Strategic Planning of Human Resources - Samsung - Case Study Example

Strategic planning of human resources Samsung is an international company that started back in 1938 asSamsung general stores in Korea. It conducted trading business until 1950s when it ventured into sugar and wool business. Later in the 60’s, Samsung was among the first Korean companies to expand their trade overseas. Its expansion continued with the insurance business, retailing and then finally into communications industry where it’s a major player in the market up to date, which is basically aiming to be local (Coe & Lee, 2013). It is a well-structured company with well trained staff and employees whose focus is on keeping the global market satisfied with their services and products. Its major core sectors of business is electronics, trade services and finance. In 1993, the company changed its strategy in being a global brand after its then chairman provided a blueprint dubbed Samsung global success. This strategy involved a new management that involved technological innovation, employee empowerment and organizational creativity (Kim & Sung-Choon, 2013). Employee empowerment as part of new management saw the encouragement of the company’s employees to make changes individually at a personal level and among themselves. This also encouraged the employees to involve themselves with each other and provide care among them. In addition to this, they were encouraged to conduct their activities in an ethical manner (Khanna, Song and Lee, 2011). Samsung’s employees over the past decades have been led and guided by a philosophy that states that, they (Samsung) will devote their employees and technological advancement to create better and superior products, thus building and contributing to a better society globally. This philosophy is in use up to date and is key part for all it’s smaller and affiliate companies and employees. On the other hand, its founding chairman Byung-chull lee believed that a company was its people. Therefore from an early era, Samsung attracted and developed their interests among their best employees. In light of this, every new employee to Samsung undergoes an intensive one month orientation programme intended to educate the employees on the values that are core to the company. The orientation also educates the employees on the management, strategy and vision of the company. Samsung’s major strategy on human resource planning is by recruiting competent staff indiscriminately globally. The recruitment on the other hand is not based on the nationality of the intended employee rather than it focuses on those who have attained doctorate and master’s degrees in various fields of study. These areas include research, management, development, design, information technology, finance and marketing. Samsung’s human resource strategy is based on a global platform that oversees the globalization of the human resource department globalization of local human resources attracts high ranking personnel from abroad .this involves the personnel being proficient in foreign languages and culture coupled with the ability to acclimatize to different cultures and environments. Conversely, Samsung’s strategy involves provision of early career developing training programs to individuals indentified to posses’ talent and worthy capability in various fields of specialization. This enables the company to start nurturing new employees to fill in positions that are available in the fast growing market. This also enables the company to face new challenges arising from competition. This is also a key part in capacity building which, in line with the half century long culture, is developed individually and later as a group. This strategy has enabled the employees to have an international perspective and responsibility. This strategy has seen Samsung with over 2000 employees who have attained PhD level of education. In Korea, which is the home country of Samsung, Samsung has a Samsung resources development centre. This is Samsung’s headquarter to learning and education system. This centre is run by Samsung and its affiliate companies. Such centres have also been established in other countries. These centres are Samsung’s value and knowledge creating areas that are entrusted in improving the company’s performance. Samsung also provides globalization training and courses for newly employed and appointed recruits, senior corporate and executive leaders (Lawler, 2008). On the other hand, Samsung allows international employees to develop customized training programs depending on the country or location. These programs offer intensive training to the employees and provide a platform for talented employees to nature their ideas. Innovative labs for designs are the incubators for these talented in-house and new designers. The lab also provides post graduate courses on design as the employees mature and nurture their creativity. Strategic human resource management has become a vital competing factor for many companies. That is why Samsung has heavily invested in human resource and management of various aspects dealing with employee satisfaction. This is by emerging with diverse but effective strategies Samsung included, have developed various human resource management strategies as well as topologies, for instance, high involvement HRM. This approach is similar to that of Samsung for it implicates all the aspects and philosophy of the company. This topology is characterized by extensive training programs, broad job designs and high employee participation on various company based programs. The topology has further evolved to New Human Resource Management (NHRM) which has an almost similar approach to human resource management. NHRM like Samsung’s model approaches to human resource advocates for staff to work in teams, via empowerment, which encompasses performance based pay