Assessment of the Human Resource Management function

in a

Service Provider Company-- strategic or not?

 Table of Contents

Section Topic Page

I. Executive Summary 3

II. Introduction and Background of the Study 3

III. Objectives and Methodology 4

IV. Proprietary Information (with Organizational Chart) 5

The Five-year Business Plan

V. The HR Function 11

VI. Presentation of Findings 13

VII. Conclusion and Recommendations 18

Appendices 21

References 23
 I. Executive Summary:

Along with the changes in the global arena, the role of the workforce has also changed. The

role of human resources has been evolving for some time. The changes of the workforce required

a shift from traditional personnel management to human resource management. With the

evolution of HRM, this field has gained a more strategic perspective in both academic and

practice. Human resources have started to be seen as an inimitable and most valuable factor for

organizations to gain competitive advantage. With this perspective, HRM departments has

gained more importance and become strategic players in the organization. Today, the new HRM

requires being strategic partner in the organization by aligning all the HR functions with the

mission, vision and strategies of the organization. In this paper I have discussed whether the

function of Human Resource Management in A Service Provider Company is strategic or not.

Top Services is a Service Provider for Contracted Services. The organization specializes on

sourcing, screening and deployment of qualified personnel to suit its client’s needs. The

organization is composed of 380 organic employees and 17,000 deployed employees assigned to

different clients of the Company.

Topservices has been chosen for the practical information in this paper and the learner is one

of the HR Officer of the organization.

II. Introduction and Background of the Study

Human Resource Management is an indispensable function for both the private and public

sector organizations. The process deals with several operational objectives such as recruitment,

training the employee, selection of the employee, assessment of the employee, motivating and

maintaining a proper relationship with the employee and maintaining welfare and health for the

employees in the organization through the policies created by the organization. The human
resource management is a process through which the organization utilizes their limited skilled

workforce.

Despite major structural and economic changes in the workplace, this paper highlights three

core questions that have underpinned much of the work in this field throughout its history:

1. In terms of policy, how strategic are HRM policies and HR functions? What impact do

HRM policies have on organizational performance?

2. In terms of practice, how well do employers implement and ‘land’ HR policies?

3. Perhaps most fundamentally of all, what is the purpose of strategic HRM and do

employees as well as employers benefit?

These fundamental questions of impact, implementation and ethics underpin much of the

research and policy work in the field and lie at the core of this paper.

III. Objectives and Methodology

The objective of this paper is to gather preliminary information that will help in the

assessment as to whether the HRM function is strategic or not.

The data for this study was drawn from two main sources; primary and secondary data sources.

The primary data sources were those original data collected and analyses by the learner

from the employer. These were mainly obtained from the responses of respondents to self-

completion questionnaires and semi structured interviews.

The secondary sources of data refer to data collected other than the user of the

information. This kind of previously collected information is not case-specific but it can be

relevant to the studied problem (Lindstrom et al 2010). This study to a significant extent

depended on information about the HRM practices relevant materials such as available

handbooks, annual reports, performance reports, employment policies, and other relevant
information from the organization. The data obtained from these sources were scrutinized for

reliability and validity.

IV. Proprietary Information (Organizational Structure) and the Business Plan

(Strategies that bear on HR)

The Human Resources Department Business Plan is intended to be a working document that will

be modified and updated as needed to reflect the Company’s priorities and the changing needs of

our internal and external customers.

The Department is a stand-alone department arranged around six internal functions: Employment

and Recruiting, Employee/Labor Relations, Benefits, Compensation, Training and Development

and HR Records.

To effectively manage the Department, Human Resources is currently staffed with Twenty (20)

manpower.

Organizations such as A Service Provider Company, with a solitary Human Resources

Department, have a median ratio of 1.1 Human Resources staff member per 100 employees.

Despite our current lower ratio, we have been able to effectively manage the program through an

effective and efficient approach to training and staff development, cross training, and increasing

the duties and responsibilities of our staff.

The Human Resources Department provides its services to a large array of clients from

different industries such as but not limited to Retail and Industrial, Logistics and Warehousing,

Food Industry, Manufacturing and Aviation. The focus of the Human Resources Department is

to deliver quality service to these clients and stake holders.

