Introduction

The purpose of this paper is to examine the HRM functions and how leaders of company to actually use the theories for application and practice. HRM functions not only to assist decision making of senior managers but also as a tool to encourage employee participation and linking it to performance improvements and achieving company objectives and goals.

Human resource management (HRM) have strategically position itself as the core of a successful company. Given the fact that efficient and productive employee will improve the company’s bottom line and increase company’s value; human resource management has in fact changed from simple function such as hiring and filing to developing, training, rewarding employees from a more strategic perspective. Most HRM functions are now tied to company performance and financial situation.

In this paper, discussion will begin with understanding the concepts in HRM, relevant theories and its application in real world situation. Followed by which we will see the application of HRM practice in British Airways, linking theories and its applications in British Airways to the end results of achieving its objectives. Managing performance and evaluating achievement of company goals and objectives through application of HRM tools Investing In People (IIP), EFQM, and Total Quality Management (TQM). The final section of the paper will conclude all the discussion by linking HRM functions to performance.

The end result of this paper; hopefully can give the reader a thorough view of HRM concepts and theories and its applications in companies; achieving company goals through employee engagement and how it can assist leaders and managers to improve performance and instill culture of employee engagement.

Human Resource Management Concepts and Analyses

Strategic Human Resource Management

In real practice, many companies actually confuse between traditional HRM and strategic HRM due to the fact that both are almost similar. Strategic HRM brings us a new concept of HRM.

Strategic HRM by definition means Human resource management linking it to the strategic planning or the organization as a whole. Given this scenario; HRM now has the role to strategize for the organization to meet its objectives in both the short term and long term strategic planning. HRM should be able to organize its human resource; i.e. recruiting, training, rewarding and evaluating, according to the growth of the company without hurting its financials. (Losey, Ulrich, & Meisinger, 2005)

In strategic HRM, it is very important for the human resource managers to constantly open up two way communication with the top management of the organization for planning and adopting the strategic plans in the long run with the objectives of increasing efficiency and productivity of its workforce.

Strategic HRM focuses on the long run and its objective is to have improved understanding and strategic use of its line managers. The division itself basically tends to lead, inspire and understands its line managers while instilling a culture of open, employee engagement and empowerment. The planning horizon varies according to the company’s needs; medium and long run. Strategic HRM also focuses on developing its employee to fit the needs of the company in the future. Most importantly, the investment in its human resource should be able to be measured, evaluated and communicated to the whole organization.

HRM Relationship with Line Managers

Line managers are basically operation managers which has direct contact and manages employees work processes and responsibilities. Given the task of managing people and operation flows; line managers usually focuses on getting things done rather than in people related matters. Therefore it is common for line managers to always complain of HR not doing enough, policies are theoretical and not practical nor applicable in business, and much more. (Francis & Keegan, 2006)

In modern days, line managers and HRM works hand in hand for results, mainly because they are the one in touch with the employees directly. Line mangers are required to take up responsibilities for HR matters and even look for ways to resolve them instead of waiting for the “right” people to do it.

Given the responsibilities of managing people issues, line managers now share the responsibilities with HR managers. Based on IRS survey, major HR issues still resides with the HR specialist such as policy formulation, policy consistency and compensation. Line mangers have actually shared the responsibilities; i.e. recruitment, grievance procedures and performance and goal setting for employees and is empowered to put the policies into effect. (Craig, 2007)

The drawbacks of line managers involved directly in HRM are that most of them find it taxing and stressful to what they already have. According to IRS employment review, line managers felt burdened by the need to perform both task of regular work requirement and HR functions at the same time, stressful to find a balance between both functions where in most cases HR functions are left until a later time. (Craig, 2007)

It is vital to have thorough collaboration between the HR, line managers and top management to collectively plan and strategize company’s goals. How to maintain high morale of employees with policy and compensation from HR, constant contact with the employees through line managers to get the overall sentiment of the workforce and both HR and line managers have to link and bridge performance, productivity and morale of employees towards achieving company’s goals.

Organization Culture

Creating an ideal organization culture is as important as having clear strategic plan. Organization culture will determine the level of engagement and productivity of its employees. For example, Toyota Motor Corporations organization culture as describe in the Toyota Production System states that the company strives to eliminate wastes and openly engage its employees to innovate. The culture developed and practiced over the years have managed to form an efficient company acknowledge and adopted by most organizations.

Organization culture by definition means a subconscious level of behavior for the employees to follow. This culture basically determines right or wrong, can and cannot of a company where all employees are bound to follow. Organization culture would be an invisible code of conduct which will determine the way its employees deal with customers, loyalty, productivity, decision making and its community. (George, 2000)

Building ideal organizational culture takes time as the saying goes; “Rome was not built in a day.” Organizational culture is based on collective ways of the people involved in the organization on their behavior, the way they work and reactions towards the environment over the years would result in developing an unwritten standard code of conduct. In simple term, it means the way how work is done in the organizations.

Employee Engagement and Motivation

Employee engagement means employees have heightened emotional attachment and positive approach to which encourages him or her to contribute positively and productively in the course of his or her job requirements and maybe more towards achieving the organizations goals. These good approaches are basically group as the level of commitment, involvement and motivation.

