When the firm, rehiring former employees, and increasing

When you consider that
an organization’s strategy is designed to paint a picture of how resources will
be allocated to drive positive results, it is sensible to align the human
resource function to it. Bill Allen and Maria Pejter, of Maersk Group’s Human
Resources Department, considered some key aspects of Maersk’s talent management
strategy that focused on talent management, employee turnover, internal
training and development programs, hiring experienced talent from outside the
firm, rehiring former employees, and increasing employee diversity (Groysberg
and Abbott, 2013). This idea of strategic human resource management directly
involves the human resource function in achieving specific business objectives
and plans. Teena Bagga and Sanjay Srivastava, both of Amity Business School,
define human resource management as, “linking human resources with
organizations’ strategic goals and objectives to improve business performance
and develop an organizational culture that nurtures innovation, flexibility and
competitive advantage (2014).” Human resource management and strategy can
support the overall organization strategy through effective staffing, training
and development, performance appraisals, and compensation.

Human Resource management plays a vital part in impacting
management practices within an organization to address the challenges of
globalization. In the case study A.P. Moller-Maersk Group: 
Evaluating Strategic Talent Management Initiatives, Maersk continued to grow
into this enormous global organization, Bill Allen, the new head of HR, decided
to shift the strategic focus of talent-management to five (5) key areas:

•    Attraction – adding the right people into the
HR Group

•    Identification – identifying the major needs,
and the required capabilities of talent

•    Development – emphasis placed on the training
needs of experienced employees

•    Deployment – resources/skillset utilization
– 

•    Scenario planning – reviewing the business
plan and accessing the people’s needs

Organizations with a global presence should place greater
emphasis on the key elements of attracting, identifying, and developing human
capital. Global staffing and global leadership development are the two
components of global human resources with the greatest potential for powerful
leverage for global firms (Pucik, 1996). As businesses transition to a global
structure to diversify and increase market-share, the human resources strategy
will need to address diverse backgrounds, languages, social and cultural
issues, and employment law specific to regions where the organization will have
a footprint.

Along with the global expansion, comes a tremendous
opportunity for economic growth. Organizations will expand its customer base as
well gain additional employees in other regions around the world. Employers are
faced with the decision to hire internally or externally based on several
factors. Those factors include the job itself, the company’s needs, and what
skills are available within the employer’s workforce and the regional labor
market. Most
companies try initially filling job vacancies above the entry-level position
through internal candidates. These candidates are readily available, have
decreased learning curves, and present less uncertainty about their performance
(Snell, 2015). The promotion of internal candidates can have positive impacts
on the organizational culture.  Employees
can be encouraged to perform well in the duties for the possibility of being
promoted within the organization. Employers are using career development and
training programs to increase employee retention. However, there are advantages
to recruiting external candidates. Often seeking an external candidate increase
the pool of skilled individuals, newer skills, and creative input, as well as
gaining greater insight into other organizations and industries. There are
several external recruiting methods for organizations such as advertising job
openings on websites to reach a large audience, walk-ins and unsolicited
resumes, social media, mobile recruiting, job fair, etc. 

Hiring
inexperienced individuals and providing them with training had historically been
the hallmark of Maersk’s recruitment program. The global expansion of
Maersk impacted talent management practices. During the early 2000s, the
organization embarked on a series of training initiatives to facilitate
employee development. A change in Maersk’s executive positions ushered in a
shift in the internal training structure to emphasize leadership development.
They employed leadership and development coaching. It would seem that the
changes implemented to the organization’s recruiting, retention and training
problems helped in their global expansion.

Consequently, identifying training needs within an
organization can lead to improved process efficiencies, greater employee
retention and morale, as well as the development of better organizational strategies.
Training-needs assessment involves key players such as direct supervisor,
employee, an executive team member and/or trainer. There are three analysis
components to the assessments: organizational, task and person. Organizational
needs analysis allows the company to consider training factors that affect
efficiency, innovation and overall business strategies. It also includes a
review of the corporate culture. Task analysis collects information on the job
being performed and details the knowledge/skills required for effective
performance.  A gap between an employee’s
capabilities and the knowledge/skills required for effective performance could
be identified in a personal needs analysis. These
inter-connected levels of analysis help measure the need of training, competencies
required to perform job tasks, and the cognitive abilities required at a
personal level without overlooking the organizational training big picture
(Kumar, 2016).

