Hrm Practices & Hpws

Human Resource Management

Project “How Can HRM Practices Assist In Developing High Performance?”

Submitted to: Ajmal Waheed Submitted By: Kanwal Naeem Zonish Inayat MBA-III-A Submission Date: 10th May, 08.

Department of Administrative Sciences Quaid-I-Azam University Islamabad.

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Acknowledgements We truly express our gratitude towards our respected teacher, Mr. Ajmal Waheed who helped us a lot in carrying out this project. We would like to express our gratitude to all those who gave us the possibility to complete this project. We want to thank the Human Resource Management Department of Mobilink® Pakistan for giving us permission to use departmental data. We want to thank Mr. Hasan Arshad, human resource specialist of Mobilink who gave us his valuable time and provide us with the information on the practices of human resource department. We would like to thank our parents and siblings who helped us in difficult times. Thus with great love and appreciation, we dedicate this report to all the above-mentioned people and to all the readers of this report.

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Table of Contents o Executive summary

V

1. Company’s Profile 1. Staffing and Compensation Department

1 1

2. Organizational Development Department

1

3. Human Resource Operations Department

1

4. Human Resource Project Management 2. HRM Practices and High Performance Work System 2.1. HRM Practice

1 1 1

2.1.1 Employee Recruitment Planning

1

2.1.2

Selection of Employees

2

2.1.3

Workforce Alignment

2

2.1.4

Orientation

2

2.1.5

Creating Supportive Cultures

2

2.1.6

Reducing Status Differences

2

2.1.7

Employee Motivation and Retention Practices

2

2.1.8

Empowerment Practices

2

2.1.9

Providing Extensive Training and Development

3

2.1.10 Feedback / Performance Appraisal

3

2.1.11 Linking Compensation Directly to Performance

3

2.1.12 Promotion and Career Development

3

2.2 Human Resource Management (HRM) Practices and High Performance Work System (HPWS) / High Involvement Organizations / High Commitment Organizations 3

Mobilink GSM in the Context of HRM 3.1 HRM Practices and High Performance Work System of Mobilink

3 4 5 3

3.1.1

Recruitment

5

3.1.2

Orientation of New Employees in Mobilink GSM

5

3.1.3Workforce Alignment 6

4

3.1.4

Selective in Hiring

6

3.1.5

Motivation

6

3.1.6

Disclose Full Information

7

3.1.7

Team Work and Empowerment

7

3.1.8

Training and Development

8

3.1.9

Performance Appraisal

9

3.1.10 Compensation

10

3.1.11 Career Development

10

3.1.12 Grievance procedures

10

3.1.13 Exit Interviews

11

Recommendations

12

4.1 Change in performance appraisal method

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4.2 Growth opportunities/career planning

12

4.3 External recruitment

13

Conclusion

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References

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Executive summary The report on the project “how HRM practices assist in developing a high performance work system” starts with the introduction of the company Mobilink GSM whose human resource management practices are studied to analyze the impact of HRM practices to develop high performance work system. After introduction of the Mobilink, HRM practices are described in relation with their function to improve performance. After the theory describing the HRM practices, the HRM policies of Mobilink like recruitment, selection, orientation, exit interviews, training and development, performance appraisal, empowerment, grievance handling etc. are described in detail with live examples of these practices to describe how they assist in developing a high performance work system. After the detailed description of Mobilink’s HRM practices some recommendations are given to remove flaws and for further improvement of Mobilink. In the end conclusion is drawn.

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Mobilink Global System of Mobile GSM 2. Company’s Profile Mobilink a, pioneer of Global System of mobile (GSM) technology, was originated in 1994 and is providing the best cellular services in Pakistan. Mobilink in Pakistan is market leader in mobile communication. Mobilink has got huge market share of 42%. It has 2.4 million users. Mobilink has 5000 skilled, energetic and educated professionals with vast experience consisting of 4500 permanent and 500 temporary employees. It has more than 5,000,000 connections and six codes 300, 301, 302, 306, 307, and 308. Its network consists of more than 200 franchises and more than 700 retail outlets with the coverage of more than 315 cities and towns. In Mobilink, employees are given necessary and comprehensive orientation before starting a job. Moreover other training programs including on-the-job and off-the-job are also arranged to keep the skills of employees upto-date. Competitors of Mobilink are (a) Telenor, (b) Warid, (c) Paktel, (d) Ufone, (e) Instaphone and (f) PTCL. The Human Resource Department of Mobilink is sub-divided into four departments as under: 1. Staffing and Compensation Department 2. Organizational Development Department 3. Human Resource Operations Department 4. Human Resource Project Management 3. HRM Practices and High Performance Work System 3.1. HRM Practices 3.1.1.Employee Recruitment Planning

