Summary HRM3704 PAST EXAM PAPER SOLUTIONS.

HRM3704 PAST EXAM PAPER SOLUTIONS. Contemporary Issues In Human Resource Management. Read the following case study and then answer the questions that follow. Happy Sky Company: Aligning human resource functions with strategic objectives. Happy Sky Company is a company that produces anything from cutlery to toiletries for all South African Airlines. Although Happy Sky has been profitable over the decade of its existence, its productivity has recently declined. In the past several years, their employees have displayed diminished innovativeness, a higher turnover and absenteeism, and an overall sluggish performance. Based on these trends, Paul (the founder of the company) calls a meeting of all the managers to discuss potential courses of action to correct the problems. After a lengthy meeting, they agree to hire a full-time HR manager to assume sole responsibility for the employees. Previously, the line manager had assumed basic responsibility for managing their employees. After careful consideration, Paul decides to hire Kgomotso Molotsi, in line with the company’s new employment equity policy, to assume the primary responsibilities of developing a systematic HRM function for Happy Sky. When Kgomotso arrives at Happy Sky, she meets with Paul to discuss the strategic objectives of the company. Paul indicates that the two primary objectives of Happy Sky are, firstly, to continue its growth strategy to respond to growing demands for its services, and, secondly, to enhance the innovative nature of the workforce, in order to ensure that it remains competitive and up to date with market changes. Paul gives Kgomotso the task of developing and HRM function that will tackle the absenteeism and turnover problems while helping Happy Sky attain its two primary goals. As a first step, Kgomotso begins by reviewing the HR practices used at Happy Sky. It becomes clear that the company relies primarily upon two practices to meet its employee needs. Firstly, it recruits at the local university just 10 kilometers away. If graduating students are not interested or are unsuitable candidates for a certain job, Happy Sky places advertisements in regional newspapers to seek job candidates with the relevant skills who are willing to relocate. Although this hiring process is not comprehensive, Happy Sky has not experienced much difficulty in recruiting employees, thanks to the growth opportunities it offers. Secondly, Happy Sky has relied upon an established compensation system that applies to all employees throughout the company. Employees are paid salaries, the compensation level being based on the going market rate for similar positions. Annual salary increases are calculated according to inflation and individual performance. The average salary increase is between 3 and 7 percent of an employee’s basic salary. Kgomotso realises that, besides these recruitment and compensation practices, no other HR practices are consistently applied at Happy Sky. Instead, managers use different methods of managing the employees in their respective departments. For example, no uniform performance appraisal standards are applied throughout the organisation. Criteria used to evaluate employees range from counting days absent to measuring innovation and creativity. Similarly, each manager uses somewhat different tactics for training employees. Some units assign new employees to shadow more experienced employees, who serve as the new employees; mentors. Other managers do not offer any training and assume that the employees come to the job with all the knowledge they need to succeed. In the light of the organisation’s goals of growth and innovation, Kgomotso realises that significant changes need to be made at Happy Sky. The productivity of employees and the success of the company depend on effectively realigning the HR function. 1.1 Suggest specific HRM practices that could facilitate Happy Sky’s strategic objectives of growth and innovation. 1.2 Happy Sky employs 10 sales representatives to sell its software products. Name and describe various criteria which can be used to evaluate the performance of these sales representatives. QUESTION 2 Read through the following case study and then answer the questions that follow. Global HR at McDonald’s One of the best-known companies worldwide is the McDonald’s Corporation. This fast-food chain, with its symbol of golden arches, has spread from the United States (US) into 91 countries. With more than 18 000 restaurants worldwide, McDonald’s serves 33 million people each day. International sales represent an important part of McDonald’s business and more than 50% of the company’s operating income comes from sales outside the United States. Operating in so many different countries means that McDonald’s has had to adapt its products, service and HR practices to legal, political, economic and cultural factors in each of these countries. A few examples illustrate what kind of adaption had to be made in some countries, such as India, beef is not acceptable as a major part of the population, so McDonald’s uses lamb or mutton. To appeal to Japanese customers, McDonald’s has developed teriyaki burgers. Separate dining rooms for men and women have been constructed in McDonald’s restaurants in some Middle Eastern countries. HR practices must adapt to different cultures. Before beginning operations in a different country, HR professionals at McDonald’s do research on the country and determine how HR activities must be adjusted. One method of obtaining information is to contact HR professionals from other US firm operating in the country and ask them questions about legislation, political factors and cultural issues. In addition, the firm conducts a detailed analysis to ensure that all relevant information will be gathered. Data gathered might include what employment restrictions there are 1 on the age of employees and hours of work, what benefits must be offered to full-time and part-time employees (if parttime work is allowed) and information on other operational requirements. For instance, in some of the former communist countries in Eastern Europe, employees provide locker rooms and showers for their employees. These facilities are necessary because shower facilities and even consistent water supplies are unavailable at many homes, particularly in more rural areas around major cities. It is also important to check public transport to ensure that employees have adequate means to travel to work. Once a decision has been made to begin operations in a new country, the employment process must begin. Often, McDonald’s is seen as a desirable employer, particularly when its first restaurant is being opened in a country. For instance, in Russia, 27 000 people initially applied to work at the first McDonald’s in Moscow. Because customer service is so important to McDonald’s, recruitment and selection activities focus on obtaining employees with customer service skills. For positions such as those of counter representative and cashier, the focus is on identifying who will be friendly, customer serviceorientated employees. A “trial” process whereby some applicants work for a few days on a probational basis may be used to ensure that these individuals will represent McDonald’s appropriately and work well with other employees. For store managers, the company uses a selection profile emphasising leadership skills, high work expectations and management abilities appropriate to a fast-paced restaurant environment. Once applicant screening and interviews have been completed, individuals are asked to work for up to a week in a restaurant. During that time, the applicants and the company representatives evaluate one another to see if the job “fit” is appropriate. After the first group of store managers and assistant managers have been selected, future managers and assistant managers are chosen using internal promotions based on performance. Once the restaurant has been staffed, training becomes crucial to acquaint new employees with their jobs and the McDonald’s philosophy of customer service and quality. McDonald’s has taken its hamburger university curriculum from the United States and translated into 22 different languages to use in training centres throughout the world. After trainers and managers have completed their training, they conduct training for all employees to work at McDonald’s locations in foreign countries. 