Note Last Exam SHRM

7/27/2019 Note Last Exam SHRM

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to the organizational culture may become more acceptable by the employees because evolution is usually acceptable by people than revolution. Learning applies to all levels in the organization. It can be a serious problem as people working in the operational levels may see they have not received sufficientlearning. When organizations develop more, the skill-gap should be maintained atacceptable levels, otherwise it can discourage the employees in the low level tocontribute and exert more efforts to get promotion.

Continual change is implied through reflection on performance. This can bereferred to performance management. Through performance management, skills,knowledge gaps can be identified. Skills, knowledge are usually not or should not

be consistent or stable. Consistently unchanged skills, knowledge are unbeneficia lto organizations as they constrain the organizations from changing and innovation.Therefore, continual change should be linked to relatively continual performancemeasurement or management.

Overall, a shift fromtraining to a learning approach have many advantages asanalyzed above. To achieve those things, organizations should be consistentlycommitted on involving the management and employees and the entire organization toachieve that. Besides, organizations should take account whether the shiftfromtraining to a learning approach is suitable to the organizational culture and/ or structure. It is because the precedent culture or structure may constrain the transitionfromtraining to a learning approach.

3. What do we mean by the terms best fit and best practice to describeSHRM.

Best practice : A single set or bundle of H R policies & practices will lead to better organizational performance, Sustained over a lengthy period, Whatever the prevailingbusiness circumstances.

Effectiveness of practices which emphasize skills of implementation and do not fitbusiness strategy. Besides, cost of implementation is high. Represent an attempt toimprove HR practice in organizations, best practice also lead to better organizational

performance whatever the prevailing business circumstances, it does not emphasis fitor matching but is solution oriented,

In best practice view of HSBC bank in Hongkong, it is talking about long-termplan, strategy or policies. The priority areas in HSBC bank in HongKong humanresources practice were recruitment and selection, performance appraisal, rewards andcompensation and organization and development. They are strict in recruitment andselection because they believe corporate image as an employer is important. One of the way for them to recruit and select good employees is by using psychological tests,and another key strategy is the policy of growing our own from graduate trainees.Performance appraisal is their essential mechanism for tracking goal achievement andhelp in determining rewards for each employee. Thereby, the branches of HSBC inVietnam also implement the same of plan, strategy and policies to make the effectivelike the mother HSBC bank in Hong Kong.

Best fit is focus is on specific business operating environments. Suggest thatparticular types of HR practices will provide competitive advantages for particular types of firms depending on their strategic environment and reaction to it. Level of fitbetween business strategy and environment at first level and HR strategy & businessstrategy at a second level. Besides, it allows organizations to determine whether ahard (outsourcing/tighter contracting) or a soft (involvement, communication &sharing) approach needs to be taken given the circumstances.

For example: In Wal Mart, they implement anti-union policy in its stores to reduceextra-costs from union workers; they discriminate women by giving them much fewer money and opportunities to be promoted, etc. WalMart have tried their best fit thecorporate strategy to low down cost.

Problematic aspects of bet practice: emphasize skills of implementation. Bestpractices not fit biz strategy (when linked to the relevance of ppl mngt at the top of theorg). HR driven by outside factors which point us toward the next model of SHRM,the best fit view.Advantages of best practice model: Focus on staff as resources with the associatedinvestment in high performance strategies: development, reward and recruitmentpractices. Emphasis on the professionalism of personnel practice. Involvement andempowerment of staff. Advanced management skills. Ethical HR practice. Emphasison organizational flexibility, quality and integration of activities

4. Outline the main uses of competence models in SHRM

Competence model: Organizations that operate strategically attempt to definecompetence at each of these levels: Core competence, Threshold competence,Differentiator competence, Emerging or decision competence, Life cycle competence,Functional competence, and Personal behavior/effectiveness competence,

Core competence: unique to the organization and its activities. It givesorganization its competitive edge. The business in partnership with HR develops, extend, protect and exploit its strategic core to the full.

Threshold: needed to achieve satisfactory performance Differentiator competence: difficult to imitate capability that gives

competitive advantages Emerging or decision competence: the assessment of demand and supply

Life cycle competence: matching competence to strategic changes in the business

Functional competence: linking task performance based upon criteria,standards and range statements, outlining the contextual situation in whichthe task is performed

Personal behavior / effectiveness competence: problem solvingcommunication skills, decision making, learning effectiveness, etc.

Competency Models can be used by employers as a useful selection and professionaldevelopment tool. It can assist HR staff match specific skills and work requirementsto different jobs at selection, promotion, career path development and whiledeveloping training programs for the organization. It can help to assess performance of individuals in their jobs as well as in their roles of managers, direct reports, customersand team members. It can also be a means for businesses to communicate their

performance expectations to their workers.Competency Models can serve as a measure of the gap between employer needs andthe offerings of the current education and training delivery system. Contents of existing coursework can be reviewed and mapped against the tier competencies and acrosswalk can be created and gaps can be identified. As education/ tra

providers evaluate existing programs or design new ones, the Competency model canserve as a benchmark, resulting in addition of courses that will match workplacerequirements and trendsBeside, Competency Models can profile people for their development in jobs andmake underpin selection decisions. Moreover, it can contribute to performance

planning and reward designs. So it can build a good conditions working in theorganization

5. The main features of a learning organization, why is it important in a strategicHRD approach to organizing development?

Features of a learning organizationA Learning Organization is the term given to a company that facilitates the learninof its members and continuously transforms itself. Learning Organizations develop asa result of the pressures facing modern organizations and enables them to remaincompetitive in the business environment The key terms that define LOs are as follows3 factors: First of all, that is adaptive learning, it is developing skills in coping,reflecting and improving, typified by TQM models of continuous improvement.Secondly, generative learning is one of in this term, organizations develop a capacityto think radically and differently about themselves and their market; they questionwhat they do and attempt to re-define their mission. The last is creative tension, ii ishow the process of understanding and diagnosing the present can assist withdeveloping a shared consensus of the future.

