Research Articles Base: Human Resource Benchmarking

Human Resource Benchmarking

Approaches in Identifying Problems             The problems in the case study might have been in the company for many years now. The management must have been not that keen in observing and identifying problems. Most successful companies are fast in identifying problems even before they can cause bigger problems. The following are some of the effective approaches/techniques used in identifying problems in a company in relation to human resources aside from the different theories and models for organization dvelopment. HR Benchmarking             Benchmarking is the search for industry best practice which leads to superior performance (Camp, 1989). It is the process of identifying, understanding, and adapting outstanding practices from organizations anywhere in the world to help a company improve its performance (TBE, 2006). Xerox Corporation was the first to practice benchmarking. Xerox observed and benchmarked the practices of its competitors. Benchmarking is commonly used in product development and market planning of companies to improve productivity and reduce cost production (WMDO, 1994). In HRM, benchmarking is a very significant tool in identifying and solving people problems in a company. By observing more successful companies’ (not necessarily within the same industry) HR practices, FumeGo can identify which work practices the company has neglected and are not able to adapt earlier that resulted to problems.             Camp (1992) outlined the steps in HR benchmarking. Step 1 is the identification of the essential functions or outputs that should be benchmarked. The new MD of FumeGo observed that they had problems in meeting delivery deadlines and low customer satisfaction because of poor quality of the products. The company should include these functions as the ones to be benchmarked.             Step 2 involves identification of external organizations or functions within own organization with superior work practices for comparison (Camp, 1992). The FumeGo has chosen delivery as the function and customer satisfaction as the output to be benchmarked. The company should observe other superior companies such as Dell Corporation which is known to have competitive edge because of its just-in-time delivery and inventory practices, or the McDonald’s which shows quality customer service.   By observation and study of other companies, FumeGO can be able to determine which work practices its employees are not performing and the reasons why its employees are not practicing such practices. It can be because the employees are not aware of these practices, they do not have the capability of performing such tasks or they have the understanding of such practices but they do not have the leadership or the resources needed to implement such practices.             Step 3 is the determination of data sources needed. These sources are personnel records, surveys or interviews and other systems used to measure HR practices and outputs easily. These data maybe measure with the use of human resource indices (WMDO, 1994). Indicators such as rate of employee turnover, absenteeism, and educational level may help in identifying people problems within the organization. FumeGo may not be able to meet delivery deadlines because of the increasing absenteeism in the manufacturing department or the design department may not design satisfactory products because their skills might be obsolete already. By benchmarking, FumeGo can establish standard measurements and once the company fall below the standard, the company should take countermeasures before bigger problems occur.             Step 4 is the determination of the company’s current level of performance. According to Camp (1992), the company must first have a full understanding of internal business processes before attempting to compare it with other organization. As FumeGo compares itself with other companies, a gap in performance will be determined, helping the company analyze where the company goes wrong and how behind they are from other companies.             Step 5 is the development of a vision for future operation based on benchmarking findings (WMDO, 1994). This involves analysis of the quality of the best practices and how the company can adopt these practices and further improve them. Step 6 involves report of progress to all employees which needed good communication and feedback. There may be feedbacks suggesting that not all employees understand the concept of the practices being adopted so training and seminars may be conducted.   Step 7 is the establishment of functional goals linked to the overall vision for the organization. At present, the design department’s goals might be different from the goals of the manufacturing section. As stated earlier, the objectives and goals of the organization must be aligned with the different departments of the organization. Steps 8 to 10 provides the solutions basically provide the solutions to the problems identified in problems 1 to 7 and involve development of action plans, implementation of the best practice findings and updating knowledge on current work practices.                Other approaches in identifying people problems are employee performance evaluation and setting of some measurement based on the standards set by the company. These measures should be linked to the overall aims of the organization. While benchmarking compares the workforce practices of different organizations to set standards, in performance evaluation, the organization has already set standards that will be the basis of evaluating employee performance. In most manufacturing companies, the company set the minimum number of outputs an employee must produce based on the total target output of the company and on the number of workers that will produce the same outputs. This measurement can help in evaluating the delivery performance of the company. Another measure that is significant in evaluating employee performance is by counting the number of defected products an employee produced over a certain period. The company must set the minimum number of defects and when a worker repeatedly produced defected products, he might not be fitted for the job or he needed trainings to improve his performance. In the design department, the company may conduct getting feedbacks from the customers in order to determine the standard quality most customers needed.   A range of workforce measures, such as statistical ratios, can be used over time to assess the workforce quality (WMDO, 1994). These statistics, like benchmarking, can be compared to the past performance of the company, especially when the sales are declining while in the past years, the company was enjoying higher returns and had increasing number of customers.   