2.1 Identify and discuss cultural factors that might be important in a training programme for food handlers at McDonald’s in Saudi Arabia. 2.2 Rather than focusing on differences, indicate the similarities that you expect will exist between McDonald’s customers and employees in the United States and those abroad. 2.3 Any business (whether it is a fast food franchise such as McDonald’s or a big corporate company such as Deloitte and Touche), has a management team. However, differences exist between a leader and a manager. Briefly define the concept of leadership and explain the difference between leadership and management. MANAGEMENT LEADERSHIP - Means creative problem solving - Works within the paradigm - Works within a system - Sets people and “things” in motion by means of methods and techniques - Uses people as means - Means an attitude of doing - Means alertness to opportunities - Imagination and vision to capitalise on them - Creates a new paradigm - Works on the system - Is a natural unforced ability to inspire people - Requires respect and a genuine interest in people - Means attitude of serving SECTION B – ESSAY QUESTIONS QUESTION 3 3.1 Briefly discuss the four questions which determine a resource’s value. The question of value – The first question to ask is: do a company’s resources add value by enabling it to exploit the opportunities and/or neutralise the threats in the company’s environment? By answering this question, managers link the analysis of internal resources with the analysis of environmental opportunities and threats. This is important as the resources of a company cannot be valuable in a vacuum; the company must be able to exploit opportunities and/or neutralise threats. The question of rarity – The second question to ask is: How many other companies already possesses the valuable resources? The valuable resources must be rare among the competing companies in order to be a source of competitive advantage. However, this does not mean that a common but valuable resource is not important, it might be essential for a company’s survival. The question of reproducibility – The third question to ask is do companies without a resource face a prohibitive cost disadvantage in obtaining the resources other companies already possess? Having a valuable and rare resource can at least provide a company with a temporary competitive advantage. However, if a competing company does not find it too expensive to imitate this resource, the competitive edge will soon disappear. If imitation is too expensive, the fist company will retain its competitive advantage. According to Barney, imitation can occur in at least two ways: by duplication or by substitution. Duplication occurs when an imitating company builds the same kind of resources it knows the competitor possesses, with substitution an imitating company may find a similar resource that provides the 2 same result. It is important to note that some competing companies might find the imitation of a company’s resources difficult as a result of historical reasons. For example, many resources are built up over years through trial and error within companies, making them unique reflections of personalities, experiences, and relationships that can exist only in one company. Another obstacle might be the social integration of resources through trust, friendship, teamwork, and culture, which will make them virtually impossible to imitate. The question of organisation – The fourth question that can be asked is: is a company organised to exploit the full competitive potential of its resources? As indicated thus far in this chapter, a company’s competitive advantage potential depends on the value, rarity, and reproducibility of its resources. However, to fully realise what it has, a company needs a proper organisational structure. Issues that are important in this regard are a formal reporting structure, explicit management-control systems, and compensation policies. These components are also referred to in the literature as complementary resources, as they have – in isolation = only a limited ability to generate a competitive advantage. In combination with other resources, however, they are capable or releasing a company’s full competitive advantage. 3.2 Explain the major differences between numerical flexibility and functional flexibility. Numerical Flexibility: - Is a quantitative approach to the utilization of the workforce - Based on the principle of relating the size of the workforce to the levels of economic activity easily and at short notice - As the workload fluctuates, management has the option to adjust or redeploy its human resources accordingly. - The use of seasonal, casual, part-time and subcontracted workers typically provides this form of flexibility. - The pressures of unpredictable short term fluctuations in demand, combined with increased competitiveness, make these work patterns efficient and effective to sustain, as organisations are relieved of the cost of a fixed labour force - While these patterns of work organisation have been traditional aspects of some segments of the labour market (e.g. the service and retail sectors), the use of these work practices to externalize traditional core organisational activities is the major factor in increasing enterprise efficiency through numerical flexibility Functional Flexibility: - Functional flexibility refers to management's ability to deploy and redeploy particular sections of the workforce on a wide range of tasks, in response to market demand, as and when required - To ensure that this can be achieved efficiently, employees are trained in a wide range of skills - The volatility of product markets and the blurring of skill boundaries through technological change provide the environment for the development of this form of flexibility - Central to the development of functional flexibility is the reversal of the Taylorist practices of frag-mentation and deskilling - Working practices which incorporate elements of functional flexibility include team working, empowerment, multiskilling, re-skilling, and project-working 3.3 Explain the major difference between financial flexibility and procedural flexibility. Financial flexibility - Is sought after two reasons: 1- pay and other employment cost reflect the state of supply and demand in the labour market. 2- and properly of greater importance in the long term, pay flexibility means shift to a new pay and remuneration that facilitate functional and numerical flexibility, such as assessment-based pay system in place for ratefor-the-job system - Provides the durability of 1- allowing market forces to dictate relative wage rates, providing effective numerical flexibility to the organisation, 2- providing incentives to increase skills based by relating pay to the skills level Procedural flexibility - At the level of the organisation the process can range from directive through a particular framework of negotiation - Central to procedural flexibility is the acceptance and the role of managing the new relationship for the employees and their representatives - Such procedures are indicative of commitment to join administrative labour flexibility in the workplace 3.4 Briefly discuss why it is important to develop and manage flexible patterns of work. The most important factor for management in the adoption of flexible patterns of work is the ability to respond quickly to market demands with the minimum disruption. QUESTION 4 4.1 Discuss how the psychological contract between employees and employers have been affected by the new era of HRM. 4.2 Why has the role of HRM changed so dramatically over the past few years? Discuss briefly. 