coupled with evaluation though it poses adverse effects more so in some regions. For instance, Korean firms might result to terminating employee based with the intention to bring up a certain flexibility. Samsung’s human resource management strategy and planning can be attributed to the 1997 Asian crisis. The crisis, just like the 2008 crisis, attributed to major changes in how companies planned their activities. Samsung having originated from Korea is among the companies who have had to review concerns arising from thee economic crisis. Human resource management was one of the major sectors affected by the crisis causing companies to re-strategize on the planning, implementation and cost of human resource strategies in favour of the employee and the company (Chang, 2012, p. 1436). To cope with the changes, companies such as Samsung have added to their human resource planning various strategies. One of their strategies encompassed buying as well as recruiting strategy though this is effective especially when procuring services of a foreign trained staff whom the company will integrate with those of the local ones. This strategy enables Samsung accepting applications from all over the globe, initiation of programs such as internships and global recruitment drives (Chang, 2012, p. 1445). This has seen the company heavily investing in attraction and retention of highly qualified employees from the global pool to fulfil its daily business wants. a good illustration is the training of salesperson in Chinese market whereby the company has managed to have ensure a heightened aggressive edge compared to other expatriate firms in the region (Fu, Yi & Zhai, 2013). Due to this, Samsung has developed a recruiting strategy that focuses on the competence of the employee. An employee is placed in a department where they are most suited and has favourable conditions for them to refine respective skills as well as talents (Chang, 2012, p. 1445). Samsung also promotes an open employment recruitment system that publicly advertises opportunities through various media such as print, television and online platforms. This system can be compared to various systems used in many other parts of the world. Applicants undergo various tests such as written exams and the Samsung aptitude test whose aim is to single out those best fit to work at Samsung. In addition to this, Samsung recruits occasionally from various institutions of higher learning. The company also entices employees by offering them superior executive positions at Samsung to draw them from other competing companies (Chang, 2012, p. 1445). Contrariwise, Samsung has an employee grading system that has seen an increase in employee ranks that an employee can rise to. This job grading system is divided into two; the R&D and design and manpower. General manpower has five ranks in a hierarchical structure whereby the highest rank is general manager while the lowest rank is head. This is away from the traditional ranking which would take an employee about eight years to reach the highest rank. In light of this, the company introduced a merit based ranking system which relies on mainly job performance evaluations, received awards, service time and examinations taken. This is also coupled by an ability oriented method which does not necessarily rely on examinable traits rather than the abilities of a manager (Chang, 2012, p. 1446). Employee appraisal is a key factor that can be used for compensation or promotion purpose. At Samsung, the human resource section mandated with appraisal performs about 180 to 360 reviews on various employees based on merit (Chang, 2012). The criterion used is divided into competency and performance appraisal. Performance appraisal evaluations are conducted twice annually for promotions and bonuses. Competence evaluation is done once in a year both evaluations have major impacts on the careers of employees (Chang, 2012, p. 1447). On compensation of employees, Samsung has made progress over the decades. In earlier compensation models, male and female employees had a significant pay differences. This was the case with high school and college graduates (Chang, 2012). However, due to the rising competition and globalization, an increase in compensation fee was observed and is based on seniority ranking. This is also coupled up with an increase in basic salary two times in a year. The increase is coupled to the company’s profit and is paid according to the division in which an employee is placed under (Chang, 2012, p. 1448-1449). Samsung has also been able to uphold a diversity culture in planning its human resources. According to a sustainability report compiled in 2009, Samsung was spotted to be making most of its revenue from overseas branches and the greatest number of its employees were non-Koreans. In a bid to embrace diversity, Samsung also employs many female workers approximated at 35% (Ivaniukovich, 2009.p.24). The company also offers training to its employees on how to uphold a diversity culture while dispensing their duties at Samsung. Moreover, the company also employs disabled persons and offers them with treatment as well as welfare programs to ensure that they comfortably work in the company (Ivaniukovich, 2009.p.24). Therefore, it is clear that embracing a diversity culture when it comes to its human resources enables the company to attain a competitive edge. Samsung also minds the welfare of it human resources in various ways. One of them is through providing medical insurances to its workers for instance those who are physically underprivileged. In fact, the company manages a distinct website that listens to employee’s grievances and tries tackling them (Ivaniukovich, 2009.p.27). For instance, if an employee feels unsatisfied and wants any changes effected in the work place, they can inquire that through the website and get aid. The company also has