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Executive Summary This report focuses on the primary issues and secondary issues of Banksia Health Service (BHS). BHS consist of about 500 employees and operates without a human resource department. This led to many issues that surfaced and causing BHS to be deemed as a poor performer by the state health department. Firstly, the report looks into what is strategic human resource management and uses the Harvard Analytical Framework for HRM to analyze the various issues in BHS. Primary issues such as the CEO management styles, a lack of human resource department, and mandatory compliance to the government policies were present within BHS.
There were also secondary issues such as communication problems, lack of trust in the HR policies, sense of unfairness among employees. This report also explains the impact caused by the issues which are low employee morale, poor organization effectiveness. The report moves on to provide alternatives for solving the issues revolving BHS by establishing a HR department and implementing effective communication system. Benefits of such alternatives are further explained in the report and a conclusion for the report makes it stand on the importance of SHRM within an organization and emphasize on the advantages of SHRM. Introduction 1. 1 Strategic Human Resource Management and SHRM Model Strategic Human Resource Management (SHRM) is one of the most impactful and convincing idea that have erupted in the contemporary context of organizations (Salaman, Storey and Billsberry 2005). It had become an important part of many organizations today as SHRM strives to increase organization performance through human capital and to satisfy the needs of the organization’s workers.
SHRM is the process of developing and implementing Human Resource (HR) strategies that are integrated with the organization strategies, allowing the organization to meet its goals (Armstrong 2008). HR strategies include various functions such as HR planning, Recruitment and Selection, Training and Development, Performance Management, Employee Relations, and Reward management. Therefore, SHRM looks into how to integrate these functions with the organization strategies to be the organization’s strategic partner. One of the most recognized SHRM model will be the Harvard Analytical Framework for HRM created by Beer et al. (1984).
The creation is based on the belief that issues of historical personnel management can only be fixed when managers establish a view point of how they hope to see workers involved in and groomed by the organization and of what HRM policies and practices may achieve those objectives. Without either a strategic vision or a central philosophy, which could be provided by the manager, HRM will likely remain as a set of independent activities, each led by its own tradition and practices (Pattanayak 2005). The model has incorporated the past and practice of HRM, especially highlighting HRM as a general management role rather than just personnel role.
Figure 1. 2 below illustrates that a HRM policy should consider the stakeholders interest (Internal environment) and situational factors (External environment) which leads to HRM outcomes such as competence, cost effectiveness, congruence, and commitment. Ultimately, it leads to long-term consequences such as organizational effectiveness, individual wellbeing, and societal wellbeing which in turn affect the situational factors, stakeholder interest and the choices of HRM policy. Figure 1. 2 Harvard Analytical Framework for HRM Stakeholder Interests * Shareholders * Management * Employee groups Government * Community * Unions Stakeholder Interests * Shareholders * Management * Employee groups * Government * Community * Unions Source: The Harvard Framework for HRM, Beer et al. (1984) HR Outcomes * Commitment * Competence * Congruence * Cost effective HR Outcomes * Commitment * Competence * Congruence * Cost effective Long-term Consequences * Individual wellbeing * Organizational effectiveness * Societal wellbeing Long-term Consequences * Individual wellbeing * Organizational effectiveness * Societal wellbeing HRM Policy Choices * Employee influence * HR flow * Reward systems Work systems HRM Policy Choices * Employee influence * HR flow * Reward systems * Work systems Situational Factors * Workforce characteristics * Business strategy and conditions * Management philosophy * Labour market * Unions * Task technology * Laws and societal values Situational Factors * Workforce characteristics * Business strategy and conditions * Management philosophy * Labour market * Unions * Task technology * Laws and societal values 2 Issues of Banksia Health Service 2. 1 Primary Issues It can be analyzed from the case study that Banksia Health Service (BHS) faces three primary issues.
Firstly, there is no Human Resource (HR) department in the organization. With employment strength of 500 people, it is pertinent to have a HR department to run the day-to-day human resource processes. On the long run, without a HR Department there will be undesirable consequences like low employee morale leading to decrease in productivity which inevitably result in a fall in business performance (Griffin 2012). No HR department were formed even after the organization restructuring, this proofed to be a mistake which many managers and staff thought it was important to establish a HR department.
Secondly, funding acquired by the organization is from the government. As such, there was a mandatory need to follow and respond to changing government policies. This causes confusion whenever there are changes regardless whether it is a huge or small change. Lastly, the long-serving CEO is one of the primary issues BHS faces. The CEO’s ad hoc method of seeking new business opportunities was felt as both a weakness and strength by the senior managers in the organization. The CEO’s reluctance to set up a formal HR function within the organization also proved to be one of the catalysts that generate more issues.
Instead, the CEO delegated such HR responsibility to the senior management who none understood the importance of HR’s relevance to the organization’s performance. 2. 2 Secondary Issues As there was no HR department, the HR management policies and processes adopted from other healthcare organization were mostly ad hoc, inconsistently applied and not interpreted. Information of such policies was not well disseminated to the whole organization. This had led to disagreement between the management and such policies, as the management does not understand the importance of HRM.
As such, little reporting was done by the management on the HR outcomes and on how these policies had impacted the organization. Without a HR department, BHS’s documented vision and mission were merely written strategic and operational plans. No particular department other than a HR department will be more than relevant to take on the task of aligning the organization’s vision and mission with HR strategies. Even after the restructuring of the organization, no HR department was formed.