3 4.3 Briefly discuss the four components of the Workforce Scorecard. Workforce success – this is the most important dimension of the workforce scorecard because it captures the ‘bottom line’ of the workforce performance. These are the measures that reflect how well the workforce has contributed to the execution of the company’s strategy. Typical measures here include the number and quality of customer complaints, the number of new distributors, and the response time for customer inquiries. Workforce mind-set and culture – the question in this area is two-fold: does the workforce understand the company strategy, and dos the culture within the organisation support the execution of this strategy? Organisations create norms and expectations that the workforce needs to understand. This creates the culture of the organisation, which ultimately shapes the employees’ behaviour. Managers can never consequently measure and assess this culture in terms of its impact on the company’s strategic success. Typical measures to use here include the extent to which the average employee can describe the company’s HR strategy, and the extent to which employees take pride in working for the company. Workforce competencies – the question in this area is: does the workforce have the skills it needs to execute this strategy? The competencies represent the knowledge, skills and ability each employee possesses, and can also be measured and monitored. Typical measures here include the effectiveness of information sharing among departments, the exposure of cross-functional job experiences, and the extent of organisation learning. Leadership and workforce behaviour – the question in this area is: are the employees consistently behaving in a way that will lead to the achievements of the company’s strategic objectives? To execute the strategy, leaders and employees must behave in ways consistent with the strategy. These types of behaviour can be defined and measured to ensure that leaders and employees do what the strategy suggests needs to be done. Typical measures here are effectiveness in dealing with poor performers, percentage of employees making suggestions, and percentage retention of core-competency workforces. 4.4 Discuss the ethical issues that may arise within traditional HR activities of employee promotion. The key ethical issues in managing the promotion of employees, is fairness. The difficulty is in determining the criteria that should be serve as the basis for fair promotion procedures. While there is debate over how much weight should be given to the criteria of seniority and job qualifications, it is widely recognized that promotion should normally be on the basis of job-related criteria, especially performance, and that employees should not be discriminated against on the basis of inappropriate criteria such as gender, race and religion. Employees may not have a right to promotion, but they do have a right to fair evaluations and consideration for promotion. They also have a right to be informed of the reasons for lack of promotion in those situations where it might reasonably be expected. Promotion is one more example where HR practitioners are challenged to “merge dual responsibilities in a way that is beneficial to the firm and fair to all concerned. 4.5 Discuss the five pillars of corporate governance and the issues which need to be addressed within each pillar. CORPORATE GOVERNANCE Culture Leadership Alignment Structure Systems Aspects of culture that can work against good governance Aspects of leadership that can work against good governance Aspects of alignment that can work against good governance Aspects of structure that can affect good governance Aspects of systems that can affect good governance - Unethical behaviour - Excessive internal rivalry - Intolerance of failure - Propensity for risktaking - Secretiveness - Persecution of people who speak up (whistleblowing) - Recklessness - Ruthlessness - Being a bullying leader - Egotism - Self-promotion - Insensitivity to the company culture - Single-mindedness - Irrational behaviour - The leader’s integrity - Inability to align key functions and their responsibilities in the face of rapidly changing environments - Conflicts between functions - Gaps in responsibility - Appointing large numbers of insiders on boards - Having a wrong structure of board oversight committees which is conductive to fraud - Lack of strong financial controls - Deficient internal control systems - Weak IT systems Questions to probe whether the company culture supports good governance Questions to assess the governance abilities of leaders Questions to judge whether the organisational alignment of capabilities is conductive to stronger good governance Questions to judge whether the structure is conductive to good governance Questions to review the existing systems and their contribution to control, reporting and risk management - Are the company beliefs and values openly articulated in mission statements, and do these include ethical concerns? - Does the culture temper drive for - Is the leadership considered charismatic and processing extraordinary powers? - Does the leadership show an absence of reflection and unrealistically assess - Do the company’s recent actions and performance show evidence of unfocused and misaligned priorities? - Do the board, senior executives and top - Are the roles of chairman and CEO combined? If so, how are any conflicts of interest managed? - Is there an appropriate degree of diversity, and are - Does the company have an effective and standardized system of internal controls and financial reporting? - does the company regularly assess changes in the 4 entrepreneurship sand success with a tolerance of occasional failure? - Do employees feel free to bring problems to executives without fear of adverse consequences? - Is the organisation unduly concerned with meeting short-term earnings targets, and are fear and extreme pressure associated with missing numerical goals? - Do incentive plans in any way encourage or condone unacceptable unethical and illegal behaviours? opportunities and constraints in the business environment? - Are leaders committed to developing the highest standards of corporate governance, managerial judgement and independence of mind in their followers? - Does the leadership show sensitivity to the needs of all important organisational stakeholders (internal and external)? - Does the board ensure leader are measured and motivated not only by stock valuations, but also by longer-term strategic and ethical considerations? management teams collectively have an understanding of the best practices in corporate governance and internal reporting and how these may be aligned? - Have the responsibilities of senior executives and governance committees been properly aligned to ensure compliance with regulations? - Is there a regular communication between internal auditors, external auditors and senior executives? - Do strategic planning processes encourage an appropriate balance of conservatism with entrepreneurship and risk avoidance with opportunity seeking? outsiders on the board? - Does the organisational structure provide an effective system of checks and balances for governance and strategic decisionmaking? - Are there strong roles for internal auditors with an appropriate structure of reporting to senior executives and board committees? - Is the responsibility for assessment of internal controls structured throughout the organisation? business and regulations environments that have an effect on internal control systems? - Is the organisation attempting to improve strategic risk management? - What systems are currently in place to identify, assess, and mitigate risks across the organisation? - Is the organisation