A fully engaged employee will tend to go the extra mile to achieve organization goals and to satisfy internal and external customers that they are in contact with. This commitment brings about increased productivity. Many researches have been done to measure employee engagement and the relationship with productivity and performance.

It is important for organizations to understand how to engage employees as studies have shown that engaged employees tend to produce better results and have the right psychological attitude to help the organization to achieve its objectives. Engaged employees are also more productive, efficient and willing to do more that what is required. Employee engagement research have shown positive correlation with productivity, performance, employee turnover, loyalty, customer service, satisfaction, and many other subjects of interest.

Employee motivation is defined as psychological forces that shapes and determine the behavior and attitude of employee towards the organization they are in; it affects their productivity, ownership of work and work perspective. (George, 2000)

Much research have been done to understand employee motivation and among the famous models are; Maslow’s Hierarchy of Needs Model; Freud’s X theory; Herzberg’s Y theory and McGregor’s Z theory. All this theories and models present interesting perspective to improve employee motivation. However; in my humble opinion, self interest is the essence in employee motivation, if the employee’s self interest is challenged then it would change their motivation.

Performance Management

Performance management is defined as the process which the management works together with their employees to align their productivity towards achieving goals and objectives of the organization. This process uses empirical measure to evaluate performance and also to provide feedback to employees. Performance management in layman terms is to measure, evaluate and provide feedback on employee performance based on a set of standard determined by the organization.

Performance evaluation is a common tool used by many organizations to gauge its employee performance. However, many also did not align performance evaluation towards achieving company goals and objectives. This has defeated the purpose of having performance evaluation itself. (Robert & Lynne, 1996)

Focal point of performance evaluation should first align itself towards achieving company’s strategic goals and then only look at short term performances. Overstressing on performance would also tend to create individuality among the employees as everyone tends to take care of their self interest instead of the company’s.

Deming has listed several weak links in performance management which has its points and also suggests for improvements in this area. Among the points raised are:

1. Performance management focuses on immediate individual goals set and performance and neglects the strategic development of the organizations. Alignment of employee performance to achieving organizational goals is very important for strategic planning and human resource development.
2. Employees will feel unsatisfied and afraid to give opinions that are not in line with the managers’ perspective. For whatever reasons; in most cases, justifications and evaluations given by superiors are right and there’s an old saying which goes “it’s my way or the highway”. Managers evaluating performances would always position themselves in defensive position when employee questions their judgment; closing their mind and relentlessly defending they are right.
3. Performance management brings about team rivalry, increase office politics, detrimental to harmonious office environment. It focuses on the end results and therefore everyone is for themselves.
4. It uses empirical measures where managers and employee would focus on the numbers instead of quality in the performance. All work related processes would have to be quantified; this put stress on the employees and line managers. Meeting deadline and numbers will encourage workers to meet and exceed the numbers and more often than not neglects innovation and creativity.

Performance management in an organization; it should be prepared in a way that it could be legally defensible way. Many lawsuits from the employees are concerning discrimination towards race, religion, sex. From the case Brito vs Zia Company, the court rules that the company has not shown that its performance evaluation was valid in the sense that it is related to the work which the employee are being rated; i.e the evaluators have come into little or no contact with the employee concerned. (Barrett & Kernan, 1987)

Evaluation of Organization Success

Organization success can be measured according to the key areas outline by the management in their strategic plans. The important value of organization success should be linked back to the performance of its employees. Only through this bridging, employees are able to connect and comprehend the effort that they have put in to the achievement of the company. (Armstrong & Baron, 2007)

Linking employee performance to company’s performance will create sense of accomplishment to the employees. For example; a sales employee has sold 1% of the company’s total sale of product ABC. This employee can relate his productivity towards company’s achievement and he knows that he will need to improve himself for better performance. Compensation and pay can also be formulated against performance evaluation and company success.

Theories and Practice

The essence of human resource management is to create workforce equipped with necessary skills and knowledge to perform its duties and responsibilities in order to help its organization to achieve its goals and objectives. Along the way, satisfy the workforce with adequate compensation, policies, right motivation and promote ideal organization culture in order for the workforce to stay focused and content.

Many models, theories has help HRM to strategically place itself as the core of an organization. Popular theories of HRM are 360 degrees performance feedback, management by objectives, total quality management, IIP and many more.

British Airways

British Airways; though its strategic repositioning, has identified four areas which will place the company competitively in the aviation industry. The four areas that needed to be answered were, i)changing business environment ii) Competition in the industry iii) What their customer wanted and iv) what do their workforce want. (Analuoi, 2002)

Addressing these areas would help to reposition British Airways in the industry.

One aspect which BA wanted to achieve is to increase employee engagement and motivation. The following steps were taken to improve the situation:

1. To encourage ownership of work, BA designed the company compensation to be based on profit sharing. This ensures the performance of the airlines is directly linked to its employee’s performance.
2. To appreciate high performance; a programme designed to recognize high performing employee through its Awards Excellence Program.
3. To recognize creativity and innovation; employees with ideas and solutions or better way of doing things are rewarded for their input into the company. This program has encouraged employees and line managers to actively look for ways to reduce cost, increase efficiency, and improve customer service.

