MANAGING PEOPLE IN ORGANISATIONS

HRM POLICIES IN PROCELL LTD

Ioannis Kountouris Instructor: Konstantinos Kiritsis

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1. INTRODUCTION...............................................................................................................................3 2. METHODOLOGY..............................................................................................................................3 3. HRM THEORY...................................................................................................................................4 3.1. BRIEF DEFINITION................................................................................................................................4 3.2. BASIC ASPECTS...................................................................................................................................4 3.2.1. Resourcing..............................................................................................................................4 3.2.2. Performance management - Appraisal..................................................................................5 3.2.3. Reward management..............................................................................................................5 3.2.4. Training..................................................................................................................................6 3.2.5. Change management..............................................................................................................6 3.2.6. Employee relations groups..................................................................................................6 4. PROCELL HRM POLICIES.............................................................................................................7 4.1. HR PLANNING & RESOURCING..............................................................................................................7 4.2. PERFORMANCE MANAGEMENT & APPRAISAL............................................................................................7 4.3. REWARD MANAGEMENT........................................................................................................................8 4.4. TRAINING & DEVELOPMENT..................................................................................................................8 4.5. CHANGE MANAGEMENT........................................................................................................................8 4.6. EMPLOYEE RELATIONS - GROUPS............................................................................................................8 5. DATA ANALYSIS...............................................................................................................................9 6. SUGGESTIONS - RECOMMENDATIONS.....................................................................................9 REFERENCES......................................................................................................................................10 APPENDICES.......................................................................................................................................11 APPENDIX 1 QUESTIONNAIRE FORM.........................................................................................................11 APPENDIX 2 - INTERVIEW........................................................................................................................13

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1. Introduction Human resource management is the management discipline which seeks to maximise organisational performance through the adoption of best practices in the management of people (McKenna & Beech, 2008). Different definitions and approaches of these best practices have been referred. A common frame, within which many approaches are presented, is that organisations should consider HRM an important process, which influences general performance. The aim of the present assignment is to present the HRM policies in ProCell Ltd, a small Greek biotechnology organisation, which offers stem cell storage services. Furthermore, the purposes underlying these policies will be discussed and, with respect to recent references regarding HRM, the alignment of these policies with the companys strategic objectives will be investigated.

2. Methodology
The discussion will be based on analysis of bibliographic references which describe the effect of HRM policies in organisational performance. In order to locate and present how HRM issues are dealt at ProCell, an interview with ProCell general manager will be held based on questions made to depict the organisations view on HRM issues, related to its strategic objectives. In addition, data will be gathered and analysed regarding the answers of the employees to a specific questionnaire. The purpose of data analysis will be to estimate the impact of certain HRM policies on individual and organisational performance.

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3. HRM theory Brief definition In this chapter the focus will be on presenting the main aspects of HRM and the interaction of policies with strategic business objectives. Employee performance may be less or more important for overall corporate performance, depending on the industry in question. However, it can be argued that a large part of business strategies involve adequate human resources performance. Organisations need people and people need organisations. As Bolman and Deal (2008) suggest, overall efforts should be towards creating a good fit between organisational and people needs, which will benefit both and will provide the organisation with the talent and energy it needs to succeed. 3.2. Basic aspects 3.2.1. Resourcing

3.1.

3.2.1.1. HR Planning
Human resource planning is about setting out the number and quality of manpower required, designing the way this manpower shall be utilised to achieve cost effectiveness and efficiency and defining the supply, internal (already employed) and external (pool of suitable applicants) (MCKenna & Beech, 2008). As suggested by Torrington et al. (2002), HRP is aligned with corporate objectives and thus HRP creates a strong link between HRM and business strategy. It can be argued that fundamental questions managers should ask themselves, when setting up business strategies are: What kind of people is needed to implement it? Are they available?

3.2.1.2. Recruitment - selection

Recruitment and selection are two parts of the process that takes place whenever an organisation interfaces with the external labour supply. Different techniques for attracting suitable applicants through recruitment and for selecting the best among them have been suggested, but the essential preparatory work is transforming HRP into specific information, which will be provided to the external supply during the recruitment process. This information refers to an outline of the job offered, job description and the profile of the suitable candidate, job (person) specification. Mullins (2002) underlines the importance of the process through which job description and person specification are recorded, job analysis. Apart from aiding recruitment and selection by creating a set of guidelines for objective applicant assessment, job analysis can provide the basis for performance review and appraisal of any organisation member. Every recruitment method has pros and cons and it could be argued that method suitability depends on job type and level and size of external supply. However, it is important to note that the internet has added a cost effective recruitment option, which is increasingly being used (McKenna & Beech, 2008). The outcome of the

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recruitment process is a list of suitable applicants, from which the final selection will be made. Several selection methods may be suggested but the interview remains the most common tool across many countries. It could be argued that the main reason is that managers find it hard to hire a person they have never met (McKenna & Beech, 2008). The latest debate regarding recruitment and selection criticises traditional approaches as failing to take into account the fact that both jobs and persons are changing over time or as a result of specific events (McKenna & Beech, 2008). As for any corporate process, there is no one best practice for HR planning, recruitment and selection. However, it can be argued that investing time and effort in organisation resourcing processes is the base for any HRM policy.