attempting to implement a framework and systems for IT governance that will be acceptable? How to address critical cultural weaknesses How to address critical leadership weaknesses How to improve alignment How to improve structure - Implementing new and stronger controls - Restructuring incentive systems - Educating employees - Creating communication programmes - Providing individual and team coaching - Using values-based leadership - Setting an example - Establishing clear expectations of ethical conduct - Providing feedback, coaching and support regarding ethical behaviour - Recognising and rewarding behaviours that support organisational values - Being aware of individual differences among subordinates - Establishing leadership training and mentoring - Ensuring strategymaking processes, aligning performance objectives with risk propensity and regulatory demands on the firm - Aligning organisational changes and structural redesign with regulatory compliance and desired ethical standards of behaviour - designing new information and knowledgemanagement systems to support enterprise management - Creating new senior management integrating roles - Training and developing management to raise awareness about compliance issues throughout the organisation - Understanding the changing nature of risk organisations face as they grow and evolve - Understanding how major structural transformations lead to changes in strategic risk exposure - Designing improved strategic risk management practices into structural change programmes QUESTION 5 5.1 Chamine identifies four types of intranet sites. Discuss each site briefly. Brochureware – Normally t the launch of a website, a company posts most of its written materials on the site and consequently uses the site as an electronic bulletin board. Under these circumstances employees are bombarded with a great deal of information. For a busy employee who is looking for a simple piece of information, this can be very time consuming and frustrating. Under these conditions, this format does not take advantage of the integrated, interactive, and personalised capabilities of web technology. Transactional – When the enormous potential of the intranet is appreciated, by allowing employees to conduct 5 transactions online, the site moves up in capability. Typical online transactions include changing personal information, registering for courses, submitting expense reports, reviewing vacation information and leave, reviewing and updating benefit selections, and applying for other jobs in the company. New types of technology have enabled the creation of truly engaging, easy-to-use applications for self-service. Integrated – Here multiple sites are linked together to create a seamless experience for the user. The challenge at this stage s how to integrate the various services in a way that makes sense to employees. Personalised – The ultimate goal is to create a truly individualized experience for each user by providing unique content based on the person’s profile: Is this person a manager, a supervisor or hourly worker? In what region does he work? To which benefits package is he entitled? What are the person’s unique skills, motivations, and objectives for career advancements? 5.2 Common barriers to change are rooted in three main areas. Discuss briefly. System barriers Leadership/Management barriers Human dimension barriers - Differing organisation values - Dysfunctional culture - Organisational immune system - Supervisors attempt to change employees when, in fact, the system may need changing - Ineffective policies or procedures -Employees are not involved in decisionmaking - The change initiative team isn’t communication appropriately - Insufficient resources (human, technical, financial, etc) to support the change - Internal conflict over resources - Inability or unwillingness to handle resistance when it occurs. - Lack of skill or ability necessary to effectively implement change - Poor or short-term leadership - The change is ill-conceived (eg seen as a quick fix or as a solution to a symptom – not to the actual problem) - Lack of management support or commitment to change - Lack of trust between management and employees - No one is in charge or accountable - Differing organisational values - Lack of agreed-upon organisational vision, mission or strategy - Dysfunctional culture - Faulty assumptions regarding change - Few leaders or managers understand the complexities of the change process, implementation techniques, or human reactions to change - The change is poorly implemented (eg lacks structure, planning, resources, etc) - Organisations fail to identify and mitigate potential barriers (including people) to the change - Supervisors/managers attempt to change employees, when, in fact, the system may need changing - Managers and executives are often powerful resistors while employees are often blamed - Employees are not involved in the decision making - The change initiative team isn’t communicating appropriately - lack of consequences for inadequate performance - Lack of rewards for change - The change is conceived, implemented, and managed from a purely technical stance and without understanding of the human influence on its success or failure - Insufficient resources (human, technical, financial, etc) to support the change - Internal conflict over resources - Inherent human resistance to change - Lack of skill or ability necessary to effectively implement change - Faulty assumptions regarding change 5.3 Discuss the important challenges that management and HR professionals face when virtual organisations are being developed. Managers Perspective Effective communication & planning will need attention as the face-to-face approaches disappear. Managers and team members will have to form clear agreements from the outset regarding issues such as performance expectations, team priorities, communication links and resource allocation. Other problems that may arise include misunderstandings and misinterpretations as a result of email correspondence. The redistribution of power within the organization can also be problematic. As a result of computer networks, faster decision making and easier access to company information are also possible. HRM perspective Approaches to recruitment and career development will change rapidly – more companies use the internet to match jobs and candidates. Easy access to relevant information will mean that individuals will also be able to plan their own career moves within the company, thus utilizing the available talent to the benefit of both the company and the individual. 6 With multiple teams, rigid, traditional job description will also have to disappear. Competencies should be organized into menus that individual teams can use to describe their work and conduct people practices. With workers at distant sites, problems can also arise regarding the appraisal system and the manner in which employees are compensated. HR Manager will have to devise innovative methods to address these unique situations. 5.4 Provide three reasons why virtual teams have become important. OCTOBER/NOVEMBER 2013 SECTION A – CASE STUDY QUESTION 1 Read the following case study and then answer the questions that follow. Tsui’s (1987 & 1992) view on the concept of strategic human resource management is as follows: “it tends to focus on organisation-wide human resource concerns and addresses issues that are related to the firm’s business, both short term and long term. It is particularly useful for designing specific human resource programmes, policies, systems or management practices at the organisational or business level” According to Dyer and Holder (1988), strategic human resource management consists of three major tasks:  Enduring that the HR issues and implications of various alternatives or proposals are fully considered  Establishing HR goals and action plans – that is, HR strategies (at all levels) – to support the business strategies  Working with line managers as principal clients to ensure that established action plans are indeed implemented. 