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1. 0 Introduction It is the intention of this paper to critically analyse the effects of Human Resource Management (HRM) intervention policies in the areas of recruitment, retention and career development of an organisation’s human resources. The nature and intention of the psychological contract which is of prime importance in the recruitment, retention and career development will be discussed. It will also be demonstrated that continued intervention and interaction of HRM will contribute to the effectiveness of the workforce and thus, to the efficiency and productivity of an organisation.
Additionally, it will be shown that human resource is a complex and evolving entity, with changing aspirations and expectations and HRM has a vital role to play in matching the companies profile to the employees’ psyche and work ethos. Global Assessment Trends Report 2011 on Top Human Resource Priorities in Table 1 indicates that Succession Planning, External Recruiting and Hiring, Career Development and Internal Promotion/Placement round out the top five priorities. HRM policies of recruitment, retention and career development will be looked at in detail. Table 1: Top Human Resources Priorities: 2009 – 2011
Source: Global Assessment Trends 2011 Report 2. 1 Human Resource Management In recent years Human Resource Management (HRM) in the workplace has become an essential tool for organisational growth (BQF, 1998; Marchington and Wilkinson, 1997; Philips 1997) and is recognised by such terms as ‘people are our most important asset’ (Accenture 2001). Armstrong (1995) defined HRM as “a strategic and coherent approach to the management of an organization’s most valued asset – the employees, who individually and collectively contribute to the achievement of the objectives of the business. Beer (1997) identified HRM as those decisions that embrace employee and employer relationships. Storey (1993) stated that, by using a diverse range of approaches, the employer will benefit from a highly committed and talented workforce. An illustration of Towers Watson’s HRM framework is shown in Figure 1 which encompasses key HR function of recruitment, retention and career development (Towers Watson, 2011). Figure 1: Human Resource Management Framework Source: Towers Watson, 2011 2. 2 Talent Management
Development Dimension International, DDI (2009) identifies talent management as being vital to the employer to obtain the right mix of quality and quantity of work force to meet future growth requirements. The process is ‘kicked-in’ when the organization selects the right talent and continues as their performance is aligned with strategic goals and with an effective performance management system. 2. 3 Psychological Contracts Psychological contracts play a vital role in HRM policies of recruitment, retention and career development.
Researchers have categorised psychological contracts into two forms: transactional and relational contracts (Rousseau and McLean Parks 1993; Robinson, Kraatz and Rousseau 1994; Shore and Tetrick 1994). Transactional contracts relate to precise rewards over short periods and they include fast-track promotion and reward payments (Robinson, Kraatz and Rousseau 1994). Conversely relational contracts offer long term job security, career development, training and development opportunities, and personal support (Robinson, Kraatz and Rousseau 1994).
More recently however, there is a view that these concepts are not mutually exclusive and that an employment contract may develop within both frameworks (Coyle-Shapiro and Kessler, 2000). 2. 0 Recruitment and Selection Policies Recruitment “includes those practices and activities carried out by the organisation with the primary purpose of identifying and attracting potential employees” (Breaugh and Starke, 2000) thus having a vital role in HRM for “performing the essential function of drawing an important resource – human capital – into the organisation” (Barber, 1998).
Lievens et al. (2002) proposed that there has been a necessary shift of focus away from selection to attraction of talent, induced by a decreasing labour pool, that has created a “war for talent” and increasing competitiveness in work force recruitment (Parry and Wilson, 2008). 3. 4 Recruitment Tool Organizations use a variety of hiring tools to help select employees. Most organizations continue to use traditional hiring tools in their hiring processes, including resume screens, structured interview guides, reference checks, application forms, and prescreening questions.
More than 80% of companies indicated they use or plan to use tests that measure skills and knowledge (Table 2). Likewise, nearly 80% use general measures of competencies, including cognitive ability/general problem solving and personality appraisement. Job fit tests, job-specific solutions and situational judgment tests round out the top types of assessments used by companies during the hiring process (Global Assessment Trends, 2011). Table 2: General Hiring Tool Usage and Plans for Use Source: SHLPreVisor’s Global Assessment Trends, 2011
A major innovation over the past 15 years is online recruitment. It has enabled employers to extend the range of job candidates to those who previously had been out of the influence of traditional advertising approaches. Platforms that include LinkedIn, Facebook and blogs have been specifically set-up by companies to attract talent. Employers must continue to embrace virtual media tools to their advantage (Adecco, 2010). SHLPreVisor’s Global Assessment Trends 2011 Survey shows that 36% of companies believe social media are effective methods for reaching talented candidates (Table 3).
