Key HRM models and their impact on international organizations
Part A
(1) The Matching Model:
Fombrun, Tichy & Devanna proposed this model. This model put forward that organizational structure and Human Resource (HR) system should undergo management in such a manner so that it finds congruence with the organizational strategy (Analoui, 2017). The theory focused on four HRM functions that included selection, appraisal, rewards and development. Thus, the model applies to performance managementthrough the process of appraisal. Compensation is determined by the rewards that drives organizational performance. The model also supports talent managementthrough the development of high quality employees. The model represents a heuristic framework that explains the significance and nature of key activities of HR.
(2) The Harvard Model:
This model is more comprehensive as it comprises of six critical components of the HRM (Beer, Boselie & Brewster, 2015).The components include the interest of the stakeholders, HRM policy choices, situational factors, long-term HR consequences and outcomes. Thestakeholder’s interests recognize the significance of the tradeoffs between owner’s interest and those of the employees. There is also the existence of tradeoffs between the various interest groups. Here lies the challenge of the HR manager who must play the role of balancing all the stakeholders.
The HRM policy choices emphasize the decisions and action of the management in the context of HRM that is appreciated on recognizing that the results are the outcome of interaction between choices and the constraints. The model applies to performance management through HR flows that includes selection, recruitment, promotion, termination and appraisal. The model applies to the compensation through its reward system in the form of motivation and pay system. The model also takes care of talent management through the work system that focuses on the design of the work and the alignment of the people. The situational factors represent the HR strategy chosen by the management. The conditional factors of the model include the labour market, task, laws, technology and social values, workforce characteristics and management philosophy.
Implementation of HRM strategies by KiwiFurniture
(3) The Guest Model:
David Guest in the year 1997 developed and claimed it to be superior to the other models. According to the model, there are certain specific set of strategies that demands specific practices and results in the outcomes (Lewicka & Krot, 2015). They are related to financial, behavioural outcomes. The model emphasizes logical sequence of the six components that includes HR practices, HR strategy, HR outcomes, performance, behavioural and financial outcome.
The model thus tries to portray, financial results depends on the performance of the employees that in a way leads to action oriented employee behaviour. On the other hand, behavioural outcome results from employee commitment, flexibility and quality that remain impacted by the practices of HR. According to this model, the HR practice needs to be in accordance with the HR strategies that remains invariably aligned with the strategies of the organization. This model applies to performance outcome through positive productivity through quality and innovation. Compensation is determined through the HR practices while talent management is taken care through cooperation, motivation, and organizational citizenship.
In the past five years, the company has put in a lot of effort for the attraction and the development of the international employees. During the time the company adopted Matching Model of HRM since the company followed an approach of integrating the new ambassadors and the employees with the organizational strategy similar to the approach put forward such model (Armstrong & Taylor, 2014) Then again, over past three years, the company spent enough time in implementing different strategies involving only fewer employees. For a long time, most of the human resource task has remained decentralized in KiwiFurniture and hence the local manager in consultation with the HRM decided on the selection and recruitment, development, retention and employee termination thereby following the Harvard Model of HRM (Alfes et al., 2013). This helped the company in not only gaining transparency but also guidelines, policies and common framework. The corporate HR now works with the overall values and policies and in conjoint with the local managers who ensured communicating the values and the policies to the local employees and the shop managers. The corporate values are marketed by writing stories portraying particular message in relation to the market condition, the position of KiwiFurniture and the new products and initiatives.
Two core strategies for performance management and recommendations for KiwiFurniture
These messages then conveyed through the intranet and monthly-published magazine for the employee and the customers. The best part was that the task of HRM not outsourced since all the tasks were performed in cooperation of the corporate HR and the local managers. In most cases the HRM manager introduce the new initiatives, speak with line managers and helps in delivering the necessary HR tools. However, there was a lack of integration of the performance management software rolled out as part of change. As a part of the feedback process employees did not express willingness to express something about the managers or the other team members. They instead preferred a performance management scale based on numerical values where they not only rated themselves but also rated the managers.
