HR Metrics: Hard vs Soft Metrics
Hard and Soft HRM
In every organization, the role of the human resource management focuses on the ensuring compliance with the employment laws while supporting the business strategies and objectives. While ensuring effective performance of the workforce, the HRM uses both soft and hard HR metrics (Noe 218). The two help in providing data used by the management and the HR department in ensuring the organization meets its performance, staffing, administrative core objectives, and change management. Hard HR metrics is part of the traditional approach of measuring HR procedures and policies by the use of quantifiable data in assessing the overall function of the HR. Hard HR thus uses cost assessment and operational efficiency as prime objectives. On the other hand, soft metrics focuses on the impact of human capital and value is has on the business results. Therefore, it views the employees as the asset of the business in maintaining a competitive edge. It adopts the qualitative methods in assessing the performance, adaptability, productivity, and commitment levels of the employees.
In a systematic study, Beardwell and Thompson (2017) denote that hard and soft metrics both aid in meeting the strategic and operational objectives of the business. As soft metrics looks into how business strategies and desired outcomes are linked, hard HR focuses on the cost control in getting the functions right for the operation. They both provide essential data that can used by the organization in progressing the business by adopting business decisions suitable for both the employees and the management. However, the matrixes also adopt different HR models in their functionality.
Harvard HR model was postulated in 1984 by Beer et al. at Harvard University, also coined the HRM territory map. The model is essential as it acknowledges the existence of different stakeholders within an organization whose recognition in their legitimacy renders the model a neo-pluralist. The model hence focuses on the soft metrics of the HR. Its emphasis is on the fact that most employees are equally essential in influencing the outcomes of the organizational operations. It thus focuses and factors in the interest of other groups in creating HRM strategies.
Figure 1: Harvard Business Model
A different view of the hard HR associates the Michigan model with it as pointed out by Newell and Roberts (2017). The model has a less humanistic edge as it holds that employees are resources just like any other business resource. On other words, they have to be managed in a similar way to raw materials and equipment hence must be obtained a cheaply as possible, developed, exploited, and used sparingly as possible. It is also known as the best-fit model that requires human resource strategies to adopt a tight fit of the overall strategies of the organization. Therefore, it limits the role of HR to a reactive organizational function while focusing on the importance of the external factors that influences the performance of the organization.
HRM Models: Harvard HR Model and Michigan Model
Figure 2: Michigan Model
Organization and Company Profile
Hilton Hotels and Resorts is a hospitality multinational company with over 575 hotels in six continents. Due to its quality services and security standards, the company has been attractive to prominent businesspersons and political leaders across the globe. On 1st June 2017, Hilton Hotels and Resort made its first debut in Morocco by launching Hilton Tangier City Centre and Residences (Hilton Hotels & Resorts Global Media Centre 2017). Hilton Tangier City Centre and Residences has “180 guest rooms and suites.” The hotel is designated at the middle of the Tangier close to restaurants and corporate offices. The vision of the hotel is “to fill the earth with the light and warmth of hospitality –by delivering exceptional experiences – every hotel, every guest, every time” (Hilton Hotel and Resorts 2017). Hilton Hotels and Resorts values include hospitality, integrity, leadership, teamwork, ownership, and now.
Host Country Profile
As a developing country, Morocco has many openings for different business opportunities across different industries including tourism. On 1st June 2017, Hilton Hotels and Resort made its first debut in Morocco by launching Hilton Tangier City Centre and Residences. The business environment has Morocco has been quite unpredictable. Moroccan policies support foreign direct investment and transfer of profits in foreign currency. The Moroccan government has been encouraging structural reforms and trade liberalization to foster foreign investment activities. Unemployment rate in Morocco stands at 10.2, which constitutes 26.5 percent of young, 17.9 percent of the university graduates, and 14.7 percent of women. Ideally, this means that the capacity of the economy to stimulate inclusive growth is weak. The country’s GDP is USD 110.2 billion and GDP per capita is USD 3083 billion with a low inflation rate of 0.7 percent (World Bank 2018). This paper provides analysis on the external business environment in Morocco by employing PESTEL analysis. The second part of the paper focuses on HRM models and theories. The subsequent section explores performance management practices and management skills in international business.
Industry Analysis
The modern business environment is quintessentially dynamic and the organizational management must take deliberate measures to analyse the external environment before planning and executing business strategy. For human resource management to apply business analysis effectively, brainstorming on the nature of the industry as well as the internal and external factors affecting its performance is paramount (FME, 2013, p.10). The hospitality industry is dynamic and is on constant changes owing to the stiff competition as a result of technological advancement and market complexities.