1.1 Discuss the implications of the adoption of an e-business strategy on the strategic role of HR (use Tichy’s model as a point of departure). The technical system - Mission and strategy – here the traditional tasks of designing a mission and strategy must take place. Through this process the organisation identifies the types of products to manufacture or services to provide and allocates resources to make this possible. - Organisational structure – the organisation designs its structure in such a way as to make the organisation function properly. - HRM – this entails placing individuals properly in posts, determining performance levels and outputs and developing career and development processes and criteria for filling present and future posts in the company. The political system - Mission and strategy – it is important to determine who will be responsible for the mission and strategy or who will play the most important role in influencing it, eg all the heads of departments, or only the vice-presidents of the company. After the mission and strategy have been accepted, the next step is their physical execution. The strategy might involve establishing new businesses, selling-off present ones or amalgamating two businesses. All these decisions can influence – either negatively or positively – the employees and their jobs. These decisions entail the allocation of resources and budgets and can even have an effect on the quality of relationships between employees. - Organisational structure –the second issue in the management of the political system is the organisational structure. At the technical level, we looked at how the organisation will be structured, here we shall consider how power will be distributed throughout this structure. In other words, we shall discuss how much power individual division or departmental heads will receive with regard to control over their budgets and their employees. - HRM – the HR system must fit with the political system within the organisation. Issues like the following will have to be addressed: who will be promoted or not, how the compensation system will be designed, what benefits will be available, and who will be evaluated, by whom and on what grounds. The cultural system - Mission and strategy – the organisation must address two issues here: the impact of the mission and strategy on the culture of the organisation and the type of culture management desires. This is vital for success. - Organisational structure – the organisation structure must address a number of elements in the cultural system. The first is the development of a management style to fit the technical and political structure developed within the organisation. For example, a company moving from a functional structure to a matrix structure needs an open management style instead of a closed one. The second is the development of different sub-cultures within the organisation – for example the production division need a cost-effective culture, while the research and development division needs an innovative and creative one. The important issue her is the management of different cultures within the structure. - HRM – the HRM system provides the final aid in the management of the cultural system, and must be used to develop work-orientated cultures within the organisation. For example, the company’s training and development processes can enhance these cultures, and compensation can nurture and develop them (for example by promoting those whose culture supports the goals of the organisation). 7 1.2 Describe the role HR should pay in assisting to gain a competitive advantage. Resource-based paradigm - HR system can contribute to sustained competitive advantage by facilitating development of competencies that are company specific - Biggest problem is employee turnover - Design and implement turnover management strategies - Allocate bigger portion of profits to employees y means of gainsharing or share options - Culture of belonging can be created - Alignment of individual interest with organisational goals important (1) Degree to which behaviour helps individuals to meet their goals (2) Relevance of each organisational goal to individual - High level of interest alignment realised at three levels of motivation by three interest-alignment levers (1) Extrinsic motivation – most directly influenced by reward system , includes issues such as power and recognition (2) Hedonic intrinsic motivation – enjoyment individual experience in completing task (3) Normative intrinsic motivation – driven by goal of engaging in behaviour that is compliant with norms/values of organisation - Alliance partners can play a significant role through network resources - Services that resources provide, not resource themselves that generate value for company Best-practices paradigm - Implies direct relationship between particular HR approaches and company performance - Bundles/systems of HR practices have more influence on company performance than individual practises - Impact of HR practices on company performance may be enhanced when practices are matched with competitive requirements inherent in company’s strategic posture - Three primary perspectives: (1)Universal approach – assumes certain best HRM practices will contribute to performance of company, regardless of strategic goals of the company (2) Contingency approach – attempts to link HRM systems/practices to specific organisational strategies (3) Configurational approach – pattern of HRM practices/systems that contributes to attainment of organisational goals - Seven practices consistently considered to be strategic in nature: (1) Internal career opportunities (2) Formal training systems (3) Appraisal measures (4) Profit sharing (5) Employment security (6) Voice mechanisms (7) Job definition Process paradigm - Anchored in both resource-based view (RBV) and best-practice theory - HRM processes deeply embedded in company-specific dynamic routines by which company attracts, socialises, trains, motives, evaluates, compensates its HR - HRM processes continuously evolving/adapting by drawing on past experience to refine effectiveness of processes to meet changing needs of organisation - HRM processes about how things are done, not what is produced QUESTION 2 Read through the following case study and then answer the questions that follow. National Medical-Mail Solutions: Leadership, Management and change National Medical-Mail Solutions (NMMS) is a reputable medicine mail-order pharmacy which operates in the South-African health care arena. The vision of the company is to realise significant returns on stakeholders’ investments by marketing health care products in an entrepreneurial and innovative fashion, which is sensitive to the needs and requirements of all health care stakeholders the company is aimed at benefiting strategic health care partners, customers and employees. NMMS’s mission is to provide an integrative health care solution to the strategic health care partners by reading, anticipating and responding successfully to unfolding macro-environmental health care trends, resulting in increased sustainability and profitability for all stakeholders in a responsible and unassailably moral and ethical manner. At the end of 2010, the CEO of NMMS, Mr. Van Niekerk died in a tragic car accident. No succession planning was in place and HR had to start from scratch and recruit a new CEO for NMMS as no one in the company had the relevant experience and qualification to take over his role. After advertising the position, HR short-listed 4 potential candidates. The short-listed candidates were black males only. They were all invited for the interviews. Each candidate was interviewed by a different HR manager of NMMS and the interviews were loosely structured. In addition to the interview, the applicants were asked to undergo HIV