Global Human Resource Strategy
Content
Global Human Resource Strategy Prepared By: XXXX Date of Submission: XXXXX
Table of Contents
1 Introduction:
The organization which has been chosen for research is known as Coca Cola International. It was founded in 1886 in United States and has grown with as the best beverage company in the world. Coke is a suitable organization to perform research with regard to influence of the economic factors on the human resource strategy. Each function performed by Coke is according to the standard which is regarded best in class. Due to this reason, Coke is the most relevant organization because it is faced with variety of economic condition and develops human resource strategy according to those factors.
2 Influence of Economic Factors:
The economic factor which influences Human Resources strategy include level of wage rate prevailing, literacy rate, stage of the business cycle, training, demand and supply of skilled personnel. Human resource strategy is dependent on various factors which are affected due to changes in the external environment. These factors are discussed below in detail.
2.1 Demand & Supply:
Human resources strategy is influenced by overall aggregate demand and supply of skilled workers. There is optimal level when demand level is equal to the supply level. This is the ideal level which is the objective of the most countries to achieve. Otherwise, there is either too much
supply of the workers or too low supply of the workers in an economy. If the demand and supply is the optimal level, it is easy generate opportunities for workers and recruit suitable workers easily. However, higher supply of workers will result in the low employment opportunities and growth in the business. This will impact human resource strategy towards appointing highly skilled workers after filtering a lot of candidates (Bratton and Gold, 2007).
2.2 Literacy Rate:
The literacy rate is mostly low in developing countries. Organization need to take into consideration such factors before establishing operations. Highly technical organization will have to employ skilled work force which will not be available. Even if there would be some skilled workers but the possibility of long term commitment would be low because most workers would prefer to shift to other organizations in developed economies. Countries with low literacy rate lack production of skilled workforce. Low skill atmosphere lead organization to take benefit from low wage rate. Technical positions are offered to employees who are adequately skilled. These factors lead organization to set different human resource strategy which does not incorporate policies to employee skilled employee (Bratton and Gold, 2007).
2.3 Stage of Business Cycle:
The business cycle of each country is different and consists of stages of recession and progression. If there is recession the primary objective of the human resource strategy would be avoid hiring new staff. Recession would result in making redundant most of the employees which will drive the level unemployment to increase in an economy. The currency would devalue which will drive rate of inflation to increase. The cost of living of the individual in the country would increase. This factor would drive the local in habitant to demand higher wage rate. The human resource strategy would focus on hiring employees with lower wage rate. This action
might be perceived as exploiting work force. Performance management will have to be performed with extreme caution. Targets which are set in these conditions are often difficult to achieve. This results in gap between expected wage rate and actual wage rate. The human resource policy will be influenced due to change in the external environment. These changes would drive the human resource to address the changes in the external environment (Bratton and Gold, 2007).
2.4 Training:
In order to ensure consistency in the performance management, training is the essential function which must be given consideration. This factor focuses on rewarding staff through training which will lead to development in the staff. On the other hand, offering extrinsic reward will not lead to development in the staff. These factors must be given in consideration when designing human resource strategy of the employees. It is not appropriate to provide training in the unstable condition in the environment because the objective of training is not achieved. The objective of training is to provide employee to address the variability in the environment effectively. Based on these factors, the human resource strategy is influenced (Bratton and Gold, 2007).
2.5 Coke:
Coke is a global organization which operates in different countries with different economic conditions. The economic factor in each country of operation influences its human resource strategy at a greater extent. The first factor is the demand and supply. There is not issue with demand and supply of the low skilled workers. The human resource strategy is influenced when there is a need of high skilled work force. The highs killed workforce would only be attracted by offering high wage rates which would not be possible in the given conditions of the economy. on
the other hand, the level of education lower than that in the developing countries. Due to which reason, human resource strategy of Coke is designed according regional basis.
3 Goals of HRM:
3.1 Employee Commitment:
It is part of the HRM to achieve employee commitment for the long term survival of the business. Employees are weaker than the organization for which they provide service. They find themselves insecure even after fulfilling their duties. On the other hand, organization requires long term commitment from the employees to ensure uninterrupted survival of the organization in the long run. Due to this reason, HRM primary objective is to achieve employee commitment. There are two main methods to achieve employee commitment. One is through intrinsic rewards and the other is through extrinsic rewards. Irrespective of the two methods, employee must rewarded on a fair and equal basis. It must encourage employees to improve performance of the business which they can control and must not be allocated on the basses which they cannot control. The first method of achieving employee commitment is through extrinsic rewards which include bonuses, increments, offering ownership in the shares of the company. These rewards are monetary based. On the other hand, intrinsic rewards include offering good working environment, providing training for development of the employee skills, offering health related benefits and offering variety of allowances to support the employee life style. These rewards are not in the monetary form (Legge, 2004). HRM of Coke uses both methods to achieve employee commitment. The monetary reward leads to achieve commitment in the short term and non-monetary rewards leads to achievement in the
long term. Employee commitment is achieved when organization start taking into account the needs and wants of the employees. It is one the key objective of the HRM to ensure that employees are kept satisfied which will allow organization to achieve their commitment (Legge, 2004).
