This report examines the role of human resources management function
in helping deliver the 'modernizing agenda' for ABC, a County Council
in England. The transformation process discusses the shift from a
bureaucratic and inefficient County to one that is customer driven and
values its employees. This is elaborated further in context of the
external environmental changes in the government. ABC had to cope with
two major reorganizations in six years.
A study of the impact of external change on the County Council,
especially in respect of its HRM strategy and policy, the report
analyses the overall Human Resource strategy of the case study
organization. This was further related to ABC's business strategy.
In the next part, the linkage between performance management and
reward policies and practices has been established with respect to
both core and peripheral workforce.
The last part of the report suggests collective measures for changes
in the linkage at both the core and the periphery. The concept of
these proposals adding value has also been established. This part also
suggests various steps under the heads of resourcing, performance
management, communications, rewards and recognition etc. A new
structure and hierarchy has also been suggested along with necessary
links with theory and models.
Introduction
ABC, a county council in England functions with a budget of over 500
million pounds, and employs about 3000 people (excluding schools) in
five locations. The County, under the local government has 4 district
councils below it, followed by the Parish Councils is a part of the
three-tier system.
ABC was rated 'good' on the Comprehensive Performance Assessments
(CPA) carried out by the Audit Commission and had a score of 3 on its
ability to improve. The Council's overall aims are to move on from a
CPA 'good' to 'excellent'. The intention is to lead for the benefit of
the whole community by being open and accountable, continuing to work
in partnership with other local agencies and improve the quality of
life in the area.
The local government could be characterized as bureaucratic,
inefficient and incompetent. There was a need to work across
boundaries and break away from the use of irrational traditional
controls.
The Conservatives legislation introduced the concept of compulsory
competitive tendering along with placing constraints on budgets and
spending caps on overly extravagant authorities. Also encouraged was
the involvement of parents' in the education of their children.
Impact of External Change especially on the HRM Strategy and Policy
HRM Strategy and Business Strategy
Two major reforms in six years had brought about a radical change in
ABC County. Changes in the Central Government Policy and the structure
had further led to a loss in revenue and major downsizing. In addition
to this there was a limited focus towards ones service area leading to
a "silo-mentality".
Policy making process was limited to the leader and a few powerful
council members. Senior managers had strong professional ties to their
areas of influence thus making it difficult to exercise control over
them. The boundaries between departments reflected the boundaries
between professions responsible for particular services. Policy
determination is a complex procedure in the ABC County Council
involving direct and indirect links at various levels.
The ABC County's officer/member structure (view appendix) has
established links between the corporate and political aspects of the
county. The members of the political hierarchy and corporate hierarchy
have similar members sharing similar responsibilities along the same
lines.
The overall structure of ABC could be simplified and made more
receptive be replacing the middle level by multi-functional teams for
processes and people oriented community services. These would be the
clearly identifiable points of interaction with the public and
responsible for coordinating the various services.
The HRM function has assumed a more important role since
reorganization. The earlier small central policy making team where the
loyalties of personnel staff were with the service areas and not the
function was brought together and renamed as the Human Resources
department. The fact that the Head of HR reports directly to the Chief
Officer rather than the head of the corporate services highlights the
rising significance of HR.
Performance management being the focal point of local government
reform emphasized the need for effective people management practices.
There was a need for management of change; this led to a search or
organizational development.
Organizational development is a vast and complex procedure involving
aspects ranging from structure and design, communication, work groups
and multi-disciplinary teams, clarification of responsibilities to
objective setting, stimulating innovation, decision making and
managing conflicts.
Environmental turbulences are bound to have an impact on the culture
of any association. The Chief Officer and Council Leader considered
cultural change as being instrumental in the transformation of ABC
County from a bureaucratic, unproductive council to one that
recognized that services should add value and be cost effective. For
this, a vision was formulated involving the following key elements:
* Focus on the customer
* Valuing employees
* Being adaptable to change
* Working in partnership and developing a performance management
culture.
A strategic framework was formulated to critically develop, monitor
and control the previously neglected Human Resource function. It is
must for employees to be well developed and valued to maximize
performance. Participation and involvement in the decision-making
processes along with employee empowerment in relevant service areas
would facilitate this. Well-articulated outcomes and expectations,
defining clear standards of behavioural working patterns and
conditions would provide a direction that aligns individual targets
with that of the teams and county. Having work planning integrated
into the overall council's long term planning process, clarifying the
roles and responsibilities for the management of people would enhance
productivity of employees. This should involve an analysis of the
future needs, keeping the future prospects flexible. Benchmarking
against other councils scoring high on the Best Value Performance
Indicators (BVPI's) would indicate comparative progress and
performance. As a tool to monitoring performance, the council does an
internal assessment (not linked to the government set BVPI's)
involving one year and three year measurable outcomes. Many of the
three-year outcomes deal with continuous improvement and change,
through the implementation of the new Information System (IS). The
council also focuses on delivering effectively and efficiently the
ongoing and new operational HR activities that are more closely linked
with customer requirements.
