employee behaviors toward customers, customer reactions, and the impact on revenue.” (1998) the work of Kaplan & Norton (1996) drew upon the work of Porter (1985) and as cited in Boudreau (1998) define the value proposition as ‘the attributes that supplying companies provide, through their products and services, to create loyalty and satisfaction in targeted customer segments.” (Boudreau, 1998 p.5)

Boudreau relates that a problem exists in that goals that are ‘company-wide’ in nature “are simply too generic and vague to guide specific HR decisions” and simultaneously value is defined too narrowly and the initiative to measure gains in knowledge increases as to products or services without having measured the effects on the organization in terms of the value-creating capacity does not provide enough useful knowledge. Boudreau states that “The PeopleVantage’ model may suggest a diagnostic approach to identifying the right level of detail for actionable value proposition.” (1998) p.5

Boudreau relates as well that: “Typical HRM measures frequently focus only on HR activities” and give rise to suggestions that these activities “represent the key business processes of HR.” (1998) Training metrics are inclusive of the effect of training upon the quality of product, cycle time, cost reduction, and speed of execution.” (Boudreau, 1998) p. 5 Typical dependent variables in research of business and economics are value propositions and business processes but the ‘moments of truth’ have “received relatively less attention.” (Boudreau, 1998) the work of Gronroos (1998) and Carolzon (1987) have documents that the ‘moments of truth’ are representative of “pivotal contact points between employees and customers, whether in providing a service, selling a product, or providing assistance… [and that these]…determine constituent’s perceptions of service and product quality.” (Boudreau, 1998) p. 5

II. Cultural Change and the Role of the HR Professional

The work of Dean Foster entitled: “The Dynamic Role of IHR in the Millennial Organization” states that: “Human resource departments and professionals represent more than just a particular function at their corporate headquarters” in that in today’s work world that is increasingly global the role of the HR professional has expanded rapidly as the HR professional is the individual “most responsible in an organization for driving the kind of change necessary for the organization to succeed in the global environment of the new millennium.” (2007) p.1 the statistics relating to global management include the following facts:

60% of all cross-border joint ventures fail” (Foster, 2007)

30% of all expatriates return from assignment abroad prematurely

Approximately 48% of all repatriates leave their company within two years of returning home. (Foster, 2007) p.1

Foster states that these statistics are representative of: “…a gross human resource failure, and the enormous capital investment that is lost as a result.” (Foster, 2007; p.1) Furthermore, these statistics shed light onto the failure of organizations in realizing the “impact that culture has on its ability to succeed globally.” (Foster, 2007) p.1 Interviews of HR professionals who have been involved in international joint ventures that failed cite the single greatest cause for the failure to be “consistently identified as the inability of both parties involved in the joint venture to recognize that they were approaching the tasks in different and incompatible, ways – that their cultures failed to align toward a common goal.” (Foster, 2007) p.1

Foster cites ‘soft issues’ to be another area that needs focus by the HR professional in that “the inability to consider the ‘soft issues’ – culture’s impact – in all cases, was the primary reason for the failures that represented significant loss of a number of key measures, to the international organization. In organizations that send employees to another country for business operation there are costs that include expenses inclusive of: “…COLA, tax offset, salary increases — “often to compensate for the lost salary of the accompanying partner — ” housing allowance, actual relocation and education costs.” (Foster, 2007) Foster states that returns that are early or premature have the capacity to “double and triple the actual ‘million-dollar’ investment of the ‘successful’ assignment.” (2007) p.1

Several phases must be included in the plans for employees who have been internationally relocated make adjustment to the everyday living issues that affect not only the employees but their families as well. There is first the tourist phase followed by the adjustment phase and finally the adaptation phase. The entire progression of these phases take up to one year’s time. In fact, Foster relates that until the third stage has been entered the employee is unable to “settle in to a pattern of acceptance with their new environment.” (2007) it is critical that the organization provide employees and member of the employee’s family with “…the ‘nuts and bolts’ information and services they need to survive, such as schools, medical care, housing…” (Foster, 2007) p.1