Managers should act in the following ways (Senge 1990): As designer, facilitating learning and not just doing and acting

as a role model As teacher, developing the capacity of the team and individuals

to think and act critically and self criticallyHowever, the messages need to be clear so it can help the learning organizationeffetely. In first, organizations need to be designed for development and self-development. Moreover, learning applies to all levels and between individuals, teamsand levels in the organization. It means that the manager or employees must join tothis process. Beside, organization should development in group learning, continualchange made through critical reflection on performance at group and individual level.And the last, organization must careful balance in allowing individual creativity anddetermining initiatives of change.

The important of LO:There are many benefits to improving learning capacity and knowledge sharing withinan organization:

Maintaining levels of innovation and remaining competitive Being better placed to respond to external pressures Having the knowledge to better link resources to customer needs Improving quality of outputs at all levels Improving corporate image by becoming more people orientated Increasing the pace of change within the organization

Beside, Learning is a central process in achieving an SHRM approach. Iforganizations wants to improve performance they need to develop the capacity tochange, and learning is essential to this capacity.

6. What are Strategic Variables in SHRMIn some businesses, certain features of the systems actor may be necessary to securethe commitment of and acceptance by staff. Aspects of strategic management of ER,there are four strategic variables in SHRM: the recognition of trade unions and newindustrial relations, collective bargaining, involvement and participation, conflictresolution.

a. Recognition of Trade Unions & New Industrial Relations

Collective relationships that exist between employers and groups of employees or representatives of employees, namely trade unions such as: public sectors or traditional industry. Beside, new industrial relations is characterized by: Single Union,


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extended Compulsory negotiation & arbitration. These can help organization thatdefined and limited bargaining and get high levels of employee involvement inbusiness and job improvement

b. Collective Bargaining:

Collective bargaining occurs when workers allow the union to negotiate on their behalf. Negotiations can be with an individual employer or an employers' association.

c. Involvement & Participation

Involving employees in business and employment decision making and participation isabout employees playing a greater role in the decision making process. And theobjectives of participation must be defined, discussed and agreed by all concernedThere are 2 methods that organizations use to enhance Involvement & Participation

that are Industrial democracy and Works Council.d. Conflict Resolution

A process that has as its objective the ending of conflict between disagreeing parties.Partnership agreements in ER

In industrial relations a partnership arrangement can be described as one in which bothparties agree to work together to their mutual advantage and to achieve a climate of more cooperative and therefore less adversarial industrial relations. It can help theorganization mutual trust and respect, so they can recognition the central role of collective bargaining. Devolved decision making.

7. What are the main feature of PMS:

Performance management is the process of creating a work environment or settingin which people are enabled to perform to the best of their abilities.. PMS is the keyintegrator by allowing objective in a business plan to be fed into the rest the HR system. A performance management system is designed to promote interaction and

feedback between management and employees, establish expectations for individualwork performance, and serve as a foundation for rewarding top employees.

The main features of PMS:Objective setting: the organization s objective and individual s objective are

combined to give the general objective. The effective goals is clear and achievable,written in specific terms, measurable and timely, aligned with the corporate strategyand appropriately supported.Ongoing review of objectives: conduct regularly to measure the objective canimplement in the best way.

The development of personal improvement plans linked to training anddevelopment: the personal improvement plans of employees is implement through thetraining of company. Before comduct the traning, it is necessary to consider thepersonal plans of each employees to provide a suitable training. For example, if theimprovement plans of employees is improve the team work s skill, the traning of company need to help employees how to developthis skill through the task isimplemented by team.

Formal appraisal with feedback: based on the feedback, the process is evaluatedagain.Pay review: consider again the reward system of organization. Employees are paidfollow the achievements and efforts of employees or not.

A competence based organizational capability review. Evaluate the capability of organization.

8. How are Human Resource Departments responding to challenges of SHRM

Nowadays, there are many challenges which HR are facing. They include theconfidence, identity and direction. Thereby, HR department needs to give many plansto overcome the challenges.

The first is auditing performance. It means checking or examining the function,operation or the management systems of HR department in an organization. Theobjective is to ensure investment in personnel and training can be justified in businessterms. This is central to the setting up of service level agreements and clear expectations of HRs role. Performance checked based on cost -effectiveness,contribution, service and the way best practice is followed. For example, in Vietnam

Airlines, the company usually implement audit performance in each 6 months viaaccessing the information about operate data, the contribution of staff, etc. Because thebusiness of Vietnam Airlines is depend on the human resource a lot, thereby, when thecompany implement this, they can ensure the performance of HR function is good or not. If their performance is not really effective, Vietnam Airlines can give the suitableplans on time.

The second is devolution of HR activities. The objective of devolution is to ensuremore business led personnel response to employment issues. This is meanstransference of HR activities from HR specialists to line manager, or to other specialists such as administration specialist, etc. Activities that are likely to bedevolved are the negotiating of overtime, job needs analyses, disciplinary interviews,etc. And retain operational areas such as monitoring of performance, coordinate of training, etc. For example, in the past, the HR department of Kinh Do cake companywas responsible for many activities such as training, recruitment and selection; rewardand job evaluation, etc. But now, this company devaluated some activities from HR department to administration specialist and other managers such as disciplinary

interview, job needs analyze, etc. Thereby, the company has many benefits from thissuch as responsive decision making in other department, better working relationship

between managers and employees, flexibility, etc.The third is decentralizing human resource function. Centralizing activities is to

achieve greater control of processes and costs. Whereas decentralized activities allowscompany to become more flexible, to speed up decision making. It depends on size of organization, diversification of businesses and markets. For example, VietnamAirlines decentralized HR activities to help the company to save a lot of time indecision making. Thereby, Vietnam Airlines may have either a HR unit reportingdirectly to a central head of HR or one reporting indirectly to a head of department.