This acted as hindrance in providing the organization with ideas, prevents local goal setting and a way for the manager where he needed to get more involved in the goal setting and in the review of the performance. Thus, following the approach of Harvard model, under the benefits and compensation, there was the launch of global performance based pay system and the seniority-based system that offers fixed salary. In the coming days, the company focuses on the well-being and the cooperation amongst the employees and the managers on a global scale there by fulfilling the goal of a more efficient and competent workforce. In respect to the competency and education development, there lay an area where the local managers held responsible. It is therefore task of the Corporate HR to ensure professionally equip the local managers with the appropriate kinds of competencies along with continuation of the education opportunities to remain updated with the newer designs, trends, and upcoming products. In addition, the Corporate HR held lot of conversation with the management regarding their expectations, employee target and put forward newer initiatives related to the skill development.
The two core strategies of the performance management include:
(1)Behavioural Approach of Measuring Performance: This approach provides a precise description with frequency in respect to the behaviour of the employees for effective performance (De Waal, 2013). The total score represents the average of all frequencies. Behavioural approach is suitable for the accuracy and the reliability. However, the key drawback of the approach represents the huge volume of data that the manager needs to remember. This approach consists of series of the vertical scales for the different job dimensions.
Cultural and institutional aspects for implementing a performance-based pay system in New Zealand, France, and Japan
The behavioural approach to performance measurement is one the oldest adopted techniques. This approach consist comprises of series of the vertical scales for the different job dimensions (Oliver, 2014). This is accomplished through either the Behaviourally Anchored Rating Scale (BARS) or the Behavioural Observation Scale (BOS) technique. The BARS technique has five to ten vertical scales based on the parameters consensually decided by the employees. Then the ranking of the employees takes place on the anchors based on the performance. However, the BOS is a recent version of BARS that put forward further specific description along the frequency in respect to the behaviour of the employees for the effective performance of a particular act. The overall score represents the average of all frequencies.
KiwiFurniture followed the behavioural approach for measuring performance through a 180-degree performance management software for the collection of the feedback as a part of the change process implemented across the organization. According to this system, collection of the feedback required the employees to provide necessary positive or negative comments for not only themselves but also their managers and co-workers. The results obtained based on the behaviour then applied for performance orientation. However, the employees opposed this system since they were not willing to comment and preferred performance management scale based on the numerical and where it was easier to rate not on only themselves but also the managers.
(2) Attribute approach of Measuring Performance: According to this approach, the rating of the employees takes place based on a specific set of parameters of teamwork, communication, judgement, problem solving skills, judgement, innovation and creativity. The approach puts forward a graphic rating scale that entails the rating of the employees based on a scale indicating one to five (Bhattacharya et al., 2014). Then mixed rating scale represents more of a layered form of measurement where in the initial step the rating of the employee takes place as high, medium or low for a specific set of the parameters. Each of the parameter is scaled and further broken to be marked as positive, equal or below. The key disadvantage of the attribute approach for performance measurement lay in its aspect of subjectivity. The approach also heavily relies on the nature of evaluator. The approach also comes with another drawback in the sense that it can only accurately identify the worst and the best performers. However, most organization follows this approach due to its simplicity (Pedhazur & Schmelkin, 2013).
Change management philosophies for implementing the new performance management system
KiwiFurniture under a new implemented initiative related to the HR compensation, benefits followed the attribute approach for measuring performance by launching a new performance based payment system, and a seniority based system that focused on ranking the performance of employees in respect to others present in the group with phasing out of a fixed salary system. The performance of the employees judged based on problem solving skill, communication, teamwork, judgement, innovation and creativity. In the future, the company also plans to focus on the cooperation and the well-being amongst the employees and the managers on a global scale with the ultimate goal of an efficient and competent workforce. Moreover, with regard to the competency and education development, the company further looks forward to the HR managers for professionally equipping the local managers with appropriate competencies and education opportunities so that they remain in a position where they can provide necessary updates on the designs, trends and upcoming products.
Recommendations for Improvement in the Current Performance Management System
The recommendations for improving the current performance management system include:
- I recommend KiwiFurniture to link the performance management to the goals and projects that render support to the strategic plan or the competencies that are critical for ensuring the organizational success. Often mundane issues like attendance, timelines and attire appears on the reviews. However, these reviews should focus on the competencies like the behaviour and skills of the external and internal customer, flexibility in facing change and strategic thinking. Such reviews should also focus on the outcomes that represent the results of actual project.
