Issues In Human Resource Management - Term Paper Example

?Issues In Human Resource Management Table of Contents Table of Contents 2 Introduction 3 HR Issue Transition and Resistance 4 HR Issue 2: Training and Development 6 HR Issue 3: Employee Engagement and Commitment 8 Recommendations for Practice 10 Conclusion 11 References 12 Bibliography 14 Introduction Global recession does impact each and every organisation worldwide. Recession is caused due to numerous economic factors that lead to financial crisis for a company. Fall in Gross Domestic Product (GDP) may lead to recession in a country. Likewise, the recent recession did impact the hospitality and tourism industry largely. The industry faced major difficulties in generating revenue from the organisation. Reduced tourists and increased costs have affected the revenue growth for the industry. This situation was experienced by Hilton Worldwide, one of the biggest hotel chains based in the United States (Scribd Inc., 2012). Hilton Worldwide employs more than 100,000 team members in 665 properties across different nations (Hilton Worldwide, 2012). Thus, the costs incurred in managing human capital is huge and has become a concerning factor for the hotel chain. Three key issues that have been identified, do not imply only for the Hilton Worldwide, but is applicable throughout the industry. The issues that have emerged due to the recent recession include the transition and resistance of the employees, training and development costs, and engagement and commitment towards an organisation. Recession has discouraged companies to spend unnecessary costs for the top level managers, such as, official tours, business trips and corporate meetings that have indirectly affected the hospitality and tourism industry worldwide. The study surveys these issues through theoretical studies and practical implementations and finds different ways to tackle them. Furthermore, managing and retaining human capital cost effectively in the recession affected period will be discussed. HR Issue 1: Transition and Resistance Change is a common aspect for all organisations irrespective of countries of operation. The change can be in the processes, style of operating and implementing modern techniques among others that the leaders feel is essential for an organisation. As identified by Helps (2001), being in transition is often uncomfortable, uncertain and inconsistent. She further states that organisations face obstructions at different points or remain stagnant for considerable periods at a stage. Moreover, she stated that psychological factors do emerge in the minds of the employees while undergoing personal change for the organisation. Thus, it can be proposed that leaders should keep the psychological factors, such as depression, anger, disbelief and few more barriers that concern the employees going through the transitional phase. According to Elrod & Tippett (2002), change is constant that arises due to the variety in life and business events. They discuss the relationship between change and development models and recognise the link between leader and organisational development. Furthermore, they use Lewin’s model of change, unfreezing-moving-refreezing the three stages of change process. Lewin in his theory stated that in the unfreezing stage the organisations need to create an appropriate condition for the change to occur. At this stage, the resistance to change may be identical and initially can cause discomfort to even the beneficial employees. The objective of this stage is to make employees move from the ‘frozen’ state to ‘change ready’ or unfrozen state. The second stage i.e. moving or transition stage is described as the journey of the transitional process that involves psychological barriers and confusions. Employees are concerned as the old processes are being replaced and simultaneously curious for knowing the new process. Good leadership and psychological support is essential in this stage. The third stage is referred to refreezing stage where the goal is to reinstate a new place of constancy and ensure that employees are connected again and familiar with the new process. Furthermore, refreezing is the stage that stabilises and increases the productivity level from the transitional stage period (Marquis & Huston, 2008). As observed by Zell (2003), that before a change process is occurred, the organisation is analysed, reasons behind the change effort are considered and policies are developed for an effective change process. He further states that the strategies involve communication, negotiation, training, coercion and participation that are applied to individual employees featuring in the change process. The objective of including these strategies is that if one strategy fails than the other can replace that and make the change process an ongoing one. Moreover he states that, causes for resistance to transform has been identified that include fear of the unknown, loss of control, loss of existing benefits, disruption of routine and threat to power and security among others. Thus, the challenges faced by the organisations to trounce resistance to change are often the reasons for slow and ineffective change process. Psychological factors such as helplessness, fear, shock and depression are few of them that need to be addressed by the leaders while undergoing the change process. HR Issue 2: Training and Development Human capital is one of the key assets of the modern day organisations. However, the factors or training required to improve the performances of the workforce has been a concern for the organisations. Providing good training facilities can prove to be an influential factor for both, individuals and organisations, which in general enable to develop the economic growth. Though training is an essential element for an organisation’s structure, it involves incurring huge costs and incorporating various training ways. As observed by Pilbeam & Corbridge (2006), human resource management (HRM) comprises various activities related to people resourcing, involving, recruitment and release of employees as well as management of their performances and potential. They further state that the activities have been derived from the Chartered Institute of Personnel Development (CIPD) definition of HR professionals who should be a “thinking performer” and will be able to approach critically towards their job while contributing