As a result, issues such as difficulties in deriving a common understanding of the HR policies were present between both managers and workers which subsequently led to the growing sense of injustice and a lack of faith in the management. The lack of appropriate HR skills of managers also contributed to the cause of such inconsistencies which led to industrial relations disputes as workers responded to the perceived prejudiced policies. 2. 3 Impact of Primary and Secondary Issues Putting both primary and secondary issues observed from the BHS case together, it can be seen that several negative outcomes and long-term consequences are present.
Various negative outcomes such as lack of trust in management, poor communications, low level of morale and commitment, and growing grievances had led to negative long-term consequences like decrease individual wellbeing, decrease in organizational effectiveness, and decrease societal wellbeing. Figure 2. 4 below illustrates BHS scenario in the Harvard analytical framework for HRM. Figure 2. 4 Harvard Analytical Framework for HRM (Banksia Health Service) Stakeholder Interests * CEO * Management * Employee groups * Government Stakeholder Interests * CEO * Management * Employee groups * Government
HRM Policy Choices * Adaptation from other healthcare companies * Senior management responsible * No HR department HRM Policy Choices * Adaptation from other healthcare companies * Senior management responsible * No HR department Long-term Consequences * Decrease Individual wellbeing * Decrease Organizational effectiveness * Decrease Societal wellbeing Long-term Consequences * Decrease Individual wellbeing * Decrease Organizational effectiveness * Decrease Societal wellbeing HR Outcomes * Lack of trust by workers * Poor communication * Low morale & commitment * Increase grievances HR Outcomes Lack of trust by workers * Poor communication * Low morale & commitment * Increase grievances Situational Factors * Workforce characteristics * Business strategy and conditions * Management philosophy Situational Factors * Workforce characteristics * Business strategy and conditions * Management philosophy 3 Solutions to Issues in Banksia Health Service 3. 1 Implementing Feedback/Suggestion System It is recommended for the CEO to implement a feedback/suggestion system for BHS in order to allow all employees including senior management staffs to provide feedback on the management style.
This system should allow employees to make anonymous feedback as some employees may carry fear of giving sensitive feedback through this system and get into difficult situations as a result or they might find it hard to give feedback directly to a person (Stone 2009). With such a system in place, the senior managers will be able to communicate their views on the CEO’s management style, the CEO must not only talk to employees but also must listen to them in order to have effective understanding of what the employees are thinking (Lee 2004).
With this system the employees on the ground will be also able to communicate their feedbacks and suggestions to the management. Employees’ feedbacks and suggestions usually play an important part to the organization’s success as it is the employees that carry out the day-to-day operations and it will be one of the valuable human capital for the organization. When the CEO and management accept such a system, it is beneficial to BHS as it helps to engage employees and foster the employees’ loyalty to BHS.
This also helps to cultivates employees respect for the management (Lee 2004). 3. 2 Establishment of HR Department The most important solution would be to formally establishing a HR department. Firstly, the HR department must streamline all the policies that are created before the HR department is set up. Policies must be current and updated, irrelevant policies will have to be removed. Once the policies are updated, it should be communicated effectively to all the employees (Rothwell, Prescott and Taylor 2008).
Communication processes have to be standardized in order to prevent confusion among employees. It is recommended to first brief the management staffs on the policies and clearing any doubts they may have before disseminating the policies to the rest of the employees. Managers and staffs should be encouraged to approach the HR department to clarify any doubts to avoid misinterpretation of the policies. The HR department will also take on the responsibility to update any changes in policies by the government and communicating such updates or changes to the employees.
Secondly, it will be important to educate the management staffs on the importance of having a HR department and how a HR department can help raise employee morale and commitment. With a better understanding about the role HR department, the management staffs can play a better role in implementing HR strategies (Heathfield 2011). As a result, managers will be able to adequately manage any HR issues with the employees and also provide a fair standardized implementation of HR policies across the organization.
This would massively reduce the unfairness felt among the employees before the formation of a HR department. 3. 3 Evaluating Effectiveness of Solutions In order to follow up on the solutions provided, it is best to use the Employee Climate Survey (ECS) to evaluate the effectiveness of the above recommended solutions. ECS is a yearly survey for an organization’s management to “take the temperature” of the organization and understand about how employees feel about various matters base on their feedback (Masaoka 2011).
This survey provides the management an objective way to assess job satisfaction and morale, and delve deeper into the employees feeling of the organization rather than by just looking on the surface. Another benefit of this survey is that it brings employee attention to areas they might be taking for granted, such as payroll processing or workplace health and safety areas (Masaoka 2011). Results from ECS will be useful for HR department and the management in strategizing areas such as organizational practices, employee welfare and benefits, and workplace environment improvement. 4 Conclusion
HR department is often viewed merely as a cost center in an organization (Stahl and Bjorkman 2006). However, a competent HR department will be able to become the organization’s strategic partner if it is able to align the organization’s goals, vision, and mission with the right HR strategies. This would lead to positive outcomes which will create desirable long-term consequences such as an excellent corporate culture which comprises of happy employees who have high morale and are motivated to strive for the organization and thus resulting in increase in productivity and overall organization effectiveness.
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