- It is also important for linking to the expected results. For performing well it is necessary for employees to understand the expectation that the company desires from them. The beginning point represents the updated job description that put forward the essential task, function and responsibilities for the job. In other words, it outlines the general skills and knowledge necessary for the employee to be successful. However, expectations for the performance go beyond the description of the job. Performance expectations serve as the foundation for communication regarding the performance throughout the year. Linking to the expected results also helps in reviewing the performance of the employees. Thus, when a clear expectation about the results to be achieved along with the required approaches and methods it leads to the establishment of a path for the success.
- The criteria for performance management also need improvement. This includes strategic congruence, validity, reliability, specificity and acceptability. Strategic congruencerefers to the extent to which performance management extract its job through congruence with organizational goals, strategy and culture (Wilden et al., 2013). KiwiFurniture must improve its strategic congruence by aligning performance with organizational effectiveness. The Reliability on the other hand refers to the consistency maintained in measuring criteria whereas validityimplies the extent of measurement of an instrument to what it intends of measuring (Spekle & Verbeeten, 2014). It is therefore necessary for the company to improve ensuring its reliability and validity in measuring its performance through the newly implemented systems. Acceptability however is a criterion for evaluation of the techniques for performance appraisal (Taticchi, Tonelli & Pasqualino, 2013). Specificity refers to the accuracy of the techniques adopted for the performance evaluation (Micheli & Mari, 2014). In this regard, KiwiFurniture must improve the acceptability of the methods implemented and ensure its specificity.
The cultural aspects that KiwiFurniture should take into consideration for expansion into the markets of New Zealand are as follows:
(1)
(1) Power Distance: In New Zealand within the organizations, there is establishment of hierarchy for convenience (Smith, 2017). The superiors remain accessible and managers rely on the teams and the individual employees for gaining expertise. At the same time, communication is not only informal, participative and direct. The country score in this particular dimension is close to 22.
The low power distance impacts the performance based pay system by encouraging the subordinates in gaining more skills and increasing their commitment towards work. The outcome lies in the fact that more the managers ensure delegating responsibility to the subordinates, the more they are able to learn the hard and the soft skills. Allowing the subordinates in presenting their argument related to work and the policies of the company usually ensures high motivation towards work.
(2) Individualism: In the context of this cultural aspect, business world can find the employees to be not only self-reliant but also display initiatives (Fairburn, 2013). In addition, within an exchange based work scenario, promotion and hiring decisions solely depends on the merit on what a particular employee has done or can do.
The individualisms can influence performance based pay system through the benefit of an increased level of personal responsibility. This is also generation of healthy competition since each of the employees demonstrates his own skills and talents that subsequently and clearly give them a rise in the ranks. The outcome of this cultural aspect lies in the fact that they also provides the workers with freedom of exploring newer means for completing the basic projects and the procedures
The institutional aspects that the company should consider include:
The Treaty of Waitangi signed in the year 1840 between the British crown and the Maori tribes portrays the base from which the Maori interest expressed and realized (Orange, 2015).
The cultural aspects that KiwiFurniture should take into consideration for expansion into the markets of France are as follows:
(1) Power Distance: In business, the companies of France have one or more levels of hierarchy with the superiors enjoying more privileges and inaccessibility (Anicich, Swaab & Galinsky, 2015). The country holds a score of 68 in the category of the power distance and portrays greater dependency of the employees.
The power distance can affected the performance based pay system through inhibited sharing of the information. The outcome is that the employees feel that it is the prerogative of the managers for making decisions and solving the problems.
(2) Uncertainty Avoidance: The French culture has a score close to 86 on the aspect of uncertainty avoidance (Matusitz & Musambira, 2013). In business, the French people do not like surprises and therefore they believe in planning and structure.
Uncertainty avoidance can influence the performance based pay system by presenting a structure that clearly shows the communications clearly and the job descriptions in detail. The outcome is that it increases the uncomfortable aspect in the unpredictable situation thereby resulting in unwillingness to challenge.
The institutional aspects that the company should consider include:
There exist two primary categories of the legal structures for doing businesses in France. The incorporated ones possess legal personality with ninety-nine year duration while the incorporated ones do not possess accomplished registration formalities but recognized by law (Meiners, Ringleb & Edwards, 2014).
The cultural aspects that KiwiFurniture should take into consideration for expansion into the markets of Japan are as follows:
(1)Power Distance: Japan represents a borderline hierarchical society with an intermediate score close to 54 (Sriramesh, 2013). The business process in Japan represents a slow decision making process and all decisions needs to be confirmed by each of the hierarchical layer and finally by top management.
