Table of Contents

Question 1: Management of Human Resource environment at Dell...............................2Four SHRM functions in place at Dell.....................................................................................2

Designing satisfactory work and maximizing customer service............................................3

Question 2: Acquisition and preparation of employees at Dell........................................5

Question3: Assessment, development and management of employees at Dell.................9Measuring employee’s performance.........................................................................................9

Preparing employees for future work roles...........................................................................10

Question 4: Compensation system...................................................................................13

Bibliography......................................................................................................................16

Question 1: Management of Human Resource environment at Dell

Strategic Human Resource Management (SHRM) is the pattern of planned HR deployments and activities intended to enable an organisation to achieve is goals.(Noe, Hollenbeck, Gerhart&Wright,2008:69). It is the management of an organisation most valuable asset, PEOPLE, based on the business strategy. SHRM is therefore shaped by the overall business strategy.

Four SHRM functions in place at Dell

1. Acquisition: consists of HR planning, recruitment, selection of new members (talent) for an organisation. The SHRM strategy of Dell is to recruit top performers to sustain the competitive edge of having a highly skilled and motivated workforce. The BEE strategy

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at Dell is a genial plan that allows the organisation to attract top performers into its business.

2. Development: consists of putting in place various trainings (on a short or medium-term) and development plans (long term) for employees. Before puting in place or revising training programs and development plans for employees, they need to be assessed through a performance management system. Being part of the technology industry, Dell relies on skilled workforce to achieve its objective of being one of the leading PC vendors in the world. To ensure continuous skill upgrading (for example, sales skills, technical skills), Dell has an individual development plan for each of its permanent employee. Employee development plan at Dell also helps the organisation to achieve its objective of high quality direct customer relationship. This is of utmost importance since Dell uses the direct sales business model which results in substantial cost-savings.

3. Motivation: performance management information at Dell also help determine pay raise, promotion, recognition. The “motivation function” of SHRM determines which compensation structure is provided to employees so that they feel motivated in doing their job. Employees at Dell are motivated through high rewards for good performance.

4. Maintenance: the “maintenance” function of SHRM consists of implementing employee benefits and services which commensurate with the expectation of employees and at the same time motivate them to make the necessary efforts to achieve an organisation objectives. This function also consists of the management of employee/ employer relations and career management.The SHRM strategy at Dell is to offer big-company benefits to employees, spouses and children. Top performers are given a sound career path and opportunities to develop their skills.

‘Employee relations’ is a common title for the industrial relations function within personnel management and is also sometimes used as an alternative label for the academic field of industrial relations. The term underlines the fact that industrial relations is not confined to the study of trade unions but embraces the broad pattern of employee management, including systems of direct communication and employee involvement that target the individual worker.” (Heery & Noon, 2001)

Employee/employer relations are managed through open communication channels. Climate surveys are done twice a year at Dell as a tool whereby employees can express themselves, monthly newsletters are sent to employees and the managing director meets with groups of employees each month to hear their views. Therefore, at Dell communication with employees is constant and information gathered from them, whether from surveys or meetings, is used to increase productivity.

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One legal factor which affects Dell HR environment is the employment equity act which requires South African organisations to develop employment equity plans. The employment equity plans serve to provide a mechanism to introduce individuals from previously disadvantaged groups into organisations (RSA,1998a). This act which can be an issue has been adopted in a positive and innovative way at Dell through its BEE strategy.

Designing satisfactory work and maximizing customer service

Job design is the process of defining how work will be performed and the tasks that will be required in a given job (Noe et al, 2008:166). In my opinion, Dell uses the motivational approach to job design. The motivational approach focuses on job characteristics that affect psychological meaning and motivational potential and it views attitudinal variables as the most important outcome of job design.

Being in a very competitive industry, Dell recognizes the fact that job design needs to satisfy the employee and affects the latter’s performance. An appropriate job design positively impacts the output of an employee and hence, contributes to help Dell achieve its objective of being one of the leading PC vendors. Since Dell has a direct sales model, it is of utmost importance to maintain a high level of motivation among its employees as this impacts the direct one-to-one relationship with customers that Dell commits to.