The final is outsourcing. This is the means to assigning some HR activities toanother specialist organization. In other words, outside organizations can afford toretain a greater level of specialist knowledge that can be called when needed.Outsourcing has become an important method of achieving flexibility and reducingcosts. However, it also has the negative impact to company. The first is security; this isthe problem which many companies fear the most. They are afraid of outsourcingemployees will disclose information outside the company, even to competitors. Thesecond is responsibility; suppliers lack of responsibility, delay and do not provideemployees with the necessary qualities will disrupt the work of the company. Thereby,the company needs to consider carefully which activities need to be outsourced.

9. Training and learning: comparison

Training usually involves attempting to devlop in others certain skills, habits, or attitudes. Knowledge is usually transferred from the trainer to the learner. The learner might learn something, but the learning and the learning experience might besomewhat impoverished as the learner might not necessarily see why the training isneeded - it might not be meaningful to the learner. Further, there might be limitedopportunities for the learner to draw upon his or her experience and enter in to adialogue with the trainer, challenging the trainer's assumptions, seeking further information through research to support or refute what the trainer says, testing new

and existing versions of reality with colleagues, generating new knowledge, whichmight include understanding and sensitivity to situations, techniques, and concepts thatthe trainer had never thought of, or even might not be able to see, or accept. Thelearner might move on to take an interest in new domains which are meaningful andthus exciting, seeing the training as a small and perhaps insignificant part of a broader and perhaps outmoded system, diverging from the path the trainer has set out as thedirection of the training. Or not. This depends upon the learner's learning.

10. Increasing levels of pay, improve the reward packages of their staff

The first is national tax regimes. Many western governments tax benefits heavily,making them less attractive for employees. Historically, they have been a costeffective way of providing extra reward cheaply. A more subtle point is theexpectation and attitude of staff. (tren unit 5)

11. Competency based approaches in modern HR strategies. Explain howthey may be used in recruitment and selection. Example

A competency is distinct from competence. A Competence may be defined as:

A task, function or role, specific to a job. What is to be achieved. Competency may be defined as:

The behaviourally defined characteristics which underpin effective and/or superior performance across a range of tasks. How the person should

behave in order to achieve the objectives.Competencies naturally cluster into three groups:

Cognitive (thinking) Affective (feeling/relating) Conative (acting)

A competency based approach to recruitment and selection of staff can help your organization make it an effective and successful investment of time, money andexpertise. Such an approach will help ensure that:

the organization is clear regarding the competencies and skill sets required by the job

selection processes encourage a good fit between individuals and their jobs,managers and staff have the required skills and competencies

individual skills and abilities are matched to the requirements of the job evaluation of work demands and staffing are accurate

Competency based recruitment and selection focuses on identifying those candidatesthat can evidence those behaviourally defined characteristics which underpinsuccessful/superior performance in the role you are seeking to fill.In recruiting and selecting staff, relying on several points of reference/bases of information rather than one, will most often allow for a better and clearer picture of acandidate's suitability for a position within your organisation.Below are listed several types of reference points


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Application Form Competency Based Interview Competency Based Referee Report Work Sample Tasks Group Discussion Verbal Comprehension Test Numerical Computation Test Customer Contact Styles Questionnaire.

A competency is defined as the underlying knowledge, skills, abilities, and personalcharacteristics required to be successful in a job role. A competency is described inbehavioral terms, and proficiency in a competency can be demonstrated by a candidate

through detailed examples of associated past behavior in various situations. Where anumber of candidates are found to be suitable, the candidates that display the closestmatch to the required competencies for the specified role will be offered the positionin order of merit as outlined in this guideline.The competency based approach to staff selection and promotion is designed to ensurethat a fair, objective and transparent selection procedure is adopted. The process willbe initially conducted in the areas of Nursing, SCOPE, Clerical/Administration(Grades III to VII) and Catering.

12. Modern employee relations is through the use of partnership andpartnership agreement

Employee relations can be seen as the positively expanded of industrial relations. ER focuses on the same relations like IR employee, union members and managers. Theshift between both ER and IR- is the diversification (e.g. works councils) from thecollective bargaining process. The individual is more empowered, which managerswould argue improves the quality of dialogue and understanding in the workplace.(Script pp. 352/ 353)There are two different kinds of partnership, the employer-union partnership and theemployer-employee partnership. The employer-union partnership is a contract of awin- win strategy relationship. The unions major interest is to maintain and increasejob security and the level of wages. The employers major concerns are strikes, whichdisplay a bad picture to the organizations stakeholder and have enormous costsinherent. The contract between employer and union ensures certain conditions for employees, e.g. job security in the first priority, further working conditions, trainingand development. The TUC sees partnership as requiring job security and quality of working life and as being long term. The employer -union partnership from this perspective can be seen as theemployment partnership. The employer -employee partnership first appeared in theUSA as outlined above. Thereby the partnership can be seen as voluntary in adeterministic environment, same as the employer-union relationship. It can be said thatthis partnership is an arrangement between both parties. The advantage for theemployer is less involvement of a union in first place. The advantage for the employee

