I. Introduction
According to (2001), the HR practitioners fulfil many roles during planning and execution of merger and acquisition activities. Although tradition dictates that HR roles involve employment, compensation and benefits issues, most of the activities have evolved into a totality which moves well beyond the issues above. (1985) have identified eight critical managerial issues which affect the firm. These issues have become detrimental to the emergence of the HR manager as a general management responsibility. These concerns are the following: increase in international competition; increase in company complexity; organisational downsizing; greater government involvement in HR management; emergence of better educated workforce; change in employee values; growing concern with balancing career and life satisfaction and work force diversity.
Solaris Hotel is a small family owned hotel in the city centre. It became a part of the Libra Group run multinational hotel chain. The existing organisational culture in Solaris is a family atmosphere and staff loyalty is high because many of its employees have been working in the hotel for many years already and absenteeism is low. The high value it places on the staff extends to recruitment because hiring is done based on the recommendation of the existing staff. The training is primarily on the job through observation and a kind of apprenticeship with more experienced staff members. Moreover, the employees are flexible and can perform duties in other departments. Lastly, the HR department is lacking an appraisal system and disciplinary procedures on the staff are rarely used. Although this is the culture of Solaris Hotel, it is now a part of the Libra Group and it has 6 to 12 months to begin a successful integration with the parent company.
This report will present the analysis of different human resources aspects which the company needs to focus on to be able to fully integrate itself with the Libra Group which has its own HR Department for its global operations. Aside from this, there will be a discussion of other major points such as organisational culture and performance management in the paper. It will also contain the recommendations for the strategies best suited for each aspect of the business.
II. Aims and Objectives
This report aims to put together a proposal outlining the human resources strategies needed to effectively implement the changes brought on by the merger with the Libra Group.
The objectives of this report are the following:
a. To fully investigate the aspects which management needs to focus on in this time of transition to integrate Solaris Hotel fully into the Libra Group.
b. To be able to identify the points in current HR practices of Solaris Hotel that will be different from the standard HR practices of Libra Group.
c. To outline the different methods needed to perform an in-depth company analysis regarding human resource concerns.
d. To be able to recommend strategies needed in the human resources aspects investigated.
III. Main Body
In mergers and acquisitions, HR performs slightly different roles from its normal functions. According to (2001), there are formally six major stages in which human resources will likely be involved in during mergers and acquisitions transactions. They are the following: target screening, planning/pre-acquisition strategy discussions, due diligence, negotiations, integration planning and actual post-deal integration process. These stages are important because it influences the direction of the strategies which the HR team will be involved in and how it will go about it. However, these stages can be applied to the HR teams of the company which will acquire or merge with others. In the Solaris Hotel case, it is the company which will be acquired. Thus, the discussion will focus on different HR aspects that are important in the transition.
The growth of HRM has led to more and more organisations spending more time, effort and money in developing their ‘human’ resources and management leadership necessary to create a working environment conducive to effective production and growth. This shift in focus resulted to the evaluation of organisations through different grids, in a bid to ascertain underlying factors which are common to all. This would explain the recurrence of certain features.
Human resource management has been a crucial element in an organisation’s life since its inception because it is considered as an important tool to maintain competitive advantage (1981). This is especially pertinent in the financial services organisations where the main focus is on generating huge income, demonstrated by large profit margins and rewarded by huge bonuses.
One factor which has been identified as a major player in staff morale and over-all effectiveness of an organisation is organisational culture (OC). Another factor is leadership. Many believe that good and effective leadership simultaneously maintains and boosts the growth of organisational culture, which is deemed necessary and essential in creating good working relationships that will summarily manifest in the ‘bottom-line’ or profit margins.
The relationship of human resource management and organisational culture exists because of its effect on the competitive capacity of organisations. There are two are key factors for success in today’s competitive environment. The first is to develop a strong culture that supports an organisation’s competitive strategies while the second emphasizes that at a time when knowledge management is the focus of most companies, the management of the people who possess this knowledge is as important a source for competitive advantage ( 1999). They are also continually stressed by the promotion of HR practices and work culture that both influence the behaviour of the employees.