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To recruit, organizations adopt methods such as (a) job postings within the organization, (b) advertising to attract external applicants (c) employee referrals, (d) Databank, (e) walk in candidates and (f) colleges and universities (wikipedia, n.d). . 3.1.2.Selection of Employees Three human resource practices that are used in selection are (a) emphasizing person-job fit, (b) favor person-organization fit and (c) emphasize person-future fit. 3.1.3.Workforce Alignment Company with aligned workforce has (a) the right types of people, (b) in the right places at the right times and (c) doing the right things right. 3.1.4.Orientation Orientation consists of: (a) Department level orientation and (b) Generic or organizational level orientation. 3.1.5.Creating Supportive Cultures Organizations create supportive cultures by effective communication. 3.1.6.Reducing Status Differences To reduce status differences organizations provide employees with same uniform, lunch and equal parking facilities. 3.1.7.Employee Motivation and Retention Practices Three human resource strategies to motivate and retain employees are (a) create a familylike community, (b) favor interesting and rewarding jobs and (c) rely on fair compensation (wikipedia, n.d).

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3.1.8.Empowerment Practices A number of different human resource management programs to empower employees are (a) informal participative decision-making programs (b) job enrichment (c) continuous improvement (d) self-managed work teams and (e) disclosing essential information (wikipedia, n.d). 3.1.9.Providing Extensive Training and Development Types of employees training are (a) Induction Training, (b) On-the-job training / InHouse Training and (c) Off-the-job training / External Training (wikipedia, n.d). 3.1.10.Feedback / Performance Appraisal Performance appraisal methods are: (a) assessment centres, (b) behaviorally Anchored Rating Scales (BARS), (c) human resource accounting method (d) the Critical Incidents File, (e) the Rating Scale, (f) ranking, (g) management by Objectives (MBO), (h) the Narrative Method and (j) 360 degree performance appraisal (wikipedia, n.d). 3.1.11.Linking Compensation Directly to Performance The amount of pay is less important than its perceived fairness or equity. People may compare themselves to others (a) doing the same job within the same organization, (b) working in the same organization, but performing different jobs and (c) doing the same job in other organizations (wikipedia, n.d). 3.1.12.Promotion and Career Development In Organizations, career development means (a) how individuals manage their careers within the organization and between organizations and (b) how organizations structure the career progress of their members. Businesses used to partner with employees to carry out employees' career planning and development. Now, businesses view career development primarily as the employee’s responsibility (Managementhelp, n.d).

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2.2 Human Resource Management (HRM) Practices and High

Performance Work System (HPWS) / High Involvement Organizations / High Commitment Organizations Effective use of HRM practices such as: comprehensive recruitment and selection procedures, job design, training and participation programs and those that address employee motivation such as performance appraisal systems closely linked to compensation, improve employees' knowledge, skills and abilities, and development of High Performance Work System and ultimately improves firm’s performance. High performance work system is a specific combination of human resource (HR) practices, work structures, and processes that maximizes employee’s decision making ability, knowledge, skill, commitment, and leads to flexibility, innovation, information sharing and improvement. In an increasingly competitive business environment, where sources of competitive advantage are scarce, strategic HR management can provide such an edge. A high quality, highly motivated workforce is a difficult advantage for competitors to replicate. HRM practices develop High Performance Work System as they (a) select employees with required competencies (b) provide an interface between an owner and the firm's current employees, (c) produce a climate of trust and confidence that contributes to longrun firm effectiveness and efficiency, (d) motivate and empower employees and (e) create sense of responsibility. Use of systems of high performance work practices (i) Diminishes their employee turnover; and, (ii) Increases their productivity (sales per employee) and corporate financial performance (stock market value to book value) (Google-analytics, August 28, 2006). 3. Mobilink GSM in the Context of HRM

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We will be explaining the Human resource management of Mobilink GSM. Mobilink has a very well defined and well-structured HR department and its various policies of keeping each employee a productive part of the organization are intoned with the corporate world’s requirement. Employees in the company are largely committed to their organization and have shown progress in the company. The people at HR department of Mobilink say that “we are not the admin assistants but

business

partners”.

At

Mobilink,

HR

department’s belief is that "Our people are our greatest

asset”.

