Human Resource Management Practices and Organizational Life Cycles - Essay Example

1. Introduction Recruitment is one of the most crucial activities in human resources management (HRM), which involves the utilization of organizational practices to influence the number and types of individuals who are willing to apply for job vacancies (Rynes, 1991; Rynes & Cable, 2003). Recruitment is crucial to an organisation in so far it has important implications for organisational performance. It generates costs and conditions the current and future development of the organisation. Thus, it has to be understood and analyzed as a strategic activity in all its implications (Brewster and Hegewisch, 1994). Recruitment policy and strategy of a company should be coherent with its human resources management policy and with its business policy as a whole. Brewster and Hegewisch (1994) assert that organisations have to make decisions on a number of issues related to recruitment: Decisions between short-term organisational needs and long-term organisational requirements: the choice an organisation makes is not unchanging but varies according to the resources available on the external labor market. Decisions about the kind of profile the organisation is looking for: the choice has to be coherent with the career management policy of the organisation. Decisions about how to achieve the qualification level the organisation is looking for: the choice makes affects the nature of the employer/employee relationship, the social climate, and the innovative ability of the organisation. Decisions about the organisations of recruitment: how centralized should recruitment be? An organisation, which wants to be effective, develops and realizes a recruitment strategy to attract and hire more and best talents, who have the ability to perform job so that to support an execution of the company’ s business strategy. Top performing companies spend considerable resources and energy to create high-quality recruitment and selection systems. This linkage between HRM activities, the needs of the business, and organisational effectiveness is the core of the area called strategic human resource management (Schuler and Jackson, 1999). Wright and McMahan define strategic human resource management (SHRM) as: “the planned HR deployments and activities intended to enable [an organization] to achieve its goals” (1992, p. 298). Many researchers in the area of strategic human resource management have discussed the importance of having HRM practices supporting a firm’s strategy. For example, Schuler and Jackson (1987) argue that HRM practices can create or enhance competitive advantage by fostering and reinforcing role behaviors that help to lower cost and / or strengthen product differentiation. They successfully illustrate how different practices could support each of Porter’s (1980) generic strategies of low cost and differentiation. Bierly III and Daly (2002) demonstrate the potential benefits of the alignment of HRM and organizational knowledge strategies. Researchers use the term “high-performance” to describe such management strategies that line to higher performance in organisations (Chaganti, Chaganti, and Malone, 1991). Randle (2006) suggests that high-performance recruitment strategy generally should be developed taking into account two aspects: 1. Employers’ value: a more sophisticated approach to recruiting is required, which would strategically link talent acquisition to the needs of business. 2. Employees’ value: people’s expectations of what they want from companies they would work in are rising, so companies need to be more innovative in how they attract and retain staff. It is important to note that both the practice and effectiveness of recruiting are affected by several contextual and contingency factors, first and foremost by sectoral or industry variables. Windolf (1986) has made the most clearly articulated description of the impact of organisational context on recruitment strategy. He proposed five distinct recruitment strategies, which can be placed in two-by-two matrix of contingency variables (Figure 1). Figure 1. Windolf typology of recruitment’s strategies Source: Windolf, 1986 In this model, the innovative recruitment strategy is concerned with attracting a heterogeneous group of creative applicants, drawing on a wide range of recruitment sources. The autonomous strategy starts with a precise definition of the ideal candidate in terms of skills, age, or sex, and thus it is practically isolated from labour market. To distinguish these two strategies Windolf invoked a third variable – the technical complexity of the product and the production process. The status quo strategy is focused on attracting a homogeneous set of applicants, related to social networks and referrals. Status quo firms are characterized by low organisational intelligence and have a traditional, even conservative, strategic stance. Flexible recruitment strategy is adopted by firms with weak market position, which are forced to adapt to changing environmental conditions. Muddling-through firms often have unsophisticated recruitment and selection techniques and, therefore, high employee turnover comparing with firms located in other quadrants. Overall, Windolf study shows that the reliance on internal labour markets for recruitment is typically a function of increasing organisational size and geographical location (autonomous firms are typically very large and embedded in vast personnel networks). There are a number of research findings that confirm that recruiting strategies depend on many others various contextual factors. At the same time, a number of empirical researches corroborate that there are many companies that dont use the high-performance HRM practices at all. In the case of recruitment, companies make less use of formalized practices, preferring informal recruitment and selection techniques, such as word-of-mouth or newspaper advertisements (Hornsby and Kuratko, 1990; Aldrcih and Langton, 1997). Among the common issues businesses find themselves facing when they adopt an unregulated recruitment strategy there are large degrees of misinterpretation of requirements, no economy of scale cost reduction, insufficient sector knowledge from individual agencies, lack of relationship management skills, loss of good candidates through unprofessional or unstructured recruitment processes (Randle, 2006). Informal and ad-hoc planning makes difficult to take strategic approach to HRM. Unless managers recognize it, they are unlikely to succeed in formalizing their HRM practices and reaping the benefits of growth (Barret and Mayson, 2005). It is evidently that many of companies need revamp their approaches to recruitment strategy management and to strategic human resource management at a whole. Proposed study intends to analyze current recruitment practices and to identify high-performance principles and practical methods of HRM Strategy in Recruiting. These methods could be used further as best practices to develop an effective formal recruitment strategy and align it with the overall business strategy. This study is purposively to help executives and HRM managers to evaluate their human resource management strategies in general, and recruitment strategy in particular, and to provide effective methods for strategic human resource management. The study will also be helpful for researchers who are going to conduct further research concerning the subject. 