Table 3: Use and Effectiveness of Social Media for Recruiting and Hiring Source: SHLPreVisor’s Global Assessment Trends, 2011 3. 5 Creative Employer Recruitment Branding Companies need to be more creative ; savvy in their recruitment/ attraction activities as illustrated in Figure 2. Employer Branding will be the key differentiator according to Hewitt’s Survey in Figure 3 (Jobstreet, 2011). It’s the Employer’s positioning in the talent market that differentiates a company’s employment offer from others.
It relates to and supports the company brand promise, the desired company culture, the relationship a company creates between the employees and the organization. The brand reflects and communicates the employment experience a company offers to current and potential employees (Talent Management, 2011). The so-called Generation Y (born in the 80’s & 90’s) have greater expectations from their job experience, with the ethics, environmental impact and community position influencing a candidate’s employer choice. Similarly an engaged sympathy with the end product will enter into the equation of choice (Weyland, 2011).
Figure 2: Creative Employer Recruitment Branding Campaign Source: Jobstreets. com HR Trends, 2011 Figure 3: Companies Realising the Importance of Employer Branding Source: Hewitt’s Survey on “Emerging Trends in Employee Branding” 3. 6 Selection It is important to the selection process to be aware that it is not necessarily the rising stars who will best fit into the ethos and structure of an organization (Human Resource Management International, 2007). It has been demonstrated that recruitment of an individual who’s aspirations, otivation and life style match the companies profile will generate positive productivity advantages to the long term benefit of all (Weyland, 2011). 3. 7 Embrace Diversity Through Recruitment Practices The term “diversity” came to prominence in America’s workplace as an expression of the “right thing to do”. The marketplace is becoming less homogenous every day, which means it takes an ever-evolving mix of workforce perspectives to win acceptance for new products and services (Deloitte, 2011). When we bring diverse backgrounds together, we supercharge innovation.
Today, most businesses are well versed in avoiding discrimination and recruit across a wide spectrum of groups. 3. 0 Human Resource Management Strategies for Retention Retention brings its own considerations and embraces such areas as financial returns and benefits, succession planning and skill management (Mumford and Mielke, 2008). Increasing number of companies realise that retention is a crucial issue that contributes to overall competitiveness (Walker 2001, Youndt, Snell, Dean and Lepak 1996). Hiring talent is a significant, yet essential investment for any organization.
It is crucial that hired talent is retained to the best of an organization’s ability. As labour quality continues to develop and with a reducing supply of available talent, it becomes even more important for human resource professionals, supervisors and managers to do all in their means to highlight the retention of employees and specifically those high performers filling crucial or traditionally difficult to fill roles (Adecco, 2010). Deloitte Research in Figure 4 shows that 35 percent of surveyed employees expect to remain with their current employers.
Nearly two out of three employees (65 percent) are testing the job market. Figure 4: Survey on whether employees expect to remain with their current employers Source: Deloitte, “Talent Edge 2020 – Building the recovery together” (April 2011). According to Fitz-enz (1990), retention management of employees involves identifiable areas which need to be embraced in unison: organisational culture and structure, recruitment strategy, pay and benefits philosophy, employee support programmes and a training and career development system.
Retaining diverse talent requires the fostering of an environment where everyone feels they have the opportunity to reach their full potential and contribute to their fullest extent (Deloitte, 2011). 4. 8 Work Place of Choice From the SHRM 2010 survey of HR professionals (Figure 5), the most effective HRM strategies for attracting the best people and retaining and rewarding the best employees is providing flexibility to balance life and work as illustrated in Figure below (Mark Schmit, SHRM 2010). Figure 5: HR Managers’ Tactics for Attracting, Retaining and Developing the Best People
Source: Challenges Facing Organizations and HR in the Next 10 Years (SHRM, 2010) With changing work patterns expectations of employees are high, often requiring longer working hours with less time to spend with family or for leisure activities. The excessive stress caused by high demand can cause performance malfunction. HR has a role to play in ensuring that a work life balance can be achieved and that companies must be prepared for these eventualities that could be detrimental to an employee or to the company in general (Adecco, 2010).