is a better working environment and a better job security. The benefits for theorganization go partially along with SHRM more to that later.Partnership AgreementsThe Involvement and Participation Association (IAP) launched a project in 1992:Towards industrial partnership: A new Approach to relationships at Work. Thedocument set up included three commitments and four building blocks:The Commitments were: Parties subscribe to the success of the enterprise. Building trust and greater employee involvement. Recognizing the legitimate role and responsibility of the parties. The building blocks were: Employees need to employ security and employers need to maximize job /Organizational flexibility. Success should be shared by the organization and its employees. Staff should be widely informed and consulted at the company level on matter affecting their employment. Employee interests (voices) need representing. UK perspectiveBy 1969 the number of strikes reached a record level of 3,000 and a loss of sevenmillion working days, because of the domestic empowerment of trade unions facingthe development of globalization and new attitudes towards job security and workingconditions. By 1979 the union membership increased to 13 million, in some industriesthe membership went up to 75% and over. A further reason for this development wasthe non-ex istence of formal rules of collective bargaining. The winter of discontentinherited 29 million working days lost. Europe had a high acceptance of socialpartnership between unions and employers, thereby not only debating wages andproductivity, but also training improvement in the case of Germany. Japan had even awider sense of interrelationship between unions and employers, having unionsorganized at an organizational level, which worked in co-operation focusing with theemployer the organizations objectives. In respond to these developments Britainadopted this attempt and introduced the Advisory

Conciliation and Arbitration Service (ACAS) to support individual and collectivelabour management processes. Both employee and unions rejected legal intera

preferring the historical voluntarist approaches. (Script pg. 354) ER shifted later in some cases from collectivist to an individual relationship tomanagement, e.g. direct communication rather than through representatives.However, the 1980s and 1990s saw a downfall of union and employee control, asmanagers responded to market pressures by part-time employment, new technology,new lean working practices, downsizing, outsourcing functions and enhancingflexibility, structurally, in terms of skill acquisition and cognitively, with respect toflexible mindsets and approaches to learning.US perspectiveThe US Department of Labour acknowledges the wider recognition and acceptance inthe USA of the dominance of the universalistic principle for best practise representedthrough a high performance work system led by a strong management tradition.(Script pg. 359) Union membership recognizes an ongoing decrease and there aremany examples of the so called managing through partnership. Furthermore uniare involved in the organizations strategies.Employees themselves have an impact on reducing directly design and engineeringcosts an improve processes thereby time efficient. Additionally, employees receivinstead of wage concessions shares, which are described as managing the partnershipstrategically melting business and employee objectives together. However, USAmerica can not avoid the global pressures, within the global competition.Organizations will always try to suit pressures, at a certain level of pressure wherebycost efficiency must be achieved at a level of non-conformity with partnership, e.g.changing the location of production or in the case of UPS hiring part-time worker toavoid more costs for employee pensions. These methods and these mentioned above inthe last section of the UK perspective give organizations flexibility, which is a keyissue in the SHRM. In this way we see flexibility as a potential threat to collaborativeand partnership ER. (Script pg. 359)

13. Strategic reward

Employees should be compensated and rewarded for the time and effort they putinto work. Strategic reward management involves the formulation and implementationof an equitable reward system that is congruent with the organizations strategicobjectives. Rewards can be either intrinsic or extrinsic. However, it is important whendesigning, implementing and using a reward strategy, that it meets both individual andorganizational needs.

One view of Strategic Rewards as depicted here shows four quadrants of a strategic rewards framework:

Compensation

Base Salary Variable Pay Job Evaluation Performance Management Paid Time Off

Benefits Health Care Retirement Savings

Other Insurance

Development and Learning Training Career Development Learning Experiences

Succession Planning

Benefits Health Care Retirement Savings

Other Insurance

Benefit of strategic reward :

can emphasize the importance of the employee to the organization; can influence the employee's sense of loyalty; are rarely seen in terms of their cash value, but can have an equally important

impact when an employee is trying to decide whether to accept other employmentor remain with an agency.

represent those program areas where agencies have the greatest amount of flexibility to design programs specific to the needs of their employees.

To many employees, a supportive and engaging work environment is at least asimportant as health care benefits and pay. For example, dependent care support,flexible work schedules, opportunities to telecommute, flexible leave programs,meaningful employee involvement, and well-trained supervisors providing qualityleadership may make all the difference in the world when a person with a hard-to-findskill is considering your job offer or when an employee with valuable institutionalexperience is considering a competitor's offer.

Strategic reward management is about the development and implementation reward strategies and the philosophies and guiding principles that underpin them. It

provides answers to two basic questions: 1) where do we want our reward practices to be in a few years time? and 2) how do we intend to get there? It therefore deals with both ends and means. As an end i t describes a vision of what reward processes will


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look like in a few years time. As a means, it shows how it is expected that the visionwill be realized.

Lawlers model of reward system Lawler have presented a motivational model which is a step ahead of Vrooms

theory of motivation. They have related satisfaction of employees with traits, skills,efforts, performance and its relationship with the reward system. Managers caneffectively implement this model in their organizations

1. Value of rewards.People try to find out the rewards that are likely to be received from under taking a

particular job will be attractive enough. This phenomenon is equal to that of valence inVrooms theory of motivation. If rewards are attractive, an individual will put i n anextra efforts, Otherwise he will lower the very desire of doing a job.

2. Efforts.Efforts refer to the amount of energy which an individual is prepared to exert on a

job assigned to him.3. Perceived Efforts - Reward ProbabilityPeople try to assess the probability of a certain level of efforts leading to a desired

level of performance and the possibility of that performance leading to rewards. Baseson the valence-reward and the efforts-rewards probability, people decide the amount of efforts they would like to put in.

