The theoretical concept of Human resource management is based around the strategy of initiating the composition and implementation of working practices that, as well as being conducive to promoting the organisations business objectives, also seeks to plan in a strategic manner for issues that may arise to affect the business. As opposed to being an agent that reacts to internal and external changes after the fact, this is a defining characteristic that separates it from the concept of personnel management.
Human resource management can also encompass the development and fostering of an appropriate culture within the organisation and, ideally, examples of genuine HRM strategies are both related to the organisations overall aims but are also systematically integrated with each other as part of an overall plan. The concept of integration is the core idea of HRM.
For example, Beer and Spector (1985) remark:
‘A business enterprise has an external strategy…It also needs an internal strategy: a strategy for how its internal forces are going to be developed, deployed, motivated and controlled…the internal and external strategies must be linked’.
In the longer term though the essence of Human Resources Strategy is the analysis of the whole organisation and its needs and scope for development rather than a purely mundane day to day management of people. Encompassing the whole sphere of employment issues from, the organisations needs, skills required, amount of employees needed, type of contracts given etceteras, to also, the training and future development of the staff team as well as recruitment policies. With, consideration of these issues -always in line with a consideration of the organisation objectives- a strategic plan can be drawn up.
This plan however must also be flexible enough to respond to external factors such as, changes in employment law, changes to demographics relating to the local labour market, skills shortages, plus of course, competition and, increases/reductions in demand for the organisations products/services.
Human resource Management achieves these strategic aims on a day to day basis through the implementation of strategic policies related to training, recruitment, work practices and discipline etceteras.
The company is following a major organisational trend in instituting a model of flexibility in its contractual arrangements with its employees.
Following a flexible recruitment policy can result in reduced employment costs, improved flexibility and productivity.
Because Atkinsons model is so comprehensive in the range of employees that can be fitted into it, and the work at Home Cosy distribution is so similar, it would seem to me, that Home Cosy is more easily defined in relation to the permanent/temporary split, as the main problem seems to be a contractual one, regarding only a specific section of its employees.
While catering well for the companies’ needs there are institutional problems related with this practice which Home Cosy seem to be suffering from.
Firstly, the temporary or “periphery” staff, for Atkinson (1985) are commonly more detached emotionally from the company than its full time “core” staff. They are less willing to follow instructions comprehensively or give the same level of commitment and quality of work as the full time members. For Home Cosy the easiest reference here is the level of commitment from the majority of the Saturday staff employed. As the supervisors in the case study have noted most of the student rump of the Saturday staff “do not take their work seriously and are difficult to control”.
Secondly, when managing a company that relies heavily on temporary staff, particularly where there is a high turnover of employees, the core staff are involved in the initial training, ongoing supervision and are also, often called on to help or rectify problems caused by temps. Again the supervisors questioned mentioned this was a cause for concern.
There can be difficulties in monitoring the quality and reliability of both the work produced and safety standards when permanently hiring temporary staff.
There is also a problem at Home cosy regarding the monitoring of staff. There seems to be no system to effectively monitor the composition of or trends existing within, their workforce. The company can neither give accurate figures stating the companies gender mix nor can they accurately analyse trends in hours worked because of the “lack of any formal company statistics”.
The companies’ competitive advantage though is its ‘speed of delivery’. As so far it has successfully maintained its advantage through the application of this system, then obviously it is working for the business, but does perhaps contain elements that make it unnecessary negative. The most clearly restrictive aspect of maintaining this advantage is that it necessitates a flexible mode of working. The company must cut the costs of production in line with demand. This has institutionalised the permanent/temporary split and caused a distinct difference in the treatment of permanent and temporary staff. However, it could also be argued that in a sense it does not restrain the companies retention policies for its permanent staff, only the temporary ones, who because of the nature of the companies business can not be retained anyway. The nature of the work is temporary, while the company seems to have a relatively healthy record of staff satisfaction and retention amongst its ‘core’ staff and supervisors. In short the companies’ permanent staff seem open to the economic realities the company is faced with and, accept them as far as flexibility is concerned.
The company seems to be following a style of management more akin to traditional personnel management rather than HRM. The company has demonstrated a lack of strategic planning regarding the direction of its recruitment policies, however in a business that seems to have a widely fluctuating demand it has successfully reconciled recruitment policies with the commercial need to utilise fully, the potential (and also fluctuating) resources at its disposal.
