Nor can it be depreciated, as physical resources can. In fact, it has only been in more recent times, which some call the third phase of industrialization, that the human mind of resources has been given attention as a core competitive advantage (Browne, 2000). The term human capital is used to describe the economic value of an employee’s capacities – education, abilities, experience.
It refers to the notion that the quality of an employee can be improved upon by investing in that employee through benefits, training and education (Investigated. Com, 2014). Successful and competitive organizations recognize and appreciate the fact that their employees are an essential asset and contribute to the development and growth of the organization (Brocading, 2006). Those same successful companies manage human capital in the most efficient and effective manner possible.
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The bottom line is that they view their employees as individuals whom they are making an investment in; they are considered assets, not expenses (Brocading, 2006). According to Thralldom and Martin’s ICP report on critical human capital issues for organizations today (2013), the top four are managing organizational change, workforce analytics, workforce planning, and performance management. Of course, every organization is different and faces different challenges in the human capital arena.
The development director of global communications and event management company (MIMIC) reports that their biggest dilemma is whether it is better to hire someone with the talent and experience they require or to train current employees showing high potential, thereby allowing them the mid to long term growth into managerial positions within the company (Sanchez-Arias, 2013). A growing number of Asian companies are expanding into the western territories, opening new branches and merging with or acquiring western companies to further their growth.
These companies are in need of executives who can leverage best practices and engage the delicate balance between the eastern and western cultural strengths (Sanchez-Arias, 2013). Yet another concern, from the CEO off Iambi, India IT organization, relates to transforming employee knowledge into results. This CEO wants a clear vision of his return on the investment in learning he paid for. The analytics of human capital development can be challenging.
Meanwhile, in Spain the human resources director of a global telecoms company named Telephonic reports that employee retention, not only within the company but also within the geographical region, has become their greatest challenge. She explains that this challenge goes beyond the current economic crisis in the region; she says it relates to the “new workforce profile” (Sanchez-Arias, 2013). Apparently, employees hired at Telephonic today expect to learn and develop and then will leave after two to three years. In the past, Telephonic successfully retained employees for an average of seven to fifteen years.
Therefore, the top priority for this company, and any Latin American company, is to maintain a highly competent and committed workforce. Companies in the world. Chevron has employees who quickly move to other Mounties with healthier economies. The exception for Chevron is that their employees stay with the company, so their challenge deals more with geographical retention. Hence, they employed a very flexible training and development system in order to maintain proficiency in all areas (Sanchez-Arias, 2013). At the heart of all successful, high performing organizations are effective leaders.
Leaders play an important role in developing and fostering corporate cultures. Supervisory leaders, in particular, will act and direct in the way that they believe will most highly benefit organizational operations. In order to be an effective leader, one must possess an effective leadership style. Studies have shown that leadership styles have a direct impact in creating innovative and competitive cultures (Gabon & Harris, 2000). There are many different leadership style models and theories. However, for the purpose of this summary, we will use the participative theory.
The participative theory includes four different leadership styles: exploitative authoritative; benevolent authoritative; consultative; and participative. The exploitative authoritative leadership style can be advantageous in situations where quick sections need to be made. Some groups or departments may welcome an exploitative authoritative leader so they do not have to worry about making the decisions and can concentrate on the technical or tedious aspects of their Job. Unfortunately, the negatives of this leadership style outweigh the positives.
Employees of this leader often feel disengaged and unhappy because they are not able to contribute or offer their ideas and input toward making a better product or offering a better service. In fact, researchers have found that this leadership style hinders creativity and innovation, which not only causes a decline in employee reference but it causes a decline in company performance as well (Cherry, 2013). Participative leadership is, in many ways, the polar opposite of exploitative authoritative leadership. Participative leadership is beneficial because it encourages employees to participate in the decision making process.
Thus, motivating and engaging them plus, allowing them to contribute their ideas. This benefits the company in multiple ways that all affect the bottom line. Participative leadership can also have a downside. In situations requiring quick decisions, this leadership style an stall the project and cause it to fall behind schedule or miss a deadline (Cherry, 2013). In answer to the productivity and profit-losing problems GAG was experiencing within the three new subsidiary companies, a change management plan was developed, using the action research model.
