The Organizations Internal and External Labor Markets - Assignment Example

 The Organization’s Internal and External Labor Markets Main issues and trends in the organization’s internal and external labor markets and the way they affect the organization. Key Competencies of the organization Both the external and internal labor markets play a leading role in deciding the human resource management strategies of an organization. The organization impinges on career outcomes in two crucial ways. First, it considers the division of labor among jobs in the organization and then generates distribution of opportunities, rewards and remunerations which antedates the recruitment of people or candidates for filling up those job positions. This is subsequently followed by the organizational procedures for matching employees to their jobs which consequently affect the distribution of opportunities and rewards within and across the organizations thus influencing the chances of career success of employees. At the same time, aspects such as stratification and prospects for mobility also affect the organization. Researchers have particularly regarded mobility as an important as a crucial determinant of commitment and motivation. The effects of inequality of alienation at the workplace and the organizational hierarchy have been a matter vigorous debate. Aspects such employment relations organized based on short term or long term employment can be regarded as the basic determining dimension of the type of the organization (Osterman, 2004, p.2-3). Compensation standards set in the organization are considerably grounded on the internal and external labor market conditions prevailing. For example, in this particular organization, the remuneration standards for those skills and expertise which are found in abundant in the labor marker are kept at low levels, while the rare skills which are rated highly by the organization but not found in abundance in the market need to be remunerated above industrial standards. This is done with the aim of attracting, retaining and developing potential talents from the industry which accounts for one of the most potential competitive strengths for the organization (Osterman, 2004, p.2-3). Thus, it is seen how wage rates in the organization are determined and influenced by the existence, abundance or scarcity of human resources in the market. Likewise the existing internal labor structure and strength of the organization forms the basis on which aspects such as career development planning, succession planning etc are designed in the organization. For this, labor forecasts are done to portray the future talents and skills which would be required for meeting organizational objectives. Long term objectives of the firm might call for increase in particular skilled resources while a shrinkage in the demand for some other resources. It is crucial to determine or identify the gaps between the existing level of talent in the organization and the expected future talents which would be required in the organization. The organization plans it’s training and developmental activities based strongly on the skills it desires to nurture for accomplishing future goals. Besides that, the present recruitment and selection strategies are also designed in a way which helps to the future workforce requirements in the organization. The internal labor market thus plays a prominent role in determining the recruitment and selection strategies along with the training and development strategies in the organization (Berg & Kalleberg, 2001, p.568). The external availability of skills and expertise and competence also determines the employee development strategy in the organization. In case skilled individuals are found in plenty, the organization is confronted with the choice of whether it requires to internally developing its staff or can hire them from outside. In case the skilled workers or employees are not found in abundance, then internal development of the staffs becomes an imperative. In such cases, predicting the social changes and the demographics in considered critical by the organization for internal development of its staffs. In depth analysis is conducted by the organization for the purpose, which is at times seen to conflict or challenge the conventionally based assumptions regarding who could be developed, to what extent and how would they be developed. This organization is confronted with the problem of shortage of young aged workers in the labor market with the consequent shortage of certain skills and competencies. This caused them to hire older candidates rather than freshly passed out candidates. The needs also arose to professionally develop the skills of these candidates up to the standards desired in the organization. This is because the older workers were quite slow to inculcate new ideas and strategies and adapt to the organizational environment (Kleiner, McLean & Dreher, 1988, p.5). Extensive training was associated with the hiring of these candidates in order to make them attain the level of efficiency or proficiency which was required of them. Moreover the organization is also required to reinforce the competencies and skills in its culture and structure is it wants to develop by appraising those particular competencies and skills rather than others. This is the reason why this organization implements the developmentally based appraisal system which is found to be particularly favorable in such a case. Researchers have noted the difference between strategic approaches to develop from the tactical approach in which a consistent approach towards development and assessment can be identified with a common set of language and skill criteria which remains attached with the overall business objectives of the organization. They have also noted the decreasing focus on the subjective aspects. In order to meet the organization has also resorted to develop a series of development centers and assessment centers. These centers pay particular focus on identifying the individual level of competence and skills of employees against their potential careers in the organization and the desired competence requirements in the business. Based on the gap identified, they work on removing those gaps by imparting the required training and developmental activities to the candidates (Wilton, 2010, p.89). The external labor market clearly has a remarkable impact on the employee development strategy of the organization. Thus it is essential to effectively integrate the development strategy with the other aspects of HR along with the overall strategy of the organization (David, 2009, p.136). When there is an existing choice between recruiting the respective skills and competencies and developing them from within in a given strategic