When you consider thatan organization’s strategy is designed to paint a picture of how resources willbe allocated to drive positive results, it is sensible to align the humanresource function to it. Bill Allen and Maria Pejter, of Maersk Group’s HumanResources Department, considered some key aspects of Maersk’s talent managementstrategy that focused on talent management, employee turnover, internaltraining and development programs, hiring experienced talent from outside thefirm, rehiring former employees, and increasing employee diversity (Groysbergand Abbott, 2013). This idea of strategic human resource management directlyinvolves the human resource function in achieving specific business objectivesand plans. Teena Bagga and Sanjay Srivastava, both of Amity Business School,define human resource management as, “linking human resources withorganizations’ strategic goals and objectives to improve business performanceand develop an organizational culture that nurtures innovation, flexibility andcompetitive advantage (2014).” Human resource management and strategy cansupport the overall organization strategy through effective staffing, trainingand development, performance appraisals, and compensation.Human Resource management plays a vital part in impactingmanagement practices within an organization to address the challenges ofglobalization.
In the case study A.P. Moller-Maersk Group: Evaluating Strategic Talent Management Initiatives, Maersk continued to growinto this enormous global organization, Bill Allen, the new head of HR, decidedto shift the strategic focus of talent-management to five (5) key areas:• Attraction – adding the right people into theHR Group• Identification – identifying the major needs,and the required capabilities of talent• Development – emphasis placed on the trainingneeds of experienced employees• Deployment – resources/skillset utilization- • Scenario planning – reviewing the businessplan and accessing the people’s needs Organizations with a global presence should place greateremphasis on the key elements of attracting, identifying, and developing humancapital. Global staffing and global leadership development are the twocomponents of global human resources with the greatest potential for powerfulleverage for global firms (Pucik, 1996). As businesses transition to a globalstructure to diversify and increase market-share, the human resources strategywill need to address diverse backgrounds, languages, social and culturalissues, and employment law specific to regions where the organization will havea footprint. Along with the global expansion, comes a tremendousopportunity for economic growth. Organizations will expand its customer base aswell gain additional employees in other regions around the world. Employers arefaced with the decision to hire internally or externally based on severalfactors.
Those factors include the job itself, the company’s needs, and whatskills are available within the employer’s workforce and the regional labormarket. Mostcompanies try initially filling job vacancies above the entry-level positionthrough internal candidates. These candidates are readily available, havedecreased learning curves, and present less uncertainty about their performance(Snell, 2015). The promotion of internal candidates can have positive impactson the organizational culture. Employeescan be encouraged to perform well in the duties for the possibility of beingpromoted within the organization. Employers are using career development andtraining programs to increase employee retention. However, there are advantagesto recruiting external candidates.
Often seeking an external candidate increasethe pool of skilled individuals, newer skills, and creative input, as well asgaining greater insight into other organizations and industries. There areseveral external recruiting methods for organizations such as advertising jobopenings on websites to reach a large audience, walk-ins and unsolicitedresumes, social media, mobile recruiting, job fair, etc. Hiringinexperienced individuals and providing them with training had historically beenthe hallmark of Maersk’s recruitment program. The global expansion ofMaersk impacted talent management practices. During the early 2000s, theorganization embarked on a series of training initiatives to facilitateemployee development. A change in Maersk’s executive positions ushered in ashift in the internal training structure to emphasize leadership development.
They employed leadership and development coaching. It would seem that thechanges implemented to the organization’s recruiting, retention and trainingproblems helped in their global expansion.Consequently, identifying training needs within anorganization can lead to improved process efficiencies, greater employeeretention 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 analysiscomponents to the assessments: organizational, task and person. Organizationalneeds analysis allows the company to consider training factors that affectefficiency, innovation and overall business strategies.
It also includes areview of the corporate culture. Task analysis collects information on the jobbeing performed and details the knowledge/skills required for effectiveperformance. A gap between an employee’scapabilities and the knowledge/skills required for effective performance couldbe identified in a personal needs analysis. Theseinter-connected levels of analysis help measure the need of training, competenciesrequired to perform job tasks, and the cognitive abilities required at apersonal level without overlooking the organizational training big picture(Kumar, 2016).
In many organizations, Human Resource teams help to manage recruitmentinitiatives, training development, as well as performance managementinitiatives. There is a direct relationship between organizational planning andperformance management. The role of Human Resource Management plays a crucialpart in establishing the standards to be used to measure employee achievementrelative to the job role. It participates in corporate decision-making thatunderlies current staffing assessments and projections for future workforceneeds based on business demand (Mayhew, n.d.
) Saba Software Inc., one of the largest independent talent managementcompanies, outlines the roles of HR in the performance management process:• Design a bestpractice performance management process.• Set reasonabledeadlines for completing each step in the process.• Provide trainingto all stakeholders in the process, the steps involved, their responsibilities,and the benefits to be gained, addressing particular needs• Clearly explainperformance rating scale, the difference between the different levels ofperformance, and expectations of how ratings are to be used• Provide managerson how to give feedback, coaching, and development of employees• Launch and manageperformance management process• Analyze and reviewresults (participation rates, strengths/weaknesses of organization, division,and department, etc.)• Communicatestrategic results and any actions to be taken to the entire organizationA performance management system is a vital tool for anyorganization. Human resources teams help to ensure that the process isefficient, accurate, managed appropriately and aligns with organizationalplanning.One process used in performance management is appraisalswhich review and evaluates the overall performance of individuals or teams ontheir work tasks. It is used to help maximize the productivity of employees andoverall organizational effectiveness.
