Wal-Mart Case Study
- Pages: 26
- Word count: 6427
- Category: Walmart
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Description and analysis of Wal-Mart using the strength field model of Paauwe. Indicate why you have used this model.
Paauwe’s strength field model uses the reverse based view (RBV) to explain how and why human resources of an organization which he also refers to as employees can contribute to sustaining its competitive advantage in the market. He used this approach to come up with a theory that provides conditions for human resources and human resource management to contribute to the organizations performance and competitive edge. This theory also explains factors that play a major role in shaping labor/employment relationships. He combined these two to come up with a model he referred to as Contextually Based Human Resource Theory (CBHRT). This model describes Human resource strategy as a device that makes a variety of other strategic decisions and options possible. He explains that for human resource management to be of high value it has to create a climate that allows trust and willingness of individuals to change. He shifts the triad that existed traditionally of ‘strategy to human resource management to performance’ to one that is more modern and realistic ‘human resource management that is ethical or value laden to organizational viability to implementing strategic options’.
Paauwe’s model has several areas that need to be studied by answering questions that refer to them in relation to maintaining a competitive edge in the market. One of the forces that need to be analyzed when using the model include product market technology dimension (PMT). In analyzing this aspect of an organization, the analyst determines the competitive mechanisms that directly impact the shaping of the organization. For the Case of Wal-Mart, these mechanisms include product market combination in which the company offers different types of stores depending on the location. The company has supercentres and discount stores stationed in major towns while the neighborhoods that are a bit far from the towns are served with smaller stores referred to as neighborhood markets. This gives Wal-Mart a competitive advantage over its rivals who have not dared to venture in to such areas especially in the neighbor hoods. This strategy has enabled Wal-Mart to increases its sales as it is able to serve individuals who for different reasons can not get to the super centers or discount stores that are located further from residential homes. The company also offers other stores referred to as Sams Clubs. These stores strictly discount on all their goods making them cheaper than regular discount stores.
Wal-Mart also offers competitive wages and benefits to its employees. In 2007 for example, Wal-Mart used $1.1 billion on benefits (USA today, 2009). Offering competitive wages and benefits helps keep the employees satisfied and motivates them to work towards attaining the company’s goals which increases the company’s competitive advantage. It will be worth to note that Wal-Mart’s employees are not really satisfied with the kind of wages that the company offers. There have been reports of criticisms and complains that the company does not pay what it is worth. Besides this, the benefits offered are also so limited such that that they make no much difference to the employees. This has resulted to the company experiencing high rates of turnovers which could compromise its competitive advantage.
Wal-Mart has also employed technology in its operations. Applying information technology is an idea that originated with the company’s founder Sam Walton. Technology is used in setting up private satellite network which enables efficiency in communication within the organization locally and internationally (Chendran, 2003). The company has also deployed technology in monitoring processing, central management and e-commerce. Wal-Mart markets and trades electronically through Walmart.com. Employing technology has greatly shaped the company increasing its sales hence growth and competitive edge.
Another force to be analyzed is the socio-cultural-legal dimension. This involves analyzing the organizational mechanisms directly affect the shaping of the organization. One of the mechanisms that have contributed to shaping Wal-Mart is the organization’s procedures. One of these procedures is in the selection of employees. The company has laid down procedures that ensure that only the best of the applicants are recruited. The company also has specific procedures that it uses in selecting its chief executive officer these procedures have proved to be very effective over the past years as the company has had CEOs who have lead from one success to another each increasing the sales hence growth of the company than the one who preceded him.
Another procedure though new but which seems to be one that will contribute to shaping the company is increasing the number of part time labors and employing only those employees who are healthy. This will not only save the company on its spending on benefits such as medical cover but also increases productivity as healthy employees have a high output. It also reduces cases of absenteeism which usually has a negative impact on productivity of an organization (The New York Times, 2005).