3.2 Flexibility:
It is one of most important function of HRM to make HR function flexible. Flexibility is important because organization have to operate in different external conditions. Lack of flexibility would restrict its abilities to address the variability in the external environment. On the other hand, the external condition of any one economy might not remain the same. To overcome the impact of the variability, there is need for flexibility in the HRM methods and policies (Legge, 2004). Coke operates in different regions of the world. It encounters conditions which are significantly different from region to region. To overcome this impact there is need for flexibility. Flexibility refers to the extent of changes in the human resource management due to changes in the external environment. If there is minimum flexibility in the HRM, there is possibility that employee will perceive HRM in negative way. Every employee needs and wants are not similar. In the same vein there expectation from the organization after performing service is also not similar. Incorporation of flexibility in the HRM policies would allow to account for the variability in the expectation of the employees (Legge, 2004).
3.3 Quality and strategic Integration:
Quality and strategic integration is only possible when the employee are aware of the objective of the business. Quality is the critical aspect of the business and strategic integration is essential
to achievement of quality in the employee participation. Quality would allow HRM to understand the employee needs and wants. These needs and wants must be integrated with the HRM operation at the strategic level (Legge, 2004). It is essential to integrate HRM with corporate strategies. This allows to improve performance of the business over the long term. It takes into consideration the HR issue at the strategic level which is ignored if it is remained at the operational level. It also allows organization to achieve competitive advantage by reducing wastages of resources which leads to the achievement of quality in the business processes. It is important that local managers must resolve the issue at the local level because it allows the strategic management to focus on their daily routine. It also includes preparing line managers to improve performance of the decision making in the organizational context and making employees aware of the issues which prevail at the operational level. These aspects lead strategic integration and achievement of the quality in the business (Legge, 2004).
3.4 Coke:
Coke has demonstrated application effective strategic integration with its HRM to achieve quality in its operations. Employees need to gain awareness and experience before making a decision. Mostly experienced employees are aware of such issues which new employees are expected to have knowledge about. Strategic integration is achieved when new employees are made aware of the issue which impact on the achievement and supporting the function at the strategic level.
4 Relationship between HR and Performance management:
Performance management is function which is significantly influenced by the HR strategy. Performance management includes use of organizational resources in an effective manner. Performance management is dependent on working of the employees on the daily basis. The resources are under the direct use of the employees. Employees face condition in which performance of the business are not under their direct control. The impact of this factor must be incorporated in the performance management otherwise it might result in generation of incorrect information. In addition to this, performance will only improve if it is appropriately linked with objectives of the business. Employees will focus on improving performance of the business if they receive reward on the achievement of the targets. Hence, performance management involves using needs and wants of the employees to improve the performance of the business. it take into consideration the factors such employee training which will reduce the possibility of mistake and reduce wastage of resources. It will support in the achievement of the employee retention which is part of the improvement in the performance. If performance measurement is based on the controllable functions then this will motivate employee to further improve the performance of the business because it will represent fair basis of performance measurement. The overall framework on the performance measurement must encourage employee to achieve objectives of the business (Mullins, 2010). The employees are encouraged if the organization links performance measurement with their needs and wants. In this way, employees are encouraged to achieve the objectives of the organization which will in turn leads to achievement of their personal objectives. Performance measurement must linked through reward and appropriate HRM tools so that it can be
incorporated into the strategy of the business effectively. Due to these reason, it is important HRM must be aligned with performance management of the organization (Mullins, 2010). The factors highlighted below are the link between organizational performance and HRM.
4.1 Influence of Staff on Efficiency:
Efficiency is where the work is performed using less resource. Performance measurement will directly measure the results of the performance of the work force. It is part of the HRM to ensure that performance is improved towards the achievement of business objectives (Mullins, 2010).
4.2 Quality of Output:
Quality of output is based on the achievement of the objectives effectively. This refers to achievement of objectives with less resources and time. This can only be achieved through improved and effectively HRM (Mullins, 2010).