4. Performance.Efforts leads to performance. The level of performance will generally depend upon

role perception as defined in the standing orders/ policy instructions, the level of efforts, skills, ability, knowledge, and intellectual capacity of the individual. Traitsalso play a role in performance equation. Thus, ability and personality traits willmoderate effort-performance relationship. Performance of the individual is directlyrelated to re-ward he is likely to get. Reward is of two type i.e., intrinsic and extrinsic.Individual is generally motivated by intrinsic rewards. It is therefore necessary that theorganization pay an adequate attention to the reward system in the organization.Extrinsic Reward sare in the form of money or other material elements that have been

included in hygiene factors of Hertzbergs motivation theory. 5. Satisfaction .Satisfaction results from intrinsic rewards. Individual will therefore compare his

actual rewards with the perceived rewards. If actual rewards are equal or greater thanperceived rewards the individual would feel satisfied. On the contrary if they are lessthan perceived rewards, an individual will put in reduced efforts, and obviously he willbe less satisfied

importance of Lawlers re ward systemLawler Model is a complete model and is a departure from the traditional

performance satisfaction relationship. The model is of a great significance tomanagers as it sensitizes them to focus their attention to achieve employee motivation.Following points need more attention.

1. Matching of individual traits and ability with the job2. Managers must explain to the employees the role they play in the

organization and its relationship with reward system.3. Managers should carry out job analysis carefully; lay down actual

performance levels, which should be attainable by the individuals.4. Job expectations, performance levels, and reward associated

with the job should be clearly laid down and implemented5. Motivation of employees is important. Make sure that the

rewards dispensed are in line with employee expectations. Carry out thereview of reward system periodically

Disadvantage of reward1 - Feeling of discrimination or dissatisfaction among employees (if they feel

the reward assessment process is not transparent).2 - Staff morale could fall if there is a large difference in the amount of

reward being paid out to people doing s imilar work.3 - Staff may become too focussed on individually earning those

rewards/bonuses that they forget to work in the best interests of the team as a whole.Competition can be good but if its too aggressive it can be detrimental.

4 - There will always be an element of judgment required to administer sucha system. Someone will have to rate the performance of staff. This judgment may endup being too subjective rather than objective.

5 - Some functions are support roles in nature (and therefore may not attractas much rewards as other roles such as sales). There must be a good balance of incentives for these admin/support staff or else they will not feel appreciated.

14. Evaluation of the relationship and contribution of performancemanagement systems with strategic human resource management principles

IntroductionTherefore the evaluation will be drawn alongside the features of PMS outlined to givea specified answer. Furthermore the SHRM principles were manly already included intask one, but they will be partially reviewed to the essential extent to give a fair evaluation.Performance management systems (PMS) are part of the strategic human resourcemanagement. SHRM serves the changed environment, which is global and movingfaster than ever. Global competitors can imitate everything, with the exception of highly motivated, high skilled and highly flexible staff, which are main principles of

SHRM to achieve. The SHRM principles rely heavily on attempting to manage andform corporate cultures. This in turn relies on attempts to align individual staff culturewith individual culture. The range of issues included within PMS, for example,reward, development and so on, and the style of delivery, such as involving or judgingwill influence this culture. (Script pg.186) One key driver for SHRM is the fact that work is becoming more insecure, thereforethe PDP as the feature of PMS ensures the development of people and thereby as the

people sustainability within the organization. Furthermore PDP can be seen asapplication assistance in the case of redundancy. Thirdly, it recognizes the employees

performance, which the employee will be proud of and therefore more motivated.PDPs can also be used for annual pay review, where the employee can achieve ahigher income which pushes the motivation again. Lastly, this system improves theskills though out self-control and a individuality focus is met as well. From this

perspective the key concern of SHRM is solved via PMS.As a pluralistic system SHRM also recognizes the external environment and its stakeholders. The balanced score card responds to the external environment withoperational numbers. Thereby customers are respected as well; e.g. to improve the

point of sales with investment in business equipment and give a better climate &working environment. However, the BSC has the learning and growth perspectiveinherent, which is also the development of people for long-term sustainability.The measures of the BSC provide information of firms performance targets (Script

pg. 14; 18 key practises) and it links the business strategy with the HR department(best fit view). The BSC however can be used vice versa as a hard controlling tool toimprove short term profits and run down everything to the as much as necessary

point, which would be the total opposite side of SHRM. One focus of SHRM is to develop people, make them responsive to changes andregular feedback on performance from many sources (Script pg. 14; 18 key

practises). The 360 appraisal does this by giving regular feedback on performancefrom various perspectives. The employee also gets to know fields he or her needs toimprove. Fields where he or her is good at will motivate and possible

recommendations show where to work on to improve his or her development. On theother hand it can be said that the 360 appraisal pushes weaknesses which confront thestrengths based approach as a new approach of SHRM.SHRM should have the presence of work -improvement teams and the presenc

problem solving groups (Script pg. 14; 18 key practises). Team based structuresapproach of PMS makes teams stronger throughout a pluralistic view, to move awayfrom the individual perspective. The Teams will work more closely together anddevelop better communication channels within it.The strengths based approach highly motivates staff as outlined in tasks 1. Highmotivation is a further principle of the SHRM. Merit rating serves this point in so far that it seeks particular strength for a particular job by a higher payment.SHRM lays a vital focus on people. In the PMS both is possible, the process basedapproach and the people based approach. The people based approach developsemployees to a very valuable intangible asset, by training and a motivation led

philosophy. In the process based approach contradicts SHMR in thi s point by suiting people into processes and focusing on the development of these processes. Qualitycycles and the critical path analysis have the process based approach as their basics.The last feature of PMS outlined in this assignment performance based hiring suits theaim of SHRM to attract best technical/ professional talent (Script Life cycle model

pg. 8).ConclusionPMS have a major role within the SHRM to achieve its objectives. Both follow similar

principles or the same; in the areas where PMS can have its impacts. Using the rightmix and intensions of strategies it even can be said it suits SHRM almost perfectly.

Nevertheless in an objective evaluation the contribution can only partially be agreed.Many features of PMS have another side of the coin, using them in short terms viceversa, taking the process based approach, pushing to much the weakness rather thenthe strengths of employees, using the measures to built up pressures and using the pay

performance review to threaten the job security.The relationship and contribution depends on the administrator or manager thatdecides the basic HR strategy.