testing. After the screening process, Mr. Clive Kgaugelo was selected and appointed as the new CEO of NMMS. 8 Mr. Clive Kgaugelo is more output-driven tan people-orientated. The appointment of Mr. Kgaugelo was an excellent strategic decision, because the company’s outputs and profits increased threefold, but the employee morale and overall job satisfaction plummeted to an all-time low, which furthermore resulted in an increased turnover rate. Management and the employees displayed an “us against them” mentality. Thandi Azzini, the Human Resource Director, wanted to change the situation by solving these problems. She wanted NMMS to provide the best services to their customers and she wanted the employees to be motivated and be satisfied in their positions. To achieve this mission, Thandi arranged a meeting with Mr. Kgaugelo – her concerns were put on the table and she made various suggestions and recommendations. After due consideration, Mr. Kgaugelo made some important changes. Mr. Kgaugelo developed five guiding principles that he wanted to become shared values, namely outcome orientation, customer orientation, innovation, integrity and trustworthiness. Meetings were held with the employees to tell them about the vision, mission and values that he wanted them to share. Mr. Kgaugelo also promised the employees that he would change his management style to include the employees in the company processes. He stressed the need for change especially “the way things are managed and done around here”. As a result of the meeting, the employees were then called associates and they were required to provide input and make suggestions to any problems that they were experiencing in the organisation. Managers were trained in employee-involvement management, and through training they developed skills to include employees in decision-making, to develop teams, to develop better human relations, to coach employees, and to manage time better. The associates, together with their line managers (supervisors), were given the authority to make their own decisions in their respective departments and set their own performance goals. Mr. Kgaugelo therefore increased employees’ responsibilities to ensure that they feel valued and part of the organisation. Within two years, 70% of employees formed voluntary teams. Each team represented specific department of the organisation. The organisation furthermore started holding several team-building sessions, picnics and parties every year to show their appreciation to all its associates. The “Going for Gold” reward programme was implemented to recognise and reward deserving associates and their teams for outstanding work. An awards ceremony was to be held annually, and the top achieving associate would win herself and her team an all-experiences-paid trip. The organisation’s new vision, mission and management style changed the ways NMMS do business and in 2012 the company was named the best employer to work for. 2.1 Is Mr. Kgaugelo a manager or a leader? Motivate your answer. MANAGEMENT LEADERSHIP - Means creative problem solving - Works within the paradigm - Works within a system - Sets people and “things” in motion by means of methods and techniques - Uses people as means - Means an attitude of doing - Means alertness to opportunities - Imagination and vision to capitalise on them - Creates a new paradigm - Works on the system - Is a natural unforced ability to inspire people - Requires respect and a genuine interest in people - Means attitude of serving 2.2 Did HR follow ethical guidelines during the selection process of the new CEO? Motivate your answer by discussing the ethical issues that may arise within the traditional HR activity of employee selection. The key ethical issues in managing the promotion of employees, is fairness. The difficulty is in determining the criteria that should be serve as the basis for fair promotion procedures. While there is debate over how much weight should be given to the criteria of seniority and job qualifications, it is widely recognized that promotion should normally be on the basis of job-related criteria, especially performance, and that employees should not be discriminated against on the basis of inappropriate criteria such as gender, race and religion. Employees may not have a right to promotion, but they do have a right to fair evaluations and consideration for promotion. They also have a right to be informed of the reasons for lack of promotion in those situations where it might reasonably be expected. Promotion is one more example where HR practitioners are challenged to “merge dual responsibilities in a way that is beneficial to the firm and fair to all concerned. SECTION B – ESSAY QUESTIONS QUESTION 3 3.1 Briefly define and discuss the concept of flexibility. "Flexibility is about an employee and an employer making changes to when, where and how a person will work to better meet individual and business needs. Flexibility enables both individual and business needs to be met through making changes to the time (when), location (where) and manner (how) in which an employee works. Flexibility should be mutually beneficial to both the employer and employee and result in superior outcomes." - Formal flexibility policies are "officially approved human resources policies, as well as any official policies that give supervisors discretion to provide flexibility." - Informal flexibility refers to "policies that are not official and not written down but are still available to some employees, even on a discretionary basis." - While most formal work arrangements can usually be identified, organizations acknowledge that utilization statistics probably underestimate the true reach and impact of flexibility, as they cannot accurately determine the extent of 9 informal flexibility—for example, employees who occasionally alter their work hours or work from home. 3.2 Briefly discuss ten organisational and management practices organisations can use to determine whether they are ready for flex work (flexible work arrangements). 1. Policy – Are the specific policy and strategy statements approved and communicated by top management that endorse flex work as a component of the employment relationship? 2. Employee commitment – How deeply are employees committed to the success of the organisation’s mission and to high achievement in their own jobs? 3. Management commitment – Do the actions of management as well as its communications to employees reinforce management’s support for flex work? 4. Workforce planning – How good is the organisation at forecasting projects, deadlines, production quotas, and workloads? How good is it at scheduling workforce needs, and at allocating resources? 5. Technology – Are information-technology and communication systems in place to support flex work in smooth, efficient, consistent ways? 6. Training and orientation – How effective are training content and delivery mechanisms for meeting the ongoing needs of flex workers? 7. Teamwork – To what extent is work done in teams, and is there sufficient coordination to ensure coverage and to compensate for having team members on different schedules? 8. Performance management – Are there methods for performance measurement, employee appraisal, and staff development that are equivalent, if not identical, for flex workers and others? 