4.3 Role of Staff in Achieving Objectives:
Staff play key role in driving performance towards the achievement of the business objectives. It is the staff who is responsible for operating machinery during the production. Well trained staff will ensure that less mistakes and errors take place during the production. On the other hand, the work is performed with the approach to ensure minimum wastage of resources. With the help of proper training and effective HRM, staff can prepared to align business objectives with their own objectives. Staff will only be able to achieve business objectives if performance is linked with individual needs and wants and with the objectives of the organization. Staff will achieve the objective if they are rewarded with intrinsic and extrinsic reward which in turn would lead to achievement of the objectives of the organization. With the help of this approach staff is able to
achieve its objectives effectively. However, other factors such as flexibility, training, quality and innovation must also be taken into consideration (Mullins, 2010).
4.4 Evaluation of the HRM in Coke:
Coke has linked and aligned its HRM with performance management. Each staff member efforts drive the business towards the achievement of its objectives. The achievement of the objective of the Coke leads to rewarding its staff with monetary and non-monetary benefits. Coke has demonstrated effective HRM strategy by incorporating innovation and continuously taking measures to train its staff members. With the help of this approach Coke is able to achieve its objective through appropriate HRM strategies (Mullins, 2010).
5 Task 2:
5.1 High Performance Work systems:
The purpose of high performance work system is to achieve continuous improvement in the business to survive in the changing business environment. The objective is to encourage employees to make effective decision in the light of flexibility, innovation, improvement and skill sharing. It involves designing a system which high performance without occurrence of errors and mistakes. To incorporate expertise in the business so that monitoring and controlling high performance work system without any interruption can be conducted. To provide appropriate training to staff so that staff can be made aware of the high performance work systems (Burnes, 2009).
5.2 Conditions of HPWS:
High performance work system is applicable in an atmosphere where there is high employee turnover, very low labor productivity, high level of diversity and staff are considered with equality. In order to improve these conditions staff is given training and knowledge regarding high performance work systems. In addition to this, complete procedure of conducting the daily business is changed so that performance of the labor can be accelerated. After making the desired changes, labor turnover is monitored to identity whether it has improved or not. Labor productivity is monitored by examining the production time and wastage of resources. Increased production with less wastage of resources would indicate the application of high performance work systems. Reward system must encourage the high performance work system in the organization. Properly aligned work system will lead to wards improvement in the business. Reward system will operate effectively if the staff is held accountable for the performance which they can control. Performance which is controllable by the staff is identified through appropriate information system. Effective information system ensures safety and security of the information. It also ensures that only required information must be made available to the users in order to save time and support effective decision making. High performance work system will operate effectively if all these elements work together effectively. These elements include people; technology and organizational structure are directed towards successful achievement of the results (Burnes, 2009).
5.3 Outcome of the HPWS:
Effective application of HPWS is identified through high performance of work system and efficiency. The indicators which can be used include the changes in the amount resources taken to produce the output whether it has increased or decreased. In addition to this, changes in the
profit margin would be another indicator which can be used to identify whether HPWS has been implemented effectively or not. On the other hand, other measures which can be used include improvement in quality, customer satisfaction and decrease in the employee turnover. The overall impact of the HPWS would take place on the employee turnover. If the HPWS is properly linked with the output of the labor, this will allow labor to achieve the objective of the organization (Burnes, 2009). There must flexibility in the work force as the organization changes goals due to changes in the external environment. The individual in the organization work together to improve efficiency and quality of the product. Due to this reason, the workforce must be flexible enough ensure the changes take place without any interruption (Burnes, 2009).
5.4 Factor important to achieve HPWS:
There are number of factors which must be present in the system to ensure the achievement of the objectives. This includes team working environment, procedure to monitor individual employee participation in the overall performance and providing training to the employees. Presence of these factors would ensure the correct direction of the efforts of the staff. Linking reward system would then motivate the individual staff to improve its performance (Burnes, 2009). On the other hand, employee’s participation is essential to improve the performance of the business. Employee must incorporate use of technology, equipment and design of the work in order to support the HPWS. Importance of design of the work system is the extent that employees can use variety of skills with flexibility in the operations. With the help of participation, employee will be able to get knowledge that the impact of their contribution
towards the achievement of the objectives. In the light of the changes, ethical behavior is encouraged between employees (Burnes, 2009).