an ombudsman as well as consultant specialists where its workers can get advice on any matters troubling them in the course of their work (Ivaniukovich, 2009.p.27). Stakeholders on the other hand play a major role in companies and their running. Stake holders can raise various concerns about a company and the complaint is mainly to the company director. Stakeholder theory views an organization as a party that interacts with partners inside and outside of the company (Curtis & Willaims, 2008). It also for sees the functioning of the company in their favour, therefore, stakeholders will influence directly or indirectly the functioning of a company to their favour. However, the power of stakeholders is dependent on the interactions of a company with the stakeholders. In cases where employees have no power in demoting a director or manager, they can act in a way that influences the action of the stakeholders. Action by employees, such as striking or boycott, can cause stakeholders to act and demote an executive employee. This is because the strike will not be in the interest of the stakeholder’s shares. For instance Samsung takes keen consideration in its stakeholders in various ways. One of the ways Samsung maintains communication channels with its stakeholders and ensures that it considers them while formulating decisions (Samsung, 2014). The other way in which Samsung keeps its stakeholders involved in its affairs is through conducting meetings with them as well as holding events that keep them posted of its management progresses, or any developments in the company. Samsung Company also makes sure that it creates value in all its affairs in a bid to benefit its shareholders. Therefore, stakeholders influence an organization considerably. However, according to stakeholder’s theory; stakeholders are not mainly involved in human resource management planning and strategies (Curtis & Willaims, 2008). It influences a more political backing of the stakeholders who are mainly in the background and do not interact directly with employees. They place a balance in the politico-economic sectors of a company to ensure profitability of a company. On the other hand public policy influences human resource management. Public authority arises from elected entities who influence various decisions concerning human resource such as wages and working hours. This can be through unions formed or joined by the employees. Stakeholders and the stakeholder’s theory, contend they may have various identities and their influence mainly relies on their interaction to the company’s functioning (Curtis & Willaims, 2008). Their activity is also specific to some management instances. However, stakeholder interactions are mainly indirect and their activity is dependent on strategies put in place by the founders whether to involve additional stakeholders or not. Initial firm stakeholders on the other hand relay their perspective strategies to company directors. Directors develop strategies that will put stake holder’s interests as a priority, that is, profitability. Therefore, directors, have to forge brilliant planning and strategy to achieve stakeholder’s interest. Increase in strategic human resource management over the past decades also comes with consideration to ethical issues as guidelines to enable the success of these organizations. It’s critical for the organizations to acknowledge the importance of ethics as they lay out their planning and strategies for the success of their companies. Human resource managers are the key persons who place a balance in an organization. Human resource managers place the balance between the employer and the employee. The employer has prior duties to stakeholders to achieve the set goals of an organization. The employer therefore has to come up with strategies which increase productivity of employees. Human resource manager provides the ethical stewardship required to keep the organization running to achieve the long term goals of wealth creation. For instance, Samsung has advocates for corporate ethics among its employees. Its culture articulates that each employee should uphold loyalty and integrity in executing their work. In advocating for ethical practices, the company requires its employees to refrain from corruption or any sort of bribery that leads to self- profiteering (Chang, 2012, p. 1451). In addition, Samsung renders its employees as well as its recruits training on ethical practices to ensure that their actions align to what the company requires (Chang, 2012, p. 1451). Having such a high stand of ethical culture in its organization has been a recommendable practice and it remains a challenge for Samsung to maintain the same in future times Ethical stewardship, as Caldwell, Hayes, Bernal and Karri (2008) defines it, is the honouring of duties owed to employees, society and stakeholders in long term goal of wealth creation. Ethical obligations by organizations are neither soft nor idealistic. This means that the company or organization has a responsibility to provide awareness to the employee on the risks and threats of their working environment. This also attributes to treating employees as partners rather than just employees. They should also communicate honestly and extensively providing the reality (Lawler, 2008). However, human resource personnel should also consider the fact that they also owe stakeholders an ethical duty and this is the reason as to why Samsung requires them to work appropriately. This is because shareholders also enable a company to consider the ethical implications of its employee’s actions. This can be achieved by providing the company with relevant information. In a company it is also important for human resource personnel to understand the value of strategic systems that are high performing. This can be achieved by understanding the methodology of implementing the systems