Proceedings of World Business, Finance and Management Conference 8 - 9 December 2014, Rendezvous Hotel, Auckland, New Zealand, ISBN: 978-1-922069-66-5 Analysing the Impact of HRM Discourses in an Insurance Company: The Case of GFA Ltd Darshini Seepersand* and Jyoti Devi Mahadeo* The study attempts to provide a critical account of the conventional Human Resource Management literature through the medium of discourse analysis and its impact on employee retention at GFA Insurance Ltd. This research presents a detailed examination of the relationship and debate between realistic understandings of HRM and on the other hand discourse-based notions of HRM. The objective is to provide a basis for a possible debate between these contradictory perspectives. MacIntyre (1984) pointed out that “the manager is the character of modernity, furnishing society with cultural and moral ideas”. The research is carried out by using survey methods to collect information; with questionnaires and observation being the main research instruments. This was complemented with in-depth face-to-face interviews with the Senior Management, HR Manager and selected employees of the company. The findings show that the company is doing well in terms of employee retention and other main HR practices except for the training component. 1. Introduction Critical theories aim to unveil and change societal structures, ideologies and power relations that constitute and shape the organisational phenomena and workplace relations (Adler et al, 2006). Significant understanding of Human resource management (HRM) emphasizes control and governing dimensions of administrative activities unlike the more technical approaches to organizing (Peltonen, 2011). Instead of treating worker consent as only a functional response to the individual, organisational and environmental needs, „Human resource management‟, in turn, is seen in critical theories as a way of ensuring the commitment of employees to the economic goals of the business enterprises (Townley, 1994; Legge, 1995). To obtain the best solution in any situation, it is important to define the problem first. HRM has been and remains highly controversial in organisations. Does this HR of an organisation really serve as it claims in books or is it just a rhetorical noise? Empowerment through training, performance related pay, profit sharing ratio and team building are the tools used by GFA Insurance Ltd, the company under study, to embark its people in the competitive world. According to the Senior Management, “these incentives have enabled a drop in staff turnover from 44% in 2001 to 5% in 2009”. Over the last five years the company has spent nearly MUR 2 million on training activities. *Ms Darshini Seepersand, Faculty of Law and Management, University of Mauritius Proceedings of World Business, Finance and Management Conference 8 - 9 December 2014, Rendezvous Hotel, Auckland, New Zealand, ISBN: 978-1-922069-66-5 *Dr Jyoti Devi Mahadeo, Faculty of Law and Management, University of Mauritius, Email:brinda.mahadeo@yahoo.com (corresponding author) This research aims at unveiling the determinants of employee retention in particular and the study will help GFA to manage its Human Resource (HR) more effectively and in the same run reap maximum benefits from employee retention. The remaining paper is organised as follows to fulfill the desired aims: the next section undertakes a review of the literature; and a brief discussion of the company profile. This would be followed by an overview of the proposed research method. The findings are presented and discussed next. Finally, the conclusion and limitations are presented. 2. Literature Review Keenoy (1997) observed the idea that key managerial choice of HR practices is one of adopting either a „hard HRM‟ or a „soft HRM‟ approach which has become the „dominant conceptual-analytical interpretive scheme‟ within the HRM field. It is perhaps not surprising that people are unwilling to abandon such a usage whereby any observer of HRM conferences, lectures or examination processes will continue to hear constant reference to „soft‟ (caring of labour) and „Hard‟ (exploitative stance) HRM practices. Beyond the ‘rhetoric and realities’ cliché of HRM practices Watson (2004 cited in Legge 1995, p.452) that “there have been important attempts by organisational and management theorists to use the concept of rhetoric in an neutral manner to analyse the way social actors (HR managers) use language to persuade other social actors (employees) of the validity of particular arguments”. In spite of this, many authors in the HRM field have continued to use the term „rhetoric in its „everyday‟ pejorative sense as a form of language use which has little substance and is more concerned to misguide and impress its audience through the use of clever linguistic and presentational tricks than to provide realistic or useful information about the topic addressed‟ (Watson 1995). The