Human Resources Department And Company Principles Commerce Essay Example

the design and systems of their Retail Division over time. Arran Ltd selected the Balanced Scorecard as their preferred performance management tool because they recognized the need for better management and performance information in their Retail Division. They also sought improved methods of rewarding performance. The Balanced Scorecard provided a more structured approach to presenting various performance measures, including traditional financial elements of control. Truro, a multi-divisional oil company based in the Middle East, sought assistance from an external consulting firm to implement the Balanced Scorecard. Multiple Balanced Scorecards were developed for their Corporate and Organizational unit levels.
In total, Truro and Crosshouse, two multinational companies in Europe, both implemented Balanced Scorecards to enhance strategic control over their businesses. Truro created seven Balanced Scorecards at various levels, while Crosshouse implemented a strategic management system based on the Balanced Scorecard framework across all divisions. Both companies received positive responses from managers within their organizations. Additionally, Crosshouse decided to develop an in-house performance measuring software solution for cost reasons. The adoption of this standardized approach made it easier for managers transitioning between units to understand the strategy and performance of their new unit. The unit management teams strongly supported this new management system as it empowered them to take local action without interference.The DSDA, a medium sized public sector endeavor, believed that implementing a "2nd Generation" Balanced Scorecard would increase visibility of unit performance against strategic contracts at the Board level while reducing supervision activity required. Their main focus was on creating and executing a project plan to develop a Balanced Scorecard with linked strategic aims, which would be used for informing reports made to managers. The DSDA

Scorecard, originally implemented by IIC (a UK subsidiary of a Japanese insurance company), incorporates advanced Performance Management approaches like the 3rd Generation Balanced Scorecard. These approaches involve communicating goals and expectations in one way and assessing performance against critical activities and outcomes in another. The Performance Management System is designed to raise awareness among directors during the implementation of the evaluation and decision-making system. It aims to align incentive-based compensation with a few high-level goals and utilize the Performance Management system as a tool for management teams to achieve these objectives. This approach allows for performance evaluation through scorecards, similar to how the United Nations (UN) Agency utilized a participative approach in designing an Executive Committee level Balanced Scorecard at their New York City headquarters.Initially, the plan was to pilot the Balanced Scorecard at two levels: Executive Committee and Country Offices before fully implementing it. The adoption of this system has brought improvements in transparency of performance, increased accountability among higher level personnel, promoted open discussion and consensus-building within the Executive Committee, and facilitated collaboration across different departments ("silo-working"). Literature reviews indicate that HR scorecards are crucial in organizations. It is vital for managers to have a comprehensive understanding of their organization's size, strength, and culture in order to effectively utilize the HR scorecard. In their book 'The HR Scorecard', Brian E. Becker, Mark A. Huselid, and David Ulrich emphasize that this system encourages active participation in strategy implementation rather than solely focusing on financial outcomes. By creating an HR scorecard, managers can identify areas for improvement by analyzing weaknesses, strengths, and mistakes. Susan Bowick, Vice President and Director of Human Resources at Hewlett-Packard states

that the HR Scorecard establishes a link between HR interventions and company success while promoting effective collaboration between HR professionals and line managers.Richard K. Thomas, Louis G. Pol, and William F. Sehnert describe four perspectives and objectives of the HR scorecard in relation to maximizing shareholder value and human capital performance. To demonstrate these concepts in action, the Government has implemented a ?70 million child care scheme with 124 coordinators currently deployed across the country. An additional 50 coordinators are being hired to reduce turnover rates and support employees' family needs, aiming to promote a relaxed mindset among staff members.

To enhance accessibility for NHS staff seeking information about their local Childcare Co-ordinator, a new central database has been launched at www.doh.gov.uk/iwl. These coordinators are responsible for developing local child care strategies that provide high-quality, affordable, and accessible care for staff members while also offering guidance and assistance to parents working within the NHS. This initiative seeks to create stability for children and address child care challenges that contribute to staff turnover within the NHS.