The company also tries to treat its employees well by referring to them as associates rather than employees. This is intended to make the employees feel like they also own the organization. This enables them to work harder towards achieving the vision of the company as they feel that its success is theirs as well. Influence of social partners also has a great effect on the Wal-Mart. The effect in this case is negative as Wal-Mart is one of the companies which do not allow its employees to unionize. This has result to the company facing some problems with its public relations. The function of unions is to collectively bargain and negotiate with the employer for better terms of work for the employees. Lack of labor unions implies that Wal-Mart’s employees have no platform or forum in which they can voice their concerns especially where work related problems are concerned. This can have adverse effects n the company such as high turnover rate which reduces the company’s competitive advantage.
Legislation also has some effect on Wal-Mart. All activities that involve the human resource are expected to comply with labor laws. In the event an organization violates any of the laws, it faces problems which could ruin its public relations by damaging its reputation. Wal-Mart for example has been accused several times for violating laws such as forced labor, overworking and discrimination against women. These accusations have had a significant negative effect on Wal-Mart’s sales.
According to Paauwe, configuration is another force that shapes an organization. One of the key characteristics of Wal-Mart is its age. This company was founded in 1945 and has experienced growth over the years by earning the trust of customers through its market based approach in operation. At the time of its formation, discount retailing was just beginning to pick in the United States. These stores were preferred to the traditional retail stores as they offered lower prices. Wal-Mart’s founder (Sam Walton) mission was to offer the lowest possible prices to customers. The strategy was to buy cheaply directly from manufacturers and stack high in stores that were cheap but operated and designed in a cheerful manner. Ownership structure has not changed since then. Wal-Mart is yet to get involved in any merger or acquisition. The company expands by opening its own stores. It can be concluded that Wal-Mart’s configuration has contributed the most in shaping the company and enabling it to successfully establish itself in the market acquiring a large share and sustaining a high competitive advantage over its competitors.
In terms of dominant coalition, HRM strategies of Wal-Mart are determined by the board of directors. There are several HRM policies and practices that can be applied for the benefit of HRM strategy. They include planning of the workforce. This involves determining the amount of labor that is required by each department and planning for it. The HRM needs to identify the quality of the required labor force, analyze its cost benefit and ensure that each department’s workforce is provided with the tangible resources it needs. Wal-Mart is a large organization and if planning is not done, over hiring or under hiring could occur. The HRM hence has to ensure that each department only has an appropriate number of employees that will carry out the operations of tire that particular department cost effectively.
Planning ensures that there is no unnecessary wastage of financial resources that could arise due to over hiring. Cost benefit analysis will enable the Wal-Mart’s HRM to determine whether hiring will earn the company more profits. An example is at the check counter, cost benefit analysis tool will enable the HRM to determine if hiring more people increases the speed of the services at checkout counter and whether this will attract more customers or whether the new employees will not be as fruitful as it is expected from the salaries being paid to them. Planning hence enables the organization to determine the quantity and quality of workforce required by each of its departments. Planning has enabled Wal-Mart realize that employing part time labor was cheaper than full time labor in terms of paying out benefits (Lenure Skenazy, New York Daily News, 2005). But then this is a compromise to quality as most of the part time workers are usually not as skilful as full-timers.
In recruitment, Wal-Mart’s HRM should use comprehensive interviews to choose the best candidate and offer an induction program which the newly recruited employees are familiarized with the organization’s culture, mission and vision. This period should also involve the individuals being introduced to other members of the different departments and mentorship offered so that they are helped too understand what is expected of them ad how they can achieve it. Training should also be offered so that the new individuals can understand how they are supposed to work. Training involves coaching, supervision and mentoring where senior employees guide the new ones on how to best perform their tasks, point out mistakes and teach them how to fix them new employees rely on the seniors to teach them and help them fix mistakes.