Health and well-being is part of the new workplace environment. Figure 6 shows Top 20 Retention Drivers from Career Systems International with Exciting Work ; Challenge and Career Growth, Learning ; Development top the list. Figure 6: Top 20 Retention Drivers Source: Career Systems International 4. 9 Remuneration, Rewards and Recognition of Employee Value Transactional psychological contracts have been defined as specific, monetisable exchanges focusing on remuneration for services provided by the employee (De Meuse et al. 2001). Rewards are not just clearly identified by salary payments but are made up by ‘hidden’ support structures both statutory and voluntary on the part of the employer. It has been shown that large staff-sized companies spent more on voluntary support than small staff sized companies. Companies often provide pay package superior to the market norm to attract critical talent. These include pay premiums, stock options, group based incentives, profit sharing or bonuses (Bassi and Van Buren, 1999). 4. 10 Employee Engagement
Relational psychological contracts, however, are presented as open-ended, less specific agreements that establish and maintain a relationship, being based on emotional involvement as well as financial reward (Robinson et al. , 1994). Engagement is an effective relational contract factor. It reduces general staff turnover and the loss of key staff. Additionally disengaged high reformers are actively sort after by competitors. According to a 2009 study by Watson Wyatt WorkUSA, employees with high engagement work at companies with: • 13 percent higher five-year total returns to shareholders • 50 percent higher market premium 26 percent greater employee productivity The human resource is a company’s competitive edge – and as Dr Theresa Welbourne, President and CEO of eePulse says: ‘it is not people who are our greatest asset, but our relationship with them’. PricewaterhouseCoopers recognises six successful traits of engaging, used by companies (Figure 7). By applying an analytical strategy which categorises personnel by individual qualities, it prepares a proposal which periodically overviews the progress and end result.
Successful employee engagement encourages participation in decision-making which requires a degree of latitude and empowerment. Committed leadership and middle management play vital role in driving employee engagement. Figure 7: PricewaterhouseCoopers six successful traits of engaging companies Source: Managing people in a changing world – Key trends in human capital a global perspective, 2010 Generational differences are one of the greatest engagement challenges facing employers today. Many are unaware of the issues or unclear about how to effectively work with these differences.
Employers need to recognize different motivators, communication styles and work values and define, individually, what might encourage talented people to stay (Career System International, 2011). A Deloitte survey (Table 4) of the top three retention incentives showed promotion/job advancement first at 53 percent, followed by additional compensation at 39 percent, and additional bonuses or other financial incentives at 34 percent (Deloitte, 2011). Table 4: Most effective retention initiatives by generation: Executives vs. employees Source: Deloitte, “Talent Edge 2020 – Building the recovery together” (April 2011). . 0 Human Resource Management Strategies for Career Development Companies are making smart, strategic investments in developing key talent as they seek to engage and retain employees, while also ensuring they have the skilled workforce needed to grow. Career development is a tool for strategic control and development (Evans, 1987). Career management and career planning have a vital impact on whether organisations can meet corporate goals and employees meet personal goals (Feldman, 1988). A lack of career development is cited as a key reason why top performers leave.
A recent Hewitt study found that 3 out of 4 reported career development as more important today than it was five years ago, while 9 out of 10 reported it is one of the most important drivers of engagement and retention (Human Capital Institute, 2011). Career development is a shared partnership between the employee and the manager. It is important for the manager to provide these developmental experiences and opportunities while the employee takes responsibility for creating his or her own development plan (Human Capital Institute, 2011). . 11 Corporate Ladder vs Corporate Lattice The workplace is changing – and fast. Companies are flatter. Work is more inclusive, immediate and flexible. Workers are less tethered to traditional offices and set hours. The workforce is also changing by generation, by gender, by ethnicity and culture, to changing family structures. Today’s workforce is more diverse in every sense of the word. Workers’ hopes, motivations, requirements and aspirations are multifarious, which sidelines outdated concepts of inflexibility of management.
The corporate ladder is collapsing; the Corporate Lattice is emerging as illustrated in Figure 8 (Deloitte Human Capital Trends, 2011). In mathematics, a lattice is a multidimensional structure that extends infinitely in any direction. A garden trellis is an everyday lattice example — a structure that provides for growth in many different directions. In the corporate world, lattice describes the multitude of ways careers are built and talent is developed. Figure 8: The Corporate Ladder is giving way to the Corporate Lattice
Source: Deloitte Development LLC, “The Corporate Lattice” (2010). 5. 12 Novations T. O. P Model The Novations T. O. P Model (Novations, 2011a) which represents Talents, Organisation and Passions in Figure 9 shows that achievement aspirations are reached often in performing and enjoyable task, requiring specific skills that help to achieve job and company targets. This has some rather important ramifications. Meaningful Career Development is when the individual does the job in which he or she is interested, good at and aligning to the organization needs.
Figure 9: The Novations T. O. P. Model Source: Novations, 2011 5. 13 Succession Planning According to Global Assessment Trends 2011 of Top Human Resources Priorities, Succession Planning rose from 6th in priority in 2010 to 2nd in priority in 2011, identifying a changing emphasis on the importance of leadership, compared with other HR programmes. Enlightened company executives are well aware that a well functioning team reflects on their own performance. It shows they understand how to bring talent forward.