Dell has a relatively flat structure, therefore communication is quite rapid. Employees can make decisions quickly and also have a certain degree of freedom in their action. This in turn empowers them and gives them a high level of internal work motivation. Motivation in turn contributes to high productivity, high quality of customer service and output which are free from errors and significant variations.As per the managing director, Stewart Van Graan, Dell has made changes in how they listen and interact with their customers. This implies that Dell recognizes the fact that to have a faithful customer base, high quality customer service is of utmost importance.

Through the different social projects of the Dell foundation, Dell volunteers can see the importance of their day-to-day job; for example, when they donate computers to poor communities, they can experience the meaningfulness of what they do daily. This in turn motivates them to perform and as mentioned in the case study, Dell employees are rewarded for good performance.

The motivational approach focuses on increasing the meaningfulness of jobs through such interventions as job enlargement, job enrichment and the construction of jobs around the sociotechnical systems (Noe et al, 2008:170). Dell also implements this by identifying top performers each year and embarks them on an accelerated development plan to develop future leaders. Moreover all employees have an individual development plan.

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I will suggest that Dell also uses the biological approach to job design in addition to the motivational approach.To sustain the workforce, it has become important to ensure a hazard-free and safe environment, and it has been embraced by managers that a safe working environment can result in greater efficiency and productivity. Jobs must be designed in such a manner that musculoskeletal disorders do not happen. Tools and equipment must be designed with the worker in mind and for the job being performed (Garg& Rastogi, 2006:579).

Dell being in the technology industry should be having a considerable number of employees working as IT technicians. These technicians assemble computers and servers. They are on their feet almost the whole day and can suffer from physical strains, fatigue and health problems. Tea breaks and redesigning equipments (for example, use of ergonomic keyboards and chairs) for a more worker friendly environment will increase productivity at Dell.

Question 2: Acquisition and preparation of employees at Dell

The acquisition and preparation of potential employees at Dell is a process of utmost importance as Dell relies highly on a pool of skilled and motivated employees to achieve its objectives of expanding in emerging markets, growing in the corporate and small-medium enterprise markets and ensuring the continuity of its one-to-one relationship philosophy. Dell’s motivated workforce is its competitive edge. In order to sustain this competitive advantage that allows the organisation to expand in the global marketplace, Dell needs to recruit top performers into its business.

HR planning ensures that there is enough labor with the right skills doing the right job at the right time to achieve an organisation’s goals.

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Figure 1: the Human Resources Planning Process (Noe et al, 2008:186)

In the first phase of HR planning, forecasting determines labor demand and supply. At Dell, The employees’ bi annual performance review helps to; forecast the labor demand of the organisation, identify critical roles, identify exportable talents and business key talents. In the second phase programmes and strategies are then devised based on the forecast results. At Dell, succession planning and leadership programmes are developed and forms an important part of Dell’s HR strategy. In the third phase, the programmes and plans are implemented and evaluated.One factor which affects HR planning at Dell is The employment equity act which requires south African organisations to develop employment equity plans ,ranging between one and five years. Organisations (RSA,1998a). This is implemented through the employment equity strategy at Dell.

Recruitment is the process whereby an organisation attracts potential employees with the aim of fulfilling existing or future vacancies.Recruitment activities should be carried out in such a way that it attracts people who are qualified for the job and who will most probably accept the job if offered.

From the case study, it can be seen that Dell recruitment policy includes both internal and external recruiting and through SHRM, is in line with Dell’s organisational policy of employment equity and diversity. Dell can also attract many potential employees because they are seduced by Dell’s corporate philosophy, culture, and commitment to the community and not only because of the “big-company” benefits offered to its employees. Since Dell SHRM strategy aims to recruit top performers, job advertisements should be devised in such a way to attract top caliber people in the business.