This plan includes very specific and detailed steps. In the first step, called contracting, the essential factors that will ensure success of the plan are identified (Hartley, 2005). Sac’s current processes and culture are examined and the roles of the organization development/consultant team are clarified. A contract, either informal or formal, will be drawn in order to define and outline the intent of the plan. This initial step is extremely important as it ensures that senior management and the consultant team are on the same page and share an understanding of the focus of the project.
In the next step, called data collection, we can begin to collect data relevant to the focus we established in step one. Collecting data can include pulling various company policies and processes or collect quantitative and qualitative data pertinent to the issue or issues at hand (Tsar, Pan & Aching, 2004). Three common methods of data collection is: Employee surveys, Questionnaires and Interviews. Employee surveys can provide feedback relating to current issues and can be used for comparison against other survey data at different points in time in order to determine the the plan’s degree of effectiveness (Haskins, 2010).
Questionnaire-based surveys are very effective tools for organizational development purposes. It assists management in understanding and evaluating the organizational issues at hand. Interviews are the most widely used of the data gathering techniques (Haskins, 2010). Interviewing provides subjective data that is practically unobtainable by any other method. This step is very important in the action research process because without this data, we are virtually blind to what the real problems are. Diagnosis is the third step in the process.
This is where we interpret all the data we collected and draw conclusions. Diagnosis is a recurrent procedure involving the collection and analysis of data and identifying problem areas, along with their root causes, and possible action programs (Zapped. Com, 2013). Final decisions are based on the conclusions drawn here. That is precisely why this is such a critical step in the process. A root cause analysis determines why the problems occurred at all. Feedback is the next step in the action research process. It is at this stage that Shawn addresses the board with our findings.
He presents them with a summary report as well as his conclusions and recommendations for moving forward. Action planning, or design planning, is actively working to create a plan entailing the required actions needed, addressing all areas identified in the diagnosis. This phase does not implement solutions. Rather, it allows the team and management to discuss the identified issues and determine the best solutions or interventions to address those issues. This step is important to the collaborative nature of the action research process.
The next step is implementing interventions or solutions. As time goes on and new information is cultivated during the change process, it is imperative to maintain a certain level of flexibility in order to enact modifications to the process. The integrated interventions of GAG are: A globalization plan that includes global recruitment, selection and placement of culturally agile employees to turn an ethnocentric culture into a geocentric one. A communications plan featuring clear and frequent communications delivered in several various formats to promote employee satisfaction and morale.
An employee recognition and development program to help engage employees. Sensitivity, performance management and leadership training for all managers. Diversity/inclusion and sensitivity training for all employees. Globalizes human resource programs, such as performance appraisals, exit interviews and career development, accompanied by an overly sufficient amount of information and communications to ensure complete understanding and awareness from all employees. The final step in the action research process is evaluation.
Although evaluation has been conducted by Shawn throughout each step of the action research process, a final evaluation is imperative, not only to verifying success but also to identifying needs for new or continuing change management or organization development and in order to improve the change management process Ongoing measurements are an essential part of the process in order to determine what degree of success the plan has attained. Ongoing measurements are also essential to determining the plan effectiveness as part of a continuing process improvement.
The planned use of measurement tools for Sac’s plan are: focus groups, employee surveys, financial metrics and human resources metrics (turnover, retention, hires, etc. ). In order to effectively implement and measure a change management plan, the plan must clearly detail the desired future state of the organization (Malice, 2013). In addition, a clear vision of what success will look like from a sales, operations, and management viewpoint must be defined. An added improvement to Sac’s change management plan might be a talent management plan.
Talent management entails attracting, identifying, hiring, developing and retaining those individuals who possess a high potential for continued successful performance for the organization. An effective talent management plan enables managers to recognize essential skills to be developed in all employees. Further, it enables managers to identify high-quality candidates thus, improving the recruiting process. We are currently one year into the implementation of this change management plan. Because this is a recurrent and cyclical effort, it is imperative that e stay the course and continue to monitor and measure the effectiveness of the plan.