Cultural awareness can only be possessed by the individual who has the ability to view from the perspective of a ‘cultural being’ or someone who “who carries a set of behaviors and values and attitudes particular to their home culture that may be different or similar to those of their new host country.” (Foster, 2007) This requires not only self-comprehension but comprehension of cultural differences and the culture of others as well. Foster states that culture:

is about predicting group patterns of behavior and should not be seen as an attempt to prescribe individual behaviors…” (Foster, 2007) Foster likens culture to an “iceberg, where the visible culture, as represented by the visible 1/10 top of the iceberg, is indeed, merely the tip: the significant part of a culture, around 90% of it, is often under the surface, invisible and represents the unseen values, attitudes and traditions that drive the behaviors that are visible.” (Ibid) p.1

It is additionally stated by Foster that effectiveness in cultural change requires understanding that: “…both the visible part that is perceivable as well as the invisible set of values, and traditions that can only be learned.” (Foster, 2007) p.1

III. Leveraging Technology in HR Management Process & Strategy

The work of Shariq Lokhandwala (2007) entitled: “Managing People, Process & Strategy for Increase Profitability: How Human Resource Departments Can Leverage Technology to Become a Strategic Profit Center” relates the use of software for automation of HR tasks specifically as related to efficiency of workers. Related is the fact that traditionally HR CEOs and CFOs have viewed the Organization’s HR Department as “…a cost center within the organization” and one in which the HR staff is focused on: “…non-strategic tasks such as maintaining employee records, enrolling employees in healthcare plans, maintaining the employee handbook, ensuring legal compliance and assisting with the entry/exit process – which as we know are all ‘overhead cost’ activities.” (Lokhandwala, 2007) Stated to be “starkly absent” were “any expectations about linking compensation to performance, identifying, educating and grooming future executives, and developing specific HR strategies that supported the organization’s corporate goals and objectives.” (Lokhandwala, 2007) p.1

Lokhandwala relates as well that the HR department is now perceived as: “…a competitive differentiator” that enables the organization to attract the top talent, reduce employee turn-over and control the “high cost of benefit enrollment and utilization.” (Lokhandwala, 2007) p.1 Lokhandwala relates that assistance provided in the form of a “human resource management system (HRMS) technology applies the concept and now needed is the selection and quantification of “human capital information in the form of human capital management metric that are capable of being plotted over a specific timeframe.” (Lokhandwala, 2007) p.1 Success of the HRMS system has been confirmed by Gartner, Aberdeen and Forrester in studies showing that “companies that have engaged their Human Resources departments in communicating strategic objectives create better shareholder returns than companies that have not.” (Lokhandwala, 2007) p.1 Enabling the organization’s employees further increases the organization’s profits and worker efficiency and specifically this is true through use of web portals with links for employee information changes and other HR information requirements.

IV. Towers Perrins – HR Service and Delivery Report

The work entitled: “HR Service Delivery: Connecting People, Process and Performance” is an HR Service and Delivery Research report states that “HR technologies – and self-service in particular- are becoming increasingly critical elements in helping HR develop service delivery strategies that support the overall goals of the organization.” (Perrin, 2007) p.1 the Perrins report relates that: “Deployment of HR technology remains at the forefront of the HR effectiveness agenda, given its perceived and real impact on the bottom line and management’s expectations that it will help streamline the organization and its HR processes.” (Perrins, 2007) p.1 Increase in technological efficiency enable HR professionals in possibilities for “greater gains, and [the realization of] better results than in the past. More is required that simply good technology for optimization of service delivery. (Perrins; 2007; paraphrased) p.1 at the present time “workforce effectiveness is rapidly shooting to the top of the corporate agenda as companies struggle to find, keep, engage, manage and reward top talent around the globe.” (Perrins, 2007) p.1

Becoming more prevalent in use are:

1) Talent management resources;

2) on-boarding processes;

3) Online performance management tools and reward portals; and 4) Others not mentioned. (Perrins, 2007) p.2

The Towers Perrins report is stated to be a case study of the responses provided by 244 organizations in a detailed survey of service delivery plans resulting in “…a compelling picture of how organizations can prepare for what lies ahead.” (Perrins, 2007) p.2. Employee Self-Service is related by the Perrins report to be rapidly growing among large organizations, and is now one of the most prevalent and successful methods of HR service delivery used in business today.” Benefits include:

1) Greater efficiency; and 2) Faster processing time and accuracy in HR transactions.” (Ibid) p. 5

