HR Value Chain Analysis - Term Paper Example

 HR Value Chain Analysis Report Introduction This report highlights a Series Of HR Strategies, Policies, And Programs Within A Health-Related Organization dealing primarily with customer service and call center models for a healthcare provider. This organization is responsible for coordinating payment and customer authorizations related to their healthcare policies, operating in a multicultural environment with domestic and foreign support staff that are inter-linked through technological systems. The company uses outsourced employee support as well as long-term employees to support the business. The primary goal is customer satisfaction and providing rapid responses to different physicians, clinics and hospitals across the country. The majority of the information procured for this HR value chain analysis was provided by the senior HR coordinator responsible for leadership of over thirty support employees and managers. The HR value chain consists of a cyclical philosophy that links recruitment, socialization, career planning, training and performance management so as to promote employee development and ensure a more rewarding organizational culture. The key step for this company is the performance management process, which “links goal setting and coaching for performance and careers in a continuous process to develop people and improve performance” (Chowdhury, 2010, p.1). This report identifies the HR value chain in a health care service company and offers a critical analysis of its successes and failures. HRM in Context The human resource function at the firm is to ensure that individual job role performance is linked with long-term strategy. Senior-level strategists have identified a three-year expansion plan that includes new call center development and a series of continuous improvement programs that involve technology implementation and better support tools provision. It is the responsibility of human resources to reduce resistance to change in these strategic goals and also train employees so that they are proficient on new systems as they are adopted. The senior HR coordinator ensures that high-performing employees are rewarded with pay increases associated with individual performance and low-performing employees without commitment are discharged according to established labor relations policies. The business had previously used traditional performance management systems that used a set list of objectives and performance criteria that was standardized throughout the business and its affiliates. It was discovered that these PM systems were insufficient for boosting commitment and did not recognize the individual accomplishments of high-performing employees. Peacock (2008) also believes traditional, pre-set criteria PM systems are outdated and do not give the full picture on employees’ full potential. Especially since developing a pay-for-performance scheme at the business, the senior HR coordinator could no longer rely on traditional performance management criteria and set about the task of developing a more progressive system to link job role to strategy and reward. Because this business is customer relationship management-focused, it relies on the positive communications and reputation the firm receives from diverse clients across the country and abroad. It is one of the foundational strategic goals: To improve total CRM capabilities in order to expand accounts presence. Because the need for replacing outdated performance management tools existed, the company developed a 360 degree feedback system for measuring employee and managerial competency related to strategic goals. The 360 degree system “calls attention to important performance dimensions previously neglected and provide honest feedback” from customers, clients and colleagues within the business (Morgeson, Mumford & Campion, 2005, p.197). The 360 degree system currently utilized makes use of data from customer support surveys that were returned by clients in multiple industries. These forms relate to their experiences with specific support workers and their overall view of the business as a quality service provider. Along with managerial comments and co-worker assessments, the HR coordinator is able to recognize which employees require further training or dismissal and those that have long-term career aspirations that can be developed over time. The HR coordinator at the firm believed there were some risks, however, associated with the 360 degree feedback system based on the organizational culture that exists at the company. For example, this business has a very team-focused business model that applauds increased autonomy in job roles and is supportive of job rotation. This closeness with employee-level colleagues creates strong interpersonal relationships that assist in providing better support to clients, however it produces a phenomenon where employees work together to attempt to offer glowing and unrealistic reviews of their favorite employees. Maples, Harris & Greco (2010) also agree this is a problem with the 360 degree system as employees are known to game the system for the purpose of mutual backscratching (p.2). However, the HR coordinator is aware this is occurring and puts more emphasis on management and client assessment over that of internal employee colleagues. The reason the 360 degree system is so effective as part of the HR value chain at this firm is that it recognizes managerial performance effectively. Capable managers are involved in the annual process and offer fair assessments of their colleague managers’ total business competency, something that was not measured effectively with traditional PM systems with rigid and set criteria. The role of the HR coordinator in this firm is strongly linked to strategic ambitions and works directly with senior-level strategists regarding organizational decision-making. Turnover has been a major problem at the company that has incurred considerable costs in areas of recruitment and the provision of what is