They

take

great

pride

in

acknowledging the contribution each one of them makes. 3.1 HRM Practices and High Performance Work System of Mobilink 3.1.1Recruitment To recruit, Mobilink prefers its own employees and goes outside only when fully qualified person is not available. Channels which Mobilink uses to recruit are (a) current employees, (b) employees referrals (c) advertise internally as well as externally, (d) Head hunters/executive search organizations, (e) walk in candidates, (f) job fairs (g) and colleges and universities. Application forms are available online also. At customer service Department, panel interviews are conducted. In all other departments of Mobilink, individual interviews are conducted. As Mobilink prefers its own employees, it provides career opportunities and job security to its employees. This preference motivates and helps to retain current employees and increases employees’ commitment. But as the company does not search for workforce in external market it might not get more talented, competitive and skilled workforce. 3.1.2

Selective in Hiring

The human resource department of Mobilink considers many factors while selecting an employee for any available position. The objective is to find the most appropriate employee to fill the position, who will in turn produce the most productive output for

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the organization. To hire they match applicant’s knowledge, skills and competencies with their requirements. Mobilink emphasizes person-future fit that focuses on the potential long-term contribution of applicants, often to the extent that they are willing to leave positions open until they find the best and brightest new employees. Because of the careful and long selection procedure, Mobilink hires the employees with better knowledge and skills. They select competent employees knowledge,

with

decision

skill,

making

commitment,

abilities, flexibility,

innovation and information sharing competency, which are characteristics of High Performance work System. 3.1.3

Workforce Alignment

Mobilink ensures that the right person will be selected and positioned at the right place and will do right things right which leads to achievement of firms goals and high performance. Mobilink aligns its workforce on the positions which match with their skills, knowledge and competencies. These people in the right places at the right times effectively utilize their skills and, thus, Mobilink gets the most out of its employees’ knowledge and skills. So the company with people doing the right things right has employees that always act in ways that help the company succeed. Right person  right productivity = profits. 3.1.4

Orientation of New Employees in Mobilink GSM

The objective of orientation is to acquaint all new employees with the basic structure and rules of Mobilink. A new employee is provided with the Orientation CD which contains Organizational charts and other information related to Mobilink. Email is also sent to give general information to the new employees. Mobilink provides orientation at two levels (a) Department level orientation within the first week of the employment, (b) Generic or organizational level orientation within 30 days of employment.

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Orientation program of Mobilink motivates old as well as new employees; reduces turnover rate, improves image in market and achieves commitment of employees. Old as well as new employees get chances to understand Mobilink in a better way. Besides senior and junior employees meet and share information. In short, orientation program of Mobilink leads to High Performance Work System and ultimately Mobilink’s performance. Employees of Mobilink confirmed that the company provides them with effective orientation. 3.1.5

Disclose Full Information

To disclose essential information to employees, Mobilink has a publication policy. According to which report on all Mobilink activities, booklets, news articles and newsletters are published. Sound communication in Mobilink also allows each employee to know exactly what is expected as far as her/his responsibilities and organizational mission statement, and what is happening within each organizational area. Communication between management and “shop floor employees”, who deal with customers and organizational processes, is encouraged at Mobilink. These reports and publications, communication between management and ‘shop floor’ employees, communication of grievances and understanding of responsibilities and organizational mission achieve information sharing, better performance, committed and motivated workforce and ultimately customers’ satisfaction. Employees of Mobilink admit that mostly their supervisors and colleagues provide information and help. 3.1.6

Motivation

The human resource management department of Mobilink motivates its employees by (a) creating a family-like community, (b) providing interesting and rewarding jobs, (c) giving fair compensation and awards, (d) providing sports and recreational facilities like membership at Islamabad Club and ladies club, (e) sponsors social events and outside activities, (f) regular company-wide meetings with managers, (g) participating in different community welfare programs, (h) providing feedback and (j) providing training.

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These motivating measures lead to better performance and productivity, commitment, enhancement in employees’ skills, abilities and knowledge, reduction in turnover and encouragement of information sharing that is High Performance Work System. Employees of Mobilink acknowledge Mobilink’s efforts to provide friendly and creative environment. 3.1.7

Team Work and Empowerment

Team work gives better results than that of individuals. At Mobilink teams are made to work. Mobilink makes sure that employees should be inculcated with the habit of out of the way thinking by assigning them motivational and recreational projects. Teams at Mobilink (a) develop goals and plans, (b) enhance communication among members, (c) develop and maintain positive relationships among members, (d) solve problems and make decisions on a timely basis, (e) successfully manage conflict, (f) clarify roles for team members, (g) operate in a productive manner, (h) exhibit effective team leadership and (j) provide development opportunities for team members. To empower employees, Mobilink uses self management work teams and disclosure of essential information. Team building and empowerment at Mobilink strengthen sense of responsibility and motivation by providing employees with the opportunity to attain intrinsic rewards from their work, such as a greater sense of accomplishment and a feeling of importance. Team building uses a diverse array of employee skills and capabilities more effectively, improves performance, reduces turnover, increases employees’ involvement and creativity and information sharing. In short, develops High Performance Work System. 3.1.8

Training and Development

The aim of training and development in Mobilink is to provide staff with the necessary skills and knowledge to fulfill the organization’s corporate and business plan.