term „rhetoric‟ has become a little more than a cliché and all too often simply comes to mean „false claims‟ about changes in managerial practice, claims which the researcher on „HRM‟ is able to debunk by investing the reality‟ of what is „actually going on‟. Rhetorical talk, like all language use, is in itself action, and plays a part in the construction of realities. But who are the people being criticized in the type of academic literature which presents empirical research as „evidence for the yawning gap between the rhetoric and reality of HRM‟ (Sisson, 1997)? Are they the academic creators of the HRM concept or are they managers practically involved in human resourcing work? Keenoy (1990) argued that managers are the „main creators‟ of this rhetoric or ideology (of HRM Practices), aided and abetted by „the confused academics‟ who had thought they were merely „seeking to impose order and coherence on managerial social practice‟ but were, in effect, providing something „the primary purpose‟ (original emphasis) of which was the provision of a „legitimatory managerial ideology to facilitate and strengthening of work and an increase in the commodification of labour‟. At „the heart of the HRM rhetoric‟, he found, was the conception of „a novel/narrative approach to manage employees which put emphasis on employee commitment and involvement and a relatively caring concern for employees while simultaneously integrating HR policy and practice with Proceedings of World Business, Finance and Management Conference 8 - 9 December 2014, Rendezvous Hotel, Auckland, New Zealand, ISBN: 978-1-922069-66-5 strategic business objectives‟ (Keenoy, 1990). Do HR managers read these „HRM‟ texts anyway? According to Armstrong (2006), an academically-informed and very experienced HR practitioner, they do not. HRM Practices as a Managerial Discourse „Drawing from the work of Foucault, it is argued that HRM may be best understood as a discourse and set of HR practices that attempt to reduce the indeterminacy involved in the employment contract‟, (Townley, 1993). From this perspective HRM taken as the black box of production where organisational inputs, that is, employees are selected, trained, developed, remunerated to deliver the required output of labour. Discourse is treated as a „space‟ where language and action serve to complement each other and are concerned with how power relations are exercised in discursive activity‟ (Harley and Hardy, 2004). HR practitioners, starting from the ground that language is constructive rather than reflective of some underlying organisational reality. This approach enables a close analysis of how actors draw on discourses to make sense of their real life experiences in organisations, and how they in turn produce and reproduce the discursively constituted social reality in which they are situated (Grant et al, 1998). Those discourses frame the ways in which organisational members see the world and their self, and how the social world becomes „taken-for-granted‟ through dominant discourses. Starting from the premise that discourse and language are never neutral but exist within and transmit networks of power (Adler et al, 2006). Francis and Keegan (2007 cited in Zanoni and Janssens 2003) explained the extent to which orders of discourse „control linguistic variation‟ in HR talk, and in so doing privilege some interests over others, and how power relations are played out in HR practitioners‟ talk. Knowing that some discourses are dominant in a particular order of discourses does not mean that those discourses are uncontested. Harley and Hardy (2004) argue it is by no mean a totalizing discourse and call attention to the potential, although difficult to realise, of altering and shaping discourse and the meaning of particular forms of public practice. Following this line of argument, discourse is treated as „regulated practice‟ or set of rules (Fairclough, 2003) outlining the way people perceive the world, and also as a „discursive resource‟ (Watson, 2004; Keenoy 1999) from which people can draw thereby actively structuring their own realities (Watson, 2004). Person organisation fit as a managerial discourse Person-Organisation fit is defined as the “compatibility between people and organisations that occurs when at least one entity provides what the other needs or they share similar fundamental characteristics or both” ((Kristof 1997). Alvesson (2000) found that organisations may be thought of in terms of Weber‟s typification of bureaucratized, mechanistic structures of control, as these were subsequently erected upon fully rationalized base of divided and deskilled labour. The labour process base was intensive mechanized, divided labour. It consisted of the previous achievements of Taylorism in the application of empirical methods to the study, design and „de-skilling/re-skilling‟ of work (Clegg and Dunkerley, 1980). However, it added to what Aglietta (1979) refers to as “two complementary principles”: 1) „the integration of different segments of the labour process by a system of conveyors and handling devices ensuring the movement of the materials to be transformed and their arrival at the appropriate machine tools‟ and 2) „the fixing of workers to jobs whose positions were rigorously determined by the configuration of the machine system‟. Proceedings of World Business, Finance and Management Conference 8 - 9 December 2014, Rendezvous Hotel, Auckland, New Zealand, ISBN: 978-1-922069-66-5 Marx (1844) viewed the transition from the feudal to the industrialized society as alienating workers. Technology was a tool used by the capitalist to exploit and control the worker. Technology was one of the elements that removed the worker from the goods produced by their work. The worker, thus, no longer had a „natural‟ relationship to his/her work, since technology became a mediator between a worker between a worker and his work. Marx (1844) claims that through work human lose their „humanness‟ and they become an object to themselves. They become alienated to the social world that they created. The .product of work become a commodity and because of waged work the worker himself becomes a commodity. Przeworski (1980) argued that the desire to live well provides a pressure towards active participation in the corporate system. 3. Company Profile GFA was incorporated in September 1996 by a group of Professionals having more than a quarter century of experience in the insurance field. It is located at Marina Figure 3.4: Organisation Chart House, in the vicinity of Champ de Mars. GFA has suitably situated branches in Port-Louis, QuatreBornes, Goodlands, Curepipe, Central Flacq, Forest-Side, Rivière des Anguilles and Rivière du Rempart boosting the will to be close to the clients to offer them a personalised service. GFA is amongst the leading insurance companies in Mauritius. 4. Methodology Aims and Hypotheses The aims of the study have been translated as follows: determine employees‟ level of awareness of HR practices evaluate the extent to which HRM prevails in reality. assess the impact of HR Practices on employee retention. Proceedings of World Business, Finance and Management Conference 8 - 9 December 2014, Rendezvous Hotel, Auckland, New Zealand, ISBN: 978-1-922069-66-5 Performance Related Pay (PRP)-scheme can be used to encourage workers to exert the right amount of effort and retention (Lazear, 2004). Hypothesis 1 H0: There is no significant relationship between PRP and retention. H1: There is significant relationship between PRP and retention. Meyer and Smith (2000) examined the relationship between HRM practices and organisational commitment, found that the HRM practices are valuable means to obtain employee commitment, their effects are not direct. They found that career development, employee evaluation of appraisal practices, and assessment of the benefits offered by the organisation have an effect on both affective and normative commitment, while training was found not to contribute to the increase in employee commitment. Hypothesis 2 H0: There is no significant relationship between training and commitment. H1: There is significant relationship between training and commitment. According to Blake and Mouton (1964), the most effective managers are those who realize that employee career development and retention are directly related to the organisation's overall effectiveness. Hypothesis 3 H0: There is no significant relationship between career development and place to retire. H1: There is significant relationship between career development and place to retire. Interviews and observation were the qualitative methods that were utilised for collecting data for this study while questionnaires were used to gather data quantitatively. Two questionnaires were used: one for management and another for employees. In all 14 likert questions relating to views of HR practices which can be linked to employee retention in the questionnaire meant for management. In order to understand whether these questions reliably measure the same latent variable, i.e., HR practices linked to employee retention, a Cronbach‟s alpha was run. The table below indicates that Cronbach‟s alpha is 0.909 (α=0.7), hence a relatively high level of internal consistency for these scales pertaining to employee retention. Table 1: Reliability Test Cronbach‟s Alpha 0.909 Cronbach‟s Alpha Based on Standardized Items 0.905 N of Items 14 Mixed methods approach (Williams, 2007) is an extension of, rather than a replacement for the quantitative and qualitative approaches to research. The latter two research approaches will continue to be useful and important. The objective for researchers using the mixed methods approach to research is to draw from the strengths and to lessen the weaknesses of either quantitative or qualitative research approaches. Sampling Plan The research was undertaken at the Head office