The Human Resources Department must confront many challenges in its operational

activities. As a result of the global pandemic that we continue to experience until now is the
reduction in revenue. This has created the need for a significant reduction in the budget, resulting

in organizational changes, consolidation, and a reduction in force. In order to overcome these

hurdles, the department must identify and plan for the subjugation of them.

Challenges to the Human Resources business plan are outlined below.

 Budget Constraints

- Budget Shortfall

- The Local Economic Crisis

- Continued high unemployment

 Two Separate Systems for Maintaining Employee Information

- Have to maintain excel spreadsheets for frequently needed information

- Limited position control (has to be maintained in a spreadsheet)

- Two separate Payroll systems to process bi-weekly and semi-monthly

- We continuously have to build in-house “work-arounds” with the IT department

- The two separate systems limit the productivity within the department

 Staffing Considerations

- Changing Workforce Expectations

- Employee Retention

- Reduction in Force

- Consolidation of functions

 Performance Expectations

- Fragile Employee Morale

- The Skills Gap

- Succession Planning
- Performance Management

Based on the benchmarks from the organizations from the same industry has depicted in

this plan, our department continues to considerably exceed established benchmarks, providing

quality service at a much lower cost. We will continuously monitor and develop solutions to

mitigate the challenges we face. This recent past has been a successful one for the Human

Resources Department. The department has maintained focus on the current economic

environment and its impact on the organization. This impact as previously stated, includes

workforce reduction and further reorganization and consolidation. As a team we have worked

hard to achieve our goals and some of the successes are outlined below.

Human Resources Department Successes:

 Continued cross-training within the department to enhance employee skills and continue

our efforts to do more with less.

 Launched the new online application for employment and began placing all postings

through the newly develop recruitment system at no cost to drive recruitment efforts.

 Began the use of behavioral interviewing, which includes training to assist management

in making best “fit” decisions for the organization.

 Began piloting a new performance management process that includes extensive

leadership training, fluid communication of expectations, and anchors to the

organizations core values.

 Implemented the use of web-based training to save on operational costs while increasing

the training opportunities to employees throughout the organization.

In summary, the Human Resources Department business plan provides a formal definition of

the department’s purpose and direction. All challenges are recognized and goals defined. The
Human Resources Team is committed to achieving its goals and to serving customers and

stakeholders.

Company Organizational Structure:

Mission statement: The HR department will attract, develop and retain a highly-qualified,

diverse workforce and create a culture that promotes excellence throughout the organization. We

will be able to deliver this by collaborating with the organizations operations department to

ensure customer satisfaction, high quality customer service, an appropriate fit and trained

workforce, leading best practices, and ensure Human Resources is 100% compliance with Labor

laws in the Country. This will require innovative and cost-efficient initiatives in all aspects of

Human Resources.
Vision: To enhance services, prepare the organization, and maximize ROI by:

 Aggressively implementing our role in delivering value-added investments in human

capital selection, development, and retention.

 Embracing the role of Business Partner to the Organization’s Management

 Communicating with Senior Leadership, Management, and Employees

 Continue to pursue cost-efficient technology and continuous process improvement

In order to meet our vision, the Human Resource Department must engage in an aggressive

strategy to deliver Human Resources services and programs, both internally and externally.

Strategic Goals and Objectives: Understanding, setting, and consistently delivering superior

customer service to understand customer needs and values; develop and implement plans to

achieve superior customer service; and build effective communication strategies throughout all

the organization.

Continuing to lead and improve the quality of the work culture

 Identify, develop and implement policies and procedures, interventions, training to

improve quality of work life and the “culture” of the organization

 Provide leadership with continuous improvement strategies to improve the HR work

environment

 Value organizational diversity

 Maintain a proactive employee relations process and reduce legal costs

 Promote work/family balance

 Recognize and reward individual and team contributions

Attract highly qualified and diverse candidates

 Streamline, improve and communicate effectiveness of the recruiting process ensuring

the process is always defendable

 Identify and implement aggressive strategies for successfully recruiting for key positions

 Further the addition of technology to recruitment process

 Facilitate effective recruitment processes for ensuring senior management and senior

level positions are filled

 Develop innovative strategies to attract, obtain, and retain qualified workers

 Develop cost effective motivators for younger workforce

 Train management to hire for the needs of their particular department’s success

Develop employees to be their best in order to meet the needs of the Organization

Implement and maintain an effective internal HR Department overall performance management

system which includes individual, team, and departmental objectives, personal development

plans, performance appraisal, and career planning.