Wal-Mart should also provide the employees with higher level education that is related to their work. This could increase the productivity of the employees hence increasing the company’s competitive advantage. Training also increases creativity and innovation skills amongst employees as it instills skills into the individuals which can be used to invent better ways of operating. The HRM should also recognize and reward employees that work exceptionally well more frequently. Appraisals should be done to determine such employees. This motivates employees as they feel appreciated and increases productivity hence competitive advantage of the organization. Wal-Mart should also encourage creativity and innovation which is very crucial in increasing competitiveness of an organization by offering rewards and the necessary resources for innovations.
Wal-Mart HRM needs to involve its employees more in decision making of the organization. Participation should be encouraged and the employees empowered by being allowed to form unions whose leaders will be the representatives of the employees in decision making. This especially is essential when making decisions that affect them such as on benefits and employment. Such decisions should not just be left to the board of governors as it currently is. Participation and empowerment increases motivation and productivity within the organization hence competitiveness. The HRM should also offer attractive wages to increase the employees’ satisfaction. Wal-Mart has over the recent years been accused of offering wages and benefits that are not worth a company of its status. It is in fact argued that Wal-Mart as one of the leading employers has set low wages for all Americans as other companies pay in comparison to what Wal-Mart offers. Offering competitive wages is motivational and reduces cases of high turnovers as employees are satisfied with their jobs.
Wal-Mart’s HRM strategies affect its leeway/room for maneuver in different ways. The fact that the company has been making numerous sales reporting increases in its profit margins imply that that it has financial resources available which increase the leeway of the HRM. Wal-Mart also controls a large share of the market which gives it some form of monopoly that increases the freedom and leeway of the HRM. Wal-Mart does not allow its employs to unionize implying there is no collective bargaining. This in a way increases the leeway of HRM as it does not have to comply with the demands of the union as there are no threats such as strikes which could reduce productivity. This however reduces commitment, motivation and satisfaction of the employees as they have no forum in which they can raise and have their concerns addressed. This reduces the HRM’s leeway. Legislation has also reduced the freedom of the HRM as it has to lay down its strategies in accordance with the labor laws. Any violation results to cases being filed against them which could lead to litigation, damage to reputation and reduction in sales. An example is the numerous cases that have been filed against Wal-Mart’s HRM for violating labor laws such as gender discrimination, forced labor amongst several others.
While some of Wal-Mart’s HRM strategies have increased motivation, satisfaction and commitment amongst some workers, other strategies have not. The company is characterized by high rates of employee turn over and conflicts between the management and the employees that get to the media and end up in law courts.
In spite of the few hunches, Wal-Mart has been able to perform steadily over the years. This evident in numerous sales and high profit margins the company reports each year. The company also controls the largest market share in discount retailing. Its services are of good quality as the employees have been well trained ensuring customer satisfaction.
Force analysis of Wal-Mart
Type of production organization and the potential flexibility
Flexibility is considered to be the most crucial characteristic of the competitiveness of any organization. Traditionally it was believed that the surrounding played a very vital role in competitive strategies an organization employed. It was perceived that an organization’s position in the out side environment is what determined the strategic measures taken to increase its competitiveness. It was believed that the strategies taken had to be in accordance with the position the company held externally (Prahad & Hamel, 1990). This approach is referred to as ‘outside in approach’ as the outside is what influences the internal strategies taken.
In the modern approach however, the external position of an organization (competitiveness) depends on the competences the company has. This approach implies that the company’s strategy can influence the surrounding. In this approach, the competences are mainly achieved through the human resources. This approach is referred to as resource based and has been extended to develop dynamic capabilities (Treece, Pisano, & Shuen, 1990). This approach explains that in order for an organization to develop a competitive advantage, it has to continuously develop its resources and competencies (develop dynamic skills). The dynamic skills are the ones which flexibility to an organization. An organization hence has to be flexible such that it adopts new resources and also develops the ones it has to fit the competitive situation.
