How Career Succession Helps the Organization to Avoid Compulsory Redundancy - Essay Example

Strategic HRM Contents Contents 2 Introduction 4 1 Background 4 2 Aims & Objectives 5 2. Analysis 5 2 Career Succession Planning 5 2.2. Improve Performance Management 7 2.3. Compassion two measures 8 3. Strategy 9 3.1. Strategic HRM 9 3.2. Is the report strategic? 10 4. Recommendations (350 words) 11 4.2. Accept? Why? 11 References 12 Appendix 15 Appendix 1: 15 Appendix 2: 15 1. Introduction 1.1 Background Many organizations cannot avoid the process of redundancy but still many organizations are thinking creatively nowadays to reduce the cost at the same time not to make compulsory redundancy. The need for avoiding redundancy in the organization is that the recruitment process can take a longer time which may affect the performance of the company, and even the replacement of employees can be expensive. As the replaced employees will have much better skills acquired through their experience than the new employees. The organizations avoid compulsory redundancy through deferral of job offers made to the graduates by whom they can undertake some voluntary work at the same time it would help the fir to reduce the number of overheads. The organizations even offer the employees with voluntary sabbaticals; they even give the options of buying extra holidays, and make reduction in the work hours by keeping certain employees to work for full time. In order to avoid redundancy some organizations even freezes the recruitment process and retrain those employees in the organization who are at a verge of redundancy to be transferred to some other departments whether there is vacancies. They even try to get the idea about which are the employees who are willing to go for a voluntary retirement. The organization in a way of avoiding redundancy also removes discretionary benefits and makes reduction in salary at all levels and even ceases overtime payments. They even involve employees to give ideas about the ways in which the costs can be reduced in the organization. These methods form a part of Strategic HRM by which an organization avoids compulsory redundancy. Maintaining a career succession plan and having an improve performance management in the system helps the organization to avoid compulsory redundancies which is essential for the company to reduce cost. 1.2 Aims & Objectives The aim of this report is to see how career succession helps the organization to avoid compulsory redundancy. There are some specific methods that are adopted by some organizations to reduce redundancy in the company. Redundancy is a method used by some companies to reduce costs but this can even increase the cost in the form of new recruitments and their training process. Thus following some methods will help the company to reduce cost as well as avoid compulsory redundancy in the system. 2. Analysis 2.1. Career Succession Planning Career succession planning is a continual and dynamic leadership optimization process. It helps an organization to reduce the costs which is incurred in recruiting or even promoting a wrong person for the key position. This planning helps in organizational culture to identify the competencies required to fit into the business strategy and then integrate them into training and development activities, performance management process of the organization, and also into the compensation system. Though this succession planning is owned by the CEO but it is the duty of the chief HR officer to evaluate and incorporate this planning into the system. This helps an organization to determine the critical positions and the bench mark needed for one becoming vacant keeping into account the chances of transfers, retirements, and leaves. The goal of succession planning is to weed out over time the poorer performers, to increase the motivation and productivity of the average performing employees, and to retain the high performers of the organization (Whittington, 2001, p. 25) This planning may at times involve a rating system to compare and identify high potentials through which high potential employees are retained in the company and the potential gaps are identified. This career succession planning helps to pinpoint an employee’s strengths, and development needs in order to form development plans to accelerate the performance of the employee. As there are 35% of the employees mentioned in the report who are opting for retirement this will create opportunities for those employees to substitute them. The individual performance will increase as the organization will impart its scarce resources to internally giving training to the employees (Boxall and Purcell, 2003, p.90). This plan helps to engage the leaders and even challenge their capabilities through various opportunities, and even help the organization to track the record of the employees of being on the path of becoming a leader through internal or external coach. It helps in providing the new managers with transition support system to help them work at ease with the new projects. It helps the organization to analyze whether the retention strategies have worked and whether the successors who are appointed newly are facing success or difficulty at workplace. This helps in meeting the organizational challenges and needs, business strategy and management practices. The career succession planning helps in determining the source for the needed talent, to groom them over time either internally or externally from outside the organization. This in turn helps to increase the degree of individual performance when the person finds he is the best fit for the job. Thus in today’s scenario where lifetime employment is not taken for granted or desirable this succession planning helps high potential employees to develop their managerial and leadership skills ad to retain these players (Chandler, 1962, pp.20-23). This pool of talented leaders helps in assuring that