Advising a Small Business on HRM Planning

Introduction:

Tibet Travel is a holiday company which was set up in 1990 by Mr Amar Akbar Anthohy. Using his savings Amar opened a small bucket travel shop near the High charted flights tickets to three major destinations in Tibet – Tumbai, Theli, and Toa. The business developed quickly. Amar was able to invest in the business and opened new travel shop in Birmingham and Manchester. Amar. As the business was growing there was no formal Human Resources Planning and it was the right time to built Human Resources Management team in order achieves the objectives and goals.

The outline to Mr Anthony will go through the following tasks:

Task 1)

Human Resources Management Role

a) Important role and purpose of Human Resource Management as distinct from personal management.

The best people and talent can come from anywhere. Get them before your competitors. People are a critical success factor in any business. Successful companies invest systems and processes designed to ensure that their employees are engaged and have the necessary skills and experience to meet business objectives.

The role of the HRM is the crucial one of being the driving force of the company. The stages that the resources called ‘human’ go through can be listed in the below ranking:

– Plan

– Find (recruit and hire)

– Bring it up (train – appraise – train)

– Keep it (motivate)

Torrington and Taylor (2005) define HRM which first employee working people and the organisation which uses their skills to agree about the objectives, secondly ensures the agreement is fulfilled. On the other side of organisation Personnel Management direct their effort at the organisation’s employees: finding and training them, arranging for them to be paid, explaining management expectations, justifying management’s actions etc.

HRM is something qualitative different from a personal management approach. Personnel management is essentially workforce centred while HRM is resourced centred.

The function of personal manager usually begins with the staffing process. Someone has to be focused on screening and interviewing persons, with en eye to placing individuals with the right skill sets in the right position within the company. Along with placement the HR manager may also oversee or at least be involved in the creation of entry level training programs well as continuing education opportunities for existing employees.

Depending on the size of the organisation, it may be possible for one person to handle the personal management functions. As company grows it might be necessary to expand to Human Resources team. As Tibet Travel is been grown, compare to the size in 1990 when first company was set up, it might be necessary to expand to Human Resources Management team.

In a business, personnel management starts with the recruiting and hiring of qualified people and continues with directing and encouraging their growth as they encounter problems and tensions that arise in working toward established goals.

In addition to recruiting and hiring, some of the responsibilities of a personnel manager are:

To classify jobs and prepare wage and salary scales.

1. To counsel employees.

2. To deal with disciplinary problems.

3. To develop safety standards and practices.

4. To manage benefit programs, such as group insurance, health, and retirement plans.

5. To assist individuals in their efforts to develop and qualify for more advanced jobs.

6. To plan and supervise training programs.

Personnel management V Human Resources Management

Personal Management

HRM

Time and planing

Short term, day to day task, reactive.

Long term, proactive, strategic.

Psychological contact

Compliance.

Comitment.

Control system

External control.

Self control.

Employee reaction prespective

Pluralist, collective, low trast.

Ulitarist, individua, high trust.

Refered structure task

Burocatric, formal defined roles.

Organic, devolved flexible role.

Roles

Specialist/profesional.

Largley integreted into line management.

Evaluation criteria.

Cost minimisation

Maximum utilisation (human asset accounting)

Source: Torrington and Taylor (2005) Table 1.

b) Assess the role, tasks and activities for the human resources practitioner.

The measure role of Human Resources Management is as follows:

a) Manpower Planning: HR planning helps to determine the future manpower requirements and reviewing the current skills. By planning they will be able to avoid overstaffing or understaffing problems.

b) Recruitment and selection: when candidate apply for the job they should make a short list and draw up plans for the interview process, adding new ideas and ensure that organisational objectives are met.

c) Providing training programmes: the main role of HRM is to provide its staff with training programs on the current topics where they can develop themselves with the present situation.

d) Team work: a good team consists of people with deferent skills, abilities and characters.

e) Motivate the staff: motivation can be done by work environment working atmosphere. Motivation is done by creating interest in the job for example by giving the gift to the best performance in a period of time.

f) People Resourcing: get the right people, in the right time, at the right place is the essential tool to achieving rapid goal.