3.2.2. Performance management - Appraisal

Having the right people in place is not sufficient for ensuring adequate performance. It can be argued that managing employee performance is a core managerial activity, which seeks to formalise the every day process of feedback between manager and employee (McKenna & Beech, 2008). McKenna and Beech and Torrington et al suggest several approaches for performance management and appraisal, all of which agree on the following: Performance management and appraisal should be fairly formal procedures. Expectations and targets are jointly set by employees and managers through open communication. Performance measures and goals are objective, comprehensive and challenging but not too high. In the cases where actual performance falls short from the initial planning, an improvement plan must be set. Employees and managers must commit to continuous improvement Feedback regarding management quality must be provided from the appraisee. The procedures should be organised in a way that enhances communication. Regardless of the methods adopted, it can be suggested organisations must accept that appraisal and performance management refers to many different organisational aspects and that improvement recommendations may refer to organisational structure, management practices and HR planning and recruitment stages. 3.2.3. Reward management Apart from improvement plans, appraisal may point out that employees should be rewarded for their performance. Traditional reward approaches tend to reward people based on specific results or working time, while reward systems based on organisation profit and employee skills (McKenna & Beech, 2008). A total rewards approach, which incorporates both financial and non-financial rewards. McKenna & Beech argue that this approach aims to put employee needs in

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the centre of reward and to create employee engagement by focusing on training and development, company culture and quality of working life. It can be argued that the total rewards approach seems to be matching the Bolman and Deal approach regarding human needs and the necessity of a fit between organisational and human needs. 3.2.4. Training Bolman and Deal encourage organisations to invest in people, by emphasising on the high cost of undertrained workers. They suggest that even if the cost of training is immediate and the possible gains are long term, investment in people is the way away from low quality. Training in its strict classroom sense, is to be faced as a distinct project with three phases: plan, do and review (McKenna & Beech, 2008). Nowadays the term learning organisation is increasingly discussed as the model of an organisation which, according to Bolman & Deal, has placed mentors, willing to share their knowledge and expertise, in key positions. In addition, a learning organisation provides employees with the freedom to try new things and is outgoing by keeping good exchange with the environment. The strategy behind a learning organisation is the continuous on the job training and development of employees. 3.2.5. Change management Business strategy may require organisational changes, which imply with employees. While people may resist change, many argue that Kotters model is way to introduce the changes that will support strategic goals (McKenna & Beech, 2008; Bolman & Deal, 2008). A brief analysis of Kotters model would indicate that: o Communication between employee and management is a crucial point. It mainly refers to presenting the strategic vision behind change to organization members o Strategies related to all frames introduced by Bolman and Deal (structural, HRM, political, symbolic) must be utilized to achieve successful change management. To simplify the remarks mentioned above, one could argue that incorporating issues introduced by different frames, as they are introduced by Bolman and Deal, would form a more thorough approach towards change management. In addition, communicating purposes and benefits of change at different stages of Kotters model is an important factor for successful change.

3.2.6. Employee relations groups

Interpersonal relationships at work affect both individual work satisfaction and organisation effectiveness (Bolman and Deal, 2008, p. 187). Managers have to ensure that the groups of people formed within an organisation will be productive and a benefit for general performance. To achieve that, managers must timely focus on different issues that heavily affect group performance (Bolman and Deal, 2008): o Informal roles, which are undertaken by individuals depending in their individual characteristics and background, must be

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in accordance with their formal roles regarding specific task assignment. o Informal norms, informal rules that groups develop and determine the way groups function. o Informal networks are shaped by the informal relations between group members. o Interpersonal conflicts have to be dealt with positively and throwing under the carpet must be avoided. o Leadership and decision making inside a group may derive from more than one individual, depending on the situation present.