 Continue to assess the training needs of the employees and the organization as a whole

and develop and provide timely training to meet the needs of management and employees

 Implement on-demand web-based training to serve the additional needs of the

organization and ensure all employees are afforded equitable opportunity in training in

the most convenient format possible to the departments

 Provide organizational development services that will facilitate change and continuous

improvement in the organization

Align the best management and total compensation philosophy to attract and retain the

qualified employees

 Maintain a current total compensation and classification process to effectively attract and

retain employees

 Evaluate and address employee retention issues

 Focus on an Employee Value Proposition that will fulfill the mutual expectations of both

the employee and organization

Develop continuous effective professional relationships with the Branches and Departments

 Establish and strengthen communications and relationships to serve customer and

partners

 Visit all departments and offsite work areas on a routine basis

Administer fair and consistent implementation of HR policy, procedures, and programs in

order to align personnel/labor law and organization’s policies with continuous

improvement principles

 Continue to review, develop and/or revise HR policies and procedures as needed

 Effectively communicate and/or train new or changed HR policies and procedures

 Implement and improve technical capability to ensure the most effective processes

V. The HR Function

The Human Resources Department act as an enabler and arm of the organization. Those

responsibilities include: best practices hiring procedures to maintain a highly qualified

workforce; overview of external regulatory compliance, grievance resolution and management of

fair and consistent implementation of policies and procedures. The organization relies upon the

Human Resources Department within these roles to eliminate or reduce liability through
compliance with Labor laws and regulations and consistent application of the organization’s

policies.

Recruitment is the first step in the hiring process. The Human Resources Department

conducts outreach efforts to secure a highly qualified pool of applicants. The application process

is managed by the Department by providing each department with pre-screened applicants,

monitoring compliance with the law and regulations, conducting due diligence criminal

background checks, pre-employment drug screens and physical examinations, and completing

required documents for regulatory purposes and benefits.

Departments expand the Human Resources Department’s role in resolution of issues

concerning Employee Handbook interpretations, grievance resolution and advice on the

administration of disciplinary actions and, as a last resort, termination of employment. The

Department formulates direction which is fair and consistent across all branches nationwide. One

of the goals of this process is to provide education and guidance within these challenging areas.

The Human Resources Department works very closely with the Executives, Finance, and

Operations to reduce worker’s compensation costs and to provide all our employees quality and

affordable benefits programs.

The Human Resources Department must seek programs that are attractive to the diverse

needs of applicants and employees. These requirements must be met during a time of increasing

costs and decreasing budgets.

Other departments expect the Human Resources Department to maintain classification, pay,

and equity standards that allow them to recruit, develop, retain and promote top candidates. The

Department ensures wages and benefits are competitive and that opportunities for skill
 maintenance and enhancement are available. This environment is conducive to the employee’s

professional growth while providing challenging work and opportunities for advancement.

Departments rely upon the Human Resources Department to provide consistent informed

advice on the changing trends and laws that impact their staff. In order to do so, the Human

Resources Department must have timely and accurate information that comes through training

and research. Departments depend upon the Human Resources Department to provide legally

mandated training (e.g., accident prevention) to keep the workplace in compliance with policies,

and to keep their employees informed of their rights and obligations.

VI. Presentation of Findings

Table 1: Execution and Management of HR practices:

Recruitment Centralized 40 100.0

Training and Centralized Executed 32 80.00
development and Managed by HR 8 20
Department
Compensation Centralized 40 100
Performance Centralized 5 12.5
Appraisal/ Executed and managed 35 87.5
Management by HR Department
Employee Centralized 9 22.5
participation Executed and managed 31 77.5
by HR Department
Career Planning Centralized 30 75.0
Executed and managed 10 25.0
by HR Department

Table 1 shows how some HR practices are executed and managed by the organization.