Organisational culture is defined variously as, revolving around shared values, anthropological, sociological considerations or as human relations, systems and theories (1996). As each organisation has a formal, official culture, there also exist within the organisation various informal organisations which are created by people – usually non-managers in order to support their special needs and desires. Each of these has a unique culture or subculture which is added to the official and formal one of the organisation. Solaris Hotel has a family atmosphere because it is a small hotel and ran by a family. Thus, the intimacy it projects spreads to how it treats its staff and guests so it becomes a crucial point in the integration to study and assess the company’s OC before discussing the other components of HR.
Lastly, organisational culture can be thought as a pattern of basic assumptions that have developed over time because of coping with external and internal problems in the environment (1985). Therefore, organisational culture is founded in core values and beliefs that have evolved in an organisation over time (N1988). The value-based model of organisational culture denotes that core values are ingrained in generally known statements about what is good and not good for the organisation. It also defines acceptable behaviour, traits or characteristics which constrain employee behaviour in certain ways. The abovementioned model can be applied to Solaris Hotel as it focuses on the permeation of values that directs employee behaviour as well as the other HR functions already discussed within the organisation.
According to (2003), recruiting is part of the over-all management function of staffing and is a major role player in ensuring that company strategies would be implemented. (2004) also emphasized that staffing requires both the process of attracting and selecting prospective personnel’s capabilities and competencies with the company position. It is perhaps the most important function because it is the starting point in the whole HR process. Its importance is noted by (1992) as he said that “every organization is in competition for its most essential resource: qualified, knowledgeable people” ( 1992).
Recruitment is defined as the process of discovering, developing, seeking and attracting individuals to fill actual and/or anticipated job vacancies (2002). It has three general purposes: to fulfil job vacancies; to acquire new skills and to allow organisational growth. Companies need to be able to understand that recruitment is a crucial part to their success. The magnitude of an organisation’s recruitment methods is determined through HR planning. It goes hand in hand with selection in the planning.
There are several factors which influence recruiting efforts namely: organisational reputation, attractiveness of the job, cost of recruiting, recruiting goals and recruiting philosophy ( 2002). Organisations project an image to the community and it determines the attractiveness of the company to qualified employees. It may either be a potential barrier or a significant advantage depending on the ability of the HR team to effectively advertise its job vacancies. The second factor is attractiveness of the job which refers to the job description. Any job that is considered as interesting, dangerous, stressful, low-status, low-paying or lacking in promotion potential will have a hard time attracting the right people. Cost is also an important factor because recruitment is expensive to the organisation. Thus, every company needs to assess the costs involved in each proposed methods of recruitment. The fourth issue is recruitment goals of the program which have to serve many different purposes. However, the over-all purpose should be to fulfil the definition mentioned earlier. The last issue to be considered is the recruitment philosophy which depends on the emphasis of recruitment practices, depth of commitment in seeking and hiring a diverse range of employees and the ethical aspect of fairness in the recruitment process ( 2002).
This process is important to be investigated in Solaris Hotel because it is evident that the company places such high value to its employees. This is manifested through the high level of loyalty shown by its staff and the recruitment of new employees by recommendation of the existing staff members. The recruitment process of the company, though not entirely wrong because it has yielded such good results, can be aligned to better suit the Libra Group and its HR practices.
Selection is the partner of recruitment in HR planning. It is a critical process for the organisation because good selection decisions ensure the company of their financial investments in their employees (1993). The wrong selection process can lead to frustration, repetitive training, documentation, low morale and a waste of time and financial resources. Moreover, an effective selection also decreases the risk of lawsuits of either discriminatory or criminal in nature. Each organisation has a selection system, wherein the applicants are subjected to both the basic criteria of an employee in the organisation and the specific criteria for the job description.
Solaris Hotel works upon recommendation for the hiring and selection of new employees while the Libra Group, as an owner of a multinational hotel chain, has an established selection process along with criteria to be able to fully and fairly assess its applicants. Thus, the recommendation which will be discussed earlier would be in line of an integration of the respected company culture of the Hotel and the streamlined actions of the company.
In order to effectively implement changes, HR managers need to have systematic procedures to get these done. According to (2005), training and development activities can help companies acquire a staff with the right combination of skills and motivations which a company needs to be competitive. They further explained that this process includes three different types of activities namely: orienting the new employees; helping employees acquire new skills and helping the employees strengthen existing skills.
