Strategic Human Resource Management: The Case of Balfern Hotel Essay
According to the Management Help (2006), the Human Resources Management (HRM) function includes a variety of activities such as determining staffing needs, hiring of employees to fill the needs of the company, recruiting and training the best employees, ensuring they are high performers, dealing with performance issues, and ensuring that personnel and management practices conform to various regulations, managing approach to employee benefits and compensation, employee records and personnel policies, ensure that employees have — and are aware of — personnel policies which conform to current regulations – Strategic Human Resource Management: The Case of Balfern Hotel Essay introduction. In the case of the Belfarm Hotel, with most of that growth stalled for the past years, the family-operated hotel will have to come up with human resource solutions which would then address the hotel’s HR dilemmas.
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Human Resource Planning Procedures
The following topics that the Belfarm Hotel needs to include in a Strategic Human Resource Planning are as follows: Seminar Workshop on Recruitment of Employees, Capability Enhancement Training for Employees in the Management Positions, Orientation Workshop on Collective Bargaining, Harmonization and Team Building Activities and lastly, Leadership Training. Since, as the Human Resources Director, one has to make use of the available data, observations and on several areas noticed from the first couple of months with the hotel that need development or redesign in assisting the would-be resource persons in coming up with training modules for each components that are customized to Belfarm Hotel. The Human Resources Department will have to be established by the president since the company has grown to the point of needing that department. Hence, the above topics are brainstormed and conceptualized.
The HR planning should include relevant topics that Belfarm Hotel needs like this first component which is a Seminar Workshop on Recruitment of Employees. In this training component, the target participants are the human resources workforce as well as the management level that are directly involve in the decision –making when it comes to developing Criteria or Systems in Recruiting Employees. It has been observed that the growth of the organization has been steady and that it is not expected to diminish anytime soon. The recruitment method that can be adopted should conform to the expectations of the top management that the recruiting method that will be developed is fast, reliable and cost-effective to meet the tremendous staffing needs that have been communicated to the Human Resources Director.
The next component of the HR management is an Orientation on the Employees Benefits from the Company’s Progressive Profit-Sharing Plan (Baron & Kreps, 1999). In here, the comparative salary survey that has found its way to the Human Resources Director’s desk should be included as one of the points of discussion. A resource person that can facilitate coming up with action plans in order to improve the systems on giving out salaries and benefits should be hired. It is important to address this author’s observation and analysis as a Human Resources Director that Belfarm Hotel salary and benefits for most positions are far below national averages. The trainer should facilitate the training in such a way to find out if this will, in time, have an effect on the quality of employees attracted to the company. After this training component has been conducted, this author, as Human Resource Manager will determine if the number of informational requests from employees about their benefits will be reduced. This possible decrease in the number of informational requests from employees about their benefits will eventually lead to decrease in the number of instances where much of this author’s, Human Resource Manager’s productive time was eaten up because of the informational requests received as early as this author’s first few weeks in this company, the Belfarm Hotel.
The third component of the Strategic Human Resource Planning can be on Capability Enhancement Training for Employees in the Management Positions. With a company that has grown as quickly as the hotel, the appropriate human resource development training / seminars should be provided to management level staff. In this company, it was found that the quality of people management and customer service practice varies greatly from department to department (Schein, 1987). The couple of departments that clients and vendors seem to try to avoid interaction with, though the majority of departments seem to naturally excel in the way they treat both business and internal clients, can be provided with training on Effective Frontline Services.
An Orientation Workshop on Collective Bargaining, Harmonization and Team Building Activities can be provided as part of the training program as well. Based on the case facts, it looks like there are some aspects of human resources that have to be threshed out in the current status of the hotel. Though the treatment of employees in the company seems good overall, however, there is little documentation on some of the recent terminations. Also, there are no measures in placed that would make the company fully confident that the hotel’s defense (Storey & Sisson, 1993).