they are pulled from as business manoeuvre and will efficiently respond to the opportunities in the market (American Management Association, 2014) 2.2. Improve Performance Management Performance management is to increase productivity through tackling the poor performers. It has a positive impact on the organizational culture through which the managers and governing body of the organization manages a program which takes into account the current level of performance of the organization and then implements ideas for modifying the infrastructure and organizational behaviour to get the higher output (Greer, 1995, p. 78). It helps to organization’s strategic initiatives and identifies different targeted areas of improvement. It helps the management to drive operational excellence and improvement. Improved performance management is all about measuring the output level of a process, modifying the process, and implementing certain improvements needed to increase the efficiency of the process. At employee level improved performance management contains tool such as statistical quality control. This generally involves customer satisfaction surveys to generate some qualitative data to identify the performance of the employees. It even helps in improving the organizational efficacy of setting the goal and objectives of the organization. The performance management system not only helps the management but also the executives to drill down by teams, departments or individual to determine the causes of unacceptable performance levels. This system helps in motivating the employees as they are recognized for their performance and even accelerate the performance of those employees who are not performing well. The culture of the organization remains transparent as the improved management system offers transparency in forecasting which department is performing and which is not. They help in providing the managers with a comprehensive view regarding the employee performance in respect of productivity goals and specific quality. This system also encompasses of rewards and recognition for those employees who perform outstandingly in the organization, these rewards is even non-cash items at times but being recognized for their hard work motivates them to work more efficiently (Lundy, 1996, pp. 65-66). And increases the performance of those individuals who are new in the organization or who are not performing so well as it acts as a tracker for performance for each and every individual working in the organization and give them all the necessary support required to improve their performance efficiency, though getting less increments to poor performers will ultimately bring down the efficiency level of these employees if proper motivation is not given to them. 2.3. Compassion two measures The two concepts that are improved performance management and career succession planning are used by different organizations differently. Career succession planning helps to reduce the organizational turbulence that is created through leadership change. It helps the successors to have an access to the higher executive’s tasks by being provided with on-the-job training even before assuming the position. This lessens the performance risk of a firm by hiring an individual for the firm as a senior executive who has lesser knowledge about the business context. It also serves added advantage of providing assurance to the stakeholders that the succession process is under control by hiring an heir apparent. Performance management is used by those organizations which are ready to invest in modifying the system to increase the performance. Increased performance management systems aims at improving the performance even at the cost of recruiting new talents and rejecting the poor performers. Whereas career succession planning takes into the account the vacant job positions created through departure and retirements and use its scarce resources for internal recruitment and it even aims at retaining the talent (Leopold, 2005, pp. 34-35). Thus organization which has the goal of effectively managing its workforce undergoes career succession planning and those who aim to change the working environment and practices adapt the improved performance management system. As referred to appendix 2. 3. Strategy 3.1. Strategic HRM Strategic HRM can be defined as the proactive management of the employees of a company or organization or can be stated as using the people working in the organization wisely with respect to the strategic needs of the organization (Bamberger and Meshoulam, 2000, pp. 89-90). In strategic HRM the management and employees should aim at adapting a mutually committed relationship in order to ensure the exploitation of the investment in effort and employee skills. Strategic HRM deals with selectivity in hiring, employment security, decentralization of decision making, high compensation, self management of working teams, imparting training, reducing staff differences and barriers, and information sharing (Kay, 1993, p.56). Hence strategic HRM is very essential in order to link the HRM strategies with the corporate world, develops a central focus for the business strategy from the people’s perspective, it provides a link between the planning of people with strategic intent, it even allows forward planning and competency audits with the help of information gathered from the activities at the operational level. As referred to in Appendix 1. Strategic HRM thus includes human resource components such as hiring, discipline, working collaboratively with the employees to boost retention, maximize the benefit for both the employer and employees, and improve the quality of work experience (Holbeche, 1999, pp. 55-56). 