Wal-Mart has several strategic designs that potential flexibility can influence. One of its strategies in saving on benefit cost has been to use part time labor instead of full time. This strategy enables the company to get the same quality of work but at a lower cost as part time employees are not entitled to any benefits. This enables the company to increase on its profit margins enhancing its competitive advantage. This can be considered as a potential external operational flexibility. Wal-Mart also gets its supplies from different suppliers. This enables it to stock a variety of products, have a higher bargaining power and restock only those products that move fast. Wal-Mart operates in other countries outside the United States.
This is one of the strategies that have enabled Wal-Mart to make numerous sales as well as increase its competitive advantage over its competitors. This can also be described as an external operational flexibility. Wal-Mart has a variety of stores which include the supercentres, neighborhood markets, discount stores and SAM’S clubs. This is a potential internal operational flexibility that enables the organization to stay competitive. The fact that Wal-Mart dares to invest in areas that its competitors have not yet considered is a strategy that increases its competitive edge in the market (Volberda, 2004). Besides this, Wal-Mart also has joint ventures in the foreign countries it operates in such as China and made acquisitions in Brazil, South Africa and Porto Rico. These are countries with large populations hence promise high sales. This strategy has helped the company increase its profit margins and to sustain a high competitive edge over its competitors who have not dared do the same.
The introduction of neighborhood markets is a potential external strategic flexibility. This is because this is a new area that Wal-Mart is investing in. Wal-Mart is also the first discount retailer to put up small stores in neighborhoods as the rest are usually located in towns and market centers. Wal-Mart is therefore not sure if these stores will be successful in generating profits for the company through increase of sales. It is a strategy aimed at increasing sales by bringing the stores closer to individuals who can not get to the supercentres and other discount stores. Introduction of online shopping also is a potential external strategic flexibility. The move to employ younger and healthy individuals is a potential internal strategic flexibility (Volberda, 2004). This move though new to the company is aimed at increasing the productivity of the company while saving on the cost of benefits paid out in terms of health which usually is very expensive.
The Degree to which Wal-Mart can be commented as a HPO and the degree to which the functions of Wal-Mart can be qualitatively measured.
High performance organizations are those that are able to effectively integrate people, technology and the organizational structure to fully exploit the available resources and opportunities in order to attain the organization’s vision. A high performance work system requires the organizational structure, the human resource management, task design, information systems, people and the reward systems to work together (Noe et al., 2007). A high performance work system is characterized by employee participation in decisions, high competitive wages and benefits, recognition of performance through rewards, knowledge sharing to increase productivity, trust between the management and the employees, high job satisfaction, low employee turnover.
The outcomes are high productivity and efficiency in the organization hence higher profits (Noe et al., 2007). Other outcomes of high performance work system are increase in quality of services or products and high customer satisfaction. This generates a chain that leads to the organization increasing its competitive advantage over it competitors. Increasing quality of services for example increases customer satisfaction which in turn increases sales as customers keep coming back resulting to the growth of the organization. Improving productivity enables the company to carry out more operations using fewer resources. This could appeal to the kind of customers that are price conscious and attract them winning them over from the organization’s competitors.
Low production cost and quality are the most significant outcomes of a high performance work system. These are usually achieved by reducing the rate of absenteeism and turnover. The organization also needs to have employees who are skilled and experienced. High performance is also characterized by flexibility such that in the event changes are made in strategies or goals, the employees should be willing to make and adjust to the required changes effortlessly. Changes are inevitable in the business and for organizations to succeed, they must make changes in strategies so as to meet their goals or even change these goals (Noe et al., 2007).
