Human Resources Management Contribution
“How can Human Resource Management contribute to the success of an engineering business? ”
Although there is no widely acknowledged definition for the term Human Resource Management, as far as I can understand it Human Resource Management is an approach to personnel management that sees people as the key resource of a company. In short it is a system that believes it is important to communicate well with employees and include them in what is going on with the organization, to increase the commitment and help them to identify with the organization.
HRM specifically is a body of functions and policies that shape the work environment and control the relationship with employees. Some functions contain alternative methods or practices from which managers can choose. The key functions in HRM are; Planning the HR needs of the organization, particularly for the future. Integrating HRM with the organizations strategic management process and co-ordinating clusters of HR practices to achieve the desired goals. Staffing correctly; obtaining the correct people with regards to their skill set, abilities, knowledge and experience.
Some practices involved within this are HR planning, Job analysis, Recruitment and selection. Developing skills, to ensure that workforce can perform satisfactorily in their jobs and can advance within the organization. To identify employee’s key skills and where they are competent the ‘Performance appraisal’ practice can be employed. Motivating employees through reward system, this can be done through performance appraisal, job evaluation. Designing and maintaining work systems that are safe and promote workplace wellness and employee health so as to fulfil health and safety legislations and retain a capable workforce.
Managing relationships between employees, it covers a wide range of practices that can be used to create a better co-operation between employees and also a better feeling of involvement/participation. It also extends to co-operation with unions if they are involved. Managing change for the future by helping others be able to envision and understand the change, along with setting expectations for performance and helping develop the capability to reorganize and reallocate resources (including people). Evaluating the value of the entire HR system y designing procedures and processes that measure it. All of these functions and practices are underpinned by legislation. In a practical application typically a company would set out organizational objectives and then decide on a strategy in order to achieve those objectives. In the context of an Engineering company/business the strategic focus could, for example, be on the following:
- Ensure effective training and development of all staff in order to ensure flexibility and competence within roles.
- Develop effective communication between employees and between departments/functions.
- Develop mechanisms to cope with future environmental change including social, political and technological.
In this example strategic focus is on developing a flexible organization that can adapt to change in the environment and has a good communication structure in order to achieve this. Intel is a good example of a company in the Engineering business world whose business competitive advantage is its speed and flexibility in meeting the changing needs of various market niches.
Given the extremely short product life cycle in this industry, there is a pressing need, according to Andy Grove, CEO of Intel, to channel resources swiftly from declining areas into emerging/growing areas. In these scenarios technological and financial resource transfer can be done quickly, but people are the hardest part of the system to redeploy. In order to develop and encourage continuing success the business must develop a HRM strategy that focuses on the correct HR areas in order to maximise competitiveness.
To develop a successful HRM strategy, the business strategy must first be understood (Key driving forces of the business [technology, competition etc. ], Implications of these driving forces and the fundamental contribution of people in the business). From here a mission statement can be developed that relates to the people side of the business, establishing what they contribute. Analysing the organization (Culture, Organization, People, HR systems) and the external business and market environment will determine potential performance, skill issues etc. and highlight opportunities/threats.
For each critical issue options can be generated considering the consequences of possible actions. From this a set of broad objectives can be created that can be split into specific HR areas, for example, Management, training/development, communication etc. The choice of strategy will have a big effect on the company’s success. Smaller companies will have to choose different objectives, for example, it is more expensive for a smaller company to offer effective training to their workforce, so a better option would be to select and recruit the correct staff.
This is illustrated by Small to medium sized companies in China, which were found to have focused their HR efforts on selection and recruitment, performance-based remuneration and employee involvement in decision-making. This may be working well for these SME’s but for future success it would be a good idea to develop effective training/development programmes in order to further develop their employee’s skills. The problem here is that in order to compete with other companies there has to be compromise in certain areas.
SME’s can’t always provide effective/quality training because of the cost, but over a longer period of time the cost-benefit ratio can be swung in a positive way as effective training can mean future development for the organization. In terms of Engineering industry this can provide greater benefit as development in certain skill areas, and skilled workers in general are essential for business growth. Problems can arise here though as if employee’s leave for other, better paid jobs once they have had training and developed skills in certain areas, the companies lose out on work time and incur costs.
Another focus of HRM is to develop the central role of managers and also to prevent the view from workers as ‘us and them’ with regards to managers and help create an ‘us and us’ view. Cost can be controlled to a degree within a larger business by developing the roll of line managers as people managers, this cuts down the need for HR persons and helps to create a more ‘personal’ environment for employees. This is shown by Hewlett-Packard (HP) who relatively recently have been moving back towards developing the central role of managers.
Primarily the role of the HR department now is to facilitate, measure, and improve the quality of management and teamwork, not to provide an avenue for managers to abdicate their responsibilities for people. HRM also helps to develop workers ability to manage themselves, many companies now are emphasizing flexibility and cohesion through team based activities and self managed work teams. One of the largest and most successful companies in the electronic engineering world, Apple, are a good example of focusing on self managed work teams and creating very strong employee-company bonds.
By facilitating the development of self-managed work teams, HR departments can remove themselves from the intermediary role and allow employees to be self-determining. The HRM system can provide great success for an engineering business. It provides a method to narrow down the problems within an organization relating to the people within it, and create specific areas to focus on headed by generalised terms to provide an easy to follow and implement strategic plan.
It has many advantages, such as the ability to create a flexible work environment, focusing on specific areas of the business to maximise competitiveness. However it also has some disadvantages, for example if quality training for workers is provided at great cost to the business, without proper precautions in place it is possible for trained employees then to leave and obtain better paid jobs with their provided training. In many of the examples illustrated here it is possible to see that there is strong links between the success of an engineering company and the use of HRM.
Without effective management of people the business can fail to achieve its goals or sufficiently succeed in its market. The many different aspects of HRM allow enough flexibility and variation to allow a business to select and develop specific areas to meet its needs, for example Intel has a built a flexible structure for its employees to allow the business to move in and out of growing/declining markets.