to the continued existence of the organisation, vision and strategies and profitability. Additionally, they stated that promoting self development is not only about offering training courses but can consider few factors such as, career movement, employers responsiveness and development appraisal. According to the discussion of Lazear & Gibbs (2008), human capital can be accrued in two different types; General Human Capital (GHC) and Firm Specific Human Capital (FSHC). GHC is said to be valuable in all types of organisations whereas, FSHC is lost when an employee leaves the organisation or firm, though it is transferable in similar kind of organisation. Furthermore, they stated that FSHC is valuable in increasing the productivity level at the place of current employer, but does not increase the employee’s value to other organisations. They mentioned that on-the-job training can vary between implementing GHC or FSHC, both possible, depending upon the employer’s choice. GHC is referred to the education gained through studies. GHC is the skills that are acquired outside the organisation, such as, in the universities. Thus, it can be understood that GHC is the investment made by the employee at the education level, and in the case of FSHC the employer makes the investments. As cited by Blundell & et. al. (1999), the accretion of human capital can be referred as the investment decision where the individual decides what portion of income shall be invested at the education or training level that will earn him/her increased earnings in the future. They further suggested that in a labour market which is highly competitive, where wages are replicated in the marginal product of employees, better educated or more trained staffs are likely to increase productivity than the less educated or skilled. However, they repeated the fact that productivity differentials will not affect in markets where imperfect competition or barriers towards the entry to different organisations are present, where wage differentials between the qualified or unqualified does not prevail. They further suggested that organisations should observe whether higher earnings’ is due to the high education or training skills developed while working. If the latter one is observed to be true than the estimate will be higher as training for developing productivity skills may cost comparatively much higher than the education. Thus, it can be assumed that education provides significant advantages in wage differential market, where the knowledge of the employee is judged through the education level surpassed by him/her. HR Issue 3: Employee Engagement and Commitment Employee engagement and commitment towards an organisation is identified as one of the key issues in human resource management. Friendly and good treatment from the employers can reflect in the employees’ identification, value and psychological factors expressed by the employees. As suggested by Allen & Meyer (1990), organisational commitment can be measured in various ways, one being tests conducted from a three component model aspects. The affective component can be recognised as, identification with employees’ emotional connection, and their involvement in the organisation. The continuance component is referred to the commitment in terms of the costs that employees associate with while resigning from the organisation. The last component, normative is referred to the employees’ feelings of commitment to remain in the organisation. Thus, it can be stated that human resource managers’ role in maintaining an effective human resource management is based on the observations of the psychological factors associated with an individual, from the three components of commitment cited above. According to Kahn (1990), people use varying degrees of their selves, emotionally, physically and cognitively while performing their roles, maintaining the integrity factor between their personalisation and the roles they are assigned. The author thinks that majority of people rely on their personalisation while deciding the boundaries of performances in their specific roles. Furthermore, he stated that his concern was to study the moments that people bring themselves into or separate themselves from particular task behaviours. He further added that people constantly work for and leave out various behaviours of their selves while deciding the performance levels the role requires. Thus, it can be assumed that people’s commitment and engagement towards the organisation can be judged by the behaviours expressed by an individual while performing the role that has been assigned. As cited by Appelbaum (2000), effective High Performance Work System (HPWS) requires three basic factors, namely, appropriate incentives, training and selection policies and opportunities for substantive participation in decisions regarding the organisation. He further states that appropriate incentives signify the financial pays that motivate the employees. In an HPWS, companies have developed various strategies collectively known as employees’ stock ownership plans (ESOPs), that included profit or gain sharing, merit pay and other compensation policies that to a certain way gave the employees a financial stake in the success of the company. However, the author stated that the financial benefits are subject to external factors such as; the general individual workers have no interest to change their behaviour if their contribution does not affect the overall profit of the organisation. Training and development skills in HPWS require better skills and knowledge among other skills that includes basic skills, leadership and social skills, and occupationally specific skills. The author also included that a rigorous staffing and selection process can enable a company to acquire employees with appropriate skills required by the HPWSs specifications. Opportunities provided by the management to include non-managerial employees while deciding the work process, proves to be one of the essential factors in HPWSs. The author further cited that this opportunity emphasizes on dispersing of information about the process, informations to be acted on and used for problem solving and decision making. It is assumed by the author that production level staff can contribute to the operational performance of the plants that matters them the most because of the authority provided to them for solving problems