Forecasts of labor demand Forecasts of labor supply

Forecasts of labor surplus or shortage

Goal setting and strategic planning

Programme implementation and evaluation

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One recruitment source at Dell is internal recruitment. All job opportunities are advertised internally. Internal recruitment presents Dell with advantages such as the applicant’s character and performance is known, the adaptation period will be shorter and hence he or she can start working faster. This will in turn prove to be cheaper to Dell. The disadvantages of internal recruiting are that negative attitude are cultivated in a homogenous workforce who may not be eager to innovate, and a strong development programme is required. The latter disadvantage is taken care of at Dell by having a development plan for each employee and those identified as top performers follow an accelerated development plan.Another recruitment source at Dell is external recruitment whereby recruitment agencies, search specialists, postings on website are the means used. External recruitment is important when entry-level or specialized level positions need to be filled in. external recruits provide the advantage of bringing new ideas and increasing diversity. The disadvantage of external recruiting is that the new employee needs time to adjust to the organisation. Dell addresses this problem by giving an opportunity to new entrants on the job market to gain a year of hands-on experience. In addition to increasing his professional capabilities, the new entrant also has time to adapt to the culture of Dell.

Dell also practices e-recruitment where potential employees can easily search for different job categories in different parts of the world through the company’s website. Job applications can be made securely since every potential employee needs to create his own login and add jobs to his cart, just like the very popular shopping cart nowadays. E-recruitment has several advantages such as job adverts can be reached anytime, anywhere by anyone, advertising costs are reduced, there is no word limit to the length of the advert and it can be customized in any fancy format.

Selection is the activity through which an organisation evaluates and finally chooses the best applicant to fill a vacancy from a pool of applicants.

The selection process consists of 3 phases as depicted in Figure 2 below:

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Preliminary screening can be as simple as analyzing the application form itself.A selection method needs to be reliable, valid and legal. One of the most common selection tools is the “interview”, which is a face to face contact during which information is exchanged between the interviewer and the interviewee.Appointment is the phase during which the right applicant is chosen to fill the vacancy.

As says jack Welch, former CEO at general electric says: “what could possibly be more important than who gets hired. Business is a game, and as with all games, the team that puts the best people on the field and gets them playing together wins. It’s that simple.” (Noe et al, 2008:226)

Dell recognizes the fact that its workforce is its competitive edge and choosing the right candidate is vital as it affects Dell’s effectiveness to compete in the global market place. While applying any selection method, Dell should be able to test whether the candidate meets the typical profile of a Dell employee, i.e, whether he or she can work under pressure, is meticulous, independent, creative and passionate about his or her job.However, while using any method, Dell’s SHRM strategy also needs to take into consideration clause 8 of the Employment equity act of 1998 which states that “Psychological and other testing of job applicants is prohibited unless it can be proven that the test being used is scientifically valid and reliable, can be applied fairly to all employees, and is not biased against any employee or group (RSA,1998a).

Recruitment and selection at Dell is in line with employment equity which is an element of Dell Black Economic Empowerment (BEE) strategy. BEE, which is codified in the soul of Dell, “focus is about sustainable development and economic transformation in South Africa. Our bias is toward long term commitments to projects and initiatives that deliver real value and real benefits.” (The Soul of Dell,2004:3)

Preliminary screeningProvisional selection

InterviewApplication form

Selection methodsTesting

InterviewReference checking

Medical examination

APPOINTMENT

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Dell is committed in implementing BEE in the form of employment equity in all employment categories. This is an important factor which should be taken into consideration during the recruitment and selection process at Dell.

When a candidate, who is new to the job market, is appointed at Dell, he follows an induction programme. Induction is the process whereby an employee adjusts to his or her work and working environment.He or she benefits from opportunities provided by the Dell academy.For those entering the workplace, the programme offers the opportunity to obtain at least one year’s work experience within an IT environment, learning business skills, computer skills and life skills. The 10+ persons employed per annum, are free and assisted in pursuing employment outside the company after their tenure. (Soul of Dell, 2004:7)

As depicted in the above statement the new entrant does not follow a simple induction programme but gets a tailor made training which not only increases his or her knowledge and enhances professional skills but also life skills. Communication skills, self management, decision making skills are important for the personal and professional development of an employee. Dell recognizes the importance of these life skills in order for an individual to have a successful career.

