NEW sustainable HR paradigm
Another author contributing to this subject is Baum (1995), where he analyses what he calls the traditional or OLD HR practice and the NEW sustainable HR paradigm. It can be observed that subcategories such as recruitment and staff turnover, promotion and career development, rewards and benefits, education, training and development, management culture and national HR planning for tourism are compared and contrasted in what was the OLD and what is the NEW trend to be followed (see Apex 1). From the word sustainable, conclusions can be drawn into the effectiveness, efficiency and sustainability of the NEW HR paradigm.
In other words, the new sustainable HR paradigm suggests that a high staff turnover is seen as problematic and as a barrier to continuity of the organization in terms of recruitment. In terms of development and career planning, a planning does exist with a clearly defined career ladder and promotion with preparatory training programme is encouraged. When it comes to rewards and benefits, the organization should and will offer competitive rewards and benefits, as the flexibility to match individual circumstances and needs.
In the education, training and development area, there is an existing, well-planned training and development policies and strategies, and training is linked to opportunities for promotion. In terms of management culture, staff is seen as a key resource and perceived as an important asset to the organization and even more important corporate culture responds flexibly to local cultural needs. Finally when speaking of national and HR planning for tourism, local population is helped and encouraged to recognize their role in tourism and there is an integrated approach of the two.
It can be said that the OLD HR practice is what could be called PM and the NEW sustainable paradigm is what HRM is trying to achieve. Theoretically this new paradigm presents a renewed and prosperous image of HRM and not simply a re-title or re-conceptualisation of the PM, but a truly new approach where the long term is being taken into consideration. There is an argument which remains open to debate on whether the terms PM and HRM are similar or distinctively different. Various authors have differing opinions in the subject matter.
What is more important to those involved in this subject is which one will contribute to improved results and bottom line profits. And in this view it can be said that the managers achieve results through “their” people. What is more suitable and convenient for “their” people is what should be practiced. It is possible that some organizations are content with the traditional method and are not willing to adapt to the new one, whilst there can be organizations that desperate to apply and adopt the new method.
This will vary due to the values of an organization. Aligning Corporate Strategy and Human Resource Strategy; Every well-established organization has a vision. The process of materializing a vision into results is a complex one, yet if illustrated step by step, a clearer picture of what to do will guide and motivate those involved in this process. It is relevant to define this path in order to understand why corporate strategy and Human resource strategy need to be aligned if goals are to be met, and a path has been suggested by Moorby (1990).
The word “strategy” is borrowed from military terminology. The closest understanding of this tin relation to business context is “The art of so moving or disposing troops or ships or aircraft as to impose upon the enemy the place and time and conditions, for fighting preferred by oneself. This can be interpreted as so panning one’s business to have an advantage over competitors, Moorby (1987). Due to an increased business competitiveness and dynamic external environment important emphasis has been placed on corporate strategy.
According to Quinn (1989), a strategy is a pattern or plan that integrates organizational major goals, policies and action sequences into a cohesive whole. In other words, if an organization desires to achieve these major goals, this plan, referred to as strategy must adhere and include all of its other sub-parts. In a more practical way, the sub-departments must be fully enrolled in this process of moving from vision to results, by using this so called strategy. It is then when Human Resources plays a vital role to be one of the departments which must be aligned to the corporate strategy.
The Human resource department is in charge of managing the people who will perform in order to achieve these major goals. It is through the well-being and consequently the performance of this people that an organization will attain these so desired goals. This is the genuine reason why the Human resource strategy needs to be synchronized with the corporate strategy. It is as easy as comparing it with a car engine. If all the parts of the engine are properly aligned and these parts are in a good state, the probabilities of the car running are greater to reach to desired destination.
As opposed to if there are disparities in the engine, the most probable result will be that the car will not run! The effort in this “driving” will aid an organization in moving from abstract pictures to a concrete reality. The Human Resource department should include viable communication channels in their strategy to make every single employee be aware of where the organization is and where they want to be. This is done through thorough communication activity from top to bottom and vice versa (see Apex 3).
Through offering a clear picture of the present and the future the path to reach it shall be easier. It is then when the sole of senior management and line management come into play. Them, being role models and setting example for this driving towards results. According to the Asia one careers internet site, they state that HRM is not just about hiring and firing but that a competent HR manager can actually play and active role in his firm’s strategic planning and should do so. Ideally, the HR department should work alongside senior management to convert the firm’s corporate strategy into a reality.
Today’s HR practitioners should go beyond fulfilling those basic requirements that the OLD HR practice involved, but he/she must keep in mind a larger picture, anticipating how employees would ultimately contribute to the firm’s bottom line. Though a restriction to this alignment is the involvement of HR managers. It is hard to go outside HR’s traditional role. Many practitioners are still motivated to their old routine functions, like payroll and hours worked and compliance of firm’s policies.