A Human Resources Management function is explained by identifying the key objective to be achieved:

* Staffing objective

* Performance objective

* Changing – management objectives

* Administration objectives

c) Role and responsibilities of line managers in HRM practice.

Line managers are managers who are responsible for an employee or group to a higher level of management. Normally line managers are in the lower layers of the management hierarchy.

Foot and Hook (2008) defined line managers as a person who has direct responsibilities for employees and their work. Line managers must combine their commitments to the technical aspects of task competition with attention to people aspects.

Typically line managers’ responsibilities will include:

* People management

* Managing operational cost

* Providing technical expertise

* Organisation rotas and work allocation

* Monitoring work process

* Dealing with customers

* Measuring operational performance

These are all areas where process can be designed by HRM, but it can not be delivered by HR. Role of line management is crucial in number of respects:

a) Enabling HR policies and bringing them to life

b) In acting upon advance or guidance from HR

c) In controlling the work flow by directing and guiding the work of the others.

Line managers have a responsibility to avoid discriminatory behaviour as well as to prevent others from acting inappropriate. They also have responsibilities to make decisions which not always are favourable to staff.

Task 2)

Human Resources Management Planning

a) Importance and need for systematic human resources planning.

Tomorrow’s work place it will not be the same as todays. Employments partner are changing, work methods are changing as technologies advances. This highlights the need of HRM planning.

Beech, McKenna (2008) stated Human Resources Planning as an activity that directly links HRM to organisational strategy.

Human Resource Planning is concerned with setting out the size, quality and nature of the workforce in order to meet corporate objectives.

The scope of Human Resource Planning covers not only number of people and skills, but also structure, culture, system and behaviour. HRM planning is a continuous process rather then a one-off activity.

a. It is a need to be able to meet the demands of the business environment and also to be able to motivate and develop employees.

b. It is a need for flexibility in planning.

When planning the resources, the HR takes into consideration:

– The overall mission and target of the business,

– Where does it want to go?

– How does it want to go?

While mobilising and managing the human resources, HRM should be aware that apart from the efficiency, effectiveness and the subsequent results yielded by the best management, also lots of marketing of the company is done. A happy employee shares with the others and further more is a ‘loyal’ customer of the company.

A starting point plan for HRM planning is to assess the future needs of Tibet Travel for employing high quality staff. The HR Planner and whole approach to planning for Tibet Travel need to reflect the importance of distinguish between: the number of people in employment from what actually do and are capable of doing at work.

HR has to have an extensive “global” knowledge so that the plan is rather comprehensive, and at the same time well organised and structured. In other words when planning, the HR must know the business processes, the time and knowledge required for each of them and further calculate on the number of personnel needed and the qualifications. Furthermore, given that, Tibet will be working with travels, to different location, time difference in different countries, is to be considered, weather conditions, culture and tradition of the countries of visit, etc.

b) Information required.

Mintezberg (1994) stated that planning is about collecting the relevant information to stimulate the visioning process and programming the vision into what need to be done to achieve the goals and objectives.

Plan

Vision

Plan

Providing HRM data, ideas, question( where are we now)

Defining the vision of the future organisation. (where do we want to be, goals)

Programme the vision – HRM objectives targets action plan. (design and use plan to achieve goals)

Table 2.

HR planning involves gathering of information, making objectives making decisions to enable organisation achieve its objectives. When HR planning is applied properly in the filed of HRM, it would assist to address the following questions:

1. How many staff does the Organization have?

2. What type of employees as far as skills and abilities does the Company have?

3. How should the Organization best utilize the available resources?

4. How can the Company keep its employees?

b) Stages involve in planning.

Analyzing existing resources: the strategic plan for Tibet Travel Ltd is to employee high quality staff. In particular Mr Anthony needed staff with a commitment to customer service in all aspects together with a detailed knowledge of the specialist’s services being provided. A project has to be prepared in order to fulfil the companies’ future strategy.