When enacting change plans that directly, and intentionally, affect change to the organizational culture, it takes more than a year to fully process. As previously stated, it is imperative that we continue to monitor and measure so we may make adjustments along the way, ensuring success. Standard to any business strategy is knowing the direction the organization wants to go and where the organization currently stands (Michael, 2012). In order to determine these factors, an internal and external environmental analysis must be performed.
These types of analyses find the strengths, weaknesses, opportunities and threats regarding an organization and the environment in which they do business. A common acronym used to describe these analyses is SOOT. As part of this analysis, an environmental scan will be conducted. The results are essential in order for the organization to create and implement effective business strategies (Bella, 2000). Various forms of external threats to a business are competition from other organizations in the same industry, trends, declining economy, computer hackers, new laws, demographic changes, tax changes r government policy changes (Lempel. Mom, 2014). Some examples of internal threats to an organization is physical theft, data theft, espionage, social engineering, equipment and software failure, and communications failure. Some methods used to detect the aforementioned threats are monitoring the environmental changes, subscribing to industry news sources to keep abreast of the latest news and products of competitors, monitoring internal computer systems and user accounts and routine testing and monitoring of company equipment and software (Shallows, 2013).
Due to he super-fast pace of technology today, it is imperative that an organization implement adequate IT safety measures in order to ensure the organization’s protection from external and internal technology threats. Such safety measures include firewalls, two-factor authentication methods, and restricted access to unauthorized software (Maracas, 2011). Organizations should train their employees pose to the organization. No possible safeguard available to the organization could prove effective if our employees or customers willingly hand out their identification information to strangers (Maracas, 2011).
In order for GAG to evaluate its external and internal threats, an effective environmental scanning plan should include: scanning, monitoring, forecasting and assessing analysis to identify external threats; and vision, mission, strengths and weaknesses to identify internal threats (Morrison, 2006). In conducting the scan of external threats, GAG must look for current and changing trends or patterns and once identified, they should be routinely monitored and forecasted to determine possible future direction.
Finally, these trends and patterns should be assessed to determine its specific impact to GAG. The internal analysis portion of the environmental scan entails scrutinizing Sac’s vision and mission statements as well as identifying it’s strengths and weaknesses. The purpose of a code of conduct is to define the organization’s expectations of all of its employees. It clearly communicates the characteristics most important to the company, such as integrity and respect (Room, 2010). Also addressed in the code of conduct is a clear guide on what is considered ethical.
Should an employee have any question of what to do when in a questionable situation, viewing the company’s Code of Conduct should contain the unequivocal answer. The code also outlines specific behaviors expected of its employees, such as treating all employee, customers and vendors with respect. With a thorough Code of Conduct, GAG employees at both the corporate office and all the subsidiary offices, should have no questions of what is expected of them and therefore, should maintain the appropriate behavior expected of them.
Again, those expectations apply to all employees, which includes those of different cultural backgrounds as well as managers and executives in all locations. Although some argue that virtual offices offer significant results in the way of employee engagement and retention, they also have their challenges. Like, lacking the benefit of daily social interactions with co-workers and teammates. Included in these social interactions are non-verbal cues. Employees working in virtual offices experience much less human contact.
Thus, these employees often feel isolated, which depresses their performance and productivity level (Bailey, 2013). In order to correct this challenge, an organization can make an effort to increase daily interactions with employees in virtual offices. They can be given smaller or shorter independent tasks and partner them on other assignments so they are working with others daily. Further, the manager of these employees should foster a strong one on one relationship, adding to the frequent communication plan. Another challenge involved with virtual offices is one of trust (Bailey, 2013).
This can be a particularly large problem when there is a mix of workers working from home and working in the office. Those in the office might believe that the home workers are slackers and the home workers feel cheated since they are not privy to long lunches or birthday cake celebrations in the kitchen. To correct this challenge, the organization can increase the awareness of each employee’s contributions by communicating each employee’s roles and responsibilities and then distributing weekly activities, thereby showing each team member’s productivity.
In addition, the manager can give frequent feedback and announce each employee’s achievements, which will help convey understanding of their employees. They must know their skills and talents and how they apply them. They must see their employees as assets first and then work from there to build upon each one’s potential. There has been a definite shift from research to collaboration and relevancy (Pashas, 2013). Human capital managers should work to ensure collaboration within the team as well as collaboration across all departments of the company.