There are many trends in training which companies employ today. Goldstein and Gilliam have suggested that training has to adapt to four major trends:
1. Changes in the demographic characteristics of the workforce;
2. Increased technology;
3. Shifts from manufacturing to service-oriented jobs and
4. The increased influence of international markets.
All the trends exist nowadays as more companies invest in training their staff to be updated with the latest developments in whatever sector they are in.
The case in the company is that training happens on the job, as a kind of apprenticeship with a senior employee. There are no formal lectures or orienteering which is understandable because the company is small. However, since the hotel is now a part of a global operation, it has to comply with certain standards which include the policies on training and development.
Included in training and development is the aspect of discipline which is becoming more troublesome in the recent years because managers consider it a trial to enforce while the employees consider it unfair and inconsistent in application (2005). Some disciplinary procedures can result to high turnover, loss of morale, lower performance levels, legal problems and loss of employee respect for managers. Companies have many alternatives in ensuring that a degree of discipline is instilled in the office either by someone whose performance is not up to standards or by someone who exhibited inappropriate behaviour.
Although Solaris Hotel has its own set of code of conduct from which disciplinary measures are outlined, this is not consistently applied. Thus, there is a need to assess this situation to be able to be able to align the hotel operations with a more streamlined base of the Libra Group.
This principle is a process of assessing whether organizational objectives are met. It would evaluate how the employee’s performance has fared to satisfy the organization (2003). Evaluation seeks to monitor and improve effectiveness by giving the employee feedback on his/her performance. This process should be carried out at regular intervals and should follow specific protocols to maintain objectivity in the evaluation process.
The company should have a clear set of evaluation or assessment tools that will be used in all levels of the organization. The process should either be carried out as an individual consultation or a face-to-face evaluation. Lastly, a standard review mechanism conducted by a third party should be commissioned for the reassurance of fair play and objectivity in the evaluation (2004).
This concept has its strengths as defined by (1997) for it helps the manager to be able to identify individual present performance along with the employee’s future potential. Evaluation also assesses the weaknesses and the accompanying disciplinary actions. The third strength is that it can determine which training aspect should be developed for the particular employee. It also increases the communication line between the employer and the employee because of the feedback and evaluation process.
According to (2004), evaluation is also a way for the organization to assess the role of the manager as well for evaluation and supervision are interdependent because evaluation is a tool for measuring supervision. Moreover, another advantage is that evaluation aims to establish trust among the entire organization because objectivity and fair play are called into this task. Lastly, the evaluation process is a good way of providing employee satisfaction and maturation which will improve the performance in the future.
IV. Conclusion
Solaris Hotel is in a period of transition as it joins other holdings of the Libra Group, multinational hotel chain. It has imbued its own organisational culture which is characterized as a family atmosphere where employees are treated in high regard because they have input in the pertinent HR functions such as recruitment, selection and training and development.
The above discussions regarding four basic human resources aspects namely: organisational culture, recruitment and selection, training and development and performance appraisal show that there is a need for Solaris Hotel to reorganize these areas to be able to align itself with the parent company’s own HR practices. Each component is not only important to the integration but also to organisational performance since it will also be competing with other hotels in the chain.
V. Recommendations
This report recommends that the company focus on the four HR aspects discussed because they are important factors in the company. These aspects determine the direction which the strategies would take in ensuring that it has properly integrated itself with the Libra Group.
There would be two methods used to acquire the information. The first is a survey questionnaire covering all the aspects discussed. The type of questionnaire would be delivery and collection questionnaire wherein the survey form is delivered directly to the respondent and collected later. This would prevent any inconvenience for the employee as such that the respondent could accomplish the survey at any time he chooses.
There would also be an interview for the management of Solaris Hotel. According to (2001), the use of the interview is to help the researcher gather valid and reliable data which are relevant to the research questions. The unstructured interview or in-depth interviews were employed for this research. Although this type of interview does not need to have a pre-determined list of questions to be asked during the course of the interview, the researcher opted to have a standard set of questions to be asked. This would make the interview flow easier as well as the forms to be filled out during recording more manageable.
The interviews were recorded with the permission of the interviewees. According to (2002), there are many advantages for recording the interview, all of which are delineated here. The main advantages are that it allowed interviewers to concentrate on both questioning and listening and that accurate and unbiased record is provided. Other advantages include: the researcher can review the interview, permanent records are created for future use and direct quotes can be used for the conclusion.
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