Since as organizations strive to remain competitive, there is much reliance on the management team and their ability to serve effectively in leadership roles (Molander & Winterton, 1994). Managers hold a great deal of responsibility in terms of managing people and processes. Therefore, it is but important to include in the Comprehensive Training Program the training component on Leadership.
Human Resource Retaining Strategies: The Training Delivery / Communication Options
The training delivery to be used is participative which simulates real scenarios (Schein, 1987). This will be a workshop type of training. Experiential learning should be employed in the training components of the human resources planning program aimed at maintaining work effectiveness, retaining employees and create organizational success where employee development is critical.
The communication option to be used in the delivery of training should be simple yet effective. This type of training program will fit the workforce of the Belfarm Hotel to refine their training skills. Also, this training program will provide comprehensive information and techniques to develop critical competencies. Training activities will focus on the design and approach to facilitate effective delivery of functions and responsibilities.
The training materials to be used should assist trainers in enhancing their training presentations with materials that are professionally designed and written. Group facilitation skills of the trainers should be maximized to effect intervention strategies needed to maintain effective group relationships and direct groups towards productive goals. Aside from the evaluation of the Human Resources Directors from available data and observations, a Training Needs Assessment and Evaluation conducted prior to the actual training proper help trainers understand and use selected needs assessment and evaluation tools as part of the design and delivery of training.
Human Resource Issues and Challenges to Consider – Including Suggested Solutions
The challenge to have a trained and skilled workforce is the ultimate competitive advantage for any organization (Cowling & Mailer, 1998). The rapidly expanding base of new information and technologies affects every one of us, from factory floor to business office. No matter how capable or successful an organization is, if staff training and continuing education is overlooked, there will be problems in the organization. The challenge is to get the best value for the training dollars spent by choosing training that suits the needs of the company and least impacts the bottom line (Storey & Sisson, 1993).
In order to meet the challenge, comprehensive approach to employee development can be adopted. Set goals and reach them, identifying the needs, developing the right intervention, and delivering a practical, results-oriented solution. Interactive training is designed for the adult learner, requiring involvement in the learning process. Handle specialized workplace challenges with customized group training. Handle challenges specific to the organization. A good approach is to maximize training dollars spent by tailoring content to the organization’s explicit situation to produce the results needed. The NL&C should source top-notch trainers who can combine their experiences with the latest in learning techniques for interactive sessions that emphasize skill development and application (RBA Training, 2006).
Workforce Retention and Motivation
Motivating an employee to do his or her best for the company and making him to stay long with the organization is one of the major concerns of HR. A group who specialize in management of labor in IT organization has observed that the average stay of most IT professionals in a company is less than three years. It has been observed also that companies, who are on a constant search and use of new technologies, send their employees to seminars and trainings to acquire new knowledge and exposing their people in a challenging environment are better ways to retain people than giving of higher salaries. Although, some HR managers believe that salary and career satisfaction are the key to retention, money is a prime motivator only for ‘starters’. Those who have gone to three or more jobs know the importance of being in a position highly valued by the company (Gupta 2006).
Attracting the Best Talent
In a business with cut-throat competition, urgently looking for the same kind or professionals is a normal activity of HR managers. In their search for the right people, they try their best to convince IT professionals to work with the company. In such a competitive market, IT organizations are trying to find ways how to attract the cream of the crop. Best talent means people who possess both the technical and managerial skills. They have the complete knowledge of the business, have the ability to think of new ideas, can communicate effectively, have the mind for analytical and logical thinking; possess leadership ability, team players, creative and innovative. People like them are rare commodities and being able to bring them in the organization is a key HR challenge (Gupta 2006).
Compensation and Reward
Law of supply and demand also applies to the hiring of best talents. Thus attractive compensation package is very significant in luring those great minds. This results into management doing away with the usual eight hours per day work schedule as basis for compensation. Salaries and incentives are now given commensurate to the applicants’ knowledge and performance. Employers also give emphasis on profit sharing or performing employees can opt for company shares of stocks. This encourages bright and talented people to stay long with the organization. Skills, competencies and commitment are now preferred over loyalty, hard work and length of service. Although, salary is not the number one motivator in the industry today, HR is also faced with the challenge of devising optimized compensation package to attract best people into the organization.