With over 250,000 NHS employees having children under 14 years old, access to childcare support is believed to encourage more nurses and doctors to return to work. The Al Futtaim trading group operates across various sectors such as automotive, electronics, retail, financial services, and real estate in the thriving Middle East market. It receives over 200,000 job applications annually due to its highly desirable job opportunities in these sectors.The organization has implemented SAP E-Recruiting to support its strategic initiative of filling 500 job vacancies across its 40 locations each year while reducing HR costs through paperless processes. Recruiters from all companies in

the group now have access to a centralized global talent pool and can easily create shortlists of highly qualified candidates. This implementation will save hiring costs and time for the organization.

Capita Hartshead, the leading outsourced pensions administrator in the UK, manages pensions for over 3.2 million individuals and handles more than ?2 billion in pension plan contributions annually. To deliver excellent customer service in a competitive industry, Capita Hartshead has developed customized applications using Progress Open Edge technology. These applications automate pension management, improve customer service quality, and enhance productivity.

4S Information Systems has released Dawn Performance Manager 1.0A (Windows), which allows users to quickly identify trends and changes in data. This software is ideal for tracking Balanced Scorecard measures or Key Performance Indicators (KPIs) as it enables users to correlate actions with their effects. It also helps users recognize actual changes in their data and delayed effects of actions taken. Dawn Performance Manager 1.0A caters to technical, supervisory, and managerial staff.During a webcast presentation, the speaker emphasizes the importance of integrating all components of the Performance Management suite for driving improvement. The text discusses how strategic maps and balanced scorecards play a crucial role in communicating objectives and improving collaboration within cross-functional employee teams. The presenter also highlights the significance of analytics, particularly predictive analytics and proactive decision-making, as a competitive advantage discriminator and enabler for trade-off analysis. Customers' goals involve providing quality service to employees, while internal processes focus on maintaining a strategy-focused workforce. Additionally, the learning and growth perspective addresses building strategic competences. In today's competitive market, managers must convert HR strategies into competitive ones to gain an advantage over competitors. This can

be achieved through specific strategies aimed at enhancing organizational performance such as proper job design to increase productivity and motivational strategies to encourage faster and more efficient work from employees (Source SAS). Human resources (HR) departments can effectively motivate employees by utilizing various methods outlined in Herzberg's two-factor theory.
These methods encompass wage increases, job enrichment, promotions, rewards, recognition, and improvement of working conditions. In the modern world characterized by globalization, HR departments have a primary responsibility to lease fact and hire employees from diverse cultures. This diversity can be advantageous for organizations that cater to clients with different cultural backgrounds and operate worldwide. Culturally diverse workforces bring benefits such as multilingual communication skills, offering unique perspectives based on their backgrounds, and increasing task efficiency (Wartson et al., 1993). However, it is crucial for HR to ensure fair treatment among these employees. Implementing job comprehension as a strategy allows organizations to maximize employee potential by leveraging their individual references. While competitors may also possess skilled employees, it is the organization that effectively utilizes their employees' references and taps into their potential that emerges victorious in the competition. Job design plays a vital role in achieving this through HR strategies that provide innovative and clever job opportunities, enabling employees to exceed their personal limits.The HR strategy is crucial for supporting the organization's key strategy and gaining a competitive advantage. In 1987, Randall S. Schuler and Susan E. Jackson introduced a model that illustrates the link between HR strategies and Michael's market strategies as identified by E. Holder in 1985. This model emphasizes various strategies, including the innovation strategy, which involves taking risks and fostering creativity.

Organizations adopting this

approach are uncertain about outcomes and depend on effective marketing to gain customers' trust. The corresponding HR strategy aligns with the goal of the innovation strategy by selecting individuals with creative backgrounds and granting them autonomy to drive new ideas forward.

The organization's HR strategy should support the development of new approaches that benefit the organization, providing stable employment to employees while ensuring they understand the importance of product quality and excellent customer service. Providing security and incentives can encourage their unwavering commitment to their work.