actually very complicated and in-depth training packages. In areas of cost, the HR coordinator is very much involved as a line leader and a human resources professional. To reduce turnover problems, the business developed an exit interview strategy that focuses on key dimensions of satisfaction in order to improve the organizational environment. What is unique in this company is that their exit interview strategy is not formalized with set questions or criteria, rather it is informal and discusses problems with employees no sooner than two weeks before their departure. Mercer (2001) agrees that this is an effective method, offering that such cold-calling avoids the phenomenon of burning bridges, where the exiting employee is nervous about telling the whole truth of their rationale for leaving. The cold-calling system at this company asks employees to level with the leader, offering four or five main problems that led to their departure. This information is stored quantitatively in a database and plotted for periodic strategist review and is often included in quarterly HR reports. Since its inception in 2008, the company has witnessed a six percent reduction in turnover with a goal of 10 percent by the end of this year. The company has experienced problems with job rotation efforts, based largely on employee resistance to new skills development. However, these same resistant employees often express burnout characteristics and ask for more responsibilities. It is a duplicitous environment that is unstable in terms of employee change adoption. Burnout symptoms include “emotional exhaustion, a tendency to depersonalize others in the organization and lack of accomplishment” (Singh, Goolsby & Rhoads, 1994, p.559). When employees begin to exhibit this burnout, service is affected as well as colleague relationships or those relationships with line management. Gaining employee commitment for the job rotation system has been difficult and a major problem related to the strategic goal of skills improvement and career development. To combat this, the coordinator has developed a new job description template that clearly indicates a supplementary mandate for flexibility related to skills development. This was accomplished as a control mechanism to ensure that resistance was minimized and was also expressed as an obligation of employment during recruitment and after taking the position. Key Changes Linked to HRM The service firm has also recently decentralized some of its administrative function in order to motivate employees to become more active in decision-making related to their environment. The strategic goal is the development of quality employees with a long-term focus and dedication as part of career planning. This decentralization process has created more group meetings and special projects involving low-level support workers and mid- or senior-level managers. Each time an employee has attended a special project meeting, they are expected to sign an attendance form that is later transposed into electronic graph format. The HR technology systems in place allow for construction of graphic representations related to the volume of experience in group meetings as part of career measurement. There is a strong reliance in technology related to the employee development program and it serves as an instant access database with specific and individualized employee involvement information. Part of the decentralization process, along with another example of the strategic role of the HR coordinator, included self-service HR systems for employee support. Self-service tools include intranet applications that allow employees, themselves, to update their demographic information, make time-off requests, assess corporate policies and even provide suggestions. Copeland (2004) believes these self-service tools improve employee morale. The implementation of new self-service technologies is a new process and the HR coordinator could not provide success metrics, however she insisted it was already reducing the burden on her own job role and was reducing costs in key areas. This was also a strategic intention to familiarize employees with self-service technology models that are part of a larger revamping of information technology that is in the planning and development stages. The company has access to many models of psychology and sociology that have been modified by the HR coordinator to fit the needs of the call center. One of the key foundational models used is Maslow’s Hierarchy of Needs, involving a tiered needs system to include self-esteem development and belonging. Under this model, once an individual has achieved respect and recognition from others, they can develop a positive self-concept (Gambrel & Cianci, 2003). The HR coordinator has a supplementary degree in psychology and has found this model the most effective as a universal employment tool. This model works as part of the HR value chain as it relates to the processes involved with career development and self-confidence efforts. The goal is to give employees with high-performing metrics a sense of power and prestige within the company by promoting individual talents and achievements on the self-service intranet systems. Therefore, it should be said that the premise behind the psychological contract at this health service company is one of contingent rewards based on performance measurement. Van Dam, Oreg & Schyns (2008) believe that resistance to change processes can be minimized by recognizing the level of trust placed in management and organizational tenure with the firm. One of the foundational HR practices is trust-building, however it has been found to be less of an investment and more of a by-product of quality HR value chain practices and focus. The company once piloted a role-playing scheme in group meetings so that interpersonal and managerial relationships could be put to better use. It was a dismal failure that brought nothing but complaints from managers, employees and even the HR coordinator who could not foster support for