Human Resource Management is consistently challenged by the need to adapt to the forever changing business environment and react through their focus on staffing policies to enhance their own competitive advantage within a business setting. This essay identifies the key reasons why staffing policies are changing as well as how they are changing from an organisational point of view. This paper also includes academic literature and organisations to support the theories and practices used. Introduction
The nature of work in today’s society brings many challenges for staffing in organisations. Some of the factors that are contributing to the dynamic nature of work environments are knowledge-based work places and the fact that organisations are placing more demand on employee competencies. In conjunction with this the demographics within an organisation such as culture, age and diverse work places are all contributing to the business environment and staffing policies. Staffing, as described by Heneman & Judge (2009, p.28) is the practice of acquiring, deploying and retaining a workforce to create a positive impact on the overall effectiveness of organisations.
Each of the practices identified by Heneman and Judge (2009, p.28), come together to create staffing policies for organisations. Whilst the notion of acquiring talented employees, deploying competent staff members and retaining quality employees all contribute to staffing policies, they also form part of the wider goal which is Strategic Human Resource Management and the end goal of sustained competitive advantage. Literature review identified arguments for and against each of these ideas presented by Heneman and Judge (2009) which will be explored in further detail. This paper will critically analyse academic writings on staffing as well as drawing on personal experience (Company ABC) and case evidence from South West Airlines to support and/or challenge the main arguments.
Over the past twenty years there has been a significant shift in the way that organisations and Human Resource Management acquire employees. The past decade has witnessed the acquiring process shift from risk management, to one of capitalizing on strengths and talents (Suddith & Dowden, 2013, p.24). Wright, McMahan, & McWilliams (1994) noted that employees are more commonly seen as a strategic source of sustainable competitive advantage in that an employee’s skills intelligence and judgement all play a role in the overall success of an organisation (p.312). This change in mindset over the past twenty years has allowed Human Resource Management to change its focus on acquiring new employees. Human Resource Management and its quest to select talented employees have developed many approaches to the recruitment process, such as the increasing use of psychometric testing.
Psychometric testing identifies the abilities, personality and traits of potential employees and enables the HRM function to determine fit with the vacant position. Belbin’s (1981, p.48) team based model supports psychometric testing as an aid to selecting the right individual as the measure of Belbin Team Role Self-Perception Inventory uses psychometric properties and criteria to select employees based on their dominant profile. Belbin (1981, p.72) claims individuals can be grouped by eight role types, and are aligned to both a primary and secondary profile. Belbin (1981, p.76) goes on to state that the most successful teams and organisations have a combination of the eight role types. Table one describes Belbin’s eight roles. From personal experience in Company ABC, psychometric testing is used mainly for senior positions. This is due to the fact that psychometric testing is an objective approach to recruitment, and Company ABC utilises personality and trait assessments to obtain a deeper understanding of the individual, to ensure the candidate has a good organisational fit within the company.
The main reason Company ABC does not extend the psychometric testing to all candidates is financial as these tests are conducted by a third party and is additional to the overall recruitment cost. Another observation that has been made is that there is resistance from line managers to want to exercise psychometric testing as they question the overall effectiveness of the test and are unable to see the benefits it brings. This then means that line managers need to be educated and trained on psychometric testing so that there is more of a buy in from line managers, to want to participate in the testing. Some organisations may argue this and request that all candidates receive testing due to the insights it provides into the behaviour of individuals. The arguments for the use of psychometric testing are summarised by Lord (2007, p.82) who shows that the testing is an effective way to assess the skills and attributes of individuals in a non-subjective way. Lord (2007, p.105) goes on to demonstrate that psychometric testing in recruitment assists the more conventional recruitment methods so long as the data is reliable and the testing is in a contained environment.