of GFA Insurance Ltd at Port-Louis and in 8 branches. The sampling frame was made up of the 64 employees of GFA. Since the population was surveyed there was no need to sample out. Employees who Proceedings of World Business, Finance and Management Conference 8 - 9 December 2014, Rendezvous Hotel, Auckland, New Zealand, ISBN: 978-1-922069-66-5 Table 2: Number of Employees per Department Department Main Branch HR Department Accounting Claims Agency Underwriting Secretary Internal Audit IT Branches Port Louis Goodlands Central Flacq Quatre Bornes Curepipe Forest Side Riviere des Anguilles Riviere du Rempart Total Number of Employees 1 9 12 4 10 3 1 1 3 3 3 3 2 3 3 3 64 worked in the Claims, IT, Marketing, Underwriting, Accounts and Administrative departments were all contacted to fill in the questionnaire. The latter were filled on the spot and collected. 5. Analysis of Findings Awareness of HRM Practices HR Officer stated that the „theoretical‟ criteria are subjective since people behaviour is not constant in an organisation. Also, performance evaluation is not done on a regular interval but as and when required. There exist also the halo and horn effects while conducting the performance appraisal system. Based on Senior Management‟s statement, GFA Insurance Ltd employees are evaluated based on a performance appraisal system and they are compensated according to their merit. Besides, as per the company‟s term, employees who have completed a year in full time employment are entitled to an unsecured loan. Thus these substantiate the literature where examination through performance appraisal is based on a distribution between a positive and a negative pole. According to Foucault (1977) normalising judgment is also known as a punitive balance sheet. It thereby becomes possible to enmesh the individual in a series of calculative norms and standards, and to identify those who do not live up to the rule of the norm. As such individuals become known in terms of their mark or the score they achieve in an examination system (e.g Performance appraisal system) which set them apart. It is therefore mentioned by Foucault in his book Discipline and Punish, “On the basis of these records, those in control can formulate norms, averages and categories that are in turn a basis for knowledge. The examination turns the individual into a “case” as an object of care where caring is always also an opportunity for control”. Proceedings of World Business, Finance and Management Conference 8 - 9 December 2014, Rendezvous Hotel, Auckland, New Zealand, ISBN: 978-1-922069-66-5 Performance assessment criteria Table 3: Mean Values of statements relating to views on Performance Assessment Performance Assessment Criteria Attendance Punctuality Commitment Quality of Work Loyalty Ability to work in Team Flexibility Meeting agreed deadlines Honesty Integrity Training other People Mean 1.75 1.77 2.19 2.06 2.44 2.28 2.89 2.09 1.73 1.81 3.63 Standard Deviation 0.98 1.05 1.27 1.36 1.40 1.25 1.32 1.14 1.09 1.13 1.41 Culture of the organisation From table 5.9 below GFA‟s management team can be seen as a high power distance society since the Mean value (2.28) of (I have no objection if my suggestion is not taken into account) is in the range of Agree. According to Hofstede (2006) cultural dimension that result indicates that management don‟t expect subordinates to take initiatives at work. Also, the Mean value of 2.03 (long term commitment) shows that people in the organisation believe in long term relationship with the organisation. According to Hofstede (2006), in a high power distance organisation people are committed and honest to their workplace. They have a strong work ethics and believe in training and development. They have patience toward long term results. Proceedings of World Business, Finance and Management Conference 8 - 9 December 2014, Rendezvous Hotel, Auckland, New Zealand, ISBN: 978-1-922069-66-5 Table 4: Mean Value of statements relating to the culture of the organisation Organisational Culture Mean I have no objection if my suggestion is not taken into account I believe in teamwork and team based performance reward I like challenging and new situation I believe in long term commitment to the organisation 2.28 1.70 2.42 2.03 Standard Deviation 1.37 0.95 1.27 1.15 Table 5: I believe in commitment to the organisation * How far do you believe Training is important for you? Crosstabulation I believe in long term commitment with the organisation (%) Total (%) Strongly Agree Agree Neither Agree nor Disagree Disagree How far do you agree training is important to you? (%) Extremely Somewhat Moderately Important Important Important 65.4 30.8 3.8 71.4 23.8 4.8 60.0 30.0 10.0 Total (%) 66.7 75.0 100.0 100.0 33.3 25.0 0.0 0.0 100.0 100.0 100.0 It can be confirmed from table 5 that Hofstedes‟ argument about employees supporting long term commitment believe in training holds true at GFA. The reason behind is that 65.4% of