In many organizations, Human Resource teams help to manage recruitment
initiatives, training development, as well as performance management
initiatives. There is a direct relationship between organizational planning and
performance management. The role of Human Resource Management plays a crucial
part in establishing the standards to be used to measure employee achievement
relative to the job role. It participates in corporate decision-making that
underlies current staffing assessments and projections for future workforce
needs based on business demand (Mayhew, n.d.) 
Saba Software Inc., one of the largest independent talent management
companies, outlines the roles of HR in the performance management process:

•    Design a best
practice performance management process.

•    Set reasonable
deadlines for completing each step in the process.

•    Provide training
to all stakeholders in the process, the steps involved, their responsibilities,
and the benefits to be gained, addressing particular needs

•    Clearly explain
performance rating scale, the difference between the different levels of
performance, and expectations of how ratings are to be used

•    Provide managers
on how to give feedback, coaching, and development of employees

•    Launch and manage
performance management process

•    Analyze and review
results (participation rates, strengths/weaknesses of organization, division,
and department, etc.)

•    Communicate
strategic results and any actions to be taken to the entire organization

A performance management system is a vital tool for any
organization. Human resources teams help to ensure that the process is
efficient, accurate, managed appropriately and aligns with organizational
planning.

One process used in performance management is appraisals
which review and evaluates the overall performance of individuals or teams on
their work tasks. It is used to help maximize the productivity of employees and
overall organizational effectiveness. There are three primary types of
standards used in performance appraisals. By definition, a trait is
distinguishing characteristic or quality, especially of one’s personal nature.
This could include such things as appearance, attitude, initiative, work ethic,
and leadership ability, a sense of ethics, loyalty, adaptability, and judgment.
One issue with using traits-based appraisals is they are subjective in nature.
It may be a suitable to use traits as a measurement of performance when it
directly relates to the job tasks. For example, a luxury car dealership expects
is salespersons to be well-groomed and professionally dressed. Appearance has
relevance to the employee’s overall job performance. Behaviors can also be used
as criteria in performance appraisals. The majority of employees end up with
satisfactory results which limit this system’s reliability and accuracy
(Griffin, n.d.). Where traits are defined by characteristics; behaviors are
actions. Behavior-based appraisals judge employees’ actions using a rating
scale to measure specific actions related to the job performance. The results
of performance management appraisals are documented in rating scales. Four
rating scales are used in behavior-based appraisals; graphic rating scales,
behavior-anchored rating scales, forced choice scales and mixed standard scales
(Griffin, n.d.):

•    Graphic – rates
behaviors on a sliding scale. The ratings can include a scale of 1-10;
excellent, average or poor.

•    Behaviorally
Anchored Rating Scale (BARS) – specific standards to score employees actions as
pass or fail

•    Forced-choice –
lists rankings of performance such as “poor,” “needs improvement,” “average,”
“above average,” or “excellent

For the Maersk Customer Service – CARE Business Partner, a
behaviorally anchored rating scale would be most effective as customer-facing
positions are productivity driven. Customer Service CARE representatives manage
the customer relationship through tangible measurements such as the number of
contacts received and/or made. The results-driven appraisal or Management by
objectives (MBOs) is a concept developed by Peter Drucker in his 1954 book The
Practice of Management (Drucker, 2006). The appraisal system is where the
manager and employee determine the performance standards and/or objectives.
After a period of time, the manager reviews the employee results against the
agreed upon objectives. This creates development opportunities for the employee
as well as a good working relationship with the manager. An MBO’s objectives
should be specific, measurable, attainable, results-oriented, and time-limited
(SMART).