and propose changes that will affect in the organisational routines or processes. Thus, it is evident that in the global recession period, international hotel chains have been affected largely due to the changes that had to be adapted by the industry to survive in this highly competitive market. Therefore, it has been noted by researchers that training is the most common essentials in the hospitality industry. Pleasant and presentation styles of employees are preferred from each sector of work in this industry. Furthermore, effective training can ensure a better performance and developed skills that will benefit the image and reputation of the hotel’s overall performances and reputation. Thus, few recommendations will help the HR professionals to contribute to the Hilton Hotel’s success at a time when financial crisis and recession are prevailing worldwide. It will help them to take initiatives that will lead to the assessment of the employees performance area and evaluate areas that are concerning to the organisational cause. Recommendations for Practice The management of Hilton Worldwide focuses on recruiting and retaining the best-in-class employees in the industry. They believe that an appropriate training process will provide the key to success for the organisation in giving clients a life time experience in hospitality ground. Therefore, the management can employ HPWSs to encourage employees to amply use the resource talent that they possess. Furthermore, modern techniques involved in training can be incorporated such as Firm Specific Human Capital, which can lead to an investment from the organisation but has the chances of improving the talent required in this industry. The management can engage the lower level employees in deciding the processes that would require them to provide guests best services compared to the value spent. Financial pays, as a monetary incentive can be more developed in order to attract as well as retain talents. Group incentives can be effective where employees collectively strive to achieve the targets. This is also useful to develop the team bonding and commitment level in the organisation. Furthermore, pension schemes can be provided to the employees, which will help the organisation to retain existing talent. However, the pension schemes can have criteria such as, employed for more than 30 years and not a single punitive measure among others. This facility can be an added ESOP to the employees. Thus, it can be concluded that the HR professionals need to challenge their abilities and creativity to develop Hilton Worldwide’s reputation across the nations that will enable the organisation to improve client’s views towards the services provided by them. It can be assumed that high level of service expectations, with minimum costs are required by the clients in the current recession period faced by different multinationals. Conclusion The three issues identified are just a few of the challenges faced by the HR professionals. The fast changing and growing world has ensured organisations to introduce different techniques to hire and retain talent. Moreover, the competitive market has made the task of HR personnel much tougher, in terms of training and development programs, especially in the hotel industry. Therefore, it can be advised to the HR team of Hilton Worldwide, to have implementation of HPWSs to enable the organisation to achieve optimum level of capabilities from the employees. Furthermore, the recession hit period has added more worries to the HR managers regarding how they can develop training and development programs with lowest possible costs. Apart from these, financial incentives can hurt the organisations’ investment a large way. Thus, it is the job of the HR teams to find ways of motivating techniques, other than financial pays. Rewards and recognitions can be an effective way to motivate employees. The fact that lies in the hotel industry is that clients tend to desire for best in class services and experiences with possibly low value. Due to the availability of high competition in the market it is evident that retaining clients is the prime objective to achieve success in not only the hotel industry but each and every industry worldwide. References Allen, N. J. & Meyer, J. P., 1990. The Measurement and Antecedents of Affective, Continuance and Normative Commitment to The Organization. Journal of Occupational Psychology, Vol. 63, Issue 1, pp 1-18. Appelbaum, E. & et. al., 2000. Manufacturing Advantage: Why High-Performance Work Systems Pay Off. Ithaca. Cornell University Press. Blundell, R. & et. al., 1999. Human Capital Investment: The Returns from Education and Training to the Individual, the Firm and the Economy, Fiscal Studies, Vol. 20, Issue 1, pp 1-23. Elrod II, P. D. & Tippett, D. D., 2002. The "Death Valley" Of Change. Journal of Organizational Change Management, Vol. 15, Issue 3, pp. 273-291. Helps, V., 2001. When Organisations Die, The Ashridge Journal Summer, pp. 13-17. Hilton Worldwide, 2012. Recruiting Talent. Retaining Team Members. Human Resources & Training. [Online] Available at: http://hiltonworldwide.com/development/management-services/hr-and-training.html [Accessed May 14, 2012]. Kahn, W. A., 1990. Psychological Conditions Of Personal Engagement And Disengagement At Work. The Academy of Management Journal, Vol. 33, No. 4, pp 692-724. Lazear E. P. & Gibbs, M., 2008. Personnel Economics in Practice, John Wiley & Sons. Marquis, B. L. & Huston, C. J., 2008. Leadership Roles and Management Functions in Nursing: Theory and Application. Lippincott Williams & Wilkins. Pilbeam, S. & Corbridge, M., 2006. People Resourcing: Contemporary HRM In Practice (3rd Edition), Financial Times Prentice Hall. Scribd Inc., 2012. Executive Summary. Hotel Industry Analysis Report. [Online] Available at: http://www.scribd.com/doc/23134349/Hotel-Industry-Analysis-Report [Accessed May 14, 2012]. Zell, D., 2003. Organizational Change as a Process of Death, Dying, and Rebirth. Journal of Applied Behavioral Science, Vol. 39, Issue 1, pp. 73-96. Bibliography Price, A., 2011. Human Resource Management. Cengage Learning. Rae, L., 2000. Effective Planning in Training and Development. Kogan Page Publishers. University of Victoria, No Date. Handling Resistance. Change and Transition Tool Kit. [Online] Available at: http://web.uvic.ca/hr/hrhandbook/changetoolkit/handlingresistance.pdf [Accessed May 14, 2012]. Read More