All 40 respondents indicated that recruitment and selection is a centralized activity. This means

that it is carried out by HR Department at the head office. The only role by HR Department have

to play is to communicate and justify the need extra hands and the recruitment and selection are
done for the branches. Although some of the branches take inputs from HR Department as to

what type of person to select, they do not play any direct and major role in the recruitment and

selection process. 32 respondents representing 80% indicated the training and development is

carried out at the head office and by the HR Department. Training program are drawn up by HR

Department and resource persons are arranged for by the HR Department. It is rare for a branch

to carry out training activities on its own. All training and development needs are consolidated

and carried out by the HR Department at the head office. All 40 respondents representing 100%

indicated that compensation as an HRM activity is carried out executed and managed at the head

office. Often, operations managers have oversight responsibility over the payroll management

together with the accountant or finance officer. 35 respondents representing 87.5% agree that all

performance appraisal activities are decentralized and carried out by HR Department who play

supervisory role to the appraised. 5 respondents representing 12.5% indicated and upon further

enquiries explained that, performance management is a centralized activity. It is a common

practice that underperforming employees are transferred to the head office for coaching or for

reassignment. Out of the 40 respondents, 31 representing 77.5% indicated that employee

participation is a practice encouraged by HR Department at the various branches. 9 respondents

representing 22.5% responded that this practice is centralized in that employees only participate

in work related decision making and take initiatives only at the behest of top management. This

can only mean that employee involvement is gaining grounds within the organization.

Table 2: Item Statistics of Recruitment and selection practice in head office and branches

Appointment in this organization is based on merit 3.98 0.577 40

Applicants are fully informed about the qualification
4.05 0.597 40
required to perform the job before being hired

Advertisements are used by the organization to recruit 2.95 0.876 40

There is formal induction, orientation and familiarization
process designed to help new recruits understand the 4.25 0.67 40
organization
In this organization, line managers and HR managers
3.08 1.095 40
participate in the selection process
Selection system selects those having the desired
3.8 0.564 40
knowledge, skills and attitude
Vacancies are filled from qualified employees internally 2.88 0.911 40

Table 2 represents the item statistics of recruitment and selection practices according to

managers. A mean of 3.98 shows that managers agree that appointment in their organizations is

based on merit. Managers agree that applicants are fully informed about the qualifications

required to perform the job before being hired; this is represented by a mean of 4.05. A mean of

2.95 indicates that managers take a neutral stand as to whether advertisements are used by the

organization to recruit. This assertion was further concretized by the revelation that organization

do not often resort to advertisement to recruit because they rely mainly on recommendations

mostly from HR Department and top management and internal means of filling vacancies.

Managers also agree that there is a formal induction, orientation and familiarization process

designed to help new recruits understand the organization. This is shown by a mean of 4.25.

Again, managers remained neutral as to whether line managers and HR Department participate in

the recruitment and selection processes and this is represented by a mean of 3.08. It comes as no

surprise that managers remained neutral on the issue of involving managers in the recruitment

and selection processes since it is not the practice of the organization. Represented by a mean of

3.80, managers agreed that their organization’s selection system selects those having the desired

knowledge, skills and attitudes. Asked on whether vacancies are filled from qualified employees

internally, remained neutral because as it seems, such a practice is not widespread among

branches. Managers prefer roping in new recruits rather than pushing up existing employees to
fill up vacancies. This could be attributed to the fact that secondment, coaching and mentoring

are almost none existent in the branches leading to the lack of qualified employees to internally

fill vacancies. The responses to this question are represented by a mean of 2.88.

Table 3: Item Statistics of compensation and rewards in head office and branches

Pay for performance improves performance 4.22 0.698 40

Employees are rewarded based on performance 3.45 0.876 40

Compensation packages encourage employees to achieve

3.75 0.588 40
organization's objectives
Employees are recognized and rewarded appropriately in
3.42 0.594 40
this organization
Profit sharing/bonuses are used as a mechanism to reward
3.82 0.747 40
higher performance

Job performance is an important factor in determining the

3.92 0.829 40
incentive compensation of employees

Table 3 displays item statistics of compensation and reward practices carried out by the

rural banks and the perceived outcome of these practices from the viewpoint of managers. A

mean of 4.22 indicates managers‟ agreement to the assertion that pay for performance improves

performance. Managers of branches agree that the practice of pay for performance is motivating

and brings out the best in employees. It stands to reason that when pay does not commensurate

performance there is the tendency for decreasing performance. However, managers have a

neutral stance on whether employees are rewarded based on performance. This is shown by a

mean of 3.45. Though managers agree from all indications that pay for performance improves

performance, there is no strong agreement to the practice in reality. A mean 3.75 indicates that

managers agree that the kind of compensation packages offered by their organizations encourage

employees to achieve organization’s objectives. According to the managers, their compensation

packages stand among the best in a service provider industry and therefore should be able to
motivate employees to achieve organizational objectives. There is no strong agreement on

whether employees are recognized and rewarded appropriately in the selected organizations. This

is represented by a mean of 3.42 which therefore means that managers neither agree nor disagree

to the question that employees are recognized and rewarded appropriately in their organizations.