3.2. Is the report strategic? The report according to me is strategic as it highlights some of the important points essential for the reduction in costs and would contribute towards savings. The positive effect will be applying the strategy in the report there would be savings because of estimated loss of 30 posts. Staffing budgets will be reduced as the deletion of posts (Legge, 1995, p.17). The company through this strategy needs to develop new policies and even in some cases would require implementing the existing policies. Job rotation and effectively using the available human resources internally in the company will prevent from any additional expense. Job rotation will help an employee to be trained for various posts which falls vacant and would be much better than redundancy and will ultimately help the organization in long run. This strategy also involves effective communications with recognized trade unions and employees in order to minimize the risks linked with the changes proposed in the organization. The negative effect will be if the paying out of pension to the employees for retirement and even electing volunteers for the redundancy does not work then compulsory redundancies will be there in spite of cost involved in the method of avoiding it. Though through various methods organization may achieve savings but it also has to incur cost in paying awards to the performers, cost of sick leaves and other departures. Even incorporating certain policies to improve performance management will incur cost if new kind of policy has to be implemented. Other cost even includes absence cost such as annual leave, leave of absence etc. Even the degree of employee commitment cannot be achieved through part time work or work from home as it can be achieved through working in the environment of the organization. Thus the level of performance can be affected and can be a cost for the company in not being able to deliver quality service. 4. Recommendations (350 words) 4.1. Reject? Why? There are certain forms of practices that will not benefit the company for a long run though may help to avoid redundancy. For instance reducing pay bill costs, or reducing salary at all levels by putting a ban on overtime is not an effective method for avoiding redundancy. Though a company adopts such a measure to reduce the overall cost and hence avoid the situation for compulsory redundancy, but this approach brings down the level of performance of employees. Another way of avoiding redundancy is making workers work from home but this measure though beneficial cannot be used for longer run. In order to avoid compulsory redundancies there are other costs involved in hiring volunteers, and paying off early pensions so this measure is also not that useful for long run. The part time workers might bring down the motivation levels of the temporary workers and can pose an additional cost for low performance in the organisation. Thus these approaches should be avoided while cutting down costs and in order to avoid the compulsory redundancies in the organisation. 4.2. Accept? Why? Improve performance management and career succession planning methods incorporated by an organization helps to reduce the overhead costs as well as avoids the conditions for compulsory redundancy. Career Succession planning helps to develop some benchmark for competencies needed to remain in the organisation and in turn helps for further development of the employees. This planning helps to retain the talented employees and give proper training to the poor performers thus avoiding the compulsory redundancy in the system. Certain measures that are highlighted in the report effectively will manage the redundancies. One them is the Vacancy management through this the external recruitment is freezed and the employees are retrained within the organization to fill up vacant posts. This approach lessens the hiring costs as well as avoids the redundancy costs. Even earlier retirement to those employees who are willing for retirement can save those employees who do not want to be dismissed. The organization can even give career break to those employees assuming it be unpaid can help the company to do cost savings. Even another approach that can be helpful for the company to reduce cost as well as avoid redundancy is the removal of agency staff or elimination of temporary staff which benefit the permanent workers be saved who are at a risk of dismissal or redundancy. References Whittington, R. 2001. What is Strategy and Does it Matter? London: Routledge. Bamberger, P. and Meshoulam, I. 2000. Human Resource Management Strategy. Thousand Oaks, CA: Sage. Beer, M., Spector, B., Lawrence, P.R., Quinn Mills, D. and Walton, R.E. 1984. Human Resource Management. New York: Free Press. Boxall, P. and Purcell, J. 2003. Strategy and Human Resource Management. Basingstoke: Plagrave. Chandler, A. 1962.Strategy and Structure. Cambridge, MA: MIT Press. Fombrun, C.J., Tichy, N.M. and Devanna, M.A. 1984. Strategic Human Resource Management. New York: Wiley. Greer, C.R. 1995. Strategy and Human Resources. Englewood Cliffs, NJ: Prentice-Hall. Holbeche, L. 1999. Aligning Human Resources and Business Strategy. Oxford: Butterworth-Heinemann. Kay, J. 1993. Foundations of Corporate Success: How Business Strategies Add Value. New York: Oxford University Press. Kerr, J.L. and Slocum, J.W. 1987. Linking Reward Systems and Corporate Cultures. San Francisco: Jossey-Bass. Kochan, R. and Barocci, T. 1985. Human Resource Management and Industrial Relations: Text, Reading and Cases. Boston: Little Brown. Legge, K. 1995. Human Resource Management: Rhetorics and Realities. Chippenham: MacMillan Business. Leopold, J., Harris, L. and Watson, T. 2005. The Strategic Managing of Human Resources. Harlow: Prentice-Hall. Lundy, O. and Cowling, A. 1996. Strategic Human Resource Management. London: Thompson. American Management Association, 2014. The Importance of High-Impact Succession Planning [Online]. Available at: http://www.amanet.org/training/articles/The-Importance-of-High-Impact-Succession-Planning.aspx . [Accessed on 3rd March 2014]. Appendix Appendix 1: Appendix 2: Read More