Training and development also have been given emphasis as highly skilled staff is vital to achieving high customer satisfaction. Recognizing this importance led to the development of open learning through multi media channel and also library. Customer service training center was set up to ensure all its front line employees are trained with the agreed to standard expected from BA. (Analuoi, 2002)

British Airways has strategically chosen to encourage front line manager empowerment and faster decision making. The undertaking of the project did produce results as they wanted but unfortunately some innocent decision making which were deemed wrong by the management had chosen to take punitive action against these managers, based on the disciplinary action as coined before the empowerment exercise stared. Therefore the managers seem reluctant to continue undertaking ownership of work. Eventually HR department had changed the mistakes to a positive reinforcement program; only then the managers start to feel comfortable and work diligently.

Total Quality Management (TQM)

In business it is essential to get things done right the first time. Any rework on the product or services is considered as waste and it incurs cost. Therefore, total quality management developed to understand customer needs and striving for continuous improvements. TQM later developed into a statistical control called Six Sigma where services and products are based on six sigma graph; to eliminate the chances of getting defect products.

TQM has been an effective tool to evaluate employees and also to create a culture where perfection is an ideal in the company. Most manufacturing company adopted TQM to reduce defects but TQM is now applicable to most businesses. This model helps leaders and managers to build confidence and to motivate employee to perform to the expectations of TQM model. TQM can also be used as a tool for performance management.

Organizational achievement can be measured also with the HR tool such as TQM thus giving it the vital link to gauge employee performance and company achievement. This vial aspect will motivate employee to perform as his or her productivity can be linked towards success of the company. Leaders and managers can be assured of high quality work and at the same time maintain employee engagement culture in the organization. (Joseph, 1999)

Conclusions

All the above discussions, analyses and critics can be summed up as HRM requires a thorough strategic link with the organizations’ goals and objectives. Models, theories, and tools are basically methods to help HRM to implement, gauge and obtain feedback from the workforce. Important focal point in HRM is that it has to strategically meet the demands of its workforce while fulfilling the organizations objectives and goals.

HRD may not be able to successfully implement all policies without the cooperation from line managers; therefore practicality of successful implementations of models and theories depends largely on the acceptance of responsibilities from the line managers first. Empowerment and employee engagement have largely been identified as self interest of the employee and practically nothing much can be done by the HR to change the fact. To engage employee, line managers would need to identify the areas of self interest of the employees, ticking the self interest only will motivate and encourage employees to perform and be productive.

Critics and weaknesses have been identified by Demings in response to performance management. The focus on quantifying work has in fact made employees working towards achieving numbers and not quality. This has killed creativity and innovation. Performance management should be tied to companies objectives as well as individuals. Organizations must see that the performance management is free of discriminators and legally defensible to be on the safe side.

It is clear that HRM functions practiced accordingly will assists leaders and managers to promote participative organizational behavior and engage employee; thus improve performance and achieving organizational goals. Among the tools that have proven useful to assist line managers and leaders are TQM and Six Sigma as used by TATA Steel for quality control and IIP as practiced by TESCO and have shown measurable results.

To conclude, strategic visions of the organizations need to be linked with HRM. Line managers are important to create organizational culture and to tick the self interest of employees for motivation and employee engagement. Performance management should be done as part of evaluation of the employee and it also must be linked to the organizational goals.

Bibliography

Alice, G. W. (2007, February). Is Performance Management as Simple as ABC. Training and Development , pp. 54-57.

Analuoi, F. (2002). The Changing Patterns of Human Resource Management. Ashgate: Hamsphire.

Aquinis, H. (2005). Performance Management. New Jersey: Prentice Hall.

Armstrong, M., & Baron, A. (2007). Managing Performance: Performance Management in Action. London: Chartered Institute of Personnel and Development.

Barrett, G. V., & Kernan, M. C. (1987). Performance Appraisals and Terminations: A Review of Court Decisions. Personal Psychology , 489-504.

Craig, M. (2007). Roles and Responsibilities. IRS Employment Review 836 , 6-12.

Davenport, T. A. (2005). Thinking for a Living: How to get Better Performance and Results from Knowledge Workers. Boston: Havard University Press.

Francis, H., & Keegan, A. (2006). The Changing Face of HRM: In Search of Balance. Human Resource Management Journal , 231-49.

Frederick, W. T. (1998). The Principles of Scientific Management. New York : Harper.

George, G. R. (2000). Contemporary Management. Boston: Mc Graw Hill.

Joseph, A. D. (1999, July). Six Sigma Road Map for Survival. HRFocus , pp. 11-12.

Losey, M., Ulrich, D., & Meisinger, S. (2005). The Future of Human Resource Management: 64 Thought Leaders Explore the Critical HR Issues of Today and Tomorrow . New York: John Wiley.

Robert, B. C., & Lynne, M. G. (1996, June). Strategies for Success in Measuring Performance. HR Magazine , pp. 98-104.

Ulrich, D., & Smallwood, N. (2004, June). Capitalizing on Capabilities. Havard Business Review , pp. 119-27.