Forecasting: HR Planning requires that we gather data on the Organizational goals objectives. Mr. Anthony should understand where Tibet Travel wants to go, and how it will get to that point.

* Supply forecast: internal labour market may be capable and suitable to take over the proposed additional post by Tibet Travel Ltd. As they need some more staff another way is to look at external labour market. Mr. Anthony will and his company will be attracted by high qualified students in Travel and Tourism or experienced applicants as well.

* Demand forecast: to achieve his objectives and being competitive in market Mr. Amar should constantly employee high qualified and experienced people. It has to be prepared a strategic plan between personnel and line manager as well

Inventory: the HR inventory should not only relate to data concerning numbers, ages, and locations, but also an analysis of individuals and skills. Skills inventory provides valid information on professional and technical skills and other qualifications provided in Tibet Travel Ltd. It reveals what skills are immediately available when compared to the forecasted HR requirement.

Task 3)

Recruitment and selection

a) Procedures used for structured recruiting of employees. b) Evaluate the interview as a selection technique and discus various selection methods available.

Recruitment and selection are crucial decision – making points in the establishment of the working relationship.

Beech and McKenna (2008) defined recruitment as the process of attracting a pool of candidates for a vacant position and selection as the techniques of choosing a new member by the organisation from the available candidates”. (page 180)

The process incurs significant cost. Placing advertising, and using the services of managers in selection can be costly. On the other hand a successful selection has been highlighted as an integral to high performance of HRM.

As it is needed to employ a high quality staff, Amar should invest on the process of recruitment in order to benefit from it.

A clear procedure that establishes recruitment and hiring policy and the processes to be followed is to be enforced by Tibet Travel Company. This will help for the recruitment of the right professionals and proper and efficient workforce.

Main stages in Recruitment Process

Define the vacancy: a job vacancy is likely to be necessary when an existing employee retire, leaves the job to join somewhere else, or a new position is created. Tibet Travel has developed its activity, and is the need for new high qualified staff. On Amir’s case it is determined that a vacancy exists. Now Amar should decide whether to recruit internally which is cheaper and has the advantages of ensuring the appointment of someone already accustomed to the organisation’s culture and values or externally, where new staff should be employed.

Complete the job analyses: once vacancy has bee defined, Amar should go through next stage which is job analyses. This stage should represent the time when the current job/workload is being analysed and subsequently the need for an additional new employee is identified. The analysis process identifies also the duties and responsibilities the additional employee will be carrying out.

-information about the task

-responsibilities

-context of jobs

Amar has to talk to his store managers, ask them to asses how much time his people spend on the phone, how much time they spend in checking the flights schedules and connections, how many people they talk to every day etc. By doing that Amar will know what job involves and what the will expect from the recruitment.

Job description: it provides essential information to organisation and potential employee. Tibet Travel Ltd should know they are expecting from they employees, qualifications and qualities they must have to suit to the company. Job description for Tibet Travel Ltd should include:

– Job title: for example: Customer Care Specialist

– Purpose of job: to receive and handle customer requests via telephone and / or visits in person.

– Responsibilities: maintains clear, detailed and up to date records of all clients.

– Tasks: what employees are expected to do in order to carry out their responsibilities?

– Qualifications required as it mentioned by Amar, Tibet travel needs to employee high quality staff.

– Economic conditions: Tibet-travel offers to the successful candidate/s a competitive salary and bonus payment based on performance.

– Personal specification: on this stage Tibet Travel will be looking for an “ideal” profile of the candidate that they wish for the job. That means that the candidate that Amar wants to employee will have such as knowledge, skills, qualifications and experience in order to do the job efficiently and effectively.

– Job Posting Process: internal employees may be capable and suitable to take over the proposed additional post. Thus the chance is to be given to the internal employees before hiring a new one. This could be in the cases of promotions to higher positions and at the same time for Amar and its company it will cost cheaper.