respondents who Strongly Agree and 71.4% who believe in long term commitment agree that training is extremely important to them. Individual Identity in HRM Perception of training Figure 8 shows that 53.1% indicated that training given to them is extremely important while 21.9% agreed that it is somewhat important and 25% considered as moderately important. The HR Officer stated that “the objective of GFA is to have highly effective staff by providing continuous on-the-jobtraining and planned off-site training”. However, from the observation, it was noted that while performing on-the-job training the trainee was very much confused with the insurance policies and also from customers‟ pressure. It was also seen that the trainee was constantly been asked for help from some senior staff members. This shows that there are no formal and systematic training procedures in place. The Management of GFA insurance Ltd claimed that by winning the Training Commitment Award 2004 and winning the HR Excellence Commitment Award 2011 shows their dedication to their personnel. They are continuously empowering staff through training. Over the past five years the company has spent nearly MUR 2 million on training activities. They organized a number of training sessions and team building Proceedings of World Business, Finance and Management Conference 8 - 9 December 2014, Rendezvous Hotel, Auckland, New Zealand, ISBN: 978-1-922069-66-5 events, which they trust have helped the individual employees to better understand the new challenges and opportunities within the industry and are now better equipped to offer the best services to all their customers. In January 2012, a group of 12 staff attended a course – Customer Care - organised by the National Productivity Council. Impact of HR Practices on Retention HR Practices is important to retain employees It can be noted from the pie chart that 35.9 % of respondents strongly agree and 35.9 % agree that HR Practices lead to employee retention while only 6.3 % strongly disagree. This has been confirmed from Table 6 that those employees working for 7 and more years agree (34.8%+ 26.1% = 60.9%) that HR Practices are important determinant of employee retention. According to Senior Management, over the last five years the company has spent nearly MUR 2 million in training activities. In November 2010, GFA insurance Ltd gave an increase of MUR 500 to all the staff. The employees were evaluated based on a performance appraisal system and they were compensated according to their merit. In conformity to the policy of profit sharing of the company, a bonus of MUR 500 was offered for all the personnel in June 2010 higher than that proposed by the National Pay Council which was MUR 200. Therefore it is very true as mentioned in the literature by (Townley, 1994; Legge, 1995) that HRM practices in critical theories as a way of ensuring the commitment of employees to the economic goals of the business enterprises instead of treating worker consent as a mere functional response to the individual, organisational and environmental needs. Proceedings of World Business, Finance and Management Conference 8 - 9 December 2014, Rendezvous Hotel, Auckland, New Zealand, ISBN: 978-1-922069-66-5 Table 6: HR Practices are directly related to employee retention*Years of Service at GFA Crosstabulation Years of Service at GFA (%) Total (%) Less than 1 year Between 1 and 3 Between 3 and 5 Between 5 and 7 Above 7 years HR Practices are directly related to employee retention (%) Strongly Agree Neither Disagree Agree Agree nor Disagree 8.7 0.0 0.0 33.3 Total (%) Strongly Disagree 25.0 6.3 8.7 39.1 9.1 33.3 0.0 20.3 21.7 21.7 45.5 0.0 50.0 26.6 26.1 13.0 27.3 33.3 0.0 20.3 34.8 26.1 18.2 0.0 25.0 26.6 100.0 100.0 100.0 100.0 100.0 100.0 Hypothesis testing Since the sample is 64, which is rather small in size, Shapiro-Wilk test was used. From the table below, it is noted that p < 0.05, thus, alternative hypothesis was accepted and it is concluded that the data do not follow a normal distribution. Hence, Spearman‟s rank correlation coefficient, a nonparametric measure, was used to determine the strengths and direction of association that can exist between two variables, that is, determining existence of relationship. Proceedings of World Business, Finance and Management Conference 8 - 9 December 2014, Rendezvous Hotel, Auckland, New Zealand, ISBN: 978-1-922069-66-5 Table 7: Tests of Normality HR Practices are directly related to employee retention PRP as HR Practice to retain employees Training as HR Practice to retain employees I feel more committed after training programs Career Development as HR Practice to retain employees Employees‟ Perception of Organisation as a place to retire Kolmogorov-Smirnova Statistic df .241 64 Sig. .000 Statistic .827 .281 64 .000 .768 64 .000 .284 64 .000 .794 64 .000 .221 64 .000 .840 64 .000 .183 64 .000 .900 64 .000 .247 64 .000 .867 64 .000 Shapiro-Wilk df 64 Sig. .000 