In order for an organization to achieve high performance, there are conditions that it must effectively meet. These include teamwork and employee empowerment. Teamwork involves individuals with different skills and experiences working together to achieve a common goal. A part from helping the employees to learn from each other and improving communication skills, teamwork provides a variety of solutions to a single problem giving the management a variety of options. The quality of work produced by teams is always best. It also is an empowerment tool as long as the proposed decisions or solutions offered by the team are implemented by the management (Noe et al., 2007). It gives the employees a chance to contribute to the organization’s decision making. Knowledge sharing amongst the employees is a condition that should be met. Organizations should encourage this by rewarding those who share knowledge and skills that are directed towards improving the productivity of the organization. The organization also needs to ensure that there is job satisfaction. Satisfaction increases motivation hence performance. This can be achieved by setting challenging goals that are clear and making jobs interesting. Rewards should be given to those who attain the goals.
The organization needs to also emphasize on ethical behavior amongst its employees. This includes honesty, loyalty, and fairness amongst several others. This should start from the management before it can tickle down to the rest of the employees. It can easily be achieved by the company laying down ethical codes which should be used in decision making by all employees (Noe et al., 2007). These codes should also determine and explain the punishment in the event there is a violation.
The HRM plays a very important role in high performance of an organization. This is through its role in recruitment, planning, training, compensation, wages and salaries, employee appraisal, amongst several others (Noe et al., 2007). The HRM is in fact considered to be the determinant of the performance of an organization. Modern technology provides tools that enable HRM to effectively perform these roles. This is known as e-HRM which enables them to post jobs, retrieve application letters and resumes and giving information about the organization. It has e-HRM has enhanced recruiting. The human resource has to be effective if high performance is to be achieved. Its operations should be customer-oriented. HRM’s customers include the organization’s managers, the employees, and the strategic planners. The human resource management has to identify its customers, needs and address them. These needs include committed and competent employees (Noe et al., 2007). Ways of satisfying these needs include performance development, qualified staffing, rewards, training and development.
According to De Waal (2005), in addition to the already mentioned features, a high performance organization is also characterized by sustained growth over a long period of time. This growth should be higher than that one of its peers in the industry, is capable of adapting to changes, has capability of reacting quickly and effectively to changes, it strategies are long-term oriented and makes efforts to continuously improve the working conditions of its employees.
Determining whether to classify an organization as a HPO requires one to examine its structure, culture, leadership and external environment characteristics. In terms of strategy design, Wal-Mart has a vision that is not only strong but also exciting and challenging. The organization aims at increasing its sales by providing the lowest possible prices in stores that are cheap but cheerful. Wal-Mart’s long-term and short-term focuses are balanced. The company does not overlook one over the other one. Its goals are not only clear and ambitious but also achievable. Wal-Mart’s top management, particularly the CEO usually communicates strategies making sure that they are clear to everyone and well understood. Employees are made aware of changes and what is expected of them.
In terms of processes, Wal-Mart has a well designed reward structure in which employees who perform exceptionally are awarded at the end of each year in a function that is attended by representatives from all its branches. The company also offers promotions to managerial levels from amongst its employees. Financial information is always communicated and the set targets made clear so that all can work towards achieving them. Internal communication is effective through the Intranet where employees can voice their concerns and get response from the HRM.
In terms of technology, Wal-Mart has always been keen to in applying technology in its business operations. This was emphasized by its founder Sam Walton. Wal-Mart uses ICT systems in e-HRM, e-commerce such as online shopping through Walmart.com and communicating with suppliers and general communication within the organization through a satellite system (Chandran, 2003). Wal-Mart has over the years experienced challenges with its human resource. Some of the factors contributing to this are the high employee turnover, the overwhelmingly number of employees (over 1.5 million) and high entry level salaries and wages. Wal-Mart has however recognized the significance of HRM and in an effort to enhance the efficiency of its human resource management; the company has connected itself with HR technology (Noe et al., 2007). This is through an online system in which all communication with the employees is enabled. This communication may be request for leave, application for promotion to a higher position or any other. This has proved to be efficient in reducing employee turnover among store attendants. The company has hired legal experts as part of the HRM team who give legal advice in relation to labor laws so that it does not implement strategies that violate them.