2. Reasons In May 2009 the Harvard Business Review magazine published an article “The Definitive Guide to Recruiting in Good Times and Bad”, in which some interesting results of research in recruiting strategy were presented. Researchers surveyed 50 CEOs of global companies and executive search consultants from about 500 firms and found that the overwhelming majority of respondents “relied heavily on subjective personal preferences or on largely unquestioned organizational traditions, often based on false assumptions” (Fernández-Aráoz et al, 2009). The most companies reported that they react to hiring situations as emergencies, moreover executives held widely differing views regarding the desirable attributes of new hires. They emphatically disagreed on whether it was best to hire insiders or outsiders, on who should be involved in the recruiting process, on what assessment tools were most suitable, and on what the keys were to successful hiring and retention. Yet very few of the organisations appear to engage in a systematic approach to HRM by aligning HRM policies and practices, including recruitment and selection, with the overall business strategy. Survey of 408 small businesses in Victoria showed only 21.4% of companies had a formal staffing plan (Barret and Mayson, 2005). At the same time companies of all sizes, across all industries, and in all geographical areas identified recruiting qualified employees as a major challenge and struggling to attract enough good applicants (McTague, 2001). I’ve been interested in the problem and wondered whether it is possible to find any recruitment practices that could work or matter like possible “best practices” for all firms. It is clear for me that organisations need to stop treating recruitment as a question of minor importance; they have to approach it from strategic and objective point of view. I understand that recruitment is a core area of human resource management, and it is not simply techniques for filling job, but it is a lever for organisational changes, sustaining employee commitment and achieving high performance. I agree with Price (2007) in that HR managers should seek not only a “right person for the job”, but rather who will “fit in” with the culture of the organisation; who will be content to build a career within the organisation; who will absorb the goals of the organisations. From literature I’ve already learned that the adoption of either recruitment strategies depends on different factors: the current hiring practices of other firms (e.g. competitors), domestic and international labour market conditions, industry context, and other external and internal variables. But I want to make more deep research to seek possible common patterns or methods for recruitment strategy development and to investigate main effects of recruitment on organisational effectiveness. I suppose for many of companies a study of best practices in high-performance recruitment strategy management would help to revamp their recruiting processes drastically. 3. Aims Considering all speaking above I primarily aim the study to explore current recruitment strategies and practices in organisations in order to: To identify high-performance principles and practical methods of HRM Strategy in Recruiting, To present general description of best practices in Recruiting Strategy Management, supporting the organisational capacity to achieve business strategy’s objectives. I assume the result of research might offer helpful insights to HR managers in adopting the most appropriate recruiting strategy suiting to their organisational context. 4. Objectives The following research questions shall be answered during the study: What are different current recruitment approaches, strategies and practices? How can existing theories help to explain relationships between recruitment practices and organisational performance? What potential barriers (external and internal) can complicate the process of development and achievement of the formal recruiting strategy? How owners and managers assess the need for formal HRM Strategy in general, and in Recruiting Strategy in particular? Which principles and practical methods of HRM Strategy in Recruiting have the most positive impact on organisational performance? How companies can improve the performance and achieve business goals more effectively by using high-performance principles and practical methods of the Recruiting Strategy Management 5. Research Methods I intend to use a descriptive form of research, so that to present the existing nature and status of a situation, the relationships and practices that exist, beliefs and processes that are ongoing, as well as conditions held in the organization as it occurs now (Creswell, 1994). The descriptive approach will also allow me to obtain first hand data from the respondents, based on their current impressions, and thus to formulate rational and sound conclusions and recommendations for the study. The study will combine qualitative and quantitative approaches. The qualitative approach will be used to gain in-depth information (explanations, interpretations, opinions) on the situation from real executives and managers, working in HRM area. Looking at the research questions above, a case study method seems to be the best way to answer these. Creswell (1994) suggests considering a qualitative study where a single entity or case is studied by collecting detailed information using a variety of data collection procedures over some period of time as a case study. Yin agrees that a case study is an “empirical inquiry that investigates a contemporary phenomenon within its real-life context, especially when the boundaries between phenomenon and context are not clearly evident” (2003, p.13). Hayes (2002) claims that case study has several important advantages over other methods, namely: Case study highlights unique situation, processes and behaviour. Case study sometimes challenges established theory assumption as these often come from generalised theories that do not explain a specific situation. The exploration of a single case allows for greater detail and richer information mining. Case study allows for the studying of complex processes. All of these definitions and advantages are in compliance with my study objectives. As the main technique for gathering data I plan to use semi-structured face-to-face interview with human resource directors and senior line management executives. In addition to interviews, I will make the literature reviews to collect relevant data. So, the overall result of qualitative part of the study will be a summary of all gathered information in a form of case studies. The quantitative approach will be used to draw measurable data on the situation to determine relationships between some variables. I plan to conduct a questionnaire survey across managers and experts in recruitment, which will cover issues related mainly to performance appraisal, job analysis, human resource planning, and employee turnover. These data will be analyzed using statistical methods and presented in charts and tables. 