4. ProCell HRM policies

In this chapter the HRM policies applied at ProCell Ltd are to be identified and the purposes underlying these policies will be pointed out. Finally, the link of these purposes and policies with the organisation strategic objectives will be identified. ProCell Ltd occupies approximately fifteen employees, who, according to the general manager are the organisations most important asset. HRM operations are mainly performed by the general manager and the commercial director, while bookkeeping is the responsibility of the accountant. The company policies regarding different aspects of HRM identified below. 4.1. HR planning & resourcing HRP and resourcing at ProCell is directly linked with all strategic objectives. There are several case studies within the organisation that verify this link and one of them is briefly presented below. Initial HR planning & resourcing (2005) As soon as the organizations financial resources could support a sales department, ProCell recruited people strategically aiming to create a scientific company profile among health professionals. Thus, the job description and specification was correspondent to an experienced account manager of the healthcare sector and not to an ordinary salesman. The number of account managers that were employed was decided by the number of different territories the organisation aimed at. The recruitment techniques used at ProCell vary between the internet, as a low cost method for recruitment of support staff, and through personal or professional connections. The latter is picked for recruiting all other organisation members, as the purpose is that recruitment is based on an established own opinion or a reference from a trusted individual. Accordingly, selection is made through unstructured interviews by the general manager and/or the commercial director. 4.2. Performance management & appraisal Performance management and appraisal procedures are formalised at ProCell. Sales objectives are jointly set by account managers and the commercial director and approved by the general manager on a yearly basis. Performance is monitored in weekly meetings and improvement strategies are tailored, in the form of day to day

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action plans. The purpose is for poor performance issues to be timely detected and dealt with, as flexibility is a strategic objective. Informal appraisal interviews are held by the general manager to investigate the cause for poor performance of any specific staff member. Formal appraisal interviews are planned towards the end of each calendar year. Each employee meets with the general manager for performance review and target setting referring to qualitative aspects. In addition, focus is on issues that may be negatively affecting individual performance and the appraisal of management practices from each employee. Employees are encouraged to provide feedback and propose specific actions to the general manager as ProCell aims to adopt policies that will incorporate individual needs. 4.3. Reward management ProCell has adopted a typical monthly results reward system for account managers. The rewards of the commercial director are based on overall organisational performance. The evident purpose is to motivate the sales team to achieve higher sales volumes and the strategic goal of market share increase. 4.4. Training & development ProCell focuses on internal training, provided by the commercial director to the sales team. Training plans are designed with respect to the organisations strategic goals. E.g. maintaining the companys scientific profile and orientation requires that the sales team presents all the latest bibliographic data regarding stem cells. These data are gathered and put together in a newsletter format and are then analysed to the sales team, who will then present them to health professionals. Accordingly, specialised training sessions enhance personnel knowhow regarding new ProCell services. In addition, ProCell has the key attributes of a learning organisation, as they are mentioned above in chapter 3.2.4. The commercial director is the mentor willing to share knowledge and expertise and he encourages his team to try new approaches, as long as they fall within organisational culture. The organisation clearly benefits from the feedback constantly got from the account managers that are on the field, as it is able to timely react to new market trends. 4.5. Change management Whenever a change process is required, it must take place in a very short time. The interview pointed out that most of the steps of Kotters model are followed, even though ProCell management was not previously aware of the model. It is important to note that any change is mutually agreed between the general manager and the commercial director, before being introduced. 4.6. Employee relations - groups Despite the fact that the heart of the organisation is the sales team, day-to-day routine is individual work. In the cases that certain projects are assigned to a group of people, the commercial director is appointed head of the group and he acting as the group facilitator when necessary.

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In day to day work, apart from maintaining a good level of interpersonal relationships, ProCell management does not consider additional policies regarding employee relations and group dynamics. 5. Data analysis ProCell employees were asked to fill in a questionnaire (attached in appendix 1) aimed at investigating the outcome of HRM policies. In the present chapter, the purpose of each question will be presented and the main outcomes will be analysed. Question 1 was aiming at verifying that all employees have the understanding tha ProCell management is open to new propositions form their side. Impressively, all but one have picked answer 3, pointing out that they feel free to make suggestions for possible changes. The next question referred to the opinion of people for the quality and sufficiency of personnel preparation for a specific new service. Once more, answers are pretty well aligned with option 3, the conclusion being that employees are satisfied with preparatory work, but expect directions for dealing with exogenous factors. Number 3 general question regarding improvements of the working environment desired by employees. No replicate has chosen more than two options and only option 4 more challenging work has more than one hits. It can be argued that manpower is generally satisfied by the working environment. Question 4 aims to reflect the peoples view on the appraisal criteria. It is impressive that despite the fact that there is a monthly bonus based on sales volumes, the number that have marked it #1 are equal to the number that have marked it #4. In addition, one must note that option 4 regarding company profile that is communicated, is always within the top two ranks. Thus, it is clear to the employees that the profile of the organisation is an important asset. Question 5 is a straightforward question about alignment of individual and organisational goals and all have picked option 3 similar with ProCell strategic goals. Question 6 seeks to explore the benefit employees feel to have from their work. It is impressive that options 2 and 3, evolvement opportunities and prestigious employment are the top two for all but one. Seems ProCell is on the right track towards the total reward approach. Replies to the last question do not provide any significant conclusion, as they are almost equally distributed and employees seem to equally worry about their career and organisation perspective.