a Lilifors Significance Correction Hypothesis 1 Ho: There is no relationship between PRP and retention. H1: There is a relationship between PRP and retention. Table 8 shows that there is a moderate positive correlation between PRP and employee retention (rs = +0.571, p < 0.01). So, H1 is accepted, therefore in line with the (Lazear, 2004) where he mentioned PRP-scheme can be used to induce workers to exert the right amount of effort and retention. In line with the literature review, the result in table 5.18 can be taken as the „making out‟ game separating the worker‟s interests and concealed the fact that management was obtaining productivity with only slight increases in wage rate. The act of playing the game created consent for its rules while providing a challenging distraction to the general tedious and repetitive labour work (Burawoy, 1979). Table 8: Correlation between PRP and Retention Spearman‟s Rho ** HR Practices directly related to employee retention PRP as HR Practice to retain employees Correlation Coefficient Sig. (2 tailed) N Correlation Coefficient Sig. (2 tailed) N HR Practices directly related to employee retention 1 64 571** 64 Correlation is significant at the 0.01level (2-tailed) Hypothesis 2 Ho: There is no relationship between training and commitment. H1: There is a relationship between training and commitment. PRP as HR Practice to retain employees .571** 0.000 64 0.000 64 Proceedings of World Business, Finance and Management Conference 8 - 9 December 2014, Rendezvous Hotel, Auckland, New Zealand, ISBN: 978-1-922069-66-5 Table 9: Correlation between Training and Commitment Spearman‟s rho Training as HR Practice to retain employees I feel more committed after training programs Correlation Coefficient Sig. (2-tailed) N Correlation Coefficient Sig. (2-tailed) N Training as HR Practice to retain employees 1 64 .461** 0.000 64 I feel more committed after training programs .461** 0.000 64 1 64 Table 9 shows that there is a moderate positive correlation between training and commitment (rs = +0.461, p<0.01). So, H1 is accepted, therefore contradicting the research of Meyer and Smith (2000), where they found that training was found not to contribute to the increase in employee commitment. According to Storey and Sisson (1993) training is a sign of the employer‟s commitment to staff which is being adhered by GFA Insurance Ltd. Therefore, it can truly be said that employees may be considered in this case as an object of knowledge through training and a subject of control. Hypothesis 3 Ho: There is no relationship between career development and place to retire. H1: There is a relationship between career development and place to retire. Table 10: Correlation between Career Development and a place to retire Spearman‟s rho Career Development as HR Practice to retain employees Employees‟ Perception of the Organisation as a place to retire Correlation Coefficient Sig. (2-tailed) N Correlation Coefficient Sig. (2-tailed) N Career Development as HR Practice to retain employees 1 64 .568** 0.000 64 Employees‟ Perception of the Organisation as a place to retire .568** 0.000 64 1 64 Table 10 shows that there is a moderate positive correlation between career development and viewing organisation as a place to retire (rs = +0.568, p<0.01). So, H1 is accepted and this agrees with Blake and Mouton (1964), where they stated that the most effective managers are those who realize that employee career development and retention are directly related to the organisation's overall effectiveness. 5. Conclusions The main findings of the study can be summarized as follows: firstly it was revealed that there is a slight positive correlation between PRP and retention rate of employees at GFA which is in line with theory. Secondly, the positive relationship between training and commitment clearly demonstrates the commitment of GFA towards its employees as emphasized by the study of Storey and Sisson (1993). On the other hand, it contradicts the findings of Meyer and Smith (2000) which implied that training did not add to employee commitment to the company. Thirdly, the relationship between career development and the perception of the organization as a place to retire was also positive in the case of GFA. This is in line with the findings of the investigation of Blake and Mouton (1964) whereby they stated that the best managers are those who are able recognize the fact that an employee‟s career development and retention are positively related to the general healthiness of the organization. Proceedings of World Business, Finance and Management Conference 8 - 9 December 2014, Rendezvous Hotel, Auckland, New Zealand, ISBN: 978-1-922069-66-5 It can thus be concluded that capitalism is still present and is gaining in strength. Workers sell their labour power when they accept compensation in return for whatever work they do in a given period of time. 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