and maintaining communication with the directors and other stake holders (Becker and huselid, 2006). According to Kanter (2008), Human resource managers are the ethical stewards who transform various companies into communities that are humane, empowering, and trustworthy and partnership worthy. This kind of community plays a key role in enabling employees to reach set goals and generate social ties that are strong even outside the work place. This can be achieved by treating employees as a part of the company and are valued partners. This is in line to Grossman (2007, p. 58), who stated that Human resource personnel are the backbone of ethics and have a legal standpoint in providing advocatory roles and providing the culture and change. Sung-Choon, Morris and Snell (2007), also emphasizes on the importance of information while planning and strategizing for human resource. This, like in Samsung’s structure, adopts a learning topology and structure and enhances competitive edge and advantage. Human resource personnel play a vital role in empowering individual employees by creating new opportunities and knowledge base which benefits the company and the employee. This model is used by Samsung where they provide learning environments to strengthen their work force in order to have a competitive edge against their competitors globally (Becker, Huselid & Ulrich, 2001). Use of ethics also enables companies to create an environment which adds value to the lives of employees and keeps them in an authentic working condition (Solomon and Flores, 2003, p. 6). Ethical issues and programmes in a company are more successful when they are headed into two complementary directions. The first direction moves towards putting in place new values for the company while the second direction heads towards ensuring employees follow and comply to the values on a day to day basis (Guerci et al., 2015). These ethical oriented directives can be viewed as values and compliance oriented. Value oriented directive is observed when overseeing shared duties in a responsible self mitigated behaviour. Compliance oriented approach is observed when rules are imposed on employees. In this case a value oriented approach is more valid for it has a higher purpose of steering employees from a situation where they feel they have been imposed into a friendlier environment (Guerci et al., 2015, p. 328). Value oriented programme, similar to that of Samsung has been shown to put the well being of colleagues, stakeholders and company in frontline (Guerci et al., 2015). It adds up to individual self drive and has been shown to have an impact in the environment of employees. This means that, employees act on the values that are acceptable, thus establishing an environment that maximizes the work output of an employee. Compliance oriented programmes impose the goals of an organization on individual employees hindering them from working in a fluid environment. Employees in this form of orientation are expected to follow the set rules and achieve the set goals of the company (Guerci et al., 2015, p. 328). Companies on the other hand can introduce motivational enhancing human resource management practice. This type of practice hits on employee ethical behaviour at the work place. This is done by the company in order to motivate employees by enhancing their degree of commitment and accepting the moral outcomes that come hand in hand with moral responsibility. This means that employees are aware of the moral cause of action taken against them when one breaches code of conduct or behaves unethically. Unethical employees would behave in this manner for they will not suffer the cost. This cost however, weighs on the company (Guerci et al., 2015).Therefore, motivational oriented approach seeks to minimize incidences of staff resulting to behaving unethically as well as encourage a better working settings in which each individual is comfortable. Samsung has adopted motivational mechanisms such as offering bonuses, awards and pay increase to its employees. Samsung also has a grading system for its employees according to their performance in the company and this acts as a means of motivation to those highly graded (Chang, 2012, p. 1447). In order to act in line with employee legal requirements, Samsung has a code of conduct that curtails any sort of biasness to its employees whether based on sex, race or even someone’s religion. Therefore, the code ensures promotional, recruitment or rewarding systems do not entail discrimination at all (Ivaniukovich, 2009.p.26). The company also offers education to its workers on upholding human rights in the workplace. The company also has a labour council that looks into matters pertaining to employees. The council also participates in global matters that concern its workers and checks the day to day employee conditions in the company (Ivaniukovich, 2009.p.26). Strategic planning of human resource highly relies on human resource personnel who play a major role in providing the balance between the employee, organization and stakeholders (Baruah and Barthakur, 2012). Therefore, adoption of ethics and legal standpoint in human resource is very vital in provision of a smooth running productive employee environment. Productive and happy employees will in turn translate in to profit margins for stakeholders. Conversely, fulfilled employees will also give a competitive edge for the company for they will be motivated. This will enable creativity and innovation. Samsung has shown application of these human resource directives and techniques that have given the company a competing edge enabling it to become a global brand. References Baruah, P. & Barthakur, B.J. 2012, "Employees Attitude: Performance and Satisfaction", SCMS Journal of Indian Management, vol. 9, 3, pp. 30-42. Becker, B. E. and Huselid, M. 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