approach, the decision reflects the positioning of the company and also its strategy. Studying a different perspective shows that development strategies on recruitment and retention are often underestimated. There is no dearth of evidence which shows that employees and potential employees show greater interest in developmental opportunities, particularly the structured ones rather than improvement and enhancement of financial rewards. Developmental activities can actually contribute towards motivation and encouragement and this can be used in a strategic way of contributing towards the attainment of long term goals and objectives of the organization. The study of the organizational structure reveals some of the key competencies of the organization in its training and developmental activities, retention strategies for holding its present workforce and also a highly motivated and encouraged potential workforce which makes contributes towards the fast progress of the organization (Abowd & Kramarz, 1998, p.357). HRM practices in the organization with particular reference to the management of high potential and high performing people Training and Coaching The organization undertakes very high quality and efficient strategies for the management of the potential and high performing workforce. This is demonstrated in the organizational chart of the company which displays a hierarchical structure with particular emphasis on learning and development which is led by the Director of Learning and Development. The learning and development department is particularly accountable to the Chief Human Capital Officer, who is at the top of the hierarchy. The department which particularly attracts and develops the performance and productivity of high performing people and highly potential talents are divided into the four major categories, namely, training and coaching; HC performance; Career development; and finally Organizational and National Development. The training and coaching department is further subdivided into corporate training department, mandatory and internal training, and coaching and mentoring. These three categories of training and developmental activities for enhancing the career capabilities of potential talents in the workforce can be explained and compared against the backdrop of training theories and models and international practices which are undertaken in the multinational organizations across the world. Corporate and internal training can be defined as the process of developing the staffs with the purpose of improving their performance in a particular position with assigned job responsibilities (Halim & Ali, n.d.). It is particular designed to strengthen the competencies and skills of workers holding a particular position in the organization. Internal training can be further of four types, namely, orientation or induction training, on the job training, maintenance training and career development training. Induction training is provided right after employment of the candidates for introducing them to the organization and other personnel. It is provided to develop and generate the approach of dedicated towards the service of the organization and people at large. According to Dersal (1962), the importance of induction training lies in the fact that when individuals begin to work in an organization, they remain eager to know what the organization and how their activities would be aligned with the organizational objectives, what activities are expected of them and whom they would have to work with. They would be more open minded and attentive than other experienced employees and this can be regarded as the most effective time for gaining their attention and developing good habits in them while they are new. On the other hand, the importance of foundation training lies in the fact that it provides the basic technical competence and the routine instructions about the organization to the candidates; provides the professional knowledge regarding various regulations and rules of the government, financial transactions and administrative capabilities to the candidates. It also equips the candidates with the required leadership abilities, communication skills, cooperation and coordination among institutions and their respective linkage mechanisms. It primarily strengthens the foundation of the service career of the candidates and it is mainly provided to the employees at an early stage of his career (Halim & Ali, n.d.). Refresher training is provided to candidates with the objective of specializing and updating the subject matter of the serving. It can be delivered to all candidates in the organization at all levels to enhance, update and add to the skills and knowledge that they already possess. Refresher or maintenance training generally involves introducing new methods and information and reviewing old materials. This training has its importance of keeping their employees at the peak of their production process and disallows them from going into a groove or rut. The organization also focuses on on-the-job training which is particularly provided by some superior personnel or a subject matter specialist to subordinate staffs and members in the organization. This kind of training is particularly important for technology oriented organizations and includes such aspects as formal presentations, informal discussions and opportunities for acquiring new knowledge and skills in the respective domains. Additionally the organization also focuses on career development training with the objective of upgrading the knowledge, skills and expertise of employees for helping them assume better responsibilities at a higher position in the organization. Malone (1984) has highlighted the importance of such training programs by their advantage of providing employees and staffs for preparing themselves to plan a career in the organization and in return enjoying greater longer tenured and more satisfied employees in the organization (Halim & Ali, n.d.). The training program in the organization shows that it is highly focused on the technical and procedural aspects of the organization, with very little emphasis on the behavioral aspects of employees. Recently, the high performing organizations are increasingly seen to emphasize on soft skills training and behavioral aspects of employees as behaviors and conduct of employees account for a major factors for their effectiveness, productivity and performance at the workplace. Aspects, such as flexibility, tenacity, cooperativeness, team working abilities, decision making abilities form some of the basic behavioral components which are greatly valued in organizations. This organization is seen to focus solely on mentoring and coaching and ignores some of the other essential components of behavioral training