6. Suggestions - recommendations
From the aforementioned analysis one could conclude that organisational performance is affected by HRM policies. An organisation should identify the distinct aspects of HRM and adjust policies according to business objectives. Based on the above findings, one could suggest that ProCell is standing for the statement people are our most important asset. The following can be noted: o As suggested by Rowden (2002) there is a strong link between workplace learning and job satisfaction is small to midsize businesses in the US. It could be argued that this link is verified by the learning organisation perspective of ProCell and the overall satisfaction of the manpower as indicated by questionnaire findings.

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o According to questionnaire data, employees feel they can contribute by proposing changes to company management. Thus, it could be argued that their thinking is considered an asset for corporate development. o There are strong indications that ProCell is offering a reward package close to the total reward approach. However, enhancements can be made, especially regarding training and reward management. One could suggest that a shift from result based reward to a profit related pay model could be considered, in terms of strengthening the link between individual and organisational goals. Moreover, a training plan focusing primarily on the development of sales skills might turn out beneficial for the pursuing of strategic objectives related to market shares. References 1. Eugene McKenna & Nic Beech; Human resource management; 2nd edition 2008; FT Prentice Hall 2. Lee G. Bolman & Terrence E. Deal; Reframing organisations; 4th edition 2008; FT Prentice Hall 3. Derek Torrington, Laura Hall & Stephen Taylor; Human resource management; 5th edition 2002; FT Prentice Hall 4. Laurie J Mullins; Management and organisational behaviour; 6th edition 2002; FT Prentice Hall 5. Robert W. Rowden; The relationship between workplace learning and job satisfaction in US small to midsize businesses; Human resource development quarterly; Winter 2002; pg. 407

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Appendices Appendix 1 Questionnaire form Question 1 Regarding your propositions towards ProCell management, to change a company procedure and/or policy, you would say that they are most likely to be (pick only one answer): 1. Rejected without been discussed 2. Discussed shortly and then rejected 3. Discussed, evaluated and possibly tested for a short period of time, before it is definitely accepted or rejected 4. Dealt positively and adopted right away Question 2 ProCell has recently launched a new product. Your opinion is that (pick only one answer): 1. ProCell has not dealt with preparing personnel for supporting the new product (training, supporting material etc.). 2. ProCell has followed an insufficient plan for preparing personnel for supporting the new product. 3. ProCell has followed a sufficient plan for preparing personnel for supporting the new product. Supplementary support will be needed to deal with exogenous factors. 4. ProCell has followed a sufficient plan for preparing personnel for supporting the new product and has included provisions for exogenous factors. Question 3 To improve your work environment at ProCell, apart from higher rewards, you would require (you may pick more than one answers): 1. more freedom 2. more responsibility 3. less pressure 4. more challenging work 5. more security 6. better relations with colleagues 7. Other: Question 4 You feel that your appraisal is based on (rank from 1 to 4): 1. 2. 3. 4. 5. sales volumes commitment to ProCell strategic goals treating towards colleagues ProCell profile that you communicate to customers and/or health professionals Other:

Question 5 You feel that your professional goals are (pick only one answer):

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1. 2. 3. 4.

Contradicting ProCell strategic goals Irrelevant to ProCell strategic goals Similar to ProCell strategic goals Identical with ProCell strategic goals

Question 6 Your employment at ProCell mostly offers you (rank from 1 to 4): 1. 2. 3. 4. 5. An attractive reward package Opportunities for professional evolvement Employment at a prestigious and trustworthy organisation Good time while at work Other:

Question 7 If sales volumes drop significantly, you are worried about (rank from 1 to 3): 1. 2. 3. 4. Not grabbing your bonus Losing your job The organisations future Other:

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Appendix 2 - Interview The interview, during which many of the HRM policies were identified, was held with Mr Dimitrios Bibis general manager and managing partner of ProCell. Mr. Bibis has no management related degree, but is a management enthusiast and has consulted many recent management readings. Initially, the purpose of the interview was outlined and the main aspects of HRM were presented on a theoretical frame. Mr Bibis then explained company policy on each point by providing relevant examples and by identifying the link of policies with business strategy. Some changes were suggested to Mr. Bibis and he committed on carefully evaluating them.

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