Integrating HR strategy with Business Strategy
HR direction should be in conformity with the business direction. HR plans are just a part of the overall business strategy with the purpose of attaining the business objectives. Everyone should row in a single direction. Other departments depend on HR in recruitment, retention, motivation and rewarding of valuable personnel. HR is also tasked to manage change, anticipate future personnel requirements, organizational effectiveness, team building and employees’ training and development. (Gupta 2006).
‘Encouraging quality and customer focus’ should be a concern of all employees in all departments. It is HR’s duty to orient people on this topic and emphasize its importance in the overall business operation. A culture of superior quality should be encouraged. With globalization and technological change running at an incredible speed, companies with inferior quality products cannot cope up with the competition. Building friendly relationship with the customer is also important to insure repeat orders and continuous purchases (Gupta 2006).
Upgrading of Skills through Re-training
In a highly competitive hotel business environment brought about by the fast-paced, unpredictable technological advancement and increased emphasis on quality of services, software businesses are compelled to look for adaptable and competent personnel in the case of Belfarm Hotel. Software professionals are sent to various venues to attend seminars and trainings to upgrade their skills so they can perform all the functions that are assigned to them by the organization. Highly skilled software professionals are a bit discouraged if they feel that they are being left behind. Once they have gained a new knowledge and have disseminated it to their subordinates, they start to look for yet other new things. That’s what motivates them. And it is another challenge for HR personnel to keep those bright people highly motivated (Gupta 2006).
Experts interpret such trends as a significant new problem for businesses which the hotel industry has never experienced. This is the serious lack of workers who possess the skills required by the economy. With longer life expectancy, reduced birthrate and the aging workers now coming to the age of mandatory retirement, the age profile of workers is dramatically changing (hrsolutionstoday 2006).
Figure 1 : Re-Training Diagram
These changing workforce demographics have serious implications in HR’s quest to attract the best talent. Because of the lack of qualified IT professionals, HR must once again repackage the compensation and reward being offered to make it more attractive. They should strive hard for the retention and motivation of the existing workforce because piracy of talented personnel among IT organization is on the rise.
It is suggested that retention of older employees is one way to counter the problem on changing workforce demographics. That suggestion is often overlooked. For more than 20 years, it has been the practice of the corporate world to retire aging employees. To ease out retirees, programs such as retiree medical coverage, early retirement programs and other plans are being designed. They also make way for the entry of younger workers who will receive salary for ‘starters’, thus are less expensive (Gallo 2006).
While those who stay in the company for long have higher salaries and benefits than younger workers, the prospect of losing those aging but reliable people can entail more cost to a company than continue paying their salaries and benefits. And they are not really willing and ready to leave their job they have loved for several years. They want to work more and extend their stay in the company for another several years. Some still need the financial reward and the health benefits that employment can give (Gallo 2006).
Watson Wyatt’s Strategic Reward Survey said that there are top five items which are important to older workers and they are: benefits, compensation, independence, security and skill development. This prospect of extending the services of older workers is still under study. There are however at least five strategies which can be viable to make retiring employees stay in the company longer thus cushioning the impact of lack of workers problem. Viable options can be phasing retirement, modifying retirement plans, modifying compensation plans, customizing benefits and redesigning the job (Gallo 2006).
Technology and globalization drive organizations to be more flexible. A contract relationship is not inexpensive, but it’s more flexible. The use of contingent workforce affords companies to be more competitive. Randy Floyd, program manager of the Office of Contingent Workforce Management said, “Those that push for the use of contingent workforce may see greater benefits (Contingent Workforce Strategies 2005)”.
The use of contingent workforce has positive implication in the technology industry. HR can opt for this kind of workforce while trying their best to look for the best and the brightest. They can adjust their budget as this labor force is less expensive than those people who are directly hired by the company.