9. Decision making – Who holds decision rights and makes key decisions in the course of everyday work? 10. Communication and information dissemination – How effective are the means, media, and frequency of communication of everyday business information and are those processes robust enough to keep flex workers in the loop? 3.3 Briefly discuss the four perspective of the Balanced Scorecard. A customer perspective - How do customers see us? - Manager’s measures lead time, quality performance, service and cost. - Companies articulate goals for components of time, quality, performance, service and cost. - Translate goals into specific measures. An internal perspective - What must we excel at? - Determine processes and competencies that are most critical for the company. - Specify measures for components such as cycle time, quality, employee skills and productivity. - Articulate goals for cycle time, quality, employee skills, productivity. - Translate goals into specific measures An innovation and learning perspective - Can we continue to improve and create value? - Monitor company‘s ability to launch new products, create more value for customers and improve operating efficiencies. A financial perspective - How do we look at shareholders? - Managers measure cash flow, quarterly sales, growth, and operating income by division, return of equity. - Companies articulate goals for these components. Financial goals have to do with profitability, growth and shareholder value. - Translate goals into specific measures. - Financial performance measures indicate whether the company’s strategy implementation and execution are contributing to bottom-line improvement 3.4 What is the strength of the Balanced Scorecard? QUESTION 4 4.1 Briefly define and discuss the concept of talent. Talent is the employees and their skills and knowledge. Talent will always be the scarcest of scarce resources - it is what companies compete for, depend on, and succeed with in today's highly competitive business environment. Insofar as talent is the greatest competitive instrument, skills, competencies, and aspirations are its building blocks. 4.2 Outline how a talent mindset differs from the old view of management. Old talent mind-set New talent mind-set 10 A vague notion that “people are our most important asset” A deep conviction that better talent leads to better corporate performance HR is responsible for people management All managers are accountable for strengthening their talent pool We do a two-day succession planning exercise once a year Talent management is a central part of how we run the company I work with people I inherit I take bold actions to build the talent pool I need 4.3 Discuss the benefits and disadvantages of implementing e-learning within a company. Benefits Disadvantages - High degree of interaction between the learner and materials - Understanding can be assessed before the learner moves on - Feedback can be tailored to the learner’s decisions - Topics can be accessed in an order suits the learner 0- Potential for adapting the learning style to the user’s needs - Relatively easy to update text and graphics - Ready means of testing - Standardised form of training - Attractive to many learners - Learner can use material at his own pace - Computer aided learning programmes are flexible regarding usage time - The possibility of using different kinds of material - Requires specific equipment to run the programmes - Access to a computer is needed for each learner - Development time can be high - Specialist expertise may be required to design and write the programme - Hardware may be expensive - Not good at conveying attitudes or behaviour - Some learners find it difficult to read text from a screen - Can be inappropriate as a single medium for longer applications - Learner may be unable to comprehend learning material - Learning process cannot be followed of modified by tutor following production - Learning programmes may be unreliable - High-level infrastructure and equipment needed. Time spent on studies is reduced, meaning less time spent away from the workplace 4.4 Discuss the important challenges facing management and HR professionals regarding the development of virtual organisations. Managers Perspective Effective communication & planning will need attention as the face-to-face approaches disappear. Managers and team members will have to form clear agreements from the outset regarding issues such as performance expectations, team priorities, communication links and resource allocation. Other problems that may arise include misunderstandings and misinterpretations as a result of email correspondence. The redistribution of power within the organization can also be problematic. As a result of computer networks, faster decision making and easier access to company information are also possible. HRM perspective Approaches to recruitment and career development will change rapidly – more companies use the internet to match jobs and candidates. Easy access to relevant information will mean that individuals will also be able to plan their own career moves within the company, thus utilizing the available talent to the benefit of both the company and the individual. With multiple teams, rigid, traditional job description will also have to disappear. Competencies should be organized into menus that individual teams can use to describe their work and conduct people practices. With workers at distant sites, problems can also arise regarding the appraisal system and the manner in which employees are compensated. HR Manager will have to devise innovative methods to address these unique situations. QUESTION 5 5.1 Chamine identifies four types of intranet sites. Discuss each type of site briefly. Brochureware – Normally t the launch of a website, a company posts most of its written materials on the site and consequently uses the site as an electronic bulletin board. Under these circumstances employees are bombarded with a great deal of information. For a busy employee who is looking for a simple piece of information, this can be very time consuming and frustrating. Under these conditions, this format does not take advantage of the integrated, interactive, and personalised capabilities of web technology. Transactional – When the enormous potential of the intranet is appreciated, by allowing employees to conduct transactions online, the site moves up in capability. Typical online transactions include changing personal information, registering for courses, submitting expense reports, reviewing vacation information and leave, reviewing and updating benefit selections, and applying for other jobs in the company. New types of technology have enabled the creation of 11 truly engaging, easy-to-use applications for self-service. Integrated – Here multiple sites are linked together to create a seamless experience for the user. The challenge at this stage s how to integrate the various services in a way that makes sense to employees. Personalised – The ultimate goal is to create a truly individualized experience for each user by providing unique content based on the person’s profile: Is this person a manager, a supervisor or hourly worker? In what region does he work? To which benefits package is he entitled? What are the person’s unique skills, motivations, and objectives for career advancements? 5.2 Common barriers to change are rooted in three main areas. Discuss these briefly. System barriers Leadership/Management barriers Human dimension barriers - Differing organisation values - Dysfunctional culture - Organisational immune system - Supervisors attempt to change employees when, in fact, the system may need changing - Ineffective policies or procedures -Employees are not involved in decisionmaking - The change initiative team isn’t communication appropriately - Insufficient resources (human, technical, financial, etc) to support the change - Internal conflict over resources - Inability or unwillingness to handle resistance when it occurs. - Lack of skill or ability necessary to effectively implement change - Poor or short-term leadership - The change is ill-conceived (eg seen as a quick fix or as a solution to a symptom – not to the actual problem) - Lack of management support or commitment to change - Lack of trust between management and employees - No one is in charge or accountable - Differing organisational values - Lack of agreed-upon organisational vision, mission or strategy - Dysfunctional culture - Faulty assumptions regarding change - Few leaders or managers understand the complexities of the change