6 Organizational, National & Cultural Issues:
Organizations promote learning by offering training and knowledge which improves performance in the long term. Due to this reason the employees share ideas and knowledge with each other which allows to explore new and innovative ideas to improve performance of the business. The objective must be to provide training consistently, sharing the knowledge obtained from the training and ensuring managers take active role in applying the knowledge of the training in variety of scenarios. This approach would lead to establish a culture of learning between employees where they generate value by communicating and sharing knowledge. In order to incorporate culture into the HRM strategy, it is important to identify the source through which employees receive satisfaction. Identifying these sources would lead to establish link between fulfillment of the needs and wants of the employees and organization. This includes clearly communicating the goals of the organization to the employees. Identify the standards which must be implemented to ensure achievement of the goals. The goals must be SMART which must allow to perform appraisal effectively. It needs to establish a culture which would encourage staff to enhance the effectiveness of the performance appraisal by resolving problem through sharing information and knowledge. In this way staff would gain an understanding of direction of their own performance. On the other hand, national issue such as in ability to establish effective communication with other staff members is another key issue. This issue is important to the extent that it create hurdle when establishing communication with in the whole organization. Situation of unrest outside the
organization will cause the individual to act negatively inside the organization. Increase in the inflation rate will cause the employee to perform comparison and judge their role according to wage rates. Due to these reason, it is important that HRM must address the national issues so that objective of the HRM can be achieved. HRM strategy would be effective if the impact on the staff from the external environment is minimum. This can be ensured by offering pleasant work environment so that staff gets feeling of satisfaction when working with the organization. On the other hand, offering yearly trips to new location would further encourage employees to act positively. Apart from this weekly gathering with senior staff and discussing on surviving in this tough time would be further motivate the staff members to adopted knowledge sharing attitude. HRM strategy is based on various internal and external issues which must be taken into consideration otherwise it might fail to achieve the objective. Performance appraisal is influenced if these factors are ignored. It is significantly important that working of the individual staff members must be linked with performance appraisal. In this way, performance of the individual is accounted for and is reflected through culture, national and organizational issues.
6.1 Influence of Culture on HRM:
There are number ways through which HRM can be influenced through culture. This includes tall or flat culture, consultative or authority and power culture. Recruiting employees on the basis of equality or merit based on the type of job. Determination of wage rate on the basis of collective groups or individual operating in an organization. The extent of discrimination between masculine and feminine culture. These factors influence the HRM strategy in every organization.
6.1.1 Recommendation:
It is important to develop and implement culture according to the type of people working for the business. If the work force is mostly looking for authority then there must tall structure. If the work force has the capability to operate in groups then there must be flat culture. If the work force is creative and innovative and holds themselves accountable for their actions then there must be authoritative culture rather consultative. If the work is not capable to make their own directions then there must be consultative culture (Millward, 2005).
6.2 Influence of National Issues on HRM:
HRM varies from country to country due to changes in the national issues. The issues include level of unemployment, literacy rate prevailing in the country, business cycle prevailing in the country, the strength of labor pressure groups and level of dynamism prevailing in the organization. The issues vary from country to country which cause the HRM to include measures to address these measures. Mostly these issues are faced by the multinational and global organization. These issues create significant difficulties to develop and implement effective HRM strategy for the business (Millward, 2005).
6.2.1 Recommendations:
It would be viable to provide regular training and development to the employees when there is high level of unemployment. It would be viable to focus on efficiency and effectiveness of the work force when the business cycle is going from recession. Implementing policies to ensure the power and influence of labor union is kept to the minimum. In order to make organization dynamic, it is important that labor must also be dynamic. Due to this reason, HRM must incorporate measures to address the flexibility in the environment (Millward, 2005).
6.3 Influence of Organizational Issues on HRM:
The organizational issues which influence HRM include age, gender, job expectation and level or authority and responsibility. These factors play important role when developing HRM strategy. HRM strategy is influenced if the ratio of old staff members is high; there would be too much reliance on the old staff members which would lead to reduction in innovation. In the same vein, mostly employees set higher expectation from the job roles and returns. HRM must ensure that it must be neutral and must not emphasis return or job roles. Employees often expect job responsibility to be lower and authority to be higher. This expectation would act against the interest of the organization (Millward, 2005).
6.3.1 Recommendation:
To overcome the impact of this, it is important that there must be a balance between the job responsibility and authority. In contrast, there must also be sufficient training for the employees in order to establish long term commitment of the employees.
References Bratton, J. and Gold, J., (2007) Human Resource Management and Practices, 4th Ed, Basingstoke: PalGrave McMillan. Legge, K. (2004) Human Resource Management: Rhetorics and Realities, PalGrave McMillan. Mullins, L. J., (2010) Management and Organizational Behavior, 9th Ed, Harlow Financial Times Press. Burnes, B. (2009) Managing Change, 5th Ed, Harlow: Financial Times Press. Millward, L., (2005) Understanding Organizational and Occupational Psychology, London: Sage. “Influence on HRM” Available at <www.bbc.co.uk/news/business-1142889>.