the idea. However, this is not surprising as post-interview research identified that role play exercises generally lead to considerable employee resistance. Offers one training expert, “mention that there will be role play during a training course and wait for the rush of doctors’ notes as the first day of the course looms large on the horizon!” (Pollitt, 2008, p.558). This is exactly what was occurring at the organization as employees were not showing up for the role play meetings and even managerial support began to falter in terms of group meeting attendance. This role play situation was mentioned as it was a rather innovative methodology to link strategy with performance in the HR value chain and shows the level of commitment that the HR coordinator has in trying to build better communications and a stronger organizational commitment from all key players in the firm. It not only shows the dedication to improving culture, but also the ability of the company to recognize superfluous programs quickly and remove them from the HR model. Survey feedback provided from employees and managers regarding this new change practice were unsatisfactory in every detail. Key Learning Regarding HR This company has a very well-developed HR value chain that takes into consideration performance measurement, socialization, training, recruitment and career planning. In order to be considered effective, each of these must be included in the total HR planning and implementation models. Turnover costs are related directly to strategic goals of expansion, job rotation is also linked to strategy as it diversifies and improves human capital, and performance management systems offer guaranteed rewards for meeting performance criteria and guidelines. This business should refer to its human resources concepts as strategic HRM since it is absolutely inseparable from senior-level goals and administration. The HR value chain at this company recognizes not only human needs, but remains focused on cost reduction as part of traditional line management function. Coaching and mentoring occur at the line level and it is not a part of the HR coordinator’s activities related to HRM. However, the value chain requires HR input in psychology, sociology and performance assessment in order to make any reputable or workable coaching system for poor performers. What is most interesting is that this company has what seems to be a zero tolerance methodology when it comes to low-performers and works quickly to dismiss them from the organization rather than devoting resources to their development. This is all done legally and within the boundaries set by organizational policy, however HR and strategists in the firm realize it is a wasted effort to put resources and labor energy into low-performers. Instead, they focus on high-performing employees and attempt to use them as models to modify the behaviors and attitudes of others. The business and the HR coordinator clearly understand cost issues under the hard HRM approach and allocate resources accordingly. This was one of the key learnings from the assessment process of this company’s HR value chain: Responsible cost allocation and time investment does not necessarily involve creating motivation and long-term commitment in employees most predicted to add to the turnover problem. This is why the system is referred to as a value chain, as its function develops employees rather than undertaking the rigorous process of attempting to change personality and long-standing cultural values in diverse employee groups. The HR system identifies key performers using quantitative research, measurement tools, and support for skills development and then devotes most resources to those identified meeting performance mandates. The value of this system to the company is found in terms of cost and competitive advantage through human capital development. Conclusion HR strategy at the service firm is based on strategic intention rather than at the employee level. It is based largely on issues of cost recognition and career development. Like most companies, the HR strategy at this organization is cyclical with each step leading toward meeting strategic goals. The key practices included performance management, exit interviews, employee and customer surveys, and self-service technologies. In many ways, this progressive and modernized system of human resources could be benchmarked by other service agencies in the health field. References Chowdhury, Sanjay R. (2010). “Human Resources Value Chain”. Retrieved November 27, 2010 from http://www.citehr.com/28758-hr-value-chain.html#axzz16xTYcTXv Copeland, Bill. (2004). “Making HR Your Business”, CA Magazine. 137(3), pp.45-47. Gambrel, Patrick A. & Cianci, Rebecca. (2003). “Maslow’s Hierarchy of Needs: Does it Apply in a Collectivist Culture”, Journal of Applied Management and Entrepreneurship. 8(2), pp.143-162. Morgeson, F., Mumford, T. & Campion, M. (2005). “Coming Full Circle using Research and Practice to Address 27 Questions about 360 Degree Feedback Programs”, Consulting Psychology Journal: Practice and Research. 57(3), pp.196-209. Maples, G, Harris, B. & Greco, A. (2010). “Using a 360 Degree Appraisal Approach to Redesign Advising Programs”, Contemporary Issues in Education Research. 3(1), pp.1-8. Mercer, Michael. (2001). “Taming the Turnover Beast”, Texas Banking. 90(11), p.11. Peacock, Louisa. (2008). “Feed the Feedback Fervor”, Personnel Today. September 16, pp.44-47. Pollitt, David. (2008). “Experiential Training Ensures Customer Service is Ship-Shape at Stena”, Training & Management Development Methods. 22(3), pp.557-562. Singh, J., Goolsby, J. & Rhoads, J. (1994). “Behavioral and psychological consequences of boundary spanning burnout for customer service”, Journal of Marketing Research. 31(4), pp.558-569. Van Dam, K., Oreg, S. & Schyns, B. (2008). “Daily work contexts and resistance to organizational change: The role of leader-member exchange, development climate, and change process characteristics”, Applied Psychology. 57(2), p.313. Read More