process, implementation techniques, or human reactions to change - The change is poorly implemented (eg lacks structure, planning, resources, etc) - Organisations fail to identify and mitigate potential barriers (including people) to the change - Supervisors/managers attempt to change employees, when, in fact, the system may need changing - Managers and executives are often powerful resistors while employees are often blamed - Employees are not involved in the decision making - The change initiative team isn’t communicating appropriately - lack of consequences for inadequate performance - Lack of rewards for change - The change is conceived, implemented, and managed from a purely technical stance and without understanding of the human influence on its success or failure - Insufficient resources (human, technical, financial, etc) to support the change - Internal conflict over resources - Inherent human resistance to change - Lack of skill or ability necessary to effectively implement change - Faulty assumptions regarding change 5.3 Briefly discuss the four components of the Workforce Scorecard. Workforce success – this is the most important dimension of the workforce scorecard because it captures the ‘bottom line’ of the workforce performance. These are the measures that reflect how well the workforce has contributed to the execution of the company’s strategy. Typical measures here include the number and quality of customer complaints, the number of new distributors, and the response time for customer inquiries. Workforce mind-set and culture – the question in this area is two-fold: does the workforce understand the company strategy, and dos the culture within the organisation support the execution of this strategy? Organisations create norms and expectations that the workforce needs to understand. This creates the culture of the organisation, which ultimately shapes the employees’ behaviour. Managers can never consequently measure and assess this culture in terms of its impact on the company’s strategic success. Typical measures to use here include the extent to which the average employee can describe the company’s HR strategy, and the extent to which employees take pride in working for the company. Workforce competencies – the question in this area is: does the workforce have the skills it needs to execute this strategy? The competencies represent the knowledge, skills and ability each employee possesses, and can also be measured and monitored. Typical measures here include the effectiveness of information sharing among departments, the exposure of cross-functional job experiences, and the extent of organisation learning. Leadership and workforce behaviour – the question in this area is: are the employees consistently behaving in a way 12 that will lead to the achievements of the company’s strategic objectives? To execute the strategy, leaders and employees must behave in ways consistent with the strategy. These types of behaviour can be defined and measured to ensure that leaders and employees do what the strategy suggests needs to be done. Typical measures here are effectiveness in dealing with poor performers, percentage of employees making suggestions, and percentage retention of core-competency workforces. 5.4 Briefly discuss the alternatives to expatriation. Doing it cheaper: Alternatives to expatriation - negotiate more toughly - employ expatriates on local terms and conditions - use of third country nationals - short term assignees - international commuters - development of technology - cheapest option is to employ locals MAY/JUNE 2014 SECTION A – CASE STUDY QUESTION 1 Read the following case study and then answer the questions that follow. MEGAMASH MegaMash, a large manufacturing company in South Africa, has been in business for the last sixteen years. MegaMash has several smaller branches in India, China, Hawaii and Australia. An administrative position has recently opened in China. The administrative matters in China have been chaotic for the last couple of years and Dave Darbis, the executive vice-president of MegaMash, decided to fill the administration position in China with someone who has a lot of experience with the current systems that MegaMash use. Dave approached Joe Summers (the current administrative assistant) to relocated to China for two years to fill the position as a senior administrative assistant and to train local junior assistants to take over the position. Joe was chosen because he is a n exceptionally effective administrative assistant who has worked for the company for 10 years and has experience of all aspects of the complex systems that MegaMash use. Dave offered Joe a generous expatriate relocation package that includes pre-departure language and cross-cultural training for him and his family, a 30% increase on his salary, a bonus after he successfully finished the assignment of training the new assistants, a housing allowance, assistance with tax preparation, full medical aid and subsided tuition for his children at an international school. Joe and his family had several discussions regarding whether he should accept the offer or not. While Joe and his family has taken some international vacations to Bali, Rome, London and some other European cities, none of them had ever set foot in China or any other Asian country for that matter. Two weeks later Joe informed Dave that he accepts the offer and would relocate immediately. The administrative position in the South African branch therefore became vacant immediately. Alicia Darbis recently graduated from university with a degree in business management. Alicia was quite clever, although her results did not reflect this. She had thoroughly enjoyed school and university, dating, playing netball and hockey, but found few stimulating academic avenues. After graduation she did not make any attempt to find a job. Her father (Dave Darbis) was very upset when he discovered this, and took it upon himself to see that Alicia find employment. He approached Sue, the human resources officer who dealt with the appointments at the company, and asked her to find a job – any job – for his daughter at the company as soon as possible. Sue had just finished interviewing candidates for the administration position when Dave phoned her. She already identified the perfect candidate. Thabi who had excellent administrative credentials and was able to commence duty immediately – she would be perfect for the position. Sue asked Dave to send Alicia to her office for an interview. Alicia went, at the instruction of her father, and before she left the building she was surprised to learn that she had been selected as the new senior administrative officer at MegaMash. Alicia realised that she had been appointed because Sue hoped that she might get extra perks or promotion opportunities from Dave. After Alicia’s appointment, Sue had a tough decision to make (1) disappoint Thabi or (2) appoint her as Alicia’s subordinate. After careful consideration Sue offered Thabi the position of junior administrative assistant. Thabi was surprised by this offer, during the interview Sue had expressed the opinion that Thabi would make an excellent senior administrative officer, because she had the relevant experience, skills and qualifications. In Sue’s words “You will be able to deal with the administration of this department all by yourself with your qualifications”. Despite the disappointment about the seniority and compensation of the position, Thabi accepted the offer. The new recruits were scheduled to start on 1 April, however it did not take the employees in the department long to discover why Alicia had been appointed. When a difficult task was assigned to Alicia, she asked Thabi to dot it, suggesting that the department head would be please with her if she helped out. In the end Thabi did most of the work that Alicia was responsible for, while Alicia received all the credit. Alicia developed a pattern of coming late, taking lon