The power distance impacts the performance based pay system through inhibiting the sharing of information. The outcome shows how the employees consider the prerogative of managers for not only solving problems but also making decisions. The impact of this cultural aspect is that the managers do not find it important for sharing the information with the employees due to better access.
(2) Uncertainty Avoidance: In corporate Japan, there is a lot of effort and time invested into feasibility studies and risk factors worked out before the start of any project (de Bellis et al., 2015). The managers make sure that they have the details of all the figures and the facts before taking a decision.
The uncertainty avoidance affects the performance based pay system through increasing the pain of the employees in the unpredictable situations. The outcome of this lay in showing the unwillingness of the employees in facing challenges. However, higher uncertainty avoidance helps the employees in deriving benefit from the job.
The institutional aspects that the company should consider include:
Basic Environment Law that serves as base for Japan’s environmental policy that imposes lesser burden on environment and the international cooperation for conservation of global environment (Wallace, 2017)
Part (D)
The Kotter’s Eight Step Models is more suitable in New Zealand for implementing the new performance system without bringing about a change in the performance since the country score quite low in terms of power distance: The steps includes (Pollack & Pollack, 2015):
- Creation of Sense of Urgency: Helps others in seeing the change through the inspirational opportunity statement that helps communicating importance of immediate action.
- Building a Guilding Coalition: People believes in the coalition of effective people who are born for guiding, coordinating and communicating activities
- Forming a Strategic Vision and Initiatives:Helps in clarifying how the future will remain different from the past by thoroughly linking the initiatives to the vision.
- Enlisting a Volunteer Army: Helps in introducing massive rally of people towards a common opportunity for driving the change.
- Enabling Action By Removing Barrier: Helps in removing barriers related to insufficient process and hierarchical norms thereby providing the required freedom to the employees
- Generation of Short Term Wins: Recognition, collection and communication for short term wins for energizing the volunteers and tracking the progress.
- Sustenance of Acceleration: Relentlessly initiating change until the vision becomes a reality.
- Instituting the Change: Helps articulating connections between organizational success and newer behaviors making sure it is continued until sufficiently strong for replacing the older habits.
Benefits
The model puts forward a systematic process that is easier to apply and follow. The primary focus of the model deals with accepting and preparing for the change.
Challenges:
The model has various steps. The transition of the model becomes harder when a step is skipped. The model takes a huge amount of time for execution due to the number of steps involved.
The McKinsey 7s Model is more suitable in France for implementation of the new performance system without bringing about a change in the performance since the country score quite high in terms uncertainty avoidance : The steps of the model includes (Alshaher, 2013):
- Strategy:Sound strategy is long term and helps in clear articulation that helps the company in gaining competitive advantage through mission, values and strong vision.
- Structure:This represents the manner in which the units and divisions organized and has information regarding accountability.
- Systems:Procedures and process of company that reveals the daily activities of business and how decisions taken
- Skills:This represents the abilities of the employees for performing well
- Staff: This represents the number and the type of the employeesrequired by the organization and the process involved in recruitment, training and motivation.
- Style: This represents the management of the company by the top-level managers their interaction, the actions taken and the symbolic value.
Benefits:
The application of this model ensures holistic management of a company in terms of task allocation, coordination, reporting and the supervision levels.
Challenges:
The style factor mentioned by the model might undergo repetition throughout organizations due to culture and tradition.
The Prosci’s ADKAR Change Model is more suitable in Japan for implementing the new performance system without bringing about a change in the performance since the country score moderately in terms of power distance (Parker et al., 2013).The steps includes:
- Awareness of need for Change: Indicates need for the change and the desire of supporting the change
- Desire for Supporting Change: This step encourages the managers or the supervisors in guiding change process.
- Knowledge about the Change: This involves knowledge regardingbringing in change process and effective performance in future.
- Ability of Portraying New Skills and Behaviour: This indicates the required tools, proper technique and the process involved in bringing a change.
- Reinforcement: This implies the required mechanisms for reinforcing the change.
Benefits:
This model is beneficial to change efforts where there is presence of resistance on large scale.
Challenges:
The model requires analyzing and collecting feedback of employees and auditing the compliance with the new roles, systems and process for understanding the effectiveness of change management that might be challenging.
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