HR Issues

1.0 Introduction

There are several failings with the HR issues at Acountco, although these are causing problems at present they are rectifiable, with intervention This will take commitment from all parties involved

This report has been commissioned to identify the current problems, and recommend changes that will move the organisation forward. Although there is some initial cost involved this will be off set by a successful recruitment and retention programme.

The report recommends the introduction of HR practices, with the appointment of a specialist who will control the intervention. This will be reviewed with the partners.

2.0 Contents

3.0 Rationale

This chapter will discuss relevant theory on each of the identified problem area. From this review the recommendations are made.

3.1 Structure

The structure of the organisation is ad hoc; there has been no formal planning.

This structure has evolved is in formal, this places a greater emphasis on getting the best performance from the employees. According to Delany (2001) “successful organisations keep people issues the people issues at the forefront of their thinking and at the core of their decision making and planning”. The organisations that get the people things right are the organisations likely to be around in the future (Delany (2001) cited in Mullins, L. 2005:748).

Since the late 1990s the business environment has drastically changed (Mullins, L. 2005). Competition and the pace of change in business require continuous improvement, therefore it means continuous learning. The organisation requires flexibility to react to market changes (Stern, S 2002).

3.2 Culture

Each organisation is different and therefore must be treated as an entity. The cultural difference of Accountco to their competitors is their family value. this is an asset.

As firms evolve, they pick up skills, abilities and resources that are unique to them, reflecting their particular path through history (Barney, (1995) Cited in Paauwe, J & Boselie, P. 2003). This is particularly true of a firm's human resources, employees who are recruited, trained and who become part of the specific organisational culture and network (Paauwe, J &Boselie, P. 2003). 

Introducing the proposed program will change values. Accounto will need to prioritise the values and competencies that is requires from its employees. These can be used as benchmarks to evaluate current and future employees (Armstrong, M. 1999).

3.3 HR

There are no formal HR strategies; the delivery of any strategy is ad hoc.

The implementation of the HR policies and practices no longer helps to generate competitive advantage, precisely because they are now common across a large number of organisations. So, the timing of take-up and the costs involved in the adoption process of new HR practices is crucial (Paauwe, J & Boselie, P. 2003). Therefore to remain competitive all of the organisation must embrace HR practices (Beardwell, I. et al 2004).

Ownership and responsibility for the recommendations will be the HR department. The role the Human resource function will be harmonised with the values of values of the organisation. With a strong presence of HR professionals at the top, this should have a stronger influence on the formulation of any strategy in the future (Harrison, R. 1997).

3.4 Recruitment and Retention

Recruitment has been a problem, but this with retention of employees can be disastrous for any organisation.

Retention begins at recruitment time, so it is important to select for cultural fit, not merely against the technical and skills requirements. Best practice companies have known this for a long time, and ensure that the selection process allows a full assessment of candidates' abilities, interests, aspirations, and values, and a deliberate review of how well these match their organisational culture (Paauwe, J & Boselie, P. 2003).

Organisations are under increasing pressure to recruit the right people for the right job. The economic cost of getting this wrong can be vast. Numerous factors are to be considered during this process including the culture of the organisation, legal implications, attracting and employing the correct candidate and the cost in time and resources. Therefore it is paramount that the process is fair, reliable and valid (Armstrong, M. 2001).

As Beardwell and Holden (1994) emphasise “essential to a good HRM practice is recruitment and selection, which must consider correct “fit” between personnel and job in order to maximise efficiency in terms of retention and HRM strategic planning” The organisation can use the recruitment process to continue, enhance or even change the organisational culture. When a change of strategic direction is required, recruiting the right candidates is a important factor to increase the chance of success (Beardwell, I. & Holden, L. 1994:225)

There are various recruiting sources, but their success rates are not equal. In a survey the top three sources of successful candidates are employee referrals, college recruiting and executive search firms. All these methods should be considered for effective recruitment (Terpstra, D. 1996). 

The cost of replacing workers who have left can amount to two and half times a worker's annual salary. These costs are rarely specifically identified in any accounting records. Retention plans are vital for organisations. Kets de Vries stated that “today’s high performers are like frogs in a wheel barrow, they can jump out at any time” (Kets de Vries cited in Beardwell, I. et al 2004:176).

3.5 Mentoring and Induction

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There are simple methods that will address retention of employees in the vital first few weeks. Accountco have not addressed these issues.

Organisations that run mentoring and induction schemes lose fewer employees shortly after appointment. Employees who have just started can feel alienated from new colleagues, with little work load to occupy their minds. This can lead to the feeling of making a mistake. Mentoring will introduce the employees to the organisational networks, giving them a point of contact when there is a problem (Mullins, L. 2005). By inducting the new employee will know about the organisation, structure and goals. Orientating new employees is part of good practice, and will allow the employee to start to feel part of the organisation (Marchington, M. & Wilkinson, A. 1996).