The Six Sigma Other superior performing companies such as Motorola and General Electric integrate the Six Sigma in their organizational culture. Six Sigma is a technique in measuring how far a given process deviates from perfection (GE, 2006). Six Sigma has a standard defect of 3.4 per million opportunities. This means that when a company has more than 3.4 defects, a problem exists within the company. Six Sigma is basically a standard for achieving quality performance and products which revolves around these key concepts (GE, 2006): critical to quality- attributes most important to the customer; defect- failing to deliver what the customer wants; process- what the process can deliver; variation- what the customer sees and feel; stable operations- ensuring consistent, predictable processes to improve what the customer sees and feels; and design for six sigma- designing to meet customer needs and process capability. Its key step process is Define, Measure, Analyze, Improve, and Control (El-Nadi, 2006).             Successful implementation of the six sigma techniques greatly depends on the leadership and workforce comprising the organization. According to El-Nadi (2006), there are steps requires for the successful implementation of Six Sigma. Since performance improvement must begin with the senior leadership, the first step is to provide senior leadership with training in the principles and tools they need to prepare the organization for success (El-Nadi, 2006). Adoption of Six Sigma may involve organizational changes such as changing organizational structure, addition of another department, and removing procedural barriers to experimentation and change. These are basically the tasks of the senior leadership.             Next step is developing systems for establishing close communication with customers, employees and suppliers (El-Nadi, 2006). This step includes developing methods of evaluating customer, employee and supplier which are the stakeholders of the company; conducting base line studies to determine the barriers that may be brought about by these stakeholders.             The next step is to assess carefully the needs to training. Training and remedial skills education is provided to assure that adequate levels of literacy and skills are possessed by all employees (El-Nadi, 2006). Trainings are not only needed by the top levels of the organization but top-to-bottom training should be conducted in system improvement tools, techniques and philosophies.             While in benchmarking, choosing the functions or processed to be improved is the first step, in Six Sigma, a framework for continuous process improvement is to be developed along with a system of indicators  for monitoring progress and success. These indicators should be developed focusing on the organization’s strategic goals, drivers and key business processes (El-Nadi, 2006). After developing the framework for improvement, business processes to be improved are chosen by management and by people with profound knowledge at all levels of the organization. Because people with direct knowledge on the different levels of the organization are involved in choosing which business process must be improved, constraints on improvement will be known beforehand.   Six Sigma projects are conducted by individual employees and teams headed by the leaders with the aim of improving business performance linked to measurable financial results (El-Nadi, 2006). The leaders in the Six Sigma projects are termed green belts, black belts, master black belts, and champions and sponsors. Each team in the organization is led by the green belts or the project participant who are team-players, can facilitate teams and manage projects (El-Nadi, 2006). Green belts are required to undergo training needed in leading a team such as project management, quality management tools, quality control tools, problem solving and descriptive data analysis. Black belts are the technically oriented individuals highly regarded by their peers (El-Nadi, 2006). Black belts define the projects to the green belts and assist them with the projects. Black belts should be actively involved in the process of organizational change and development since adoption of Six Sigma definitely requires major organizational change. The so-called master black belts have the highest level of technical and organizational proficiency, providing technical leadership of the Six Sigma program and assisting the black belts with the application of different methods in different situations. This means that the master black belts should be well knowledgeable in tools application thus requiring them to have high technical expertise. While the CEO is responsible for the performance of the entire organization, the champions and sponsors are the ones who communicate the Six Sigma message within the organization, initiating and coordinating Six Sigma improvement activities. The sponsors and champions can be the Executive Vice President of a large company (El-Nadi, 2006) or it can be the managing director with extensive knowledge and analytical in solving problems in an organization.   When a company adopted Six Sigma, it requires effective human resources, that is why even the leaders of the organization are required to intensive training and the entire organization undergoes changes. Among the techniques discussed, the Six Sigma is the one more focused on the improvement of the company by improving first all the individuals involved in its implementation. Employees are utilizing Six Sigma skills to drive quality improvement in functions ranging from manufacturing and engineering to purchasing and human resources (Billington, 2003) thus employees need training and development. It may also require major organizational changes, such as change in the organizational structure, organizational objectives and management practices in order to effectively apply Six Sigma in the company. HRM and Human Resource Development             It has been a cliché that people are the most important asset of a company thus it should be well managed. Just as how important management of financial resources, information or physical resources are, management of human resources is equally and usually more important. Defining human resource management, it is the strategic approach to acquiring, developing, managing, motivating, and gaining the commitment of the organization’s key resource which is the people who work in it and for it (Armstrong, 1999). According to Storey (1992), HRM is a distinctive approach to employment management which seeks to achieve competitive advantage through the strategic deployment of a highly committed and capable workforce, using an integrated array of cultural, structural and personal techniques.             