PESTEL Analysis of Morocco
PESTEL Analysis
The modern business environment is quintessentially dynamic and the organizational management must take deliberate measures to analyse the external environment before planning and executing business strategy. For human resource management to apply PESTEL analysis effectively, brainstorming on the external environment issues is paramount (FME, 2013, p.10).
Political
Pursuant to the 1995 Morocco Investment Charter, the Moroccan policies supports foreign direct investment projects and transfer of profits in foreign currency. The Moroccan government has been encouraging structural reforms and trade liberalization to foster foreign investment activities (Export.gov, 2017). However, the country’s foreign investment policies demands that the foreign shall include domestic content in their products or technology
Economic factors
Economic factors include issues like tax rates, inflation rates, excise duties, trading regulations, and interest rates. Corporate tax rate in Morocco is 35 percent, which more compared to EU and USA markets. Unemployment rate in Morocco stands at 10.2 (World Bank, 2018). Agricultural sector is the major economic driver in Morocco, with a 15.1 percent growth rate. The non-agricultural GDP has stalled at 2.8 percent. Due to geopolitical stability, foreign direct investment in Morocco has been moving on upward trajectory.
Social factors
Social aspects and cross-cultural communication in particular, play a vital role in global and international markets and therefore the human resource management should intensify research in this area enhances the success of the company. Official language in Morocco is the “Modern Standard Arabic” while the local vernacular is Darija— a Western Arabic language. Most elites and older generations also speak French (Export.gov, 2017). In most business meetings, the language used is French. In northern part of Morocco, the common language used is Spanish.
Technological issues
Advancements in technology have the efficacy to cause a paradigm shift in the market trends (Daniels et al, 2018, p.72). Some of the common technological trends in Morocco include automation, cost saving innovations, and outsourcing. According to Abdelhak (2014), technology improves networking capabilities by enjoying extensive coverage globally as well allowing firms to contour their workflow and discard operational impediments. A telecommunication system in Morocco has improved significantly over the recent past.
Legal factors
According to Danniels et al (2018), organizations should observe legal factors in order to prevent any occurrence of risk and protect its reputation. Morocco does not have transparent and efficient systems for obtaining land approvals, government permits, and payments from government contracts (Export.gov 2017). Moreover, Morocco allows both foreign and domestic arbitration awards. Commercial courts in Morocco preside over disputes and bankruptcy issues.
Performance Management Practices and Management Skills in International Business
Environmental factors
Newell and Robert (2017) observe that environmental factors have evolved and become more pertinent to the extent that they affect social patterns and business operations. Geographically, Hilton Tangier City Centre and Residences is locate in a serene and attractive environment. Tangier is a renowned tourism destination because of its propinquity to Europe. The city has exquisite historical sights and delicious cuisine. Due to construction of electric train in Tangier and expansion of Med Port, the prospects of growth in hospitality industry is very promising. The present environmental policies in Morocco do not have the capacity to reinforce solid waste management, energy efficiency, and greenhouse emissions.
Why Morocco is Appealing for Investments
There are different HRM theories that we have implanted. One of the model is Harvard Analytical Framework. This theory recognizes various elements within the periphery of HRM, which include policy choices, stakeholders’ interests, vision and strategy, internal and external environment, and specific soft views (Beardwell and Thompson 2017, p.23). The Harvard Analytical model emphasizes two critical points that managers should take into consideration. The first point is that managers have the obligation to ensure that competitive strategy aligns with the HRM policies (Beardwell & Thompson 2017, p. 24). Secondly, HRM have the responsibility of fulfilling the organizational objectives in a coherent fashion. The model vests on mutual respect, mutual responsibility, teamwork, and mutual commitment. These principles of Harvard Analytical reinforce cohesion in the organization.
Another HRM framework is the matching model (Beardwell & Thompson 2017, p.27). The model focuses on achievement of the organizational objectives based on the appropriate application of the HRM functions, which include selection, performance, assessment, training and development, as well as benefits and compensations (Beardwell & Thompson 2017, p.38). The model insists that the organization should use sound techniques in evaluating the performance of the human capital. Upon identifying the performing employees, the HRM should reward them adequately. The model assumes that each functional unit of HRM is interdependent.
Universalistic theory is underpinned on “high performance and best practices” (Beardwell and Thompson, 2017, p.67). The theory identifies the existence of linear relationship between organizational performance and the HR practices. In addition, the theory postulates, “best practices are universally applicable and successful” (Beardwell and Thompson 2017, p.67). The organizational success, according to the theory, is best determined by using sales, profits, and market share metrics. In this context, the organization should apply the best practices in training and development, information sharing, incentive pay, employee ownership, promotions, participation and endowment, assessment of practices, hiring process, high wages, and employment security. Rather than using the external environmental factors, the theory suggest application of the aforementioned concepts to facilitate the achievement of organizational strategy.