– Job Advertisement Process: there are different source of advertisement Amar can place its advertisement: Job Centre, Commercial Employment Agencies, or an Advertisement. Because of the high cost on the first two, an advertisement in a local or national newspaper it will be suitable for Amar and its company. It is important to place the advertisement in a main page newspaper, where lots people can see it.

b) Evaluate the interview as a selection technique and discus various selection methods available

Selection Process

…..nothing matters more in winning, than getting the right people on the filed

(Welch and Welch 2005, p81)

Interview is one of the most popular methods of selections procedures. Usually it is a face-to-face meeting between a an interviewer or a panel of interviewers and the candidate

A sole person may not be able to conclude the best. There should different viewpoints together, thus an interview panel must be established.

Interview structure:

An interview structure needed for the Tibet Travel Ltd during the selection process:

* Opening: the interview panel welcomes the interviewee. Usually inexperienced interviewer is nervous so it best to begin gently perhaps with some informal comments like weather or candidates journey.

* Give information: information about positions the interviewee has applied for and some background information about the company.

* Collect information: the interview panel posses the pre-prepared questions to the interviewee. Start talking to the candidates about areas with which they are familiar and comfortable.

* Allow question and queries: invite interviewee to ask questions.

* Closing: ask the candidate how they feel and about the job.

* An interview check list.

The principle “tell me the past to predict your future” applies, thus the interviewee should be posed such questions that allow him/her to share examples. Of course there are different types of people thus an open ended question does not work always, but probe for more information.

Sample questions:

Question: Tell me about last time you had organise a trip?

Probing Q: What was your specific role?

How many participants?

What was the destination?

How did you prepare yourself :(probably participants had to obtain visa)

Question: Tell me about the last time you run out of flight ticket, but there were so many people queuing up?

Probing question: Who did you ask for help?

What was the result?

What would you do different?

The person who provided the clear examples thus showing that this is the person that gets in what he / she is doing. This person is the best choice because this person will prevent problems and provide for quick solutions in case of problems and take further the processes.

Problems in interviews:

There are some problems which might be arising while Mr. Anthony staff is going through selecting process:

* The Halo Effect: it happens quite often during the interview that interviewers see the candidate as the “right” one because they have the same hobbies and interests.

* The horns Effect: it is the opposite of halo effect. It is important on this situation to have more than one interviewer because it will help to avoid scenarios like halo and horn effect

* Stereotyping: like “the women place is in the home” or disabled people are difficult to employee etc.

Amar should provide some interviews training (as they are inexperienced) in order to avoid any wrong decision by interview panel.

Another form as a part of selecting procedures is testing techniques. This test supplements the traditional interview as a selection method and includes a variety of styles and content. Most common forms of test used in selection are as follows:

* Intelligent tests: a high IQ does not necessarily mean that an individual has the ability to carry out the tasks and responsibilities of the job or the personality to get on with people at all levels within the organisation.

* Personality test: this take into consideration the individual’s capacity to relate and get on with other people.

* Aptitude test: assess an individual’s ability to do the job for which he/she applied.

* Proficiency test: assess the ability of individual to do the task involved into the job. The best known example is a keyboard skills tests for speed and accuracy.

Task 4)

Performance and reward

a) Principles for monitoring employee performance. b) Procedures for rewarding employees. c) Identify a range of reward systems and main factors determining pay.

Every ‘new comer’ has to be introduced to the specifics of the company. Tibet Travel must have a “new comer’s booklet” that presents the general functioning of the company.

Marchington and Wilkinson (2005) stated performance as a function of all HR components: selecting people who are the best to perform the job defined by the structure; motivating employees by linking rewards to high levels of performance. (page 4)

The Human Resources cycle.

Appraisal: based on contribution to the team and support of others, rather than individual outstanding.

Reward: based on performance and contribution, rather than individual performance and individual effort. The latest approach to performance evaluation is the use of 360-degree feedback.

The 360-degree feedback appraisal provides performance feedback from the full circle of daily contacts that an employee may have. This method of performance appraisal fits well into organizations that have introduced teams, employee involvement, and TQM programs.