3.6 Motivation & Reward

Motivation is not just on the employers’ side, it is about self worth. Accountco are not attracting and retaining the correct personnel. The reward system does not motivate employees.

Motivation is an individual’s perception of their worth, role and work environment within an organisation. There are common motivational factors that employees share, although when satisfied will lead to different levels of motivation. Both Intrinsic and extrinsic rewards add to the motivation level of employees, if managed correctly. Although the perceived equitable reward varies amongst employees, those who receive less than their perceived value will feel undervalued, and not motivated. This will impinge on job satisfaction, with employees feeling dissatisfied with their award (Mullins, L. 2005). Satisfaction in the employees’ role, pride in the work produced. The work itself fulfils the employees motivation, even with some set backs, they obtain satisfaction from a job well done (Blyton, P & Turnbull, P. 2004).

Reward systems are one of the four key policies within strategic HR. the organisation can use this tool to raise commitment, competence, and congruence and it is cost effective. With individuals having more control on their reward, at a basic level this can motivate, at a higher level can introduce self esteem and self worth. These values are congruent to the organisations values and principals (Beardwell, I et al 2004).

3.7 Appraisals

This tool will work with and enhance the reward system.

The objectives from the appraisal Employees appraisals are a tool used to identify development issues within the organisation. Harrison (1993) suggests that they are “a system and process for the provision of both feedback to employees on all aspects of their performance, and the opportunity for discussion to agree actions to assist their future development” (Harrison, R. 1993:256). Mullins defined the advantages of regular staff appraisals as “a formalised and systematic appraisal scheme will enable a regular assessment of individuals’ performance, highlight potential and identify training and development needs” (Mullins, L. 1996:639). 

The capability of the organisation to achieve its business strategies depends largely on the abilities of the managers to meet particular demands and circumstances. Therefore the organisation needs to create a climate that is focused on learning and improvement (Armstrong, M 1999).

3.8 Control

Although the notion of an organisation without rules can seem attractive, rules are the basis of society.

One theory of managing organisation is that “to manage you have to control”. The idea of control is there are predictability, reliability, order and stability. With control the members of the organisation know what they have to do, and customers know when to expect the product or service. Mullins discussed that most people did not wish to have “control applied to them, but they recognised the need for a control system” (Mullins, L. 2005:832). 

Without rules in place organisations can find themselves on the wrong side of the law. Employers employing 20 or more employees are required to have a grievance procedure in place, and this will be extended to all employees in 2004 (S36 of the Employment Act 2002). If this is not in place ACAS procedures can be followed (Palca, J. (2004). (edit 12/02/08 - link no longer online) 

4.0 Recommendations

The introduction of Strategic HR should be reviewed by the partners, with the appointment of an experienced HR Manager. With the recommendations to introduce HR practices, the experience of a Manager would be vital to the success.

A formal reporting structure is to be introduced. Every employee will have clear channels of communication. Introducing an employee handbook will add to the structure, this will combine the values of the organisation with current employment legislation. 

There are several cost effective methods of attracting candidates, advertising at universities and on the internet can attract the right calibre and number of applicants. A continuous presence on the internet will allow for a steady stream of applicants. Accountco should place emphasis on family values when recruiting.

A flexible employee package is to be offered, with individuals having control on their own package. The core salary will be uniform, dependant on experience, and employees can then chose which benefits they would like on top. This flexible package is attractive to a wide range of candidates.

Orientation into the organisation will be supported by the use of the mentor. The mentor will introduce them to colleagues and the layout and structure of the organisation. This will reinforce the induction that will be completed on their first day of employment. The induction not only familiarises the new employee in the organisation, information such as health & safety, terms of employment and company policy and procedures.

The cost to the organisation would be that time committed by the mentor to the new employee. This can be justified against the high cost of recruitment and selection, reducing employee turnover. This will also help the new recruit to network and be a part of the organisation.

They will always have a contact within the organisation that can help with problems when they occur. This contact can prevent problems escalating by encouraging new employees to discuss problems.

An induction program will be introduced into Accounto; this will be given to all new employees. It will be part of the employee’s line manager’s role to induce the new employees within their department.

Appraisal will provide the employee with the opportunity to formally discuss and review their work. This will demonstrate the commitment from Accounto to the individual’s development.

This system of reviewing employee’s performance is vital, not just for the new employees but everyone at Accounto. This again will be part of the line manager’s role. The line manager’s skills will need reviewing, to ensure they can be impartial during the interview. The cost can be offset against identifying and reacting on training issues, allowing the culture to be predominant in the organisation.

The HR department will review all legislation to ensure Accountco are acting within this. Once introduce these HR practices will be reviewed regularly with the partners.

5.0 Bibliography

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