To conclude, Dell invests a lot in its main asset, PEOPLE. For the recruitment process, I would also suggest that Dell advertises for vacancies in targeted journals and periodicals and television cable. The top performers who read these specialized journals can be attracted to job adverts at Dell even if they are not looking for a new job.

Question3: Assessment, development and management of employees at Dell

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Measuring employee’s performance

Performance management is the process through which managers ensure that employee activities and outputs are congruent with the organisation’s goals. (Noe et al, 2008:343)

At Dell, performance management strategy is aligned with the organisation’s strategy of having a highly skilled and motivated workforce as its competitive edge. Dell rewards those who show talent and competence for accomplished work. Therefore the performance management system at Dell is closely linked to the notions of meritocracy.

There are several approaches to performance management. While it is not mentioned in the case study which approach is implemented at Dell, we can say that performance management at Dell is definitely not modeled by the comparative approach and the attribute approach since both are little or not at all linked to an organisation’s strategy.

A suggested performance model that would be in line with Dell’s strategies is depicted in figure 3 (Noe et al, 2008:345) below

In this model an employee’s personal attributes are transformed into behavior (example: teamwork, integrity) which helps to attain objective results. The model also takes into consideration that situational constraints will impact the employee’s ability to achieve results. This model also shows that the organisational strategy drives the whole flow.

Dell may use the results approach to performance management. This approach is in line with the strategy of Dell. It bases itself on the fact that results are the best indicator of employee’s contribution to organisational success. Being in an aggressive business whereby Dell should strive to preserve its market share, results would be one of the best ways to measure performance. It is indeed mentioned in the case study that pressure and

Individual attributes(e.g., skills and

abilities)

Individual behaviours

Objective results

Situational constraintsOrganisational cultureEconomic conditions

Organisational strategyLong and short term goals and values

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rewards are both high at Dell , meaning that performance is rewarded at Dell and the employees may be working in a highly competitive environment, both internal and external.

A performance management system at Dell serves three purposes:

1. Strategic purpose: it ensures that the employees output is aligned to Dell’s goals and are meeting their performance goals. Increased employee performance allows Dell to accomplish its goal of being one of the leading PC vendors in the world.

2. Administrative purpose: it is mentioned in the case study that the company rewards top performers with bonuses (which is a variable pay given over and above an employee’s basic salary). Performance management enables the company to identify those top performers among all employees.

3. Developmental purpose: personal and career development for each permanent Dell employee is linked to the results of performance appraisal. To allow employees to perform in their current jobs, they are trained using different training methodologies such as presentation methods (ex: classroom training) and hands on methods (ex: on the job training, international training and work experience opportunities). Another form of informal training in place at Dell is mentoring. Mentoring is a process for the informal transmission of knowledge, social capital, and the psychosocial support perceived by the recipient as relevant to work, career, or professional development; mentoring entails informal communication, usually face-to-face and during a sustained period of time, between a person who is perceived to have greater relevant knowledge, wisdom, or experience (the mentor) and a person who is perceived to have less (the protege)" (Bozeman & Feeney, 2007).

Preparing employees for future work roles

It is vital for Dell to control change if it wants maintain or enhance value in its business and to face the global labor shortage One way of controlling change is to develop a succession planning strategy to fill in projected vacant positions. The future performance of Dell relies on today’s careful succession planning.

In addition to its contribution in setting a personal and career development plan for each employee, the performance management system at Dell also helps identify high-potential employees who will take up these future vacant positions, be it a lateral move or an upward move. Put simply, succession planning at Dell ensures that the right person is in the right job at the right time,i.e, it ensures sustainability.Upon identification of future positions, across all levels at Dell, that need to be filled, a pool of employees who can take the responsibilities associated with the positions are identified. Usually those employees would have displayed excellent performance and/or have an excellent academic background. They are then placed on a development plan

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and leadership programme after a skills and competencies gap analysis. A development plan consists of job assignments, education, executive mentoring and coaching. A Leadership programme enables the employee to set a direction and guide others to follow that direction. Both will help the employee to close the gaps identified in the gap analysis process. It is mentioned in the case study that employees are reviewed bi-annually, implying that those top performers are assessed periodically. The ones who have demonstrated good performance in their development experience will be retained to occupy the organisation’s critical positions. This is a way of retaining existing key talents in the organisation since their career requirements are met and they are exposed to new perspectives of the business.