15. Principles of Human Resource PlanningPrinciples of human resources planning require attention to fundamental concepts suchas the importance of HR, integration of human resources and company objectives,efficiency and centralized decision-making. Personnel administration evolved from a

primarily process-based function of the 1980s to an all-encompassing organizationalcomponent promoting the value of human capital. Human resources planning based onHR guiding principles ensures a well-structured component that synchronizesorganizational philosophy and human resources strategy

Stressing HR Importance

One of the beginning principles of HR planning stresses the importance of humanresources. Engaging leadership that understands the impact of a functional humanresources department is the best way to adhere to this principle. The Encyclopedia for Business, 2nd Edition, states: "Business consultants note that modern human resource


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management is guided by several overriding principles. Perhaps the paramountprinciple is a simple recognition that human resources are the most important assets of an organization; a business cannot be successful without effectively managing thisresource." One way to realize the importance of HR is to envision an organization withneither a productive workforce nor the type of support that human resources planningand management provides.

Integrating Human Resources

Human resources serves the needs of the organization, top to bottom, including everymember of its workforce. Therefore, integration of human resources functions withoverall organizational goals is an HR principle that cannot be overlooked. Theimportance of integrating HR and company objectives builds on the previouslymentioned principle: stressing the importance of human resources. Human resources

activities that are merely an extension of management are signs of poor planning andfailure to embrace forward-thinking ideas that improve the company's profitability. An"Entrepreneur" magazine article appropriately titled, "Integrating the Human ResourceFunction with the Business" reinforces this proposition when it states: "It is notenough for the human resource function to be responsive to management, "customer-oriented," or even aligned as partners with management." That said, a holisticapproach to the integration principle of human resources planning ensures humanresources will be fully committed to and a part of organizational goals.

Processing HR

Human resources information technology (HRIT) contributes greatly to thefunctionality and accuracy of human resources activities. Many organizations purchasesophisticated human resources information systems (HRIS) that minimize, or eveneliminate, human error in processing employment data. Smaller organizationssometimes rely on outsourcing their HRIS needs for managing processes such asrecruitment, payroll and compensation. Technology supports an important principle of

human resources planning -- human resources data processing in the most efficient andaccurate way possible.

Centralizing HR Functions

Tying together the principles of human resources planning requires centralizing theHR functions. Systematic processes and organization adds a component to HR thatemployees will appreciate. A one-stop shop for meeting the needs of the employer andemployees unifies human resources activities and adds value to departmentfunctionality. Centralization involves the decision-making, staffing and organizing of HR functions; however, it also addresses the need for physical resources such as anapplicant processing area, private conference and interviewing space, and storage for employment and medical-related files.

16. Strength and weakness of 3 financial rewards

The aim of this assignment will analyse the strengths and weaknesses of the threedifferent methods of financial rewards; individual performance related pay, profitrelated pay and skills based pay. A wide range of research will be explored throughnewspaper, books, journals and business models and how organisations tends to tacklethese three methods, which will give a full insight on how these three spheres haveimpacted todays modern era, and how they are driven, which will then present theoverall conclusion.

Financial reward can be seen as a motivational factor, where employees may benefit,either from promotion or a bonus, it could be seen as an appraisal syst em. Mostempirical research on pay for performance systems has investigated clear-cutprograms, that is, programs based on individuals versus collective performance or behaviour. Yet, many organizations pay employees using a combination of di fferentprogr ams (Gerhart and Rynes, 2003). By setting objectives and goals for a specificproject, is to maintain employees satisfaction at work, where performance andproductivity is enhanced.

Individual Performance Related Pay

In recent years, performance -related pay (PRP) has been much more widely used aspart of the human resource policies of organizations. Both organisations along with itsemployees may benefit performance related pay. It has typically been introducedalongside other HR practices as part of a package of measures, the aim of which hasbeen to increase the input (both quantitative and qualitative) of workers to theproduction process (Whitfield and Poole, 1997). The strength of individualperformance related pay is advantageous to its employees and the organisation itself.Performance related pay relates to the performance towards how well a task is carriedout in the workplace by the individual, over achieving may bring good results, whereaspoor achievement in the workplace could cost the organisation. According to(Lahdesmaki, 2008) Performance -related pay can help improve performance andpromote organizational development when it is applied properly in the right

managerial context. Therefore, organisations use this method where it motivatesindividuals recognising they will be rewarded towards their progress and their contribution, which would then be implemented, hence the success of thatorganisation.

Individual performance related pay provides the incentive, which employees can thenaccomplish and achieve the work targets, with this been recongnised with a reward.(OECD, 2005) states; Top management has generally accepted it and is committed toits implementation. Employee organizations and unions have principally accepted thesystem. Employers in agencies feel that PRP is a very good incentive, as a tool for organizational development. Therefore employers can obtain assistances from a

business structure for set objectives, which would develop and improve the productivity and the performa nce of employees. Previous work has indicated th

there is a positive relationship between PRP and earnings (Booth and Frank, 1999),and the suggestion is that this is due to the greater work effort and/or ability of thoseon incentive pay (Barkume, 2 004).

Nonetheless, organisations benefit this type of financial reward given to employees ascomprehension is increased, where employees are aware of their performance and toenhance their productivity directly associated to be rewarded. Furthermore, suchmodels also ignore that PRP is only one type of payment system aimed at increasingthe contribution of employees to the production process (McNabb and Whitfield,2007)

Poor performance from employees can improve, with the awareness of a reward for grabs. To this, rewarding employees with better performance target, where employerswould keep a hold on to the most industrious employees then those with low

performed targets. As Barkume (2004) states call centers such as Carphone Warehouseoffer commission to its employees due to the performance and how much quantity issold whereas other organisations such as Alliance Leicester, whose employees aremonitored on their performance, thus they are rewarded.