Whilst there are arguments supporting psychometric testing there are also arguments against it. As mentioned earlier, from personal experience at Company ABC, this method of testing can be a costly exercise and some line managers may question the effectiveness of the testing. Risavy & Hausdorf, (2011, pp.18-26) question the validity of personality testing and determined that there existed no correlation to individual job performance. Risavy & Hausdorf, (2011, p.30) go on to reveal that most individuals are not cornered into one specific personality group but may be a combination of many groups. Similarly Anderson & Sleap (2004, pp.429-437) also argue the notion that the Belbin model does not take into consideration the impact of gender differences when it comes to intrapersonal assessment of dominant role type. By examining the changing focus of acquiring talented employees, Human Resource Management is able to develop more ways to employ the best individuals for an organisations’ strategic staffing policy.
The deployment of individuals once acquired has also needed to develop as, until recently, there has been limited academic focus on how individuals are placed in the job they will perform (Heneman and Judge, 2009, p.42 ). Heneman and Judge go on to explain that deployment not only refers to the placement of new employees but also to internal staffing strategies such as transfers in and out of departments and promotions (2009, p.44). As mentioned previously, greater importance is being placed on deployment as there is a growing acceptance of talent management and talent development. This is because resources are becoming scarce and there is a need for competitive advantage to be developed within and not necessarily achieved externally (Rothwell, 2005, p.36). One area of deployment that will be discussed is workforce planning and in particular the use of succession planning. This has been defined by Rothwell (2005, p.48) as an effort to ensure the continued effective performance of an organization by providing development of key people over time. This shows that succession planning is essentially an organisation planning for staffing needs in the future.
Succession Planning is a more widely used staffing policy as it focuses on current employees rather than sourcing external employees. Role Theory refers to the idea that roles within an organisation should be described clearly so there is a heightened understanding of the employee’s functions within that particular role. Rothwell (2005, p.65) is able to make the link between Role Theory and Succession Planning by involving three groups within an organisation: management, facilitators and participants. Management will take an active role in a participant’s role and then be able to make assumptions based on competencies. This information is then shared with facilitators who are able to facilitate the learning direction or path that the participant will take to reach the next stage in their career.
Company ABC is an example of an organisation that utilises succession planning for all employees, whether they are in managerial positions or entry level roles. Company ABC sees succession planning as a tool to enhance the employees they currently have so that in the future they are better equipped to take on the responsibilities and tasks they may face in a more challenging role. Company ABC understands that management is vital to succession planning and support Rothwell who explained that management is part of the planning of future employees (2005, p.41). Management in Company ABC use many key drivers of succession planning such as on the job training as well as external training, education assistance, networking seminars and wider business exposure.
These key drivers allow individuals to grow within an organisation and develop skills and capabilities to make further contributions to the business overall. All of these are clear examples of how Company ABC utilises succession planning. (“Southwest Airlines Announces Succession Transition Plan”, 2001) Kelleher, CEO of Southwest Airlines stated in a board meeting that “Succession planning has been a major priority at Southwest for quite some time,”. This shows that succession planning is evolving over time as employees are being recognised as a source of competitive advantage. Kelleher mentions that the board has taken into consideration the necessary skills that will be needed to become a globally known airline company and that the company requires a mix of talent (“Southwest Airlines Announces Succession Transition Plan”, 2001).
The most efficient and effective way of achieving this mix of talent was by a succession plan program which was fully implemented on 19th June 2001. (Swamedia.com, 2001). Succession planning provides many benefits for an organisation such as the continual development of emerging leaders in line with an organisations current values and beliefs. Succession planning not only focuses on future needs, but also assists in increasing the morale of current participants by providing an enticing goal which may be promotion or advancement within a role. The most significant achievement that succession planning provides as described by Bridgl (1999, p.20) is building flexible and dynamic leadership capabilities in future employees. Bridgl (1999, pp.27-29) not only makes mention of the advantages, but also the disadvantages of succession planning which are mostly due to availability of employees undergoing succession planning. Often, individuals are taken away from their day to day work environment to complete training or mentoring programs.
This can create added pressures from colleagues or internally to perform a juggling act to ensure tasks are still adhered to. It is also worth mentioning that employees who are left out of success plans may feel dejected and unengaged from their work and this can lead to decrease in morale. Managers who do not provide clear feedback to the participant may eventually erode the credibility of the succession plan and the plan may deteriorate. Southwest Airline identified this early and was able to introduce the board to the strategic plan so there were clear guidelines for employees that were understood at the “top”. In essence Bridgl (1999, p.29) shows that organisations are re-evaluating how succession planning is driven and that succession planning is placing more significance on redeveloping leadership.