All

training sessions are delivered in a highly participative style, introducing topics in a challenging and thought-provoking way in which, exercises and case studies are used. At Mobilink, training is provided at three levels that is (a) organizational, (b) operational and (c) personal level. At the start of each year, a training calendar is issued by the HR

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department of the company. This year 2008, the theme for training is Customer Excellence Culture. This training is mandatory for all the employees of Mobilink. At Mobilink, training is need based and employees can fill a need analysis form and highlight training needs and can give suggestions. Employees are trained technically or non-technically and periodically either locally or abroad according to pre-planned programs. The Human resource department conducts a meeting with department heads at the end of the training program to focus on the individual discipline and performance during the training program. Effective training and development of Mobilink promotes organizational understanding, improves staff communication and self understanding, enhances self esteem, provides employees with greater opportunity to grow and succeed within the company, upgrades capabilities of employees, provides guidance and individual counseling, motivates employees, improves performance, reduces turnover and encourages information sharing. In short, develops High Performance Work System. Employees of Mobilink said that the company provides training programs that are relevant and helpful in their career development. 3.1.9

Performance Appraisal

At Mobilink, managers follow a regular schedule in providing feedback to employees; they provide a formal review program to evaluate work performance and to promote communication and discussion of job performance with respect to past performance. Performance appraisal is done on an annual basis (from January 1st to December 31st) for which online performance appraisal system is used. A printed form containing list of the competencies is mailed to the managers on which, managers rate employees by using point scale. The performance appraisal is up to second line that is employee, his immediate supervisor and his supervisor’s boss. Managers empower employees to monitor their own work and performance. There is a separate section in the performance evaluation form for employees. Employees are free to give feedback about their evaluation and to identify their problems, needs and suggestions and then at the end of

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the process, human resource department asks supervisors and employees about the problems and their solutions. At Mobilink, to evaluate customer relation officers’ performance “mystery shopping” is also used in which a well trained person is sent to check whether the officers are behaving well with the customers or not. The officers don’t know who the mystery shopper in the customers is. Performance appraisal system of Mobilink links compensation to performance due to which employees are motivated and committed. It also allows management to assess the performance of the Mobilink as a whole. It also identifies training needs and promotions and as a result employees’ skills and knowledge is improved. It identifies employees’ weaknesses and strengths due to which employees discover areas to improve and grow and ultimately improves productivity and Mobilink’s performance. But the system lacks opinions of employees regarding their supervisors. This is the reason that the employees at Mobilink are not entirely satisfied with the performance appraisal system. 3.1.10 Compensation Mobilink provides its employees with market competitive salaries, both through financial and non-financial means such as intrinsic and extrinsic rewards and incentives to attract, reward, and retain employees, which are reviewed at frequent intervals. This compensation system of Mobilink ensures that salaries are competitive and equitable which attract and retain the services of competent qualified employees, provides fair and equitable compensation, motivates employees, improves employees’ commitment and increase labour productivity and performance. Employees of the Mobilink said that Mobilink pays market competitive salaries and according to their expectations. 3.1.11 Career Development Mobilink supports the development of its employee’s skills and abilities with an aim to increase their potential. According to Mobilink’s managers, employees are responsible for their career development. Mobilink prefers to promote its own employees. Mobilink 15

prefers long term commitment of its employees due to which employees get career improvement opportunities. These career improvement opportunities motivate employees; reduce turnover, increase employees’ commitment and performance and ultimately develop High Performance Work System and improve Mobilink’s performance. But proper career development and counseling of employees is still missing. 3.1.12 Grievance procedures At Mobilink, the human resource department provides all employees with a voice within the organization. If there are any grievances, the employee is able to freely communicate these with the appropriate people. There is a formal set of procedures that are used to ensure that all matters are dealt with fairly, equally and by ‘the book’, i.e. staff can be assured that a reliable process is available to resolve issues. By handling grievances, Mobilink retains and motivates employees, improves productivity and performance, enhances and creates commitment within the employees and achieves employees’ satisfaction and better performance. 3.1.13 Exit Interviews At Mobilink, exit interviews are conducted to ask whether there was any problem which compelled the employee to leave. These interviews provide the basis for analysis to find out reasons of exit. The main reason is that the telecom sector is highly competitive. Talented and skilled workers can easily get job. For better pay and benefits, employees leave the organization. But this problem is a generic problem of whole telecom sector. To reduce turnover and to retain employees, Mobilink pays market competitive salaries and employees of Mobilink admit it. Besides, Mobilink prefers its own employees and provides lifetime employment. Problem has been resolved to some extent.