This allows them to delegate to the team and thus freeing them for the broader picture (Hiring Trend, 2011). The HR manager can help to pin-point talent and develop them. Also by using judgment he is able to identify the less obvious latent talents within the workforce who can be developed, given the right opportunity, support and encouragement. The diagram in Figure 10 depicts the breadth of the elements which constitute or are directly linked to career development and succession planning (Review Directorate, 2001).
Figure 10: Career development and succession planning Source: Review Directorate, 2001 Many organizations utilize a “Nine Box” approach (Figure 11) of some kind to help them identify and calibrate their talent. Using an approach like this helps an organization structure the way they think about their talent and how they develop their talent. The chart below, adapted from APQC 2001 Succession Management, is designed to give a sample of where to start (Human Capital Institute, 2011). Companies spend a tremendous amount of money on employee and leadership development.
Using tools like this one to chart and calibrate talent helps identify where and on whom capital spend would have the most impact for the organization. Figure11: “Nine Box” approach for Succession Management Source: Adapted from APQC 2001, Succession Management 5. 0 Conclusion In researching this paper it became apparent that Human Resource Management has a vital role to play in the delivery achievement of an organization. It is also clearly demonstrated that people are ‘the most valued asset. ‘ With effective use of Human Resource Management, a uniform approach to talent management is achieved.
However, recruitment of this talent and its retention is an evolving area. Traditional methods of recruitment are under scrutiny and on-line, real time methods are very much with us. With changing techniques and skill requirements in the work place, there is a move from ‘selection’ to ‘attraction’ of human resources. This, we learn, requires concepts such as employer ‘branding’ and marketing. Also there are now different expectations from employment and retention is not just a matter of remuneration but of matching the ethos of the employer to the aspirations of the employee.
Recruitment is costly – turnover of staff is wasteful and inefficient. Motivation, recognition, engagement and flexibility of the workforce mix within the working environment are all factors that impact on successful retention. HRM has an on-going and pro-active role within the organization to ensure progressive talent development and continued engagement. It’s a process that benefits employer and employee alike. We become aware of the need for succession planning, where the role of management is critical in bringing talent forward.
Recruiting, retaining, developing and engaging human resources, ‘the most valued asset,’ requires a strategic, focused approach that demands an investment of time and resources. It has been illustrated here that effective engagement of human resources directly influences productivity and produces a desirable competitive edged and improved fiscal results. 6. 0 Recommendation Vast changes have occurred in advanced economies over the past two decades, yet many companies have failed to keep pace with modern ‘talent management’ practices.
HRM’s role has never been more important and must be seen as an integral part of an organizations drive for success. Their function must be to engage the workforce to ensure maximum input and commitment. At a time when growth is driven significantly by creativity and technical innovation, it is essential that aspiring organizations must be able to recruit and retain the human resources that are vital to success. It is essential that companies are aware of the need for flexibility in the way they identify, attract and retain top talent. On line recruitment being an obvious example of innovation.
There must be a recognition of the changing skills/talent base requirements and adjust their own ‘brand’ and marketing approach to attract the right people amidst fierce competition from competing companies. The idea of branding companies image must be taken on board as, these days, potential employees are ‘buying’ into an image as well as a remuneration package. There must be an alignment between corporate values, beliefs, and behaviours with the aspirations of the individual worker, to create a company culture and loyalty to support the drive for retention.
Talent Summits can be developed to conduct sessions to review talent, leadership, and talent management processes, and create succession plans to ensure organizations have the right talent in place and that they have a transparent career path. Companies must create their own procedures for talent development with each employee has an Individual Development Plan with clear targets and goals. Mentors, including retirees can be deployed in Career Development Workshops, monitoring performance development and linked to IDPs and professional/leadership development opportunities.
This also facilitates taking immediate steps to address challenges. Rotational Assignments programmes enable individuals to gain a broader understanding of an organization’s operations. HRM has a function in the selection and development of line managers who are hands-on in the day-to-day application of talent management. Organizations must listen to their employees and involve them in decision making and at the same time, develop potential. By empowering the workforce and enabling them to meet their aspirations, recruitment and retention becomes less problematic.
It is clearly self evident that a well defined HR strategy and talent management programme will bring rewards in and ever more competitive market place. If organizational leaders take the time to implement these ideas, they have the opportunity to build the kind of workforce that their organisation needs to accomplish its goals and remain competitive. Executed well and driven by leadership, talent development is an investment that pays huge dividends in terms of business performance and competitive advantage. A well designed talent strategy could truly differentiate an organisation.