Regarding the organization's quality enhancement strategy, it focuses on expanding merchandise offerings to build trust with clients and maintain their loyalty through high-quality products. While this strategy carries low risk, it may not result in significant sales growth.However, organizations may face challenges in lowering product prices while maintaining higher production levels and utilizing cost-effective labor and marketing expenses. Selling products at competitive prices is crucial for cost leadership. The HR strategy should focus on avoiding costly job practices and dishonest suppliers to prevent increased labor and advertising expenses. Additionally, motivating employees to work more efficiently can enhance productivity.

Miles, Raymond E. and Snow, Charles C. (1978) introduced four competitive strategies, one of which is cost leadership. This involves offering the same materials at a lower price. The approach to achieving pricing advantages may vary depending on the industry's structure. If an industry can establish an overall pricing advantage, it can outperform other industries and control prices within its market.

However, differentiation should also be considered. If a product is not well-received by consumers, leaders in pricing may need to reduce their prices to generate sales. Nevertheless, this strategy might not always result in

the expected increase in profits.

For example, when analyzing major supermarket competitors like ASDA,TESCO,and Sainsbury's , ASDA stands out as having a cost leadership advantage over its counterparts due to its ability to offer high-quality goods at more affordable pricesSainsbury's offers a wide range of comparable products under their own lower-priced label, catering to consumer needs. In 1979, Harnischfeger entered the crane industry with tough Cranes and initially struggled against competitors with only a 15% market share. However, they successfully revamped their cranes by using better components, altering the configuration, and reducing materials used. These changes allowed them to produce high-quality products at a discounted rate of 15% compared to rivals, resulting in an increased market share from 15% to 25%. Walkabout is a popular Australian bar found in London and other cities across Europe and Australia. Customers can enjoy various drinks like beer, liquors, wine, and cocktails for only ?1 on Mondays at Walkabout—a promotion that attracts young people seeking affordable drinks. Companies like Brigg's & Stratton in gasoline engines, Lincoln Electric in arc welding, and Emerson Electric achieve competitive advantages through cost leadership strategies by focusing on improving existing products rather than pursuing innovation or introducing new ones. Conversely, companies with diverse product ranges prioritize innovation and differentiation by selling a variety of products and constantly striving to create new ones. Additionally, there are also companies operating in multiple markets that act as both the owner of one product line and the solicitor for another.These companies employ a low-cost strategy in one market while seeking differentiation in the other market. Reactor: Some companies face instability due to changes in the construction and cultural environment.

These companies continuously adjust their company structure to adapt to external pressures.

Critical Analysis: Mobilink, the leading telecom company in Pakistan with a 53% market share, is an excellent example of this. Despite facing competition from Telenor, Warid, U-fone, and others, Mobilink shows its strength. One of the main reasons for its success lies in its HR practices that set it apart from competitors. Mobilink prioritizes providing development opportunities to its staff, which has been crucial to its success. The company ensures that its employees remain updated on the ever-evolving telecom market through continuous training and incorporating technological changes.

Skilled and creative employees are further developed according to market demands through higher studies and workshops. This prevents competitors from taking advantage of their expertise. Additionally, Mobilink's attractive wages and compensation policies contribute to high employee satisfaction and motivation.

Nucor is an American steel maker that tightly integrates its HR strategy with other functional strategies to create unique capabilities and gain a competitive advantage.Nucor's competitive advantage is built on cost leadership achieved through four main pillars: Inefficiency, Quality, Innovation, and Responsiveness. The company's operations revolve around a well-designed human resource strategy that emphasizes hiring self-reliant individuals who are motivated to continually improve for greater financial compensation. Collaboration among workers is vital in producing high-quality steel, leading to significant incentives based on team output. Plant managers' compensation relies not only on their specific plant's performance but also on the overall success of the company. Nucor actively promotes the sharing of best practices and innovations within the organization to further motivate employees. To maintain low costs, Nucor maintains a lean hierarchy with minimal layers of management. This cost-conscious approach even extends