The work of Scott Wescott (2005) entitled: “Should it Stay or Go?” states that prior to outsourcing by the organization determination of ‘valid reasons’ for the outsourcing must be made through conduction of a “detailed and frank evaluation of its processes for a whole array of HR functions.” (Westcott, 2007) p.1 it is important that outsourcing analysis be focused on assessment “of the costs for various functions being performed in-house – and the potential savings that could be realized through outsourcing.” (Westcott, 2007) p.1 Comparison of costs provides companies with an idea of “how efficient and effective their processes are -and what savings might be realized through outsourcing.” (Westcott, 2007) p.1 Core competencies of HR may be determined through isolation of “things that most directly contribute to the company’s bottom line.” (Westcott, 2007) p.1 After the company’s processes were analyzed the measurement of outcomes was performed and benchmarks were created for gauging the effectiveness of outsourcing for the company. The company realized an approximately $12.5 million savings in a five-year period of time. IBM Lotus Workforce Management Software is stated to:

Streamline employee and manager HR activities through an intuitive self-service front end;

Guide employees and managers through HR activities in accordance with company policy and best practice;

Give managers access to tools and applications to support staff more effectively;

Increase worker efficiency and enable cost savings by allowing a higher ratio of employees to HR specialists

Enhance the ability for managers and HR specialists to focus on strategic HR initiatives that help to ensure the vitality of the workforce;

Generate value by improving communication, increasing employee productivity and actively engaging the workforce, Help extend the value of existing it applications by bringing the power of IBM WebSphere; Portal and IBM Lotus software to SAP HR installations.” (Westcott, 2007) p. 5

IBM Workforce Management Software also allows HR to maintain a focus on “high value areas that help to ensure the vitality of the workforce.” (Westcott, 2007) p. 5 IBM’s Websphere Portal software solution “provides employees with a personalized view into all the content, self-service transactions, company intranet applications and third-party applications and services they require.” (nd) Specific assistance is stated to be through the following provisions:

Help managers work more effectively with their staff – Manager self-service provides tools and applications for hiring, submission of employee reviews, initiation of employee changes, leave approval, review of operational data, tracking of employee growth as well as others. Benefits are stated to be inclusive of a) More informed decisions;

b) Improved productivity;

c) Reduction of costs; and d) Building of value in the organization. (IBM Lotus Workforce Management, 2007) p.1

Take advantage of robust features – IBM’s Lotus Workforce Management software is a “portal-based solution” that assists with the following:

Get users up and going quickly; user-friendly interfaces quickly help make employees productive and reduce the need for training.

Enforce best practices by assisting employees with personal and managerial transactions in accordance with company policies through time proven interfaces and a tailored task list.

Deliver relevant content, context sensitive help and transactions based on the user’s role and profile.

Assist employees and managers with the completion of required tasks in a timely manner through in-box and e-mail alerts. Provide convenient access to content relevant to the task at hand through integration with company policies and knowledge bases.

Automate and streamline life and career event processes by letting employees and managers update information on their own, thereby reducing the need for HR involvement.

Integrate seamlessly with SAP technology and other leading back-office systems. Integrate with all related HR, benefits and life event services provided through links with third parties.

Improve compliance and audit tracking for the organization by logging all transactions performed.”(IBM Lotus Workforce Management, nd) p.1

The work entitled: “A Framework for Human Resources Management” published by the International Civil Service Commission states that human resources planning: “involves the systematic assessment of future staffing requirements in terms of numbers and levels of skills and competencies and formulation and implementation of plans to meet those requirements. It is vital to match human resources to the longer-term programme needs of the organization and to maintain an ongoing review of how to make the best use of current and future human resources. In the process, human resources managers must assess how a well-trained and flexible workforce can best be maintained to meet the organization’s changing and at times uncertain needs.” (Amor, 2001) p.1

V. Oracle’s Human Resources Management System

The Oracle report entitled: “Information Empowers: Oracles Human Resources Management System – Incorporating Human Capital Management Strategies for an Effective Workforce” states that effective HR strategy “requires the adoption of a comprehensive human capital management (HCM) strategy.” (Oracle, nd) p.1 Oracle believes that effective workforce is built from development of “a cohesive HCM strategy that is tightly linked to your overall

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