There are two approaches to succession planning strategy; buy talent in OR build it from within. A succession strategy will inevitably be a mix of buying and building (Hills, 2009:3)At Dell, in addition of building talent from within the organisation, succession planning identifies top performers within the same line of business, attract and retain them by offering a sound career path and skill development opportunities. Talent is brought from outside when key skills and competencies are not available within the organisation.

Both buying and building talent have their advantages and disadvantages (as per table below (Hills, 2009:3-4)

Buying BuildingAdvantages Keep pace with changing market

demandsDevelop people to your ‘‘spec’’.

Acquire specialized skills. Save money – lots of it!Bring in new ideas and fresh perspectives Enhance career mobility &

engagement within existing workforce.

Disadvantages Expensive. You know what you’re getting into.

The talent you buy is unproven in your organisation

Less opportunity for injecting new knowledge/energy

During the bi-annual employee reviews at Dell, exportable talents are also identified. Employees who have a consistently good performance and are ready to be relocated are an important asset to Dell which has worldwide presence. Dell needs to export talent to Countries or states where local talents for specific jobs are not available. Such employees may need special coaching, an insight of country’s culture, have a good morale and given necessary incentives before relocation. It would be advisable for Dell to have a development plan for these employees.

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From the above it can be concluded that Dell has elaborated and well-thought plans, objectives and expectations from its employees. However, no mention has been made in the case study about how Dell helps the employees to cope with the high pressure in their work life. For example, events can be organized during weekends for each department so that they meet their colleagues outside the office environment and get to know each other better. Another suggestion would be that in addition to presentation methods and hands on methods, training can also be carried out using group building methods such as Adventure learning (outdoor activities), team training (activities where information need to be coordinated so as to succeed) and action learning( problem solving in group).

Question 4: Compensation system

A compensation system provides rewards to the employee in exchange of the work that the latter is performing in the organisation. The rewards can be both extrinsic and intrinsic. Examples of extrinsic rewards are salary, job security and employee benefit.

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Benefits are an indirect form of compensation. Examples of intrinsic rewards are goal achievements, job satisfaction, reputation and esteem.

A strategic compensation strategy should be in line with the organisation’s overall strategy. For example, at Dell, the SHRM strategy is to recruit top performers in its business. Therefore, the compensation strategy should be attractive enough to encourage such labor to leave their current employer and join Dell.

There are several factors influencing a compensation system:

External environment factors:1. Labor market – supply and demand of labor will definitely impact on the

compensation system. If demand is greater than supply, a very attractive compensation system has to be put in place

2. Economic conditions – if there is a high degree of competitiveness within the industry, the organisation may not be able to pay high salary.

3. Government influences – legislations in many countries impose a minimum salary for different job categories.

4. Union influences – worker’s unions have their say and influence compensations through negotiation with compensation decision makers

Internal environment factors:1. Organisational strategy and goals – in order to be effective, the compensation

strategy should support the organisation’s strategy.2. Labor budget – it is the amount of money that the organisation is ready to inject

into the compensation system.3. Compensation decision makers – usually these will be members of the

management team and may consist of other employees in order to ensure objective decisions are taken.

The development of an effective compensation system requires the following:

Job structure development - it is the comparison among jobs within the organisation and helps to determine the value of a job. Job evaluation is the process that measure job worthiness and identifies compensable factors. These characteristics may include job complexity, working conditions, required education, required experience, and responsibility (Noe et al, 2008:192).

Pay structure development – in order to develop an effective compensation system, both external and internal information must be used while determining a pay structure. External information will be in the form of “what is the competition proposing?” Internal information will be the result of the job evaluation process. Usually, organisations will have different pay structures for different job grades.

In my opinion, a compensation system is rated as effective by an employee if the equity theory equation is in favor of the employee.

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An interesting analogy to the equity theory is the following recent study.