The final element of staffing policy is retaining, which is focusing on the management of employees exiting the business (Heneman & Judge 2009, p.42). Whilst there is this focus of an effective outflow of employees there is also a demand to retain quality employees as Barney & Wright (1997, pp.103-110) mention that quality employees may produce a sustained competitive advantage for an organisation. Retaining “top performers” and releasing “poor performers” is a challenging staffing policy as organisations are becoming more aware of the changing workforce environment. O Neal and Gebauer (2006) interestingly suggest that what attracts an individual to an organisation is not necessarily the reason an employee stays at an organisation and an effective staffing policy needs to be implemented to ensure that the top performers remain within the organisation.
An engaging culture is part of the changing workforce environment as organisations are acknowledging that an engaged culture is one that has all employees involved in the day to day actions of the business and the employees have a willingness to perform. (O Neal and Gebauer, 2006). Figure 2 from Friedman (2005) illustrates the top five drivers of employee engagement and it is interesting to note that the number one reason employees feel engaged is because of a succession plan through learning and development as mentioned earlier as part of deployment. Herzberg’s Motivation-Hygiene Theory outlines the satisfaction or motivation of employees as well as the hygiene factors or dissatisfaction of employees. (Cole, 2004, p.92). Herzberg’s theory identifies that satisfaction of employees is motivated by: achievement, recognition, work itself, responsibility and advancement. Herzberg also identifies the dissatisfaction of employees as being caused by: policy and administration, supervision, remuneration and working conditions (Cole, 2004, p.105).
Cole (2004, pp.105-106) goes on to explain that Herzberg’s theory shows that there needs to be an absence of hygiene factors which contaminate the employees overall satisfaction of work. On reflection, Company ABC tries to stay clear of these hygiene factors by trying to provide a work life balance, and therefore eliminates the issue of unfavorable working conditions. As previously stated, Company ABC has a strong succession plan which strongly emphasises the motivation of employees. One downside of Company ABC is its current hierarchical organisational structure which means there are many layers of management and also more layers of supervision. These added layers of management create a micro-management environment where there is constant supervision, which in turn creates a stressful working environment. Similarly Southwest Airlines also place a strong emphasis on employee engagement. According to senior management, Southwest Airlines contribute much of their success to the company culture and the way the company engages with its employees.
Much of the success of the organisation can be attributed to the trust and direction shown by senior management as well as the overall personality of the company. (Barney & Wright, 1997). The advantage of an engaged culture is the strong link between retention and organisational culture, as the organisation becomes a family-like experience for the employee. This is evident at Company ABC as employees who reach ten years’ service at the company are more likely to stay for another five years. This can be seen from internal Human Resource Metrics where 76% of employees who reach ten years of service will go on to complete twenty years of service. This trend is due to the way Company ABC engages with its employees and the overall culture of the organisation. O Neal & Gebauer (2006, p.6) demonstrate that individuals want to work for organisations that are aware that employees are critical to the overall success of the business, and in turn the organisation will get the best out of the individual.
A negative of employee engagement is that there is not a one solution fixes all as individuals are different and unique and what may motivate one employee may demotivate another so employee engagement needs to be almost tailored to individuals. (O Neal & Gebauer, 2006, p.6). This shows that added time and resources need to be utilised so that all employees are engaged in one way or another. Employee engagement shows that retaining employees goes beyond the outflow of employees and also the changing nature of staffing policies to adjust to the dynamic working environments. With effective employee engagement policies in place organisations will achieve a competitive advantage through its most valuable resource, its employees.
In summary, the dynamic nature of work in today’s society is bringing many challenges for staffing in organisations. Whilst examining staffing policies in more detail and understanding the functions of acquiring, deploying and retaining we are better able to create a positive impact on the overall effectiveness of organisations and better able to achieve a strategic competitive advantage. By exploring the staffing policies in Company ABC and Southwest airlines we are better able to put into context the staffing policies in place in organisations around us.
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