to senior executives who travel in economy class. Strategic location selection for small plants helps reduce transportation costs and better meet customer needs. When constructing new facilities, internal teams are formed to utilize knowledge from previous projects while protecting innovations from competitors. Nucor conducts independent research and development while maintaining close relationships with engineering providers worldwide to stay informed about developments that could impact its competitiveness.
The company embraces new technologies that have been successfully tested at pilot plants and utilizes their expertise to scale up these technologies for commercial use. The Lincoln Electric Company also aligns its business strategy with its human resource strategy. As a manufacturer of electrodes and welding machinery, Lincoln Electric adopts a cost leadership approach. Co-founder James F. Lincoln believed in maximizing individuals' potential through a system that promotes both competition and teamwork, which includes rewarding factory jobs based on output, providing an annual bonus exceeding regular salary, guaranteeing employment, and offering limited benefits.
Similar to Nucor, Lincoln Electric prioritizes hiring self-motivated individuals who excel in performance. Compensation for these individuals is closely tied to their output with established minimum quality levels. Additionally, a significant portion of the company's profits is distributed to employees based on individual merit evaluations considering output, ideas and collaboration, reliability, and quality.
In 1995, Lincoln implemented an advanced HR program which resulted in a 36% market share in the fragmented US market for welding equipment and supplies. The HR Scorecard serves two main purposes: aligning HR actions with better outcomes and demonstrating HR's contribution to financial success.To create an effective HR Scorecard, the focus should be on goals that align with the company's strategy. It is important to

acknowledge multiple dimensions of certain goals, such as staffing quality and retention levels. The assessment should consider how different elements of HR's system either support or contradict each other.

The careful selection of what to measure on the HR Scorecard can bring attention to and highlight the relationship between costs and benefits of HR deliverables. The main goal is to demonstrate the value that HR brings by showing that investing in HR may be more financially wise than cutting expenses.

It is crucial to differentiate between HR functions and outcomes when evaluating measures and results. Both initial indicators and performance-based indicators should be considered. If there are changes in the company's strategy or shifts in performance drivers affecting that strategy, HR's approach must adapt accordingly.

Conducting a Return on Investment (ROI) analysis is necessary to determine how best for HR to support the company's strategic plan. Pay for Performance refers to linking employees' pay with their performance. This approach motivates employees through financial incentives, rewards high achievers, and aligns individual goals with organizational objectives.Despite the benefits, pay for performance systems can also create problems such as unhealthy competition among employees or unfair comparisons. Ill-designed systems may not accurately assess individual contributions or consider external factors that affect performance. Furthermore, these systems can cause increased stress or burnout if goals are unrealistic or there is excessive pressure to perform.

There are different types of pay for performance programs including merit-based pay, bonuses, profit-sharing plans, commission-based incentives, and stock options. Each type has its own pros and cons depending on the company's objectives and industry standards.

Organizations use various strategies when implementing pay for performance systems. Some focus on individual performance while

others prioritize achievements at the team or company-wide level. The effectiveness of these practices depends on factors like organizational culture, industry norms, and workforce composition.

It is important for companies to carefully consider the potential impact on employee morale, engagement, and overall organizational performance. The term "pay for performance" refers to different payment systems that tie an employee's pay to their work group, department, or organization. Milkovich and Newman (1987) propose it as a comprehensive term covering any variable wage strategy that rewards employees based on their performance.The response to incentives varies among individuals. A study on positive affection levels discovered that individuals with higher levels of positive affection were less affected by merit raises compared to those with lower levels. This could be because the raise provided unhappy people with something to feel happy about. Individual differences also influence incentive choices, as observed with gift certificates. While performance-related pay options exist, they are not highly effective as individual incentives due to the lack of clear visibility between effort and rewards (ARMSTRONG 2002). Individual Performance-Related Pay (IPRP) refers to a compensation system linked to an individual's performance outcomes. This approach often involves payments based on results or piecework arrangements, particularly for hourly employees, highlighting their personal accomplishments.