The HRM issues needing to be addressed are resourcing, organizational
and employee development, communication and consultation, performance
management and reward recognition.
Performance and Reward Management
=================================
Performance management systems are increasingly seen as a way to
manage employee performance rather than relying on appraisal alone.
(Torrington & Hall, 2002)
The system should not be limited to just the setting of individual or
team performance standards, measuring performance through appraisals
and reviews and identifying training and development needs. At ABC
County, the cascade of strategic aims of individual performance is
mapped. One and three year outcomes using measurable targets are used
as an internal assessment of the progress. The Best Value Review
carried out the previous year highlighted the areas of concern:
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* Local priorities over powered by central government targets.
* Professional visions and values were at discord with that of the
county council's
* Inconsistent Performance management culture with examples of good
and poor practice identified.
* Irregular Individual performance appraisals.
* Poor performance were not backed by strong leadership
* Language tough to comprehend
* Relevance of performance monitoring not communicated to all levels
* Performance monitoring considered tedious and distracting by line
managers
* Improper use of information gathered- "blame culture"
* Good performance not encouraged through rewards.
These issues can be tackled by an effective performance appraisal
system such as the MBO (Management By Objectives) technique.
" Performance appraisal data can determine employee rewards and are
also used as predators in the human resource planning, recruitment and
selection process".
-Bratton & Gold (1999)
The reasons for performance review are many:
* Assessment of training and development needs
* Improvement of current performance
* Review past performance
* Asses future potential and promotability
* Assist career planning decisions
* Set performance objectives
* Asses increase in pay -Bratton & Gold (1999)
In general, a performance appraisal includes firstly, the
determination and communication of certain performance standards. This
is followed by the measured performance that is then compared with the
set standards to consequently take required measures. These may be
either corrective or rewarding. An effective performance appraisal
system must incorporate the following essentials, these include mutual
trust; clear objectives; standardization; training; job relatedness;
documentation; feedback and participation; concern for individual
differences; post appraisal interviews and review and appeal. The
system must be open and participative encouraging employees to be part
of the goal setting process and giving feedback. It should be easy to
understand and administer along with being reliable. The system can
ideally contain a follow-up mechanism to identify personal growth
needs and if it is established by all line managers, it's easy to
review and update.
- Gupta C.B (2003)
Performance must be backed by an able reward system. Employees
delivering extraordinary skills who were making valuable contributions
to ABC County did not feel rewarded. This resulted in the County
loosing its competent professionals. A prominent de-motivating factor
at ABC was the proportional pay increase for all the employees, not
conditioned by their performance. Lack of recognition and rewarding of
outperforming employees
The reward review at ABC was on an individual basis, irrespective of
whether the task was individual or team. This ruined the performance
of both.
Reward management is vital to effective HR management. A fair reward
influences an employees development and career plan while a
performance related pay could motivate an employee to undertake a
course or a training program. A reward system linking pay to
performance will require an appraisal system, which is reliable and
valid. The Morale of senior managers can be boosted through the
concept of flexibility. Is an idle concept for the county because ABC
regularly looses valuable employees to the private sector where bigger
levels of responsibility can be rewarded with higher levels of pay.
Thus, a hike in pay along with flexible working hours can act as an
incentive to stay in the county. In addition to this job swapping and
appropriate workforce planning can be implemented to have the right
number of people and the right type of people at the right place.
Recommendations
===============
Resourcing
HR planning is aimed at coordinating the requirements for and the
availability of different types of employees. It is an overall process
of determining and assuming that the organization will have an
adequate number of qualified employees at the proper time doing jobs
which meet the business objectives. Since ABC County is on the verge
of becoming a HR oriented organization it needs HR planning as a guide
to the HR Function.
Effective HR planning can take place if:
* HR objectives are balanced
* Adequately organized at various levels
* Receives senior managements support
* An adequate database for employees is in place
Any organizations recruitment process aims at locating the sources of
human resource and attracting them toward the organization. The
management at ABC County indulged in online recruitment process which
generated a high number of applicants most of them being unsuitable.
The council also had a policy to reply to each one of the applicants
thus making the process tedious and cumbersome. In addition to this
the line managers were not well trained and thus ended up selecting
inappropriate employees. An idle recruitment process should integrate
organizational needs and employee needs and provide each employee with
freedom and opportunity to develop his knowledge skill base.
Flexibility of an organization is also a pre-requisite.
Line managers who are effectively trained for the same should do the
selkection of applicants. Several tests can be taken before finally
selecting an applicant. For example, aptitude test, achievement test,
personality test and interest test. Adequate training by involving
employees for countywide projects can help them gain experience and
deliver their maximum to the organization.