such as conflict management and resolution, emotional intelligence, leadership techniques, team building, motivation, stress management, behavioral analysis, decision making, creating problem solving, time management etc. Organizations focusing on behavioral training are particularly seen to be able to harness a culture and tradition of well satisfied, collaborative and encouraged and motivated workforce. These organizations have been able to develop less psychologically strained workforces having high job satisfaction and high professional self esteem too (Proudfoot, et al., 2008, p.149-150). Thus, behavioral training account for the major shortcoming with regards to its existing HR practices against the HR practices of high performing organizations across the world. By the use of extensive behavioral training programs, organizations have been successful in nurturing a stress free environment, controlling organizational conflicts, gaps in communication system in the organization and bringing down employee attritions to a considerable extent (Mathis & Jackson, 2011, p.79). HC Performance The performance management system in the organization comprises of a performance appraisal system and a scorecard system for measuring performance. The organizational structure depicts a goal based system of performance appraisal, in which employees performance at work are evaluated and measured against specific goals and objectives. The methods of performance appraisal are systematic and structured and are more emphasized on rankings and ratings, dependant on the developmental meetings between employees and supervisors (Dargham, 2011, p.2). The most commonly used system of appraisal in the organization is 350 degree feedback approach which addresses many of the procedural justice concerns. Under this system, employees are evaluated by their supervisors, peer and subordinates too. This provides a comprehensive and all round understanding and rating of the performance of the individual in the organization. The popularity of the system in the organization arises because of the fact that it tends to reduce the problems of the previous generation appraisal methods. Moreover, it also has the advantage of eliminating biasness of supervisors or particular members of the organization against the candidate. It also eliminates the chances of improper and unfair ratings towards employees because of personal feelings of members against particular employees. This is because of the all round rating system of the method. There is a contrast or gap between the organization’s system of performance appraisal and that which is used by the high performing organizations in the world, such as the multinational organizations and firms. The more advanced structures of appraisal system have mainly focus on two important aspects, namely, evaluative aspect and developmental aspect. The function of evaluation includes using performance appraisal systems for administering salaries of personnel, making decisions of promotions of personnel, decisions for retention and termination of the individuals, recognition of the individual performance and productivity, layoff decisions, and identification of poor or low performance below the required standards. The developmental aspects of performance appraisal system includes identification of training needs and requirements of individuals, provision of performance feedback on regular basis, determining transfers and assignments to individuals and identification and recognition of the individual’s strengths and weaknesses. This form of appraisal system is found to be highly conducive for enhancing the development of the employees in the organization and progressing in his career in the organization too. However, there seems to be constant conflict between the traditional forms of performance appraisals and the modern methods of the system. This conflict can often prevent the system of appraisals to attain complete usefulness in the organization and be completely purposeful. Eventually it can contribute negatively to the individual behaviors and the organizational performance. Other research has also revealed that employees in organizations prefer their ratings in appraisals in certain purposes rather than for other purposes. The present system of performance appraisal depicted by the organizational chart shows that the system is mainly evaluative in nature, i.e. it seeks to only measure the effective performance and productivity level of employees against desired and set standards. The system does not majorly contribute or is favorable towards the career development of the employee in the organization. This may not be viewed favorably by the employees. The ratings can have positive impact on the performance of employees only if they are used for the personal and professional growth of the employees in the organization. Thus it is recommended that organizations use performance ratings of employees not only for their evaluation, but rather for the workforce’s personal and professional enhancement and improvement in their career. It is the scorecard approach is used in the organization. The traditional methods of applying the balanced scorecard is regarded as the best business practice which has improved the bottom line of the organization. The scorecard is applied to measure performance of employees using financial parameters. The scorecard essentially is a correct measure and evaluator of performance of employees; however, it disregards some of the other aspects such as employee attitudes, customer satisfaction etc. Moreover defining is a time consuming process and is conducted by managers in their respective departments. However, once they are defined they do not change very often. Also some of these metrics are highly generic and are used across all the different units, such as the cycle time, customer satisfaction, attitudes of employees, etc. The system only highlights the performance of employees with respect to their financial output against the financial input made on that employee. In other words it can be considered to be a financial measurer of performance of the organization on the whole, rather on the individual employees. Thus results generated at the lower levels can be aggregated and integrated in a way which it is reported out. This can lead to misinterpretation of the results and may not always be successful (Kaplan & Norton, 2001, p.88). Studying the present system of performance evaluation using the scorecard method, it reveals that there are a number of limitations associated with the process. Some of the other measures which can be used are MBOs, i.e. management by objectives method, combined employee and manager appraisal. The idea is to include both the perspectives of managers and also members