The above table also shows a mean of 3.82 indicating that managers agree profit sharing or

bonuses are used as a mechanism to reward higher performance. Based on the interview with

some managers reveal that the organization have adopted the practice of paying bonuses and

other incentives based on employees’ performances. This practice is received well by some

employees, with education and fairness in the execution of the practices, employees will grow to

understand the benefits of differentiated profit sharing or bonus packages. The last item in this

category sought to establish whether job performance is an important factor in determining the

incentive compensation of employees and the managers agreed that it does. This is represented

by a mean of 3.92.

Table 4: Item Statistics of Training and Development practices

Training needs are discussed with employees 3.78 0.832 40

There is a training strategy and coherent training program 3.25 0.742 40

Training incorporates the interests of the organization as

3.65 0.533 40
well as the individual

Training needs identified are realistic, useful and based

3.55 0.504 40
on the business strategy of the organization

Every employee goes through various training programs

3.68 0.888 40
every year
There is a budget dedicated to training and development
4.45 0.504 40
every year
Table 4 covers item statistics of training and development practices carried out by the

organization. From the above table, the mean of 3.78 establishing whether training needs are
discussed with employees shows that managers could wholly agree that such a practice is the

case. The training program are organized for employees with discussions with the individual

employees concerned. Again, the mean of 3.25 for the item, means that managers could make a

concrete stand as to whether there is a training strategy and a coherent training program. This

could only mean that training programs are strategically mapped out into a coherent whole; when

top management deem it necessary to have training sessions organized for employees, it is done.

Evidently, the mean of 3.65 shows that managers have a strong agreement to incorporating

individual and organizational interests into training programs. Obviously, the interest of the

organization will override that of the individual employees but room should be made to

incorporate the individual interests of employees so far as training is concerned. It is not

surprising that managers have a strong agreement point in confirming that training needs

identified are realistic, useful and based on the business strategy of the organization. This shows

in the mean of 3.55 for that item. This means that the wholesale nature of these training program

permits the proper identification of realistic and useful training needs that are matched to the

organization’s business strategy. Apart from that, managers agree that employees go through

various training programs every year. This is represented by the mean of 3.68. Managers agree

that a budget is dedicated to training and development every year. This is shown by the mean of

4.45.

VII. Conclusion and Recommendations

This section provides the summary of the findings of this paper, conclusions drawn from

findings and recommendations based on the findings. The paper examined the HRM practices of

the organization and its impact on organizational performance of the Company. Responses from

both managerial and non-managerial staff indicate similar and, in some cases, divergent views on
HRM practices. Though research has established concretely that HRM practices have positive

impact on employee productivity leading to improved organizational performance. From

evidence gathered are yet to benefit from the proper management of their human resources and

even when they do, it is just minimally. It is evident from the research findings that the

organization makes recruit from two sources; internal and external sources. Recruitment from

external sources though very often is given little advertisement or none at all. External

recruitment is done through personal recommendations from top management who usually

choose candidates for their friendship and blood relationships. On the other hand, internal

recruitment which requires filling vacancies through promotions, transfers and upgrading is used

by the organization as a means of selecting employees to fill vacancies. These activities are

centralized and managers have little or no role to play in the recruitment and selection process of

the branches. The branches however, make it a point to have formal induction, orientation and

familiarization process for new recruits which are very important and rewarding practices. It is

worth noting that most appointments are based on merit in these organizations. Managers

claimed that as a practice, employees are rewarded based on performance, and the research

proved otherwise. Pay for performance as a driver for improved performance, is gradually

seeping into the compensation and rewards practices of o. Research findings prove that this has

been incorporated into profit sharing and bonus payment structure organization. This aspect of

HR is a centralized activity carried put at the head office. Training and development programs

are meant to add value to employees and improve employee performance. Additionally, this

research revealed that training practices increases the benefits and creates adverse effects on

employee performance leading to increased organizational performance. All branches do have

training strategies and coherent training programs given to the employees and this means that
training and development programs incorporate the interest of individual employees. Training

needs are identified through formal performance appraisal and discussed with the employees and

thus training needs identified is realistic and based on business strategy.