However as strengths convey the rewards; weaknesses remain as employees may facea low payout due to the low inflation climate, as the pay may not be as great.According to McNabb and Whitfield, 2007) The results indicate that PRP schemesare costly for employers. They may help increase the input of workers, but whether this yields better financial performance depends on the relative magnitudes of the costsand benefits. It may perhaps be focused upon as a reward to work hard rather thandevelopmental needs where employees are simply working for the reward, despite the

job role, connection to thi s, employees are likely to be de-motivated if targets are toocomplex to achieve.

(McNabb and Whitfield, 2007) states that; Alternatively, it may be that PRP operatessimply as a distributive mechanism, rewarding the high-achieving more and the low-

achieving correspondingly less than in non- PRP workplaces. Individual performanrelated pay can be targeted to over-skilled and qualified employees, whereas theunskilled and unqualified employees may find it difficult to keep on track then thosefurther in front, which reduces pay equity and make the organisation liable if rewarding is not operated fairly. Organisations may use performance related pay as ashort term for a specific project where employees performance woul d increaswhen the reward is outdrawn, the performance will then decrease where employeeswill expect the same reward for them to work effectively, which may even delay thecollaboration. Finally, too much responsibility is relied on the supervisor or themanager as (Dickenson, 2006) states; The big problem with this, performance related

pay in organizations, is that it is so totally disorganized, that your performance reliesso much on other people doing their job right that it is very, very difficult to get a fair idea of what of work are you doing. It is suggest by Dickenson, (2009) that

performance related pay may have an upper hand towards employees performance,however performance cannot be measured and predictions can only be made towardsthe end of the year.

Profit Related Pay

Profit related pay is an element of reward where in co-operation will ascend anddescend together for the employee and the organisation. The prospect is that suchmethod would improve employees job satisfaction and mot ivation and is seen wage substitution. The idea that workers might be paid in part out of profits has beenspreading since the mid-1980s across OECD countries along with the growth of international competition and rapid technological change (Amisano and Del, Profit related pay is either a given bonus due to the organisations performance or byreceiving a share based on the performance of the organisation; for example JohnLewis employees have a share in the organisation performance. According to(Robertson, 2007) At the John Lewis Partnership, which employs 64,000 staff, for example, profit sharing remains central to its partnership ethos.


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The introduction of new work practices that are supposed to increase employeeperformance, flexibility and involvement with organizational goals has often beenassociated with the introduction of new compensation systems, such as pay for competencies, performance related pay and profit sharing (Handel and Gittleman,2004). Handel and Gitleman (2004) stated that profit related pay can be just as equal toperformance related pay, however occupation differences have an impact on the typesof rewards, job-role (such as nursing, teachers and social workers) have no impact onprofit sharing as individual job role is at a fixed salary whereas major organisationshave to perform to increase profit and out compete competitors.

With a similar interaction between performance related pay; profit related pay consistsof the organisations performance. For example, if John Lewis sales increase and profitrises, then employees are rewarded the shares due to the performance of the company.

As (Robertson, 2007) states; Last year, John Lewis Partnership paid out 106mthrough its scheme, which equated to a 14% supplement to wor kers' annual salaries.However, a weakness behind profit related pay is due to John Lewis recital and if theperformance decreases, therefore the organisation profit will decrease or at worst, theoutcome would lose its turnover, subsequently the employees would suffer a decreasetowards their pay. According to Estrin and Bradley (1992) they have investigated JohnLewis profit sharing, which have not made much of a significant difference towardsemployees performance; this is based on employees awareness of the terms andconditions of their contract and should be aware of the type of financial reward, whichdepends on the profit of John Lewis and the amount of profit shared is received.

According to Ogden (1995), Alpha Water was one the many first private limitedcompanies that introduced profit sharing, at first such financial reward was notrepresented as a reward; employees carried out their job-role as usual as for AlphaWater, competition with other major water companies was at risk, thereforeperform ance had to be increased and productivity had to be elevated. Schemes may

also encompass a number of different computational formats with, for example,payment varying by amount, entitlement and the profit level at which payment istriggered (Ogden, 1995 ) Therefore the employees carried on their job-role as usual, asperforming to a uncertain organisation, which had outstanding competitors. Comparedto this and John Lewis, which is a major department store with a high profit figures in2009, employees are willing to perform harder due to the realisation on the amount of share that can be received from John Lewis. GlaxoSmithKline (2009), one of themajor pharmaceutical company offers a profit related pay scheme where it offers sharesave and share reward to the employees, only if employees consider buying shareswith GSK, they will get the same amount of discounted share by GSK as a rewardwithout tax.

Profit related pay can be seen as a benefit for John Lewis employees, as they receive ashare mainly based on the company performance, whereas GSK offer these rewardsonly to the employees when they purchase shares. Profit related pay can either increase or decrease employees pay depending on the success of the organisation,

where reward can be a vast amount or nothing at all.

Skill Based Pay

Skill based pay could be seen as a remuneration system where employees are paidwages on the foundation towards the number of skills they are assessed to have andeven qualifications they have obtained. As (Silva, 1998) sta tes; Skill -based paysystems are most appropriate to enterprises which depend on a high level of skills, andin which labour costs represent a relatively small portion of total costs, unlike inlabour intensive industries. However the reward in learning a new skill to perform atask is highly motivating as employees are encouraged to learn furthermore withoutpaying for the particular course and to perform on the job they are doing whiletraining. Skill -based pay (SBP) is a rapidly spreading pay innovation thatcompensates for the range, depth and types of employee skills, rather than for the jobsemployees perform (Dong -one, 1999) However skill based pay is the incentive tolearning for the individual themselves and the organisation, which requires employeesto learn new skills, which brings the strengths towards job satisfaction where byrewarding to learn, could support the intrinsic job role, therefore motivation isincreased, however weaknesses do remain as learning may not be associated towardspay but the individual curriculum vitae is presented with the learnt skill. For example,an individual may be working in the human resource sector and were given skill basedpay to carry out a CIPD course; the training will then enhance their current knowledge,where they can carry out further duties.