working with the employee who are associated with him in some of work related activity. This brings to notice not only the performance factors of the employee, but also other behavioral aspects which are recently regarded highly in organizations. Some of the aspects which play a dominant role in determining the potential and productive worth of the employee are employee attitude, customer centric approach, tenacity at the workplace, team building skills, decision making skills, team working skills, leadership skills, collaborative and cooperative approach at the workplace etc. Some of the advanced and high performing organizations are seen to provide particular interest and emphasis on developing the above behavioral aspects of the employees and the workforce on the whole in order to retain the right attitude who can contribute to the welfare of the organization (UNU, 2007, p.54). Employee Development and Succession Planning The company undertakes extensive HR succession planning strategies for equipping the required workforce needs of the organization in the recent future. The present employee development and succession planning strategies of the organization includes providing extensive training and developmental activities for improving and creating the learning infrastructure, relationships and programs necessary for producing a workforce ready to meet the future needs of the organization. The barriers to training programs are considerably minimized, subsequently making costs sustainable and blending the learning approaches of the organization for meeting with the dynamic and changing needs of the workforce. These training activities are highly aligned with the performance dimensions needed for the success of employees and helping them making advancement in the career ladder in the organization. As part of the succession planning strategy of the organization, it also focuses on organizational development through health workplace climates for attaining greater employee commitment and effective teams (USCD, 2012). The gap identified with the company’s present employee engagement and succession planning programs is that majority of the efforts towards measuring work engagement have been through the self report surveys of the individual employees. Then the person level scores are integrated or aggregated to measure the workgroup level score or the organizational level score. The recent multinational and high performing organizations is that most of them conduct surveys on employee opinion in order to determine employee engagement and they are successful in attaining high rtes of response from them. Employers engaging themselves in such employee surveys have been particularly successful in identifying aspects like the prevalence of supervisors to encourage development of employees; provision of praise or recognition for good work done by employees; the existence of good friends and colleagues at the workplace. Analysis of the above aspects were worked on employers to instill an environment of professional development of employees at the workplace through proper recognition of work and praises, nurturing friendly and mutually helpful atmosphere at the workplace and constant encourage by supervisors to encourage the progress and development of employees (Workplace Mental Health, 20009, p.3). Many organizations also employ external agencies or institutions for conducting unbiased surveys and generating reports which provide unbiased results regarding employees’ perceptions about their management’s strategies towards employee engagements and succession planning. The company also engages in internship and scholarship program for training freshly passed out candidates on the job activities. Meritorious candidates are provided scholarships and are absorbed in the organization on time to time basis. This not only helps to attain highly efficient talents from the market but also helps to enhance and improve the goodwill of the company at large (Macey, Schneider, Barbera & Young, 2011, p.97). Critical evaluation of the organization’s approach to strategic HRM The company’s first step towards strategic HRM is begins with its senior managers and personnel evaluating their positions with respect to the present goals and missions of the organization. The mission of the organization describes its aspirations and values. It also describes the direction along which the management is moving. Goals are regarded as the desired ends through the procedures of the organization and are measurable in short come outcomes. One of the primary components of the strategic HRM policies is to conduct a thorough internal and external analysis of the firm to identify its potential threats and opportunities and then subsequently design its HR policies and practices. The company involves its senior managers to evaluate and verify the interaction between the different strategic factors before making a strategic choice which acts as a guidance for its managers towards meeting organizational goals and objectives (Bratton, 2003, p.39-41). As per the organizational chart, strategic evaluation and decision making solely rests with the personnel at the higher level of the organization such as the Director of workforce planning and talent acquisition, Director of human resource and employee relations, Director of learning and development, and finally the Director of employee welfare. The idea is to settle the long term objectives of the organization and then design suitable and appropriate HR strategies aligned with them. This involves long term forecasting of the probable skills and strength of the workforce which would be required to meet those objectives in the future. It also includes designing suitable HR policies such as training, learning and developmental activities in order to enhance and upgrade the present skills of the workforce to the desired level in future. Strategies are formulated at the business, corporate and specific functional levels in the organization. The idea of strategic choice also attracts attention towards strategic management as being a political process through which actions and decisions are undertaken by the higher level authority including managers in the organization. One of the prominent features of a political model of strategic management it is necessary to consider the distribution of power in the organizational hierarchy. According to the views of Ahlstrand and Purcell (1994), organizations must consider it crucial to determine where laid the power and the ways in which the outcome of coalitions and power plays are important and linked to employee relations. The perspective of strategic choice on decision making in the organization makes the subject of strategy more concrete and provides can throw important insights as