HRF assessment activity 1 template
Managing HR at BCB Finance – written briefing paper
Name: Rushabh Khajuria
Word count: 3246
Organisational objectives
There are a number of things that the HR department should be doing. These include:
Supporting the delivery of organisation objectives –
The HR practitioner should understand the organisation’s objectives. It should then tailor its
activities to support those objectives.
So, if an objective is to develop knowledge and understanding of a particular technology HR
should look to source teaching of this.
If an objective is to grow the business then HR should understand what skills are required, and
either develop those amongst existing staff or recruit them externally.
If a Company is recruiting mass/bulk sales professionals due to an increase in orders. Clearly,
the organisation objective is to meet the orders that have been placed in a timely manner. To
support this objective the HR department the company will need to recruit people quickly and
efficiently. These people will need to have the right mix of skills and experience so that they
can quickly contribute to the increase in demand.
If we look at Google’s talent acquisition, we will learn a lot about their constant hiring and
acquisition of talents. Google has a vision, “We’re looking for people who are good for Googleand not just for right now, but for the long term.” Factor that made possible the great
development of Google as a hub for innovation is their recruitment methodology used when
hiring employees. That methodology has been able to build Google’s most important asset:
Human capital. Every year Google receives over one million resume’s and of this only 40006000 people are hired every year. The hiring process starts with detecting talents in its infancy,
not like Microsoft or other companies, who hires only the graduates. The next steps are
challenging interviews, consisting phone and face to face interviews. After the selection, Google
offers core and job-specific courses to all its employees, which is called School’s in. the
following step is Reiterate Training, where Google experiments within the company and
provides extra training, if needed. At the last stage, Google gives its employees Room to Play
because Google believes, “People do not learn through going on training courses.”
Building organisation capability (Improved Staff Training & Development)
Microsoft is a good example of an organisation that is constantly reviewing and developing
organisation capability. Microsoft constantly ensure that the employees within organisation
have the capability to produce the latest new ideas. This means investing in training and
development, investing in relationships with universities and other education establishments
and careful recruitment of new employees with new ideas, new skills and recent qualifications.
Organisation and job design –To build effective organisation capability the HR department
needs to understand what the organisation wants to achieve, and what this organisation is
HRF assessment activity 1 template v 1.1 online
going to look like next year, in five years and in the longer-term future. Organisation design is
a topic in itself and it is important to HR because an organisation is simply a group of people.
Organisation design involves shaping the organisation in a way that maximises its
effectiveness. This could be in reviewing the structure of the organisation, it could be in breaking
down barriers between departments. It could be in reviewing the design of jobs, to make them
more effective.
Performance Objectives
Once the required workforce is in place, HR managers must ensure that employees are well
motivated and dedicated so as to maximize their performance. By use of various motivational
techniques such as promotion, increased pay and benefits such as company cars, HR
managers can shore up an individual employee’s performance. They also train employees and
negotiate improved performance with trade union officials. HR managers can also assist in
disciplining errant workers if their performance or conduct is unsatisfactory.
Coca Cola Company is a multinational American company producing non- alcoholic drinks. It
has a very effective performance management system. The following picture shows the process
of performance management steps of Coca Cola Company:
Change-Management Objectives
In an organization, change is inevitable. It can be structural, requiring reorganization of activities
or hiring new people to fill in particular roles. At other times, change occurs to alter attitudes,
philosophies and established organizational norms. HR managers recruit or develop people
with the necessary leadership skills to steer the change process. They also inform employees
of incoming changes and help them adjust accordingly. Thus, if the organization intends to
introduce computers to cut down its costs and improve profitability, HR managers train
employees with no computer skills.
Administration Objectives
HR managers have a responsibility to facilitate the smooth operation of the organization. They
must maintain accurate and inclusive data on individual employees. This data includes
employee performance reports, their terms and conditions of employment, training and
attendance records and their personal details. Precise record-keeping is necessary to ensure
that the organization complies with legal regulations such as National Minimum Wage
regulations.