Table of Contents
1 Introduction:
The organization which has been chosen for research is known as Coca Cola International. It was founded in 1886 in United States and has grown with as the best beverage company in the world. Coke is a suitable organization to perform research with regard to influence of the economic factors on the human resource strategy. Each function performed by Coke is according to the standard which is regarded best in class. Due to this reason, Coke is the most relevant organization because it is faced with variety of economic condition and develops human resource strategy according to those factors.
2 Influence of Economic Factors:
The economic factor which influences Human Resources strategy include level of wage rate prevailing, literacy rate, stage of the business cycle, training, demand and supply of skilled personnel. Human resource strategy is dependent on various factors which are affected due to changes in the external environment. These factors are discussed below in detail.
2.1 Demand & Supply:
Human resources strategy is influenced by overall aggregate demand and supply of skilled workers. There is optimal level when demand level is equal to the supply level. This is the ideal level which is the objective of the most countries to achieve. Otherwise, there is either too much
supply of the workers or too low supply of the workers in an economy. If the demand and supply is the optimal level, it is easy generate opportunities for workers and recruit suitable workers easily. However, higher supply of workers will result in the low employment opportunities and growth in the business. This will impact human resource strategy towards appointing highly skilled workers after filtering a lot of candidates (Bratton and Gold, 2007).
2.2 Literacy Rate:
The literacy rate is mostly low in developing countries. Organization need to take into consideration such factors before establishing operations. Highly technical organization will have to employ skilled work force which will not be available. Even if there would be some skilled workers but the possibility of long term commitment would be low because most workers would prefer to shift to other organizations in developed economies. Countries with low literacy rate lack production of skilled workforce. Low skill atmosphere lead organization to take benefit from low wage rate. Technical positions are offered to employees who are adequately skilled. These factors lead organization to set different human resource strategy which does not incorporate policies to employee skilled employee (Bratton and Gold, 2007).
2.3 Stage of Business Cycle:
The business cycle of each country is different and consists of stages of recession and progression. If there is recession the primary objective of the human resource strategy would be avoid hiring new staff. Recession would result in making redundant most of the employees which will drive the level unemployment to increase in an economy. The currency would devalue which will drive rate of inflation to increase. The cost of living of the individual in the country would increase. This factor would drive the local in habitant to demand higher wage rate. The human resource strategy would focus on hiring employees with lower wage rate. This action
might be perceived as exploiting work force. Performance management will have to be performed with extreme caution. Targets which are set in these conditions are often difficult to achieve. This results in gap between expected wage rate and actual wage rate. The human resource policy will be influenced due to change in the external environment. These changes would drive the human resource to address the changes in the external environment (Bratton and Gold, 2007).
2.4 Training:
In order to ensure consistency in the performance management, training is the essential function which must be given consideration. This factor focuses on rewarding staff through training which will lead to development in the staff. On the other hand, offering extrinsic reward will not lead to development in the staff. These factors must be given in consideration when designing human resource strategy of the employees. It is not appropriate to provide training in the unstable condition in the environment because the objective of training is not achieved. The objective of training is to provide employee to address the variability in the environment effectively. Based on these factors, the human resource strategy is influenced (Bratton and Gold, 2007).
2.5 Coke:
Coke is a global organization which operates in different countries with different economic conditions. The economic factor in each country of operation influences its human resource strategy at a greater extent. The first factor is the demand and supply. There is not issue with demand and supply of the low skilled workers. The human resource strategy is influenced when there is a need of high skilled work force. The highs killed workforce would only be attracted by offering high wage rates which would not be possible in the given conditions of the economy. on
the other hand, the level of education lower than that in the developing countries. Due to which reason, human resource strategy of Coke is designed according regional basis.
3 Goals of HRM:
3.1 Employee Commitment:
It is part of the HRM to achieve employee commitment for the long term survival of the business. Employees are weaker than the organization for which they provide service. They find themselves insecure even after fulfilling their duties. On the other hand, organization requires long term commitment from the employees to ensure uninterrupted survival of the organization in the long run. Due to this reason, HRM primary objective is to achieve employee commitment. There are two main methods to achieve employee commitment. One is through intrinsic rewards and the other is through extrinsic rewards. Irrespective of the two methods, employee must rewarded on a fair and equal basis. It must encourage employees to improve performance of the business which they can control and must not be allocated on the basses which they cannot control. The first method of achieving employee commitment is through extrinsic rewards which include bonuses, increments, offering ownership in the shares of the company. These rewards are monetary based. On the other hand, intrinsic rewards include offering good working environment, providing training for development of the employee skills, offering health related benefits and offering variety of allowances to support the employee life style. These rewards are not in the monetary form (Legge, 2004). HRM of Coke uses both methods to achieve employee commitment. The monetary reward leads to achieve commitment in the short term and non-monetary rewards leads to achievement in the
long term. Employee commitment is achieved when organization start taking into account the needs and wants of the employees. It is one the key objective of the HRM to ensure that employees are kept satisfied which will allow organization to achieve their commitment (Legge, 2004).