Though these duties are necessary, they do not add value to their jobs or to their organizations. Management also, contributes to the problem; senior managers often view HR as a cost, which does not play an active role in aligning human resources to and systems to a firm’s strategy. According to Suriya (2003), this is a great dilemma, though HR practitioners should think and rethink in order to make management understand that HR can highly support the organization’s strategy to achieve those desired results.
It can be said that productivity is no longer what has to be increased but the value offered to both shareholders and customers. It is not about specialization in roles but to share the responsibility of involving everyone within an organization or aligning people to the organization’s goals. According to a study that Gunnigle and Moore (2003) did for the Water Price Project in Ireland, they used the top1,000 trading companies and the top 500 non-trading bodies. A questionnaire addressed to either the Personnel manager or the Chief Executive was mailed.
Questionnaires were returned and the results shown that in terms of Personnel/HR involvement in the development of corporate strategy and it’s alignment, the picture was positive from a Personnel perspective, with over half the firm surveyed reporting personnel involvement from the outset in the formulation of corporate strategy, as we can see from table 2 (see Apex 3). However, as we can see from table 3 (see Apex 3) less than half of the firms surveyed had a written statement or corporate strategy, while 29 per cent of the firms had a written Personnel/HR strategy.
This study was taking into consideration trading companies in Ireland only, therefore has some limitations, though it is a good guide onto how much importance is given to aligning PM/HR strategy to corporate strategy. It can be said that even though there is a need to align HR strategy to corporate strategy, there is still more to be done in the future to make this attempt successful. Hospitality strategic Issues of Human Resource Management The image of the Hospitality Industry is not one, which attracts employees to form part of a hospitality organization by pleasure but by mere necessity.
Issues of pay, long working hours and even split shifts are reflected in a high staff turnover. Managing this image can and is a hard task for employers in the Hospitality industry. Nowadays HR department is primarily concerned in attaining and improved image for the potential and already employees to be retained and further developed. Organizational Behaviour, the science studying behaviour of people will facilitate the HR department of an organization to understand individual and group behaviours, thus providing a guideline to improve this image.
It is only when knowing the people, their perceptions, and feelings and motives when and organization can try to match it to their needs, thus improving this poor image of the industry. According to the Financial Times Mastering Management Series 2, sited in Mullins (2002), Organizational Behaviour is one of the most complex and perhaps least understood academics and modern general management, but since it concerns with the behaviour of people, it is one of the most central ones.
Organizational Behaviour is a behavioural science with three main disciplines, (see Apex 4) and this is why it is strongly correlated to Human Resource Management, after all it is people who are managed. Understanding why people behave the way they behave is of extreme importance because it is through people that an organization accomplishes their goals, and especially with industries such as the hospitality industry which by nature the so-called “human touch” is so necessary for a high quality service.
After all individual will vary according to his or her ethics, culture and values. As individuals we work in groups and behaviour will be influenced in a group situation. Therefore there is a need to consider that individuals match the structure and mission of the organization they are working for like Ritz Carlton does when recruiting their staff, in other words there must be a match between the personality of the potential employee and the organization’s personality; this will result in impacting the successfulness of the organization.
One important concept to look at when speaking about behaviours is the psychological contract. According to Schein (1980), the psychological contract may be defined as an “unwritten set of expectations operating at all times between every member of an organization and the various managers and other in that organization”. In other words, it is a process of giving and receiving between employer and employee outside the legal contract, due to loyalty and commitment.
Relating back to the poor image of the hospitality industry, the nature of the psychological contract is trying to be changed to a more committed one to reduce staff turnover, increase employee loyalty, thus having a direct effect in bottom line profits. In a study done by Rousseau (1990), in the UK, where the main objective being to examine the differences between the psychological contracts of permanent and non-permanent employees. The sample involved 797 staff employed in customer service capacity by large organizations on the holiday sector.
Overall 1145 questionnaires were returned. Items to asses the nature of employees perception of the organization’s obligations and items to asses the nature of employer obligations in the psychological contract can be seen in (Apex . 5). From the table in (see Apex. 6) some conclusions can be drawn. Permanent staff has a much greater loyalty and therefore commitment to the organization, due to personal desires, like career development, promotion consequently implying greater salaries. As compared to non-permanent staff, whose main purpose is to work temporarily for fast cash.
From this it can be said that the psychological contract initiates commitment of both employees and employers is much more efficient when staff are permanent; a greater commitment leads to improved results, improved results lead to greater profits, which is the objective of most organizations. Thought the issue of flexibility, using temporary staff to be able to meet demand with supply comes into conflict with this theory. The issue of flexibility will be discussed later on as a trend in HRM.