As these definitions suggest, HRM is a strategy used by the company first to acquire the right person for a certain position who are capable and committed. After the acquisition of human resources, they are managed, motivate and developed for the competitive advantage of the company. Therefore, human resource development, HRD is directly linked to HRM.             HRD is defined as organized learning activities arranged within an organization to improve performance or personal growth for the purpose of improving the job, the individual and the organization (Rouda & Kusy, Jr. 1995). It includes the area of training and development, career development, and organization development thus HRD promotes and helps achieve competitive advantage among employees. While the primary purpose of HRM is to achieve competitive advantage, the goal of HRD is to drive employee behavior change in order to achieve the goal of HRM.             Looking back at the company being study in this paper, FumeGo Ltd. seems to be lacking effective HRM in terms of developing its employees. As stated earlier, the primary problem of the company is skills deficiency among employees brought about by poor HRM, resulting to lack of concern and commitment for the company.             Popular HRD initiatives that can be used to address these problems include training program, developmental assessment centers, coaching and mentoring programs, multi-rater feedback processes, leadership development programs, and succession planning processes (Schleck, 2005).             These initiatives may require cost in the part of the company so careful assessment and planning must be done first before implementing any initiative and to assure success of the initiative. Assessment of needs and planning (Rouda & Kusy, Jr. 1995) will lead to several possible ways to improve performance thus a company should decide which way they plan to take the company. Assessing FumeGo, the company needs to develop the quality with their products, improve its employees’ skills and knowledge, learn how to satisfy customers, and to promote employee satisfaction, making them committed to the company.             After assessing the needs of the company, the initiatives or programs are now to be designed, developed and evaluated (Rouda & Kusy, Jr. 1995). These involve considering the benefits that the employees can be learned from the programs, the changes in behavior and performance that can be expected and how the organization can benefit from such programs. Evaluation of the program also involves the assessment of the costs for such programs and considering other alternatives if there are alternatives. However, if the management sees human resource as assets, training them will be considered to be an investment and not as a cost. Program evaluation and designed basically determine if the programs that are initiated can satisfy the needs that are assessed earlier.             For example, if FumeGo decided to adopt the Six Sigma technique for the improvement of the company because, according to its management’s assessments, Six Sigma will perfectly change the culture in the organization, improve work performance and quality, set standards for measuring future performances aside from its long term effect in the company, therefore top-to-bottom trainings should be included in its HRD initiatives such as leadership training to develop the green, black and the master black belts. It would be better to define further some of the initiatives mentioned above to help the company decide on the initiatives to take. Training and Development Training and development is the acquisition of knowledge, development of competencies and skills, and adoption of behaviors that improve performance in current jobs, including adult learning theory and applications, instructional systems design, train-the-trainer programs, and instructional strategies and methods (Rouda & Kusy, Jr. 1995). Career Development              This initiative is one of those initiatives that promote employee satisfaction. It involves activities and processes for mutual career planning and management between employees and organizations. These activities will encourage employees to improve and perform better with their jobs knowing that what they do may help them to be promoted or will lead them to brighter career paths, and as the company grows, its employees grow as well, while the customers become satisfied with the company.                         Generally, these programs provide a company the tools needed to manage and operate the organizations, solve current problems and eliminate and prevent future problems. To ensure that the initiatives will greatly impact the organization and become successful, two key areas of focus are necessary: aligning organizational strategies with the HRD practices and understanding the conditions required for learning to occur (Schleck, 2005).             Alignment of the organization’s strategy to the initiatives involves being knowledgeable of the organization’s vision, objectives and strategies; implementation of HRD program for the right reasons, for the desired outcomes, and for the solution of the identified problems; creation of culture that support development; encouragement from the company’s leaders; and creation of working environment that aid in development (Schleck, 2005).             Moreover, there are five conditions necessary for development to occur to people. These are: know what to develop; invest the time and energy to change; acquire the skills and knowledge they need; apply what they have learned at work; and internalize these new skills to improve performance and results. Conclusions and Recommendations             The study presented the importance of human resource development in solving problems and has found out how important human resources in a company like FumeGo. Therefore, HRD and OD are the basic tools in solving problems in a company. As stated in the study, the people are the most important asset of the company; they cause success or failure for the company. it is important that human resources are managed strategically using the techniques applicable to the company.             For FumeGo Ltd, it would be advisable to follow the steps in organizational diagnosis. There may be other root of the problems that were not identified in the study like inappropriate organizational structure and errors in hiring employees. it would be necessary for the company to take consider the HRD initiatives presented in the study in order to solve its problems, to equip its employees of the necessary skills that will result to employee and customer satisfaction, and profitability for the company. Credit:ivythesis.typepad.com

Human Resource Benchmarking

Approaches in Identifying Problems The problems in the case study might have been in the company for many years now. The mana...