3.2 Flexibility:
It is one of most important function of HRM to make HR function flexible. Flexibility is important because organization have to operate in different external conditions. Lack of flexibility would restrict its abilities to address the variability in the external environment. On the other hand, the external condition of any one economy might not remain the same. To overcome the impact of the variability, there is need for flexibility in the HRM methods and policies (Legge, 2004). Coke operates in different regions of the world. It encounters conditions which are significantly different from region to region. To overcome this impact there is need for flexibility. Flexibility refers to the extent of changes in the human resource management due to changes in the external environment. If there is minimum flexibility in the HRM, there is possibility that employee will perceive HRM in negative way. Every employee needs and wants are not similar. In the same vein there expectation from the organization after performing service is also not similar. Incorporation of flexibility in the HRM policies would allow to account for the variability in the expectation of the employees (Legge, 2004).
3.3 Quality and strategic Integration:
Quality and strategic integration is only possible when the employee are aware of the objective of the business. Quality is the critical aspect of the business and strategic integration is essential
to achievement of quality in the employee participation. Quality would allow HRM to understand the employee needs and wants. These needs and wants must be integrated with the HRM operation at the strategic level (Legge, 2004). It is essential to integrate HRM with corporate strategies. This allows to improve performance of the business over the long term. It takes into consideration the HR issue at the strategic level which is ignored if it is remained at the operational level. It also allows organization to achieve competitive advantage by reducing wastages of resources which leads to the achievement of quality in the business processes. It is important that local managers must resolve the issue at the local level because it allows the strategic management to focus on their daily routine. It also includes preparing line managers to improve performance of the decision making in the organizational context and making employees aware of the issues which prevail at the operational level. These aspects lead strategic integration and achievement of the quality in the business (Legge, 2004).
3.4 Coke:
Coke has demonstrated application effective strategic integration with its HRM to achieve quality in its operations. Employees need to gain awareness and experience before making a decision. Mostly experienced employees are aware of such issues which new employees are expected to have knowledge about. Strategic integration is achieved when new employees are made aware of the issue which impact on the achievement and supporting the function at the strategic level.
4 Relationship between HR and Performance management:
Performance management is function which is significantly influenced by the HR strategy. Performance management includes use of organizational resources in an effective manner. Performance management is dependent on working of the employees on the daily basis. The resources are under the direct use of the employees. Employees face condition in which performance of the business are not under their direct control. The impact of this factor must be incorporated in the performance management otherwise it might result in generation of incorrect information. In addition to this, performance will only improve if it is appropriately linked with objectives of the business. Employees will focus on improving performance of the business if they receive reward on the achievement of the targets. Hence, performance management involves using needs and wants of the employees to improve the performance of the business. it take into consideration the factors such employee training which will reduce the possibility of mistake and reduce wastage of resources. It will support in the achievement of the employee retention which is part of the improvement in the performance. If performance measurement is based on the controllable functions then this will motivate employee to further improve the performance of the business because it will represent fair basis of performance measurement. The overall framework on the performance measurement must encourage employee to achieve objectives of the business (Mullins, 2010). The employees are encouraged if the organization links performance measurement with their needs and wants. In this way, employees are encouraged to achieve the objectives of the organization which will in turn leads to achievement of their personal objectives. Performance measurement must linked through reward and appropriate HRM tools so that it can be
incorporated into the strategy of the business effectively. Due to these reason, it is important HRM must be aligned with performance management of the organization (Mullins, 2010). The factors highlighted below are the link between organizational performance and HRM.
4.1 Influence of Staff on Efficiency:
Efficiency is where the work is performed using less resource. Performance measurement will directly measure the results of the performance of the work force. It is part of the HRM to ensure that performance is improved towards the achievement of business objectives (Mullins, 2010).
4.2 Quality of Output:
Quality of output is based on the achievement of the objectives effectively. This refers to achievement of objectives with less resources and time. This can only be achieved through improved and effectively HRM (Mullins, 2010).