Factor that will affect Tibet Travel employee will be counted as follows:

* Communication

* Responsibilities

* Bench – mark

* Choice

* Outcome

* Positivism

Tibet Travel management should evaluate regularly employee performance. Employees want feedback they want to know what their supervisors think about their work. Evaluations or reviews also help in making key personnel decisions, such as the following:

* Justifying promotions, transfers, and terminations

* Identifying training needs

* Providing feedback to employees on their performance

* Determining necessary pay adjustments

A performance appraisal is a formal, structured system designed to measure the actual job performance of an employee against designated performance standards. Although performance appraisals systems vary by organizations, all employee evaluations should have the following three components:

* Specific, job-related criteria against which performance can be compared

* A rating scale that lets employees know how well they’re meeting the criteria

* Objective methods, forms, and procedures to determine the rating

Appraise the work of your employees, not only once, but continuously, provide on the job coaching and identify deficiencies in performance and the reasons why. Repair these deficiencies with training courses and closer cooperation and coaching.

There are different kinds of rewarding taken into account by Mr. Anthony:

* Non – financial rewarding: job satisfaction, job security

* Financial reward: money (pay rise or bonus)

* Employee benefit: insurance, training, flexible hours, travelling discount etc)

* Payment in kind: (gift given from Tibet travel to employees for good performance)

Task 5)

Motivational influence

a) Motivational theory and its link with employee reward system. b) Approaches to monitoring performance.

Provide for salary increases and bonuses upon successful resulted appraisals. Pay for some costs, a marriage, a difficult situation, provide for trips for your employees. Do delegate responsibilities. Send one of the travel agents with a group of tourists, and let that person arrange everything from A- Z. That’s the way how Tibet Travel should motivate and keep its staff.

Slocum and Hellriegel (2007) declared that “motivation represents the forces acting on or within a person that cause the person to behave in a specific, goal directed manner”. (p.393)

Because motives of employee affect their productivity, one of management’s jobs is to channel employee motivation effectively toward achieving organizational goals.

The basic motivational process

Source: Slocum and Hellriegel (2007)

Motivation is the psychological feature that arouses an individual to action toward a desired goal. This process never ends. Nature of motivation will be counted as follows:

1. A psychological concept

Motivation deals with workers on the psychological plane. Even workers with extraordinary abilities will not be able to perform as desired until they are effectively motivated. Performance is equal to abilities opportunity multiply by motivation.

Performance= abilities opportunity *motivation.

2. Motivation is total, not piecemeal

A worker cannot be motivated in parts. For successful motivation, he should be treated as an individual unit, taking into account all his urges and aspirations.

3. Motivation is determined by human needs

A worker will perform the desired activity only he has satisfied his needs through his work. After one need is satisfied, he will wish to satisfy other human needs

4. Motivation may be financial or non financial

Financial motivation seeks to satisfy physiological and security needs and it is way of wages, allowances and bonus. On other hand, non -financial motivation which seeks to satisfy social, recognition and creative needs may be by way of appreciation for the work done, higher status and greater responsibility or increased participation in decision making.

5. Motivation is a constant process

Human needs are infinite. No sooner a person has satisfied one need than he seeks to satisfy another. Mc Gregor said, “man is a wanting animal- as soon as one of the need is satisfied, another appears in its place. This process is unending…”

Theory of motivation:

Expectancy model: states that people are motivated to work when they believe that they can achieve things they want from their job.

Expectancy theory successfully can be applicable for Tibet Travel Ltd. Mr. Anthony might include thinks like satisfaction of safety needs, the excitement of doing a challenging task or the ability to set and achieve difficult goals.

* Attractiveness: it is the importance we place on the potential outcome or reward that can be achieved. On the job.

* Performance – reward linkage: it is a degree to which we believe that the performing at a particular level would lead to e desire outcome

* Effort – performance linkage: the probability where a given amount of effort will lead to performance.

Tibet Travel Ltd must go through motivation stage in an organisation in order to achieve their goal. The strength of people’s motivation to perform (effort) at Tibet Travel depends on how strongly they believe that they can achieve what is attempted.

Formula that expresses the theory can be expressed as follows:

Motivational force (F) = Valency (V) x Expectancy (E)

Valency is the value of the outcome to the person; expectancy is the perceived likelihood of the outcome.