The company also does not seem to consult regularly with workers although there was union consultation on the introduction of Performance Related Pay.
Although the company appears to have instigated a study in the early 1990s regarding future recruitment and retention, there seems to have been no real analysis or planning resulting from the findings of that survey.
The lack of this in conjunction with the characteristics described above also suggests the lack of any real HR strategy.
Internal and External factors that affect HRM practice
1. Lack of similar alternative employment in the area. Members of staff that are overskilled seem to prefer working at Home Cosy, in part you would assume because of the healthy remuneration levels. So, although some staff members are overskilled for Home Cosy a large rump would actually be underskilled for the newly developing companies in the area and some staff actually prefer the simple work allied with healthy wages.
2. Also, supervisory staff claim to always have potential recruits. However the problems the company is facing regarding temporary staff are due to the nature of demand, not external factors such as being a high area of employment, skills shortage etceteras.
3. The company may have to reassess its policies in light of the European Working Time Directive and other UK employment legislation.
4. The fluctuating nature of demand and the pressure from its competitors also restrict the nature of the HR strategy.
1. The company seems to be in a positive leading position in its market and can be reasonably supposed to be in a position to offer substantial employment in the region in the future.
2. The menial, non-skilled nature of the business restricts HRM policies in a sense as there is a limited scope for development and training.
3. Again, the menial nature of the work and its ‘factory image’ limits for many staff it seems, their sense of pride in their work, workplace and the company as a whole.
The company does have a problem in that its business necessitates the use of temporary staff and the current trend is for recruitment of this group to be slowly increasing in difficulty. However, the company has implemented commendable policies relating to its treatment of its temps. For instance, the equality with full time staff in using the firms many social facilities and the equality in pay scales, the nature of the work they do, hours worked etceteras, are all positive indicators not, that the company is essentially a bad employer, but more that, it is a fair one that is constrained by the nature of its business.
However, there are some recommendations to make that would have an effect on the retention of its temporary staff.
A) The company should implement a monitoring process on its commercial trends that would help it perhaps, formulate a longer-term strategy and provision for recruitment.
B) The company should phase out completely the sector of permanent Saturday staff who contribute the least towards the companies business and redistribute those hours amongst its core (and recurring) temporary workers.
C) The company needs to investigate the potential of reducing its base of employees who are recruited and let go (its revolving door policy) and establishing a committed core of temporary staff who could be offered any extra work as overtime payments. Thus maximising the number of hours per day that the employee can work in his temporary employment. These staff could be placed on a bank system, similar to the type of arrangement between a commercial employment agency and a full time temporary agency worker.
D) As the company seems to employ a significant percentage of people seeking to supplement their income and women amongst its temporary staff it could encourage loyalty to the company in the form of an unorthodox bonus scheme.
To encourage loyalty from the temporary workers staff could deposit part of their wages in a bank where at the end of a fixed period “interest” is paid by the company to the supplement the value of their wages. In the meantime the company could deposit the money in a bank with high rates of interest and add a little on top. This is similar in form to some of the “community savings schemes” that are in operation at present and would help people save for special events.
E) The company has little scope to change its policies regarding its sickness and pension schemes and is advised to leave them as they are.
F) The key for the company in retaining its temporary staff is the reduction of the base of temporary workers and concentration on improving the lot of those remaining. In order to do this it could also look into introducing a loyalty bonus, where, after the completion of a qualifying period and then following on from that other time scales, the company could offer rewards. These could be in the form of direct cash pay outs, or, rewards that may foster a greater sense of community in the workplace such as outside entertainment (movies, group meals with supervisors, management e.t.c), day trips, or short breaks as a work team.
Atkinson, J. (1985) Flexibility: Planning for an uncertain future. Manpower Policy and Practice, 1 summer.
Beer, M and Spector, B. (1985) Human Resources Management: A General Managers Perspective. New York, Free Press.
Mabey, C and Salaman, G. (1995) Strategic Human Resource Management. Oxford, Blackwell.
Warren, M and Crossman, A. (1996) Human Resource Management. London, Thames Valley University.