4.3 Role of Staff in Achieving Objectives:
Staff play key role in driving performance towards the achievement of the business objectives. It is the staff who is responsible for operating machinery during the production. Well trained staff will ensure that less mistakes and errors take place during the production. On the other hand, the work is performed with the approach to ensure minimum wastage of resources. With the help of proper training and effective HRM, staff can prepared to align business objectives with their own objectives. Staff will only be able to achieve business objectives if performance is linked with individual needs and wants and with the objectives of the organization. Staff will achieve the objective if they are rewarded with intrinsic and extrinsic reward which in turn would lead to achievement of the objectives of the organization. With the help of this approach staff is able to
achieve its objectives effectively. However, other factors such as flexibility, training, quality and innovation must also be taken into consideration (Mullins, 2010).
4.4 Evaluation of the HRM in Coke:
Coke has linked and aligned its HRM with performance management. Each staff member efforts drive the business towards the achievement of its objectives. The achievement of the objective of the Coke leads to rewarding its staff with monetary and non-monetary benefits. Coke has demonstrated effective HRM strategy by incorporating innovation and continuously taking measures to train its staff members. With the help of this approach Coke is able to achieve its objective through appropriate HRM strategies (Mullins, 2010).
5 Task 2:
5.1 High Performance Work systems:
The purpose of high performance work system is to achieve continuous improvement in the business to survive in the changing business environment. The objective is to encourage employees to make effective decision in the light of flexibility, innovation, improvement and skill sharing. It involves designing a system which high performance without occurrence of errors and mistakes. To incorporate expertise in the business so that monitoring and controlling high performance work system without any interruption can be conducted. To provide appropriate training to staff so that staff can be made aware of the high performance work systems (Burnes, 2009).
5.2 Conditions of HPWS:
High performance work system is applicable in an atmosphere where there is high employee turnover, very low labor productivity, high level of diversity and staff are considered with equality. In order to improve these conditions staff is given training and knowledge regarding high performance work systems. In addition to this, complete procedure of conducting the daily business is changed so that performance of the labor can be accelerated. After making the desired changes, labor turnover is monitored to identity whether it has improved or not. Labor productivity is monitored by examining the production time and wastage of resources. Increased production with less wastage of resources would indicate the application of high performance work systems. Reward system must encourage the high performance work system in the organization. Properly aligned work system will lead to wards improvement in the business. Reward system will operate effectively if the staff is held accountable for the performance which they can control. Performance which is controllable by the staff is identified through appropriate information system. Effective information system ensures safety and security of the information. It also ensures that only required information must be made available to the users in order to save time and support effective decision making. High performance work system will operate effectively if all these elements work together effectively. These elements include people; technology and organizational structure are directed towards successful achievement of the results (Burnes, 2009).
5.3 Outcome of the HPWS:
Effective application of HPWS is identified through high performance of work system and efficiency. The indicators which can be used include the changes in the amount resources taken to produce the output whether it has increased or decreased. In addition to this, changes in the
profit margin would be another indicator which can be used to identify whether HPWS has been implemented effectively or not. On the other hand, other measures which can be used include improvement in quality, customer satisfaction and decrease in the employee turnover. The overall impact of the HPWS would take place on the employee turnover. If the HPWS is properly linked with the output of the labor, this will allow labor to achieve the objective of the organization (Burnes, 2009). There must flexibility in the work force as the organization changes goals due to changes in the external environment. The individual in the organization work together to improve efficiency and quality of the product. Due to this reason, the workforce must be flexible enough ensure the changes take place without any interruption (Burnes, 2009).
5.4 Factor important to achieve HPWS:
There are number of factors which must be present in the system to ensure the achievement of the objectives. This includes team working environment, procedure to monitor individual employee participation in the overall performance and providing training to the employees. Presence of these factors would ensure the correct direction of the efforts of the staff. Linking reward system would then motivate the individual staff to improve its performance (Burnes, 2009). On the other hand, employee’s participation is essential to improve the performance of the business. Employee must incorporate use of technology, equipment and design of the work in order to support the HPWS. Importance of design of the work system is the extent that employees can use variety of skills with flexibility in the operations. With the help of participation, employee will be able to get knowledge that the impact of their contribution
towards the achievement of the objectives. In the light of the changes, ethical behavior is encouraged between employees (Burnes, 2009).