The leadership characteristics at Wal-Mart are of good quality. The company’s CEOs have always led by example. They work hard and expect the rest of the employees to do the same. The company has had strong and effective leadership which is characterized by coaching and facilitation. Seniors coach their juniors from the top to the lowest level developing leaders from within. This has enabled leaders to be developed who have led the company from success to success through growth in profits. There is commitment and decisions are always decisive and focused on strategies.
In terms of individuals and role characteristics, Wal-Mart has failed in some areas. Employees for example are not involved in decision making. Everything is decided by the board of directors and unionization has not been allowed. Wal-Mart however provides a safe workplace that is secure. Wal-Mart also is a learning organization where employees are continuously trained to improve on their skills.
Wal-Mart’s culture does not empower people as they are not given freedom to decide. Decisions are made by the board of directors. The culture is however performance driven and is characterized by meaningful values such as taking care of employees and people in the community in which it is located which it does. There also is transparency and openness within the organization. The external characteristics of Wal-Mart include creating an enhanced customer value through offering quality services and low prices. The company has also strived to ensure that its relationship with all stakeholders including those who are not share holders such as employees, customers and members of the community is good. Wal-Mart responds to the environment and has taken measures to help sustain it through strategies that were announced by its CEO, Lee Scott. Wal-Mart though not keen on partnerships has grown by competing with the best players in its market and aiming to beat them.
According to Noe et al., (2007), high performance is measured by examining the profits of the organization which should be long term, quality of the services and products which should be high and customer satisfaction that has to be great. Regarding this and the already discussed characteristics, it can be concluded that Wal-Mart is a high Performance Organization as it meets most of the conditions. It will be worth to note that an organization can not meet all the outlined conditions as humans are not perfect and in business, compromises always have to be made. However, an organization should be strongly characterized by a majority of these conditions which Wal-Mart does.
Improvements that need to be made in the field of the organization and of the HR policy based on previous analysis.
There are several improvements that need to be made in Wal-Mart. Teamwork needs to be emphasized on. Solving tasks using teams has several advantages. It enables the team members to identify the skills they lack hence can focus on self-development to master them. It is through teams that knowledge is effectively shared improving the process of solving tasks. Teams are made up of individuals with different skills and experiences. This implies that the way they perceive the task varies hence different approaches are implemented in solving it. This encourages diversity which improves the quality of the results. Teams also offer more than one solution to a problem. Decisions reached at by teams are more reliable than those made by individuals. Applying teamwork is a way of involving employees in decision making of the organization and empowering them. Wal-Mart should therefore improve on the use of teams especially in decision making.
Wal-Mart faces high employee turnover. This implies that there is a problem with its labor relations and needs improvement. The main reason as to why employees leave their jobs is due to lack of satisfaction and motivation. Wal-Mart seems not to have made enough efforts towards this. Wal-Mart should therefore come up with strategies that would increase satisfaction and motivation amongst its workforce.
Employee involvement and empowerment is very important in an organization. Wal-Mart seems to have a problem in this area. Unionization is a very important form of employee empowerment. Unions give employees an avenue from which they can raise their concerns and express their needs to the employer. Organizations that allow employees to form unions that are free from employer influence enjoy a good relationship with their employee which is good for the productivity of the organization. Wal-Mart hence needs to improve in this area and allow unionization. HR policies should hence allow employees to form unions.
HR policies should also not just focus on profit maximization while ignoring the means used to attain the profits. The needs of the employees need to be addressed. The organization needs to ensure that cases such as forced labor and overworking are avoided. Such issues result to work related stress and illnesses which reduce the productivity of the organization. Wal-Mart has over the years been accused of overworking its employees by locking them in the stores; there are cases that have filed against the company in relation to this. Wal-Mart hence needs to make improvements in its HR policies to ensure that the means used to get the profits are both ethical and lawful. Wal-Mart could alternatively have a feedback system through which employees can voice their concerns and dissatisfactions with the organization’s policies concerning their workplaces, the management and cultural freedom. Such feedback when addressed improves the organization’s dynamics and motivates the employees as they feel that they also are stakeholders and that they matter.