It is very clear that outsourcing is a success. However, companies are beginning to realize the costs and inherent risks that go with it. Generally speaking, “Outsourcing is a very complex process which the benefits that are expected seldom materialize”. There are tradeoffs that go with outsourcing such as cost reduction against growth, quickness against quality, and maintaining company’s culture of working together against knowledge and innovation (Singhatiya 2005).
In an article published in the Northeast Human Resources Association paper, Michael Andrew, Principal, Strategic Impact Learning, said that “It is high time to elevate HR’s role to that of a Chief Development Officer who is bent on increasing the capabilities which are vital to the attainment of company’s goals and objectives. For HR to become a business partner to the executive team, it should speak about the language of business rather than the language of HR. There is a clear call for HR professionals to redefine themselves as business partners by being business person first and HR professional second” (Andrew 2006).
Taking the case facts mentioned into account, Belfarm Hotel had to create such a system of clear policies, rules and procedures which would allow facilitating and redirection of the current managerial structure wherein there is no direct line of management. This could be done through the increasing of service quality which thereby entails to an efficiency of subsidiary operations. The Belfarm family should realize that each equity investment in the family enterprise is an investment project wherein departments had to be set-up which would address company challenges. This team of cross-functional personnel will build a financial and operational model for an equity investment, evaluate and monitor critical performance indicators, prepare reports and recommendations for the hotel operations. It should be decided that the top management level had to draw upon best practices in equity investment management.
As a result, the current operations of the hotel will manage to achieve better efficiency in their operations. It is not an easy task though to change the mentality of the Belfarm Hotel top managers and their attitude towards their human resources. It would not be fair to claim that Belfarm directors did not have any information on companies they are ti compete with or were ill-informed. As professional managers they ought to try to collect necessary information. However they used human and organizational resources in their departments with very specific insight in certain area of responsibility (e.g. technical or functional side) not considering company performance from all angles on systematic basis. Not to mention, the current Human Resource strategy of the hotel lacks rewards for their personnel and operates without adequate HR planning strategies.
In other words, they used traditional hierarchy management system typical for big organizations for the task which required matrix team oriented approach. They should further insist that the human resource department should lead and co-ordinate the work of cross-functional project teams based on clear policies and procedures, applying uniform performance metrics and corporate governance standards. As you imagine, the first reaction to the introduction of such a system on directors’ part was hostile and more negative rather than positive. Since a big share of equity investments were non-core for the hotel, which led to the decline of the quality of services and maintenance of quality workers, the operations of Belfarm Hotel certainly needs portfolio readjustment (i.e. divesting non-core unprofitable business for a start). However, positive virtues of systematic approach with clear and uniform performance which was highly considered by their father could significantly help the current management of the hotel.
The other important challenge was to introduce corporate governance standards. It is well known that lack of strategic human resource planning, reward schemes, declining quality of services became regular features of the hotel for the past years, however, the top level management, together which all the stakeholders of the hotel, should act upon the situation in order to attain operation efficiency. Managers should start to realize that good corporate governance would increase investment attractiveness of the company and also customer loyalty.
Being a part of bureaucratic structure, Belfram Hotel employees from various departments involved in equity management process were obviously deprived of esteem and appreciation. They were missing the feeling of being a part of the team as well as they did not get any bonuses or any other incentives for their efforts. When assigned a certain task within the scope of their responsibilities as part of their day-to-day work, they could not see the whole picture and did not care much about the final result. According to Herzberg’s theory, their organizational hygiene was adequate but they clearly lacked motivators (Dictionary of human resources and personnel amangement, 2003). Elements of the matrix system introduced allowed to rectify situation by giving a sense of meaning and participation to the members of cross-functional teams, to establish a clear connection between operational results and bonuses as well as between efforts and reward (VIE theory), to improve accountability.
HR professionals are now faced with great challenges brought about by the global explosion in market-opportunities in the information technology sector (Gupta 2006). In order to be effective, HR managers should face the following five challenges, namely: workforce retention and motivation, attracting the best talent, setting standard for compensation and reward, encouraging quality and customer focus, and upgrading of skills through training
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