6 Organizational, National & Cultural Issues:
Organizations promote learning by offering training and knowledge which improves performance in the long term. Due to this reason the employees share ideas and knowledge with each other which allows to explore new and innovative ideas to improve performance of the business. The objective must be to provide training consistently, sharing the knowledge obtained from the training and ensuring managers take active role in applying the knowledge of the training in variety of scenarios. This approach would lead to establish a culture of learning between employees where they generate value by communicating and sharing knowledge. In order to incorporate culture into the HRM strategy, it is important to identify the source through which employees receive satisfaction. Identifying these sources would lead to establish link between fulfillment of the needs and wants of the employees and organization. This includes clearly communicating the goals of the organization to the employees. Identify the standards which must be implemented to ensure achievement of the goals. The goals must be SMART which must allow to perform appraisal effectively. It needs to establish a culture which would encourage staff to enhance the effectiveness of the performance appraisal by resolving problem through sharing information and knowledge. In this way staff would gain an understanding of direction of their own performance. On the other hand, national issue such as in ability to establish effective communication with other staff members is another key issue. This issue is important to the extent that it create hurdle when establishing communication with in the whole organization. Situation of unrest outside the
organization will cause the individual to act negatively inside the organization. Increase in the inflation rate will cause the employee to perform comparison and judge their role according to wage rates. Due to these reason, it is important that HRM must address the national issues so that objective of the HRM can be achieved. HRM strategy would be effective if the impact on the staff from the external environment is minimum. This can be ensured by offering pleasant work environment so that staff gets feeling of satisfaction when working with the organization. On the other hand, offering yearly trips to new location would further encourage employees to act positively. Apart from this weekly gathering with senior staff and discussing on surviving in this tough time would be further motivate the staff members to adopted knowledge sharing attitude. HRM strategy is based on various internal and external issues which must be taken into consideration otherwise it might fail to achieve the objective. Performance appraisal is influenced if these factors are ignored. It is significantly important that working of the individual staff members must be linked with performance appraisal. In this way, performance of the individual is accounted for and is reflected through culture, national and organizational issues.
6.1 Influence of Culture on HRM:
There are number ways through which HRM can be influenced through culture. This includes tall or flat culture, consultative or authority and power culture. Recruiting employees on the basis of equality or merit based on the type of job. Determination of wage rate on the basis of collective groups or individual operating in an organization. The extent of discrimination between masculine and feminine culture. These factors influence the HRM strategy in every organization.
6.1.1 Recommendation:
It is important to develop and implement culture according to the type of people working for the business. If the work force is mostly looking for authority then there must tall structure. If the work force has the capability to operate in groups then there must be flat culture. If the work force is creative and innovative and holds themselves accountable for their actions then there must be authoritative culture rather consultative. If the work is not capable to make their own directions then there must be consultative culture (Millward, 2005).
6.2 Influence of National Issues on HRM:
HRM varies from country to country due to changes in the national issues. The issues include level of unemployment, literacy rate prevailing in the country, business cycle prevailing in the country, the strength of labor pressure groups and level of dynamism prevailing in the organization. The issues vary from country to country which cause the HRM to include measures to address these measures. Mostly these issues are faced by the multinational and global organization. These issues create significant difficulties to develop and implement effective HRM strategy for the business (Millward, 2005).
6.2.1 Recommendations:
It would be viable to provide regular training and development to the employees when there is high level of unemployment. It would be viable to focus on efficiency and effectiveness of the work force when the business cycle is going from recession. Implementing policies to ensure the power and influence of labor union is kept to the minimum. In order to make organization dynamic, it is important that labor must also be dynamic. Due to this reason, HRM must incorporate measures to address the flexibility in the environment (Millward, 2005).
6.3 Influence of Organizational Issues on HRM:
The organizational issues which influence HRM include age, gender, job expectation and level or authority and responsibility. These factors play important role when developing HRM strategy. HRM strategy is influenced if the ratio of old staff members is high; there would be too much reliance on the old staff members which would lead to reduction in innovation. In the same vein, mostly employees set higher expectation from the job roles and returns. HRM must ensure that it must be neutral and must not emphasis return or job roles. Employees often expect job responsibility to be lower and authority to be higher. This expectation would act against the interest of the organization (Millward, 2005).
6.3.1 Recommendation:
To overcome the impact of this, it is important that there must be a balance between the job responsibility and authority. In contrast, there must also be sufficient training for the employees in order to establish long term commitment of the employees.
References Bratton, J. and Gold, J., (2007) Human Resource Management and Practices, 4th Ed, Basingstoke: PalGrave McMillan. Legge, K. (2004) Human Resource Management: Rhetorics and Realities, PalGrave McMillan. Mullins, L. J., (2010) Management and Organizational Behavior, 9th Ed, Harlow Financial Times Press. Burnes, B. (2009) Managing Change, 5th Ed, Harlow: Financial Times Press. Millward, L., (2005) Understanding Organizational and Occupational Psychology, London: Sage. “Influence on HRM” Available at <www.bbc.co.uk/news/business-1142889>.