Hertzberg’s two factor theory: It was termed as the two factor theory. It focuses on the rewards on the rewards of performance that are related to job satisfaction and dissatisfaction. Those factors that are related to satisfaction are called motivators on motivating factors or intrinsic factors.

Factors that are related to dissatisfaction are called hygiene factors or environmental factors.

The following table shows Herzberg’s two-factor theory.

Hygienic Factors (dissatisfies) Motivators

Abraham Maslow’s theory: Maslow has attempted a more sophisticated classification ranking the various needs in a definite order. He has classified needs into five types

Self actualization

Esteem

Love

Safety

Physiological

Physiological needs

Physiological needs represent the primary needs of the body such as hunger, thirst, clothing, shelter and other bodily needs and he has pointed when these are not satisfied , other needs never become too important.

Safety needs

Safety needs are felt by people who feel threatened, either fear of physical danger, or deprivation of basic physiological needs. The operation of safety needs is in evidence in attempt to seek job security, insurance, pensioner benefits and so on.

Love needs

These needs are related to the social nature of human relationship.

Esteem needs

These needs are concerned with awareness of self importance and recognition from others. Satisfaction of esteem needs produces a feeling of self confidence, prestige, power and control.

Self actualization

This is desire for self fulfilment. Every one wishes to achieve what they can. After finishing other needs they are very to achieve this needs.

Task 6)

Legal aspects of employee

a) evaluate exit procedure b) analyse selection criteria for redundancies

It is concerned with providing those working conditions that employees believe are necessary in order to maintain their commitment to the organization. The objective of maintenance is to retain people who are performing high levels. This requires that the organization provide staff and healthful working conditions and satisfactory labour relations.

Reasons for leaving:

* Retirement

* Pressure and Stress

Factors for stress in organization are work load, difficult boss or unfavourable supervision, unrealistic deadlines and lack of participation in decision making then they are not interested in working so they leave from work.

* Lack of delegation and autonomy

They not like to delegate authority to carryout work. Then workers feel that they are slaves.

* Bad leadership

If there is task oriented leadership and strict control, workers won’t retain long time.

* Worst working conditions and environment

When they haven’t got satisfaction through motivating factors, they will never be longer. And if they not act according to the health and safety policies workers leave from organization.

* No career opportunities

If there is no promotions and enhancement on job they will never be long or any

* Low pay

* Discrimination

Discrimination occurs on promotion, leave and benefits. Management considers own profit. So they act for someone who loyal to their fraud and their activities.

References:

Beech, N and McKenna, E (2008) Human Resources Management. A Concise analysis, 2nd edition, London: Financial Times Prentice Hall.

Foot M, and Hook C (2007) Introducing Human Resources Management, 5th edition. London: Financial Times Prentice Hall.

Slocum, W,J and Hellriegel (2007) Fundamentals of Organisational Behaviours, Thomson South Western.

Torringtan et al (2008) Human Resources Management, 7th edition London: Financial Times Prentice Hall

Wilikson A, and Marchington M (2005) Human Management at Work. People Management and Devolepment , 3rd edition. London: Financial Times Prentice Hall.

Bibliography:

Books:

A. Michael, 2006, A hand book of Human Resource Management Practice, 10th edition, Kogan Page.

Banfield P, and Key, R (2008) Introduction to Human Resources Management, Oxford Universiry Pre

H.Len and B.Lan, (2001), Human Resource Management (A Contemporary Approach), 3rd edition, London: Pearson Education Ltd.

J.M .Laurie,( 2005)Management and Organizational Behavior, 7th edition, Edexcel

Millmore, M et al (2007) Strategic Human Resources Management. Contemporary issues. London: Financial Times Prentice Hall

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www.dh.gov.uk accessed 12.05.2009.

www.cipd.co.uk accessed 12.05.2009

www.businesslink.org.uk accessed 14.05.2009

www.globalizationandhealth.com accessed 14.05.2009

www.employment-studies.co.uk accessed 25.05.2009