At Hilton Tangier City Centre, we are driven by the passion to deliver “exceptional guest experiences” (Hilton Tangier City Centre and Residences 2018). Our philosophy is entrenched on the fact that hospitality is more than just a job. We believe that hospitality is a journey of growth, self-discovery, cultures, and communities. Our team consist of extraordinary professionals that work collaboratively to enhance delivery of exceptional experience to all our clients. Throughout the globe, our vision remains “to fill the earth with the light and warmth of hospitality” (Hilton Tangier City Centre and Residences 2018). We believe it is our duty to engender profound experiences for the clients, reasonable opportunities for our team members, and encourage positive impact to the society. We take pride in achievement of the title “Great Place to Work” We are among the 25 best Multinational employers in 2017, and our aim is maintain our excellence (Hilton Tangier City Centre and Residences, 2018). Our employment models are standardized and are designed to select competent, versatile, and analytical candidates during hiring and selection.
Before we commence on hiring process, we undertake HR planning. According to Anthony et al (2016), HR planning leverages the organization to gain competitive edge over its rivals and accomplish its business objectives. To conduct a successful HR planning, we have established strengths and weaknesses of the current employees and therefore we have adequate information of what the type of employees we should consider during hiring process. During planning phase, we conduct forecasting to predict the labour demand and supply in the economy. Our concern is whether people with hospitality related skills are increasing or reducing. We use statistical models like trend analysis and leading indicators to predict the labour demand. On the other hand, we use transitional matrices to determine labour supply Noe (2018) observe that statistical models are suitable when there is consistent history of economic trends. Forecasting also enables us to determine labour shortage and surplus.
The main purpose of recruiting is to identify and attract potential employees. During recruitment process, we make decisions based on recruitment policies, personnel policies, and behaviour of the HR manager. Our personnel policies provide for both internal and external recruiting. In most cases, we fill upper-level positions through internal recruitment. Additionally, the personnel policies encourage employment-at-will, which enables either party to terminate employment pursuant to due-process policies. Image advertising is also part of our personnel policies. Our main internal sources of internal selection is job posting. This involves posting the vacancy positions on bulletin boards and corporate intranet. Noe (2018) attests that internal selection is cheaper and saves time. On external sources, majorly, we rely on direct applications and referrals. Other external sources that we use include career fairs, job aggregator websites, print ads, and online database. In most instances, we encourage applicants to apply for the vacancies online.
Our selection process starts by reviewing applications received to identify candidates who meet the irreducible minimums. After identifying candidates that meet the irreducible minimums, we administer reviews and tests to determine the candidates’ ability. The next step is inviting candidates with required skills for interviews. Our interviews involve stage of processes by our team members. At this point, we begin to making informed decisions about the candidates. We then conduct references and background check for purposes of verification if the information provided is authentic. The decision makers, teams, and supervisors then select the best candidate(s) to take the job. In our situation, we do not negotiate salary with candidates since our payment system is uniform depending on the nature of task. We have applicant-tracking system that helps us to review resumes submitted on electronic format. Our hiring process is consistent with labour laws and we do not discriminate on basis of gender.
One of the strategies that we have adopted to improve employees’ commitment, quality, and flexibility is diversity training— a form of training aimed at changing employee’s attitudes concerning diversity (Noe, 2018, p. 428). The training program has the efficacy to increase employee’s cognisance about importance of ethnic and cultural differences in the hospitality industry. In addition, we encourage development of employees through formal education, job experiences, and interpersonal relations to improve their commitment and flexibility.
Some of our programs that support development of employees include simulations, mentoring programs, coaching, experimental programs, lectures by hospitality experts, and meetings (Noe 2018, p.254). Before employee development, we conduct assessment to identify areas that need development to improve the productivity of the employee. In addition, we also encourage job enlargement and job rotation to increase employees’ understanding of the organizational functions and strategy. We also have externship and promotion programs that aim at increasing employees’ commitment and quality output. Most importantly, we have compensation and benefit programs that motivate employees to accomplish their tasks. Beside promotion, we have payment bonuses, retirement benefit programs, holiday allowances, and salary increment programs.