Organizational and employee Development
Senior management is a valuable asset for any organization. A research
project carried out by an external academic at ABC County highlighted
the need for a cadre of professional managers. There is a need to
develop the core competencies and induce the process of continuous
learning. The main objective of the recruitment of senior managers
should be to improve the level of performance at all levels in their
present jobs.
The approach of knowledge management should be introduced to improve
though process and analytical ability so as to uncover and examine
problems and ultimately take decisions in the best interest of the
County.
Communication gap should be eradicated throughout the organization and
should acquire greater responsibility and involvement at all levels.
Performance and Reward Management
Job analysis is an essential element of a sound HR management. It can
provide valuable information for taking right and adequate decisions
about the County's human resource. The job analysis can be used to
* Organizational design - wherein job analysis is useful in
classification of jobs and their interrelationship. It also
improves organizational efficiency.
* HR Planning - Job analysis can provide useful information for
forecasting manpower requirements in terms of knowledge and
skills. It also facilitates decision of work.
* Recruitment and selection - it provides understanding also what an
employee is expected to do and information relating to tasks,
responsibilities, knowledge and skills become a realistic basis
for hiring people.
* Training and development - job analysis can provide valuable
information required to identify training needs, design programs
and evaluate training effectiveness. Employee development is also
taking care of.
* Performance appraisal - job analysis can help in determining
performance standards in critical parts of the job and employee
performance and then be evaluated against known standards and
critical activities.
Job evaluation is an important of job analysis so as to develop
equitable salary structure. ABC County uses a point method of job
evaluation, which is too complicated to be applied to managerial jobs
wherein the work content is not measurable in quantitative terms.
Job classification or job grading method is a group of different jobs
that require similar skills. Here, job classes or grades are
established, a job grade being a group of different jobs of similar
difficulty.
Mentoring is a technique of HR development whereby a senior managers
acts as a friend philosopher. It is essentially an emotional support
and takes care of the knowledge base and skills of the young manager.
Mentoring reduces training times, ensures individual attention to
problems and makes learning flexible rather than structured. It is a
valuble tool for developing self-confidence and empowered managers who
can work under stress while maintaining their quality standards and
values. ABC County has also introduced this method a s a part of its
training program and can be beneficial for the employees if the senior
managers impart their knowledge to other.
There is only one specific BVPI, which is 'owned' by human resources,
which is diversity.
Certain approaches of diversity are:
* Internally driven not externally exposed
* Focuses on the total culture of the organization and not just
systems
* Focused on a specific individual
* Is the responsibility of all in the organization and not just the
human resources
Hence, ABC can work towards development of its measure in order to
achieve it organizational objectives.
Total Quality Management
This refers to a continuous process of involvement in all aspects of
organization with the involvement of all the employees of the
organization. It is basically about changing and reforming so as to
prevent failures. Its features are:
* Customer satisfaction
* Efficiency of internal customers
* A continuous process
* Management by analyzing facts
* Requires teamwork
Thus TQM at ABC can guide work team in quality improvement, design and
develop communication systems, at the same time benchmarking
performance with that of others and aiming to improve.
ABC County can gain competitive advantage only if it aims to have
non-substitutable resources. Humana resources are that part of an
organization that cannot be easily replicated by competing firms and
hence the most appropriate source of competitive advantage. As even if
a competing firm recruits a group of individuals from a competitor it
would not be able to produce the same outcomes in the new firm. This
is because the context in both the organizations is different.
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Sustained Competitive Advantage
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Human Resource Behaviour
Human Capital Pool
Human Resources Practice
Model of Human Resources as a source of sustained competitive
advantage
(Torrington and Hall, 2002)
The various recommendations given above can aid ABC in its aim of
moving towards an HR focused organization and thus gaining competitive
advantage. The above-mentioned procedures would add value and have a
positive impact on the workforce.
Conclusion
The external changes in the environment had a significant impact on
ABC County, mostly relating to its human resources strategy and
policy. The current status, areas of concern and possible
recommendations for performance and reward management for both the
core and peripheral workforce was examined successfully in relational
with the available literature.
Details in all areas of resourcing, organizational and employee
development, performance management, reward and recognition, and
communication and consultation in the County were analyzed. This made
clear the steps required in making ABC move from a bureaucratic to
customer driven, adaptive, innovative county that values employees.
There is stress on developing management culture.
References
* Torrington D. and Hall L.(2002) 5th Edition Human Resource
Management, London, Prentice Hall
* Bratton J. and Gold J. (1999) 2nd edition Human Resource
Management Theory and Practice, London, Macmillan
* Gupta C.B. (2003) 5th Edition Human Resource Management, New
Delhi, Sultan Chand