There are three primary types ofstandards used in performance appraisals. By definition, a trait isdistinguishing 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 itdirectly relates to the job tasks. For example, a luxury car dealership expectsis salespersons to be well-groomed and professionally dressed. Appearance hasrelevance to the employee’s overall job performance. Behaviors can also be usedas criteria in performance appraisals.
The majority of employees end up withsatisfactory results which limit this system’s reliability and accuracy(Griffin, n.d.). Where traits are defined by characteristics; behaviors areactions.
Behavior-based appraisals judge employees’ actions using a ratingscale to measure specific actions related to the job performance. The resultsof performance management appraisals are documented in rating scales. Fourrating 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 – ratesbehaviors on a sliding scale. The ratings can include a scale of 1-10;excellent, average or poor.
• BehaviorallyAnchored Rating Scale (BARS) – specific standards to score employees actions aspass or fail• Forced-choice –lists rankings of performance such as “poor,” “needs improvement,” “average,””above average,” or “excellentFor the Maersk Customer Service – CARE Business Partner, abehaviorally anchored rating scale would be most effective as customer-facingpositions are productivity driven. Customer Service CARE representatives managethe customer relationship through tangible measurements such as the number ofcontacts received and/or made. The results-driven appraisal or Management byobjectives (MBOs) is a concept developed by Peter Drucker in his 1954 book ThePractice of Management (Drucker, 2006). The appraisal system is where themanager and employee determine the performance standards and/or objectives.After a period of time, the manager reviews the employee results against theagreed upon objectives. This creates development opportunities for the employeeas well as a good working relationship with the manager.
An MBO’s objectivesshould be specific, measurable, attainable, results-oriented, and time-limited(SMART).Though creating a performance management system is importantto an organization’s overall effectiveness, there are other factors that impactits success. The organization’s policy around compensation plays a direct rolein recruitment, and retention of its workforce. An organization’s mindset andobjectives around employee compensation can be described as its compensationphilosophy. This philosophy helps to attract, retain, motivate and engageemployees in an organization. It is oneof the main reasons why a transparent statement about a company’s compensationphilosophy is so important. The basic framework for consistency in compensationand reward structure can be identified by this formal compensation statement.
Additionally, at a general level, the compensation philosophy can determinewhether an organization will pay its employees at-market, below-market or abovemarket wages. Factors included in a compensation philosophy are the company’sfinancial position, the size of the organization, the industry, business objectives,salary survey information, and the level of difficulty in finding qualifiedtalent based on the economy, as well as the unique circumstances of thebusiness (“Planning and Design,” 2015). Discretionary benefits can also beincluded in the compensation philosophy. Compensation packages play a vitalrole in the recruitment of top candidates.
It is important for organizations tohave targeted goals within the compensation philosophy that are aligned withthe overall performance objectives of the company. Maersk uses a system ofincentive pay arrangements for its Board of Directors and the management boardthat include short-term, long-term incentives as well as stock options. Theincentive pay guidelines were designed “to secure a high degree of alignment ofinterests between the Company’s Management Board and the shareholders, tostrengthen attraction/retention and to promote and support value creation bothin the short and long-term (“Compensation,” n.d.). Maersk’s statement aroundcompensation is transparent to its employees as is published as part of theirgeneral labor policy published on their company’s website.
To assist organizations in making informeddecisions around compensation they may conduct a salary survey.Offering competitive salaries is essential for anyorganization to attract and retain employees. To help determine the appropriatesalary for positions, companies can conduct salary surveys specific to thecompanies’ industries and market. According to Salary.com, more than 80 percentof business managers and HR professionals said their companies eitherparticipate in or purchase at least one salary survey each year. Companies withfewer 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 eachyear on these important data sources (Coleman, 2017.) Business managers have anopportunity to partner with their HR team to discover what other organizationssimilar in size and industry are paying for specific jobs.
Salary comparisonsshould take into consideration job duties and responsibilities as well as skillsets, and education requirements needed for the job. Results of a salary surveycan assist organizations in determining whether their salaries are competitivein their market.In addition to competitive salaries, employees valuediscretionary benefits packages. Benefits such as paid time off (sick, leave),retirement, health insurance coverage, vision/dental insurance and short/longterm disability all help to contribute to the employee’s bottom line and lessenout-of-pocket expenses. In 2016, the Maersk Group launched a new maternity andpaternity benefit for its employees. Thenew benefit would allow employees, globally, a minimum of 18 weeks of maternityleave as well as one week of paternity leave. Lucien Alziari, head of HR MaerskGroup, stated that the new policy strengthened staff retention efforts whilereducing hiring costs and loss of productivity (Calnan, 2017). Although notrequired by law to offer discretionary benefits, organizations will yieldgreater loyalty and higher retention rates as a result of making them availableto its employees.
Human resourcemanagement and strategy can support the overall organization effectiveness and growththrough staffing, training and development, performance appraisals, andcompensation. Aligned with organizational strategies, HRM teams create aframework for increased productivity, reduced turnover rates, greater employeesatisfaction and profitability which is in the best interest of its workforceand organization. REFERENCES Bagga Teena, Srivastava Sanjay, (2014) “SHRM: alignment of HRfunction with business strategy”, StrategicHR Review, Vol. 13 Issue:4/5, https://doi.org/10.1108/SHR-03-2014-0023Calnan, M. (2017, April 12).
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