HRF assessment activity 1 template v 1.1 online
How HR Delivers its Objectives
There are a number of models which can be used to deliver these objectives. Two models
which could be used are as follows:
1. The Purcell Model (2003), and
2. Dave Ullrich Model; the Three Legged Stool Theory (1997).
The Purcell Model provides the building blocks of good performance, AMO – meaning:
ABILITY – assumes that people want to apply for jobs and have attributes recognised, willing
to learn new skills.
MOTIVATION – assumes staff can be motivated to use their ability in a productive manner.
OPPORTUNITY – assumes employees will perform well, produce quality work and participate
in wider activities e.g. problem solving, team initiatives.
AMO contributes to feelings of job satisfaction, commitment and motivation and encouraging
employees to deliver exceptional performance which in turn builds business capabilities.
The Dave Ullrich Model; the Three Legged Stool Theory. This suggests that in large
organisations the HR function should be divided into three segments, shared service activities
should be concentrated in a call centre with supporting intranet to provide admin and basic
support functions, business partners are individuals or small teams which work closely with
business unit managers on key initiatives and change management. Finally, centres of
expertise (specialists) exist as repositories of key technical knowledge on resourcing reward,
employment relations and can develop policy whilst providing support to business units and
shared services.
At the apex of the three legged model should be a small, corporate HR team that is responsible
for performance as a whole and provide strategic direction.
An example of a large organisation would be the McDonalds Corporation. McDonalds business
model is depicted by the Dave Ullrich Three Legged Stool of owner / operators, suppliers and
company employees is it’s foundation. The balance of interest among the three groups is
essential to the company’s success. (Samantha Nielson; Market Realist December 2013)
Another large private sector organisation is the John Lewis Partnership (JLP). JLP adopts the
Dave Ullrich Three Legged Stool approach.
Marks and Spencer also follows the Dave Ullrich Model (HR Zone, Jan Hills March 2010).
The NHS, which operates are a large organisation in the public sector, using shared services
and outsourcing. (insert reference).
Gerutha is a small organisation operating in the voluntary sector, providing outsourced services
to other charities across the UK. It provides HR, admin and support services to charities on a
out-sourced basis, at a competitive cost.
Procom Construction Consultants are a small organisation operating in the private sector and
they adopt the Purcell model, adopting AMO. They utilise out-sourced HR, marketing and
payroll services, allowing them to keep their overheads low.
The options for delivering the HR objectives are to use:
Self-deliver, using internal resource
Use Shared Services
Partner with other organisations
Implement Vendor Management, or
Out-Sourcing of services
1
Self Delivery
Self Delivery involves an organisation employing its own HR Generalist and / or Specialists.
2
Shared Services
HRF assessment activity 1 template v 1.1 online
HR Shared Services are a way of organising activities within a wider HR operating model.
Usually, HR Shared services involves a team of administrative HR services in a centralised
team, shared throughout an organisation. It is thought that this idea evolved due to being a
more cost effective solution for larger organisations.
3
HR Business Partner
HR Business Partners are individuals within a HR team who have expert knowledge in
particular areas, such as learning and development for example. The HRBP’s must understand
how the business operates in depth and be able to generate insight from data and evidence,
being able to ask the right questions crafting networks within a business and identifying
opportunities to create most value. HRBP’s must have the courage and confidence to
challenge the business and its leadership, using evidence and strong relationships and an
understanding of the business to influence effectively.
4
Vendor Management
Vendor Management involves a third party undertaking specific tasks for a business /
organisation. The services most commonly sought are for payroll and recruitment.
5
Out-Sourcing HR Services
Out-Sourcing HR services involves a third party taking on most, if not all, of the HR function.
Managing Change
Major theories of effective change management
1) The Lewin Model of Change
One of the best known change models is that suggested by Kurt Lewin (1951) who regards the
change process as being made up of THREE basic mechanisms:
1. Unfreezing altering the present stable equilibrium which supports existing behaviors and
attitudes. This process must take account of the inherent threats change presents to people
and the need to motivate those affected to attain the natural state of equilibrium by accepting
change.
2. Changing – developing new responses based on new information.
3. Refreezing stabilizing the change by introducing the new responses into the personalities of
those concerned.