There is a wide difference between employee competencies and productivity between Moroccan employees and the US or EU employees. This means that employees in Morocco need adequate training to be efficient in discharging their mandate. Generally, we conduct both in-house and off job training to improve the employees’ skills and make them more productive. One of our training methods is computer-based training that allows employees to participate in the learning process and send feedback via email. The common computer-based systems that we use in training are e-learning and electronic performance and support system (EPSS) (Noe 2018, p.341). E-learning enables employees to receive training through the internet or intranet while the latter provides access to expert advice, information, and skills required. We also encourage on-the-job training methods like internships and apprenticeship. These programs enable students to combine classroom knowledge with practical skills. Another training method that we encourage is job simulation. Simulation method is a real-life situation approach where employees make decisions by envisaging what is likely to happen at work scenario. To improve our employees’ interpersonal skills, we conduct behaviour modelling through role-playing. Moreover, we have adopted coordination training to encourage sharing of information among employees, cross training to be aware of each other’s skills, team-leader training to encourage leadership in the organization.
There is a school of thought that postulates that organizations will leverage chances of implanting its strategy and effectively if managers collaborate with employees. Alsughayir (2016) argues that individual effectiveness and organizational effectiveness are implicitly interwoven. This means that for organization to accomplish its goals, treating employees fairly is paramount. Ideally, organization must involve employees in decision-making process in order to motivate them and make them feel they are part of the process. Scholars consider employee participation as a fundamental element for effective execution of new HRM strategies. Employee involvement also influences the degree of commitment and job satisfaction.
At Hilton Tangier City Centre, we believe that employee participation in management issues enhances implementation of organizational strategies. We are committed to increasing employees’ participation in management activities by involving them in problem-solving and decision-making process. We seek employee’s opinion to predict market and social trends. We also buy their thoughts on how to improve the organizational performance. Most importantly, engage them in reward schemes to promote transparency.
Noe (2018) defines performance management as “the process through which managers ensure that employees’ activities and outputs contribute to organization’s goals.” A sound performance management appreciates top performers, facilitate communication between employees and managers, has standard employee assessment procedure, enables organization to identify strong and weak employees, and mitigate performance management errors. One of the effective strategies to improve performance management is by using reward schemes (Beardwell & Thompson 2017). For instance, in Hilton Tangier City Centre and Resorts we use incentive pay to reward contribution. Incentive pay is reward on an individual or group performance. Incentive pay system stimulates employees to work harder since they are cognizant that they can earn more income if they meet individual or departmental targets. The best way to make the programme effective is by integrating performance standards with organizational goals. However, incentive system may shift employees’ attention to programs attract rewards and ignore those that do not have reward attached to them.
Another reward system is merit pay, which involves “linking pay increase to ratings on performance appraisal.” This approach influences employee’s job behaviour and increases their commitment to achieve organizational goals (Gratton 2013, p.1345). Similarly, merit pay cultivates a culture of presuming that good performance must be attached to compensation. Hilton Tangier City Centre and Resorts also promotes reward of group performances by gainsharing. Gainsharing enables employees to brainstorm on how to improve team performance rather than individual interest. The approach can succeed when there is management commitment, employment security, high levels of interaction, and cooperation. To make incentives work, there should be communication and engagement to avoid assumptions that there is discrimination.
A global manager requires a skill sets that enhance effective and efficient operation in dynamic and elaborate international business ambience. Besides being proficient in human resource management, the manager must be flexible and possess multicultural competence in order to acclimatize to foreign cultures (Anthony et al. 2016, p.182). Communication in a foreign language requires determination to learn a new dialect. In addition, the manager must have networking skills and social intelligence to build relationships with investors and other stakeholders in the foreign land (Bernstein 2017, p.298). Manager should be versatile and open-minded to succeed in international markets. Most importantly, the employer must be cognizant of the external changes in the business environment in terms of politics, economy, social issues, and technology (Buczkowski 2016, p.980).
The Hilton Tangier City Centre and Residences management should be able to apply business models that transform economic inefficiencies into business opportunities. Essentially, the management should adhere to organizational structures rather than processes. At minimum, the manager must have teamwork spirit to foster inclusivity. The management must also critically accentuate the implications of every factor and rate them according to relative importance. At minimum, rating should also include the probability of risk occurrence and other uncertainties. With regard to operational efficiency, it is paramount that Hilton Tangier City Centre and Residences Human Resource Management consider working practices, skill levels, wage trends, labour cost, and unemployment patterns to make sound hiring decisions. Additionally, Hilton Tangier City Centre and Residences HRM, in collaboration with the Information Technology team should brainstorm on how to exploit innovation opportunities and gain competitive advantage over the competitors. The management should also ensure that it is updated with the expected changes in trade restrictions to protect its reputation.
List of References
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