6. Method of Data Collection To provide a descriptive research strategy, mentioned above, primary and secondary research will be both incorporated. It will allow gathering pertinent data and achieving the objectives of the study effectively. Primary Research Primary research will be performed on a basis of: Direct interviews with human resource directors and senior line management executives of 5 companies. Interviews will be focused on general strategies and activities of company; key factors of the strategy, e.g. core values; specific HRM practices considered as strategic priorities; composition of employees; attitude to recruitment strategy; effects of current recruitment practices (both positive and negative). The interview will be semi-structured; this will allow me the flexibility to follow up specific responses to particular questions. I will be interviewing them personally, face-to-face. Companies for the interview should be selected using convenience sampling based on my access to key personnel. It would be good to select companies with different organisational contexts. To explore similarities and differences in SHRM practices across size cohorts I would need to have small, medium and large firms in my sample. It would be also useful to have companies with different ownerships (joint, individual, or state), as well as from different industry markets. Questionnaire survey with managers and experts in recruitment (about 50 persons) will focus on current HRM and recruiting practices. Structured questionnaire survey will help to understand better the issue and the different variables that involve with it. Survey aims to draw information from a large sample; it allows the investigation to derive precise and impartial data to support conclusions and generalizations. I plan to conduct the survey via email and telephone. Results of the survey will be analyzed using statistical methods (e.g. percentage analysis or correlation analysis, which determines the existence of a relationship between the various dependent and independent variables). Results and analysis will be presented using Microsoft Excel where the data is tabulated and graphed to facilitate readability. Secondary Research In support of the data gathered, analysis will be done with the help of secondary data from printed sources, such as academic and professional journal articles, magazines articles, books, corporative materials, as well as from online sources. It will give a strong foundation of the whole study. Secondary research will be performed on a basis of: Data available within the interviewed companies’ boundaries - annual reports, websites and marketing materials. Generally accessible data - published articles, books, business journals, research papers, related studies, etc.      7. Sampling The population for this study should be divided on two groups: Population for face-to-face interview composes of 5 human resource directors and senior line management executives of companies with different organisational contexts. Companies for the interview will be selected using convenience sampling based on my access to key personnel. Population for questionnaire survey composes of 50 executives, middle managers, recruiting experts and business owners of companies with different organisational contexts. To make sure that the sample for the survey is representative of the population, I will conduct a random sampling from some online business directory (like Yellow Pages). Presence of contact person’s name and her working email address is obligatory to choose a company as a respondent, because I intend to contact with persons via email mainly. 8. Limitation Since the study intends to make use of both qualitative and quantitative data, problems regarding the data acquisition may be encountered. Giving the limitation of 5 companies for face-to-face interview, the case studies seem to provide significant information, but they would not possibly enable to make a broad generalization of the issue. The case studies’ data is primarily qualitative with no cause-effect or correlation analysis of the relationship between SHRM practices and organisational performance. Besides, analysis and generalisation of information will be done only by me, so it will evidently have elements of subjectivity. The next limitation of the case study approach is that CEOs and HR directors will be key participants in the study, so potential response bias may occur. I should try to adjust to the demands of the situation so that to gain the most reliable responses without implicating any biases to the respondents. Also I’m worried that it may not be easy to contact with people directly. In this situation, telephone interview should be a substitute method in data collection. As for questionnaire survey the main problem I may be faced with will be to diagnose the veracity of the comments by the respondents who fill in the questionnaire. Not all of them may want to tell the truth, so I can gather distorted information. One of the major problems will be the time factor since I alone should conduct all interviews and surveys. Second, the illness and some unpredictable problems will also affect the process of this research. To avoid this situation, I should try to work in advance. References Aldrich, H., and Langton, N. (1997) Human Resource Management Practices and Organizational Life Cycles. In: Reynolds, P.D. et al., eds., Frontiers of Entrepreneurship Research. Wellesley, Babson College Center for Entrepreneurship, 349-357. Barett, R., and Mayson, S. (2005) Getting and Keeping Good Staff: Human Resources Management Issues and Challenges in Small Firms. Melbourne, CPA Australia. Bierly III, P.E., and Daly, P. (2002) Aligning Human Resources Management Practices and Knowledge Strategies. In: Choo, C.W., and Bontis, N., eds. The strategic management of intellectual capital and organizational knowledge. 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