Though creating a performance management system is important
to an organization’s overall effectiveness, there are other factors that impact
its success. The organization’s policy around compensation plays a direct role
in recruitment, and retention of its workforce. An organization’s mindset and
objectives around employee compensation can be described as its compensation
philosophy. This philosophy helps to attract, retain, motivate and engage
employees in an organization.  It is one
of the main reasons why a transparent statement about a company’s compensation
philosophy is so important. The basic framework for consistency in compensation
and reward structure can be identified by this formal compensation statement.
Additionally, at a general level, the compensation philosophy can determine
whether an organization will pay its employees at-market, below-market or above
market wages. Factors included in a compensation philosophy are the company’s
financial position, the size of the organization, the industry, business objectives,
salary survey information, and the level of difficulty in finding qualified
talent based on the economy, as well as the unique circumstances of the
business (“Planning and Design,” 2015). Discretionary benefits can also be
included in the compensation philosophy. Compensation packages play a vital
role in the recruitment of top candidates. It is important for organizations to
have targeted goals within the compensation philosophy that are aligned with
the overall performance objectives of the company. Maersk uses a system of
incentive pay arrangements for its Board of Directors and the management board
that include short-term, long-term incentives as well as stock options. The
incentive pay guidelines were designed “to secure a high degree of alignment of
interests between the Company’s Management Board and the shareholders, to
strengthen attraction/retention and to promote and support value creation both
in the short and long-term (“Compensation,” n.d.). Maersk’s statement around
compensation is transparent to its employees as is published as part of their
general labor policy published on their company’s website.  To assist organizations in making informed
decisions around compensation they may conduct a salary survey.

Offering competitive salaries is essential for any
organization to attract and retain employees. To help determine the appropriate
salary for positions, companies can conduct salary surveys specific to the
companies’ industries and market. According to Salary.com, more than 80 percent
of business managers and HR professionals said their companies either
participate in or purchase at least one salary survey each year. Companies with
fewer than 500 employees spend an average of $2,000 annually on salary surveys,
and companies with more than 5,000 employees spend up to $15,000 or more each
year on these important data sources (Coleman, 2017.) Business managers have an
opportunity to partner with their HR team to discover what other organizations
similar in size and industry are paying for specific jobs. Salary comparisons
should take into consideration job duties and responsibilities as well as skill
sets, and education requirements needed for the job. Results of a salary survey
can assist organizations in determining whether their salaries are competitive
in their market.

In addition to competitive salaries, employees value
discretionary benefits packages. Benefits such as paid time off (sick, leave),
retirement, health insurance coverage, vision/dental insurance and short/long
term disability all help to contribute to the employee’s bottom line and lessen
out-of-pocket expenses. In 2016, the Maersk Group launched a new maternity and
paternity benefit for its employees.  The
new benefit would allow employees, globally, a minimum of 18 weeks of maternity
leave as well as one week of paternity leave. Lucien Alziari, head of HR Maersk
Group, stated that the new policy strengthened staff retention efforts while
reducing hiring costs and loss of productivity (Calnan, 2017). Although not
required by law to offer discretionary benefits, organizations will yield
greater loyalty and higher retention rates as a result of making them available
to its employees.

Human resource
management and strategy can support the overall organization effectiveness and growth
through staffing, training and development, performance appraisals, and
compensation. Aligned with organizational strategies, HRM teams create a
framework for increased productivity, reduced turnover rates, greater employee
satisfaction and profitability which is in the best interest of its workforce
and organization.

 

REFERENCES

 

Bagga Teena, Srivastava Sanjay, (2014) “SHRM: alignment of HR
function with business strategy”, Strategic
HR Review, Vol. 13 Issue:
4/5, https://doi.org/10.1108/SHR-03-2014-0023

Calnan, M. (2017, April 12). Maersk
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Coleman, B. (n.d).
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https://www.salary.com/compensation-surveys/.

 

Compensation (n.d.). Retreived December 4, 2017, from
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Drucker, P., The Practice of Management (New York:
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Griffin, D. (n.d.). Types of Employee
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Groysberg, B., & Abbott, S. L.
(2013). A.P. Moller-Maersk Group: Evaluating Strategic Talent Management
Initiatives (Publication No. 9-412-147). Harvard Business School.

 

Kumar, A. (2016, November 1).
Beginner’s Series: In-depth Training Needs Analysis at 3 Levels – Part 3.
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Beginner’s Series: In-depth Training Needs Analysis at 3 Levels – Part 3

Mayhew, R. (n.d.). 10 Reasons HR Is
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Planning and Design: What is a
compensation philosophy? What should be included in a compensation philosophy?
(2015, December 2). Retrieved December 2, 2017, from https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/compensationphilosophy.aspx

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Snell, S. A., Morris, S., & Bohlander, G. W. (2015). Managing
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