In banks and airlines, for example, skill -based pay can be used to encourage people towork in areas where manpower is most needed at a given point of time due tocustomer flows. (Silva, 1998) Therefore skill based pay is designed to promotelearning and is adapted in additional functional areas within the organisation wheremore than one task can be carried out and the current performance is exceeded as aparticular knowledge or skill needs to be learned to do a certain role. Therefore,organisations may pay for performance; if higher skill is increased, then this would

create a better performance, which enhances development, as well as rewarding theindividual.

The strengths of skill based pay would improve the teams effectiveness andmotivation, where productivity and performance is enhanced. It will assist theorganisation as employees will have a more rapid adaptation to changes due to their skills, which will allow employees to solve the problems rather than wait for others tosolve the problem. Also, commitment to goals and objectives are met rapidly hence,self esteem from job enrichment and making self decisions when covering for anabsent employee temporarily. Improved skills would help to advance the productivityin problem solving along with working in a team, where set deadlines are met morerapidly as further skills have been adapted. Therefore qualification might not benecessary if the employee have already the skills to perform the job and are suited to

do a multi-skilled position well enough, rather than the type of employee that has thecorrect qualification. Overall it saves the organisation expenditure, rather than goingthrough the recruitment process, whereas this can be done internally.

Skill based pay may be beneficial for an organisa tion and the employees performanhowever weaknesses remain as an employee may have to change their shift patterns or work over time for training, this then cost the organisation to provide expense for employees that will have to teach the training or a institution to study the course or training required. (Silva, 1998) suggests that Skill -based pay is particularly consistwith knowledge-based work. It has generally been regarded as inappropriate in highlyautomated situations where employees have little effect on operational performance.To operates best in relatively small locations with not more than about 500employees. If necessary, skills may be required to be learnt; in this case employeesmay lack enthusiasm to be trained and may want to remain in their current role. On theother hand employees may want to gain a skill due to the increase of the pay and for that reason only.

The administration of the system is complex, both in regard to certification of skillsacquisition and payment. Therefore, unless administered properly, the costs canoutweigh the productivity and flexibility gains (Silva, 1998) As a result; it provides amajor occurrence for the organisation is the individual have not performed thanexpected. Silva (1998) looked at the risks in skill based pay and the affects it may haveon employees and the organisation. Employees that reach maximum skill level arelikely to be de-motivated even with extra pay according to Silva (1998). Lacking inenthusiasm can occur where skill assessment difficulties, which involves the timing of the assessment required such as training, which can be time-consuming.

Adopting this type of financial reward may have its strengths and weaknesses;however it is used and performed for many reasons. Skill based pay providesemployees the ability to learn new skills, which will assist the organisations

performance and profitability by saving cost in recruitment. In todays era, skillsshortage is an immense predicament as organisations seek to find skills as animportant matter to do the correct job, however teaching employees within theorganisation is at the advantage towards saving the cost of recruitment process, byteaching the individual within the organisation as cost is saved and employees are

benefited, as they are fully aware of the business environment.

Conclusion

Financial rewards are applied within organisations, especially the three analysed;individual performance related pay, profit related pay and skill based pay are thefundamental for both organisation and employees. The strengths of financial rewardsis highly dependable on how it has been applied as the accurate process must be takenupon before introducing such types of financial reward, however the weaknesses areoutlined if the correct practice is not applied.

Financial reward is an important, debatable constituent for organisations and itsemployees. Organisation mission is to save cost at all expense but retain a better

performance from employees, whereas employees seek to earn extra more from theorganisation. It is an obvious fundamental for employees lifestyle as their contribution and duties to perform their job effectively and expectation are to be metdue to their hard work, however such individual performance related pay as well asskill based pay and profit relative pay is all beneficial to employees as performanceand productivity is enhanced, thus motivation is increased and cost is made, as well assaved. However on the other hand, employers and their organisations correspond to asignificant part of the cost by giving these types of financial rewards as theorganisation will benefit itself, if the accurate procedure is implemented.

17. Main obstacles preventing HRD from delivering SHRM

Wider environment: org considered within national and international context which be shaped by fac tors such as wider value placed on educational and training by the


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state, employers and individuals. i.e, in Britain, voluntary approach to training anddevelopment adopted by the state largely endorsed by employers this exampleemphasizes providing basix support for unemployed and on selected nationalshortages such as IT, also places great pressure on employers to provide training, oftenspecific skills rather than broader labor market skills. Individual employees as a part of taking responsibility for their own learning and not waiting ro be trained by employers

Evaluation of learning and development: cost of L&D programs, ability to evaluateits success has led org to take short term view, to see L&D as reward, when bizgenerating profits rather than strategic process. Strategic thinking org see L&D is vitalto OD, competitiveness, growth, market leadership, survival key factor in employeemotivation. Evaluation of effectiveness is hard to quantify. Strategic org periodicallycompares actual benefits vs. forecast benefits. KEY measurement = improvement in

productivity, in quality, increased sales wins. Traditionally productivity has beenmeasured at the individual level, the shift emphasize at a higher level of business.L&D is effective when curriculum and learning initiative are focused to biz objectivesand current culture

Value placed on HRD by staff: sometimes, managers set barriers by a failure tomotivate trainees with effective and inclusive diagnosis. Other times, failture to allowlearning to be transferred into workplace practice leads to low motivation and dilutionof up-skilling and developmental outcomes. It is still lack of clear evidence of strategiclinkage in HRD terms. strategic outcomes and further long term commitment todevelopment are hard to achieve

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