Most HR policies seem to be more focused on making profits and do not really concentrate on the needs of their employees which are very important as they affect performance hence productivity. HR policies need to be customer based and treat employees as their customers. This is the only organizations such including Wal-Mart can be successful in all areas and not just in terms of sales and profit margins.
Areas of HRD
Human resource management is concerned with ensuring that the organization’s employees generate value in their operations. This is one of the key areas of organization management that plays a critical role in ensuring that the operational goals are met. Wal-Mart employs a departmental approach to management of its employees where the human resource manager as the head of the HR department is charged with ensuring that HR goals are met. Such an approach ensures specialization within the organization with respect to personnel charged with managing issues relating to human resource especially the recruitment of new personnel and management of conflicts. On the other hand, the employees are presented with a clear path to address their relationship and communication issues.
The main role of the HR department is to ensure that human resources are organized in a manner that leads to development of Wal-Mart. Management of conflicts between employees, communication between employees, clarification of roles and ensuring that any changes or challenges with the organization’s human resource are accurately addressed are some of the key tasks that the HR department undertakes. The coordination of the HR department with other departments made possible by the manager is important in determining areas that the organization is lacking in. In general, the overall performance that can be attained by various departments that make up Wal-Mart is dependent on how well human resource is managed.
Performance management systems are mainly aimed at monitoring trends in performance and therefore determining the levels of success that an organization records with respect to attaining its vision. Wal-Mart is best described as large and success oriented owing to the culture that it has developed. An automated performance management system will aid in evaluating of the levels of performance and highlighting areas that the organization is lacking in. Such an approach to evaluation and assessment of the organization ensures efficiency by motivating employees and aiding corrective measure in areas that the organization is lacking in.
An important factor that Wal-Mart should consider in developing its performance management system is to ensure that predictors and technology used are agreeable to all stakeholders. Performance management is a wide area that is largely affected by the perception one has of success and this may reduce flexibility attained by Wal-Mart. A performance management system that employs predictors that are not acceptable to other stakeholders or does not put into consideration the development that are being made in assessment systems and technology may in fact lead to complexity in operations.
It is apparent that Wal-Mart has an uphill task in ensuring that all its branches adopt and are appreciative of its performance management system. Automation of such a system aids in ensuring accuracy of the prediction and in assessment. This is an important factor considering the role played by performance management in ensuring operational efficiency. The employment of an effective performance management system places an organization in a position where it is able to determine the input of its resources and areas that have to be improved in seeking defined goals. Performance management systems may also aid in goal setting by helping in the development of a clear picture of the potential that the organization has in value generation.
Judgment and recommendation
The best HRM policies are those that are customer oriented. The HRM needs to recognize employees as its main customers due to their large numbers. It needs to treat them just s a business organization would treat its customers. This includes identifying their needs and addressing them. Employees need the HRM to care for their needs and be competent as well. HRM hence needs to carry out its role and responsibilities in a way that is competent as described before.
For an organization to grow and develop, its workforce needs to be developed as well. This is attained through regular recruitment of qualified skilful competent employees, training and mentorship. The organization also needs to have a well developed information and communication system through employment of appropriate technology (ICT). Technology should also be employed in other areas of operation such as marketing, buying and selling, customer relationship management and enterprise resource planning. Application technology increases efficiency, accuracy, is cheap and saves time.
Innovation and creativity have to be encouraged and rewarded. Employee relations should be emphasized on. The organization has to provide safe workplace, good wages, compensation and rewards when deserved. The HRM should employees just as it would want them to treat customers. Good leadership has to be present and the communication channel clear. An organization whose HRM strategies are directed towards achieving these things will no doubt be a high performer with an increased competitive advantage over its competitors hence a large market share.
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