Brown monkeys refused to play along when they saw another monkey get better payoff for performing the same work. The monkeys were trained to trade a granite token for a piece of cucumber. When the reward was the same for both monkeys, they took the cucumber ninety five percent of the time. But it was a different story when one monkey was given something better – namely a grape. Then, the other monkey often pitched a fit – either throwing the token, refusing the cucumber or giving it to the other monkey (Associated press, 2003).

The equity theory suggests the following: a person (P) compares her own ratio of perceived outcomes O (pay, benefits, working conditions) to perceived inputs I (effort, ability, experience) to the ratio of a comparison other(o) (Noe et al, 2008:487).

Op/Ip <, > or = Oo/Io

if P’s ratio is greater or equal to O’s ratio, equity is perceived and employee’s behavior remains unchanged. However, if P’s ratio is smaller than O’s ratio, inequity is perceived. The employee will restore the equity by exhibiting behaviors which negatively affect the organisation. Examples of these behaviors are

1. diminishing their input ( less enthusiasm ,loyalty, effort and commitment)2. maximizing their outcome(committing theft, involve in fraud)3. leaving the inequity environment (resigning from work)

However, each employee has a different personality and will not perceive the inputs or outcomes the same way, implying that the result of this equation depends entirely on the employee, and hence the results may not be objective at all times.

An effective compensation system should also benefit the employer by 1. Attracting talents to the employer2. Retaining talent, for example, at Dell the compensation system is linked to the

performance system such that employees are rewarded for high performance.3. Being at a reasonable cost so that the organisation does not face a situation where

compensation cost is growing more rapidly than profit.

There are different incentive compensation systems which are put in place to reward employees. Those include merit pay, individual incentives, profit sharing and ownership and gain sharing. All of these systems have their own advantages and disadvantages. For a compensation system to be effective it is recommended that organisations design a mix of compensation programmes (a balanced scoreboard) so that a larger number of employees are satisfied. An employer shall bear in mind that each incentive is not perceived the same way by every employee.

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The success of a compensation system also depends on the degree of participation and communication with employees. When compensation systems are changed or new ones implemented, there should be participation from those affected by the new/changed policies. Participation from employees can take the form of surveys about what they desire as compensation and propositions to implement a new policy or change an existing one. The human resource officer or line manager acting as the change agent communicates results of surveys and how any acceptable proposition can be implemented. Line managers, who have day-to-day interactions with their employees, are those responsible for making policies work and they should provide the employees with enough information about the compensation policies. Lack of communication can even make very advantageous compensation policies be perceived as dissatisfactory to the employees.

To conclude, employees now have access to lots of information about salary surveys within seconds especially from the internet. This increases the need of effective communication so that the employee does not perceive inequity. From the above discussion, we see that the perception of inequity has a negative impact on both the employee and employer.

Bibliography

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Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M. (2008) Human Resource Management: Gaining a Competitive Advantage. 6th Edition. McGraw-Hill

Heery, E. & Noon, M. (2001). A dictionary of human relations. Oxford: Oxford University Press.

RSA (1998) Employment Equity Act, No. 55 of 1998. Government Gazette No. 19370. Pretoria. Government Printer

Garg, P. and Rastogi, R. (2006) New model of job design: motivating employees’ performance. Journal of Management Development, 25(6), pp. 572-587.

The soul of Dell in South Africa [online], Dell, Available from: www.Dell.com/downloads/emea/general/za/Soul_of_Dell.pdf/ [Accessed 16th

March 2010]

Bozeman, B. & Feeney, M.K. (2007) mentor matching: A goodness of fit model. Administration and society, 40(5), pp 465-482

Hills, A.(2009) succession planning –or smart talent management?. industrial and commercial training [online],41(1) Available from: http___www.emeraldinsight.com_Insight_ViewContentServlet_contentType=Article&Filename=_published_emeraldfulltextarticle_pdf_0370410101 [Accessed 20th March 2010]

Monkeys Demand Equal Pay [online] Available from : http://management.uta.edu/Benson/EMBA/shrm11%20Compensation.ppt#305,5 [Accessed 21st March 2010]

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