Another important HR function is performance appraisal and management. The practice of

appraising employees is done quarterly. There is a formal and written performance appraisal

system which is appreciated does provide employees with feedback and counselling through the

performance management and employees development plan. Appraisal has become just a

formality and appraisal data is usually used for promotion, job rotation, training, compensation,

transfer, and termination as well. It is interesting that in this day and age, career development is

made the responsibility of HR Department to the employees. Avenues are created for employees

to discuss career aspirations within the organization with the immediate heads. It is the practice

of the organization to plan for the career and development of employees and match individual

and organizational growth needs. HR Department made clear to the employees to be aware of

their personal skills, interest, knowledge, and acquire information about opportunities and

choices in order to achieve career-related goals. Most of the employees are aware of their career

path in the organization. To enhance communication and employee involvement, regular staff

meetings are held. This practice is further boosted with the encouragement of employees to

suggest improvements in the way tasks and jobs are done. This practice increases the initiative

and innovation of the employees. Another finding was that training needs are discussed with the

employees and training strategies and coherent training program effective. Employees created

the impression that training does incorporates the interests of the organization as well as the

individual, training needs identified are realistic, and useful, and are based on business strategies.

The learner, as an observer-participant can say that employees have average views of the training
and development practices of the employer. It is a top-drawer practice to dedicate budgets to

training and development every year.

Studies have extensively shown that the proper management of human resources through

sound and effective HR practices, policies and programs can positively improve organizational

performance. This research found nothing to the contrary. Should the organization resort to the

proper management of their human resources and not leave that function to directors and non-

HRM experts, a great impact would be made on organizational performance. Recruitment and

selection which is the first process any well-meaning organization resorts to in acquiring human

resources is fundamental to organizational performance. It was found from the research that

when people with the desired skills, knowledge and attitudes improves, the performance of the

organization improves as well. Based on the findings of this paper, human resource

management function is therefore strategic.

This paper should be backed by a succession plan which is able to accurately predict future

abilities of existing human resource and future human resource requirements.

Appendices:

Questionnaires:

1. How does your Branch execute and manage the following HR practices?

a. Centralized (C) OR b. executed and managed by HR Department (HD)

i. Recruitment and selection (.....)

ii. Training and development (.....)

iii. Compensation (.....)

iv. Performance Appraisal/Management (.....)

v. Employee Participation (.....)

 vi. Career planning (.....)

2. Recruitment and Selection:

Using the scale of 1-5, please tick ( ) Strongly Agree Agree (A) Neutral (N) Disagree (D) Strongly
the levels of agreement in each of the (SA) Disagree (SD)
items below with regards to the HRM 5 4 3 2 1
Recruitment and Selection
Appointment in this organization is based
on merit
Applicants are fully informed about the
qualification required to perform the job
before being hired
Advertisements are used by the
organization to recruit
There is formal induction, orientation and
familiarisation process designed to help
new recruits understand the organization
In this organization, line managers and HR
managers participate in the selection
process
Selection system selects those having the
desired knowledge, skills and attitude
Vacancies are filled from qualified
employees internally

3. Compensation and Rewards

Compensation (Pay) and Rewards

Pay for performance improves
performance
Employees are rewarded based on
performance
Training and Development
Compensation
Training needs packages encourage
are discussed with
employees
employees to achieve organization's
objectives
There is a training strategy and coherent
Employees are recognised and rewarded
training program
appropriately in this organization
Training incorporates the interests of the
Profit
organization as well asare
sharing/bonuses theused as a
individual
mechanism to reward higher performance
Training needs identified are realistic, useful
Job
and performance
based on theisbusiness
an important factor
strategy in
of the
determining
organization the incentive compensation of
employees
Every employee goes through various
training programmes every year
There is a budget dedicated to training and
development every year

4. Training and Development

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