to how employment relationship can be managed more effectively (Bratton, 2003, p.41). The next step which follows is strategic implementation. It is the range of activities which focuses on techniques used by managers in the organization for implementing strategies. The effectiveness of this particular organization with regards to its strategic implementation of HR policies and practices arise from the fact that these activities deals extensively with the leadership styles and the structure of the organization at large. It also considers the control and information systems and along with it the management of human resources. It is seen from the organizational chart that the employment relations department and the workforce and talent management department are mutually interlinked and interactive in nature. This shows that strategic choices made in a particular department are made on the basis of status and conditions of other departments in the organization. Academic and management consultants also consider leaders as being one of the most crucial components in the process of strategic implementation. Finally, strategic evaluation also forms one of the core components of strategic human resource management in the organization. This phase plays the important role of determining the extent to which actual changes in the organization matches with the desired performance standards and levels. It highlights the strategic choices made by managers, and the subsequent changes that have been brought about within the organization and the outcomes that followed. It estimates the extent to which financial improvements have occurred due to the strategic decision implementation in the organization. The idea is to identify the gap, if exists, between the theoretical model and the reality brought about by the strategic decision making. The present policies and practices in human resource management of the company is strategic in the way it guides, covers and aligns HRM philosophies, tactical planning and practices with the long term goals and strategic goals of the organization with special focus on the human capital that it possesses. It also concerns and takes into account the macro concerns of the organization with regards to its structure, culture, quality, values, commitment and matches resources with the future needs and demands in the organization and also other long term people issues. It gives direction and guidance as to how the foundation for strategic advantage can be built for the creation of a suitable organizational structure, culture, design, value proposition, communication strategy, communication strategy and prepares the organization to cope up and adapt itself with the changing landscape which includes mergers, acquisitions and even downturns (SHRM India, 2012). Some of the other important aspects of the organization include sustainability and corporate social responsibility which also can be included within the ambit of the discipline of strategic HRM. This is with reference to the organizational values and their expression with regards to strategic decision making. Strategic human resource management in the organization is also seen to emphasize on organizational codes of ethics, manage the communal effects of business decisions, charity, and also the role played by HR professionals in improving and enhancing the quality of life of employees, their families and also the community at large (SHRM India, 2012). Conclusions and Recommendations for improving performance in the workplace The above analysis reveals that the organization is highly structured and planned, with the broader range of activities divided between departments and functions in the hierarchy. However, improvements can be brought about in the communication system between them to enhance mutual interactive processing and dependence between departments and units. An improved and upgraded system of communication is called for in this regard. This is because of strategic objectives of the firm can only be realized when units and subunits in the organization act individually and combined in the achievement of a single purpose. Inadequate collaboration arises out of poor communication between them which must be removed with first priority. All kinds of hurdles in the system of communication in the organization such that information can flow freely and can be accessed by all with ease. The organization has been currently facing with the problem of labor shortage in the market. Thus its workforce retention and talent acquisition strategies need revising. It is thus recommended the organization strengthen it’s training and developmental activities and seeks to upgrade the present level of competence of its workforce to a higher standard in order to maintain performance and productivity in the market. Finding the exact talents in the market is difficult and such rare talents are also required to be hired at higher costs. Thus a high standard developmental approach would not only be effective in nurturing its present workforce to a higher standard of performance but would also stand a chance in the competitive market to attract potential workforce. This is because it would be able to portray itself as an organization which cares for the individual career development of employees along with focusing on its long term objectives. Such approach can be incorporated either by its own line managers and supervisors and can also be conducted through external consultants and agencies. This helps to make the approach transparent and unbiased towards a few employees. Thus the training needs requirements of all employees can be met with effectiveness and consistency. The other aspect of HRM practices which needs improvement is the kind of training activities imparted. So far the organization has been focusing primarily on technical training with focus on particular software and techniques which is widely used in the organizational processes. However, it has been ignoring the behavioral aspects which were causing high attritions and conflicts at the workplace. Thus behavioral training must be conducted through coaching, mentoring and counseling of employees with the aim of imparting the right king of attitudes and behaviors at the workplace. This is needed to enhance team building, mutually dependence and collaborative culture at the workplace where differences could be reduced as much as possible (Nickson, 2007, p.71). Reference Abowd, J. M. & Kramarz, F. (1998). Markets: An Analysis of Matched Longitudinal Employer-Employee Data. University of Chicago Press. Volume ISBN: 0-226-31458-8. [Pdf]. Available at: http://www.nber.org/chapters/c8365.pdf. [Accessed on June 28, 2012]. Berg, I. E. & Kalleberg, A. L. (2001). 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