Evaluation of Lewin 3-Step Model
Advantages
One of the key advantages of the Lewin 3-step model is the analysis that provides a visual
summary of all the various factors supporting and opposing a particular idea, with all the data
that has been collected regarding a potential decision consolidated into a single graph. In
addition, the analysis also expands the evaluation beyond the data itself to look at qualitative
factors that may have an impact on the success or failure of the decision being analysed.
Disadvantages
Lewin´s model is very linear, being rational, goal and plan driven. The change looks good on
paper, as it makes rational sense, but the plans do not take into account human feelings and
experiences can have negative consequences. Employees can become so excited about the
new change, that they bypass the feelings, attitudes, past input or experience of other
employees and can find themselves facing either resistance or little enthusiasm.
The analysis requires the full participation of everyone involved to provide the accurate
information required for an effective analysis. This can be a disadvantage when full participation
isn't possible, resulting in an analysis that doesn't provide a realistic picture of the supporting
HRF assessment activity 1 template v 1.1 online
and opposing forces. Another disadvantage is the possibility that the analysis won't result in a
consensus among the group. In fact, a force field analysis may actually cause a division in the
group between those who support the decision and those who oppose it.
2) Kotter's 8-Step Model of Change
John Kotter's influential 8-step process for change: John Kotter addresses a major
challenge facing modern business leaders - how to act quickly and remain relevant in
highly competitive environments.
Kotter's 2014 book 'Accelerate' updates the influential 8-step process for change to
support the needs of modern organizations.
Evaluation of Kotter’s 8-Step Model
Advantages
 The process is an easy step-by-step model.
 Clear steps which can give a guidance for the process
 The focus is on preparing and accepting change, not the actual change.
 Transition is easier with this model.
 Focus on buy-in of employees as focus for success
 Fits well into the culture of classical hierarchies
Disadvantages
 Steps can’t be skipped.
 The process takes a great deal of time.
 The model is clearly top-down, it gives no room for collaboration involving all levels of
staff.
 Can lead to frustrations among employees if the stages of grief and individual needs are
not taken into consideration.
Evaluating HR
Employee turnover
We need to understand trends relating to employee turnover. What is important to understand
is whether it is changing significantly. Again, it is useful to look at this on a department by
department basis. If the organisation is very seasonal and employs a lot of temporary staff (e.g.
a retail organisation hiring sales assistants for the Christmas period) then it might be best to
remove those staff from the data. It is always known that they will be leaving, and including
them all in the leavers will distort any underlying trends.
Recruitment spend
An interesting piece of data is how much is being spent on recruitment. It is probably best to
look at this as an average per vacancy. Clearly, some vacancies will cost more to replace than
others. For example, asking a recruitment agency to recruit a senior employee will cost much
more than asking them to help with the recruitment of a junior employee.
KPI’s can help a business or department assess its performance, efficiency and effectiveness
or to evaluate progress towards a project. For example;
1) Average Number of responses for vacancies.
2) % of vacancies filled within a given period.
3) New employee satisfaction rate with process.
HRF assessment activity 1 template v 1.1 online
Payroll spend
The payroll is likely to be one of the (if not the) largest items of expenditure in an organisation.
It is essential to track any increase in payroll spend. Clearly, there will be increases after an
annual review – but between reviews the payroll should stay fairly constant .
Learning and Development
1) Average training cost.
2) Return on investment of training and development activity.
Reward
1) Average salary paid compared to competitors or industry norms.
2) Benefits provided compared to competitors or industry norms.
Below is Details KPI matrix that can be used
Employee turnover
Cost per Hire
Calculation of advertising, agency fees, employee referrals, relocation, recruiter pay and
benefits costs and the number of hires
Turnover Cost
Calculation of termination, new hire, vacancy and learning curve costs
Turnover Rate
Time to Fill
Number of separations divided by the average number of employees.
Separations include employees who quit, are dismissed, transfer to another company or retire
The time it takes to fill a vacancy. The longer a position remains vacant, the greater the disruption
to productivity.