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Thus, in a nutshell, bundle of HRM Practices of Mobilink are contributing much to its performance jointly. These practices are interrelated; single practice cannot lead to performance development. Mixture of all can lead to high Work Performance System. As a result of these effective practices, employees are more talented, skilled, competent, empowered, committed, motivated and productive. Due to its effective and productive workforce, Mobilink is a High Performance Work System. Its performance is shown by its market share as compared to that of its competitors. Market share of Mobilink and its competitors in 2007 was (a) Mobilink: 42.2%, (b) Ufone: 21.9%, (c) Telenor: 16.6%, (d) Warid:16.6%, (e) Paktel: 1.9% (f) and Instaphone: 0.5%. High profits of Rs. 2 billion in 2007 are a proof that the company is satisfying its customers. Mobilink’s HRM practices and employee perceptions have the potential to impact on customer satisfaction. Through HRM practices, employees of Mobilink obtain valuable information about the organization and the way it is managed. When these employees deal with customers they bring in the interaction, their perceptions of HRM practices of Mobilink. When customers meet a satisfied and enthusiastic employee, their perceptions of the service are likely to reflect the positive encounter. In a nutshell, Mobilink is using its effective HRM Practices to develop High Performance Work System in order to achieve High Performance. 4

Recommendations 4.1 Change in performance appraisal method

Mobilink should use the 360 degrees feedback in performance appraisal. This feedback would come from subordinates, peers, and managers in the organizational hierarchy, as well as self-assessment, and in some cases external sources such as customers and suppliers or other interested stakeholders. The human resource management department should ensure that the ratings come from only those individuals who know the person receiving the feedback long enough to get past first impressions, but not so long as to

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begin to generalize favorably. The 360 degrees feedback will not cause any financial or economic burden on Mobilink as only the method of performance appraisal will change. The 360 degree feedback will provide two way evaluations. As Mobilink have a supportive and cooperative culture so the supervisors and managers will be ready to receive a feedback from their subordinates. 4.2 Growth opportunities/career planning The human resource department of Mobilink should provide growth opportunities to its employees. This can be done by career planning which would enable both the employees and managers to be cognizant of their individual and organizational needs and to consider the changing business world and any personal life cycle changes when formulating their goals. The human resource department of Mobilink should appoint a career counseling resource person who can help employees plan their careers and inform them of possible avenues for training and development. Appointment of this resource person will be feasible for Mobilink because it is a sort of long term investment. And its benefits are more than its costs because employees with clear goals and aims are more productive. 4.3 External recruitment Mobilink prefers to recruit internally. This is a business which is in hyper growth. They need more number of employees to capture the arising opportunities.

Internal

recruitment will cause the managerial job openings to be filled by promoting the lower staff and the existing staff may feel they have the automatic right to be promoted, whether or not they are competent. So, with business expansion and growth they need to focus on external recruitment as well.

Conclusion Human resource is one of the most exciting and challenging departments of the organizations. People are very important in any organization. Because it is the people who start the business activity, run systems, make all business decisions. Human resource is such a resource which manages all the other resources of organization. Keeping this fact in mind all the organizations who want to survive in the coming era have to pay 18

special attention to their human resource departments. The best practices of human resource management are used to develop and improve organizational employees, who, in turn are able to enhance performance of the organization and develops high performance work systems. Any HRM practice alone cannot enhance the performance of the company unless it is combined with other practices of human resource management. So a proper linkage must exist among all the practices to achieve high performance work system.

References Google-analytics (August 28, 2006), Implementing a High Performance Work System, retrieved April 23rd 08, from http://www.google-analytics.com/urchin.js. Managementhelp (n.d), Career development, retrieved http://www.managementhelp.org/js/breadcrumbs.js. Wikipedia (n.d), human resources, http://en.wikipedia.org/skins.

retrieved

April

April

23rd 23rd

08, 08,

from from

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