Recruiting
Vacant Period
New Hires
Performance
Appraisal
Turnover Rates of
New Hires
Financial Impact of
Bad Hire
Number of overall days the positions were vacant
Average performance appraisal of new hires, compared to previous period
[Total turnover of new hire with in first 12 months] percentage of [total new hire with first 12 months]
Factors that determine cost of a bad hire: Training costs, HR costs, Interviewing costs
Retention
Preventable
Turnover
This indicator considers the reasons the employee left the organizations and what measures may be
taken to prevent it
Diversity Turnover
The impact of Diversity Turnover
Training and
Development
HRF assessment activity 1 template v 1.1 online
Learning and
Growth
Opportunities
Percentage of employees who are satisfied with the learning and growth opportunities in the
organization
Job Satisfaction
The five factors: Total compensations; the work itself; Promotion opportunities;
Relationship with supervisor; Interaction and work relationship with co-workers.
Another more tailored assessment is using Becker, Huselid and Ulrichs (2001) HR Scorecard
based on Kaplan and Nortons Balanced Scorecard (1992). HR departments can evaluate its
performance and identify top priorities by analysing a range of reliable valid indicators relating
to what HR delivers (HR deliverables) or what HR does (HR do-ables), these are collectively
termed @The Five “Right” of HR measurement:
1) Clear understanding.
2) Creating value, HR costs.
3) Work force success, capabilities, behaviours and performance.
4) Business strategy.
5) HR practices and alignments.
HR Practices and Organisational Outcomes
Various studies have attempted to understand the linkage between HR practices and
organisational outcomes. Hailey, Farndale and Truss (2005) did one such study. It sought to
comprehend the HR’s department role in enhancing the financial performance of companies.
Using a case study approach, the researchers noted that HR in most companies raises financial
performance, but it comes at the expense of employee morale and commitment (Hailey,
Farndale and Truss 2005, p.64). Although the study provides valuable insights on the role of
HR in improving organisational performance, it has a severe limitation due to the case study
method. It could be that the findings are unique to the enterprise where the study was
conducted.
Guest and Conway (2011) is another study that examined the topic. The research focused on
HR practices and organisational outcomes such as employees’ commitment and quality. The
research found that line managers and HR had low levels of agreement. In cases where they
agreed, there were no superior results (Guest and Conway 2011, p.1697). It concludes that the
quality and commitment of workers does not depend on the agreement between HR and line
managers on HR practices. The study is beneficial as it gathered data from different
organisations making its findings more applicable to other companies.
A definition of high-performance organisations comes from Pfeffer (1998) (The Human
Equation: Building Profits by Putting People First). He suggests that a high-performance
organisation should have the following seven key factors:
1. Employment security
2. Selective hiring
3. Self-managed teams and decentralisation of decision-making
4. High compensation contingent on organisational performance
5. Training
6. Reduction of status differences
7. Sharing information
There are many other impacts that affect an organisation. An organisation does not operate in
a vacuum – and the external factors (such as the impact of the recession) have had a very real
impact on organisations.
HRF assessment activity 1 template v 1.1 online
So, what does impact on superior organisational performance?
Some of the potential factors are:
Human capital perspective Human capital is the knowledge, skills and initiative of the
workforce, including the education and training that is offered to develop those particular skills.
Looking at the organisation from the human capital perspective looks at the organisation as a
mass of knowledge, skills and initiative. It is essential to look at ways of developing the human
capital because that is the basis of the worth of the organisation.
This is particularly true when we look at organisations that rely heavily on the knowledge of it
workers. For example, a law firm has a simple product – the advice given by its employees.
Hence, the nature of the product is totally reliant on the knowledge, skills and initiatives of
those employees. Without that human capital the law firm is worthless.
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Mason, IA: Cengage Learning.
Guest, D. and Conway, N. (2011). The impact of HR practices, HR effectiveness and a
strong HR system on organisational outcomes: A stakeholder perspective. The
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effective implementation. London: SAGE publications.
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Professor John Purcell (2003). The Purcell Model
Becker, Huselid & Ulrich (2001). HR Scorecard.
Kaplan and Nortons (1992). Balanced Scorecard.
HRF assessment activity 1 template v 1.1 online