How to manage Human Capital? Explain.
The main aim of the report is to advise the company on restructuring their human resource practices in order to compete effectively in the global marketplace. The report is divided into three parts. The first part of the assignment addresses the importance of effective human resource strategies in terms of creating competitive advantage and for companies operating in the global marketplace. The report analyzes the strategic human resource issues relevant to the overall performance of the organization (Buller and McEvoy 2012). The second part of the report draws an effective Human resource models and critically examines the importance and relevance of human resource management in a changing environment by analyzing the business performance of the firm, its historical development and current market contexts, together with a profile of the company’s human capital. The third part of the report critically examines how recruitment and selection and training and development can help the company increase employee performance. It also develops training strategies for the firm. The author chooses Google to evaluate its human resource management strategies and gives recommendations on how the company can compete in global environment by using proper training and recruitment strategies (Armstrong and Taylor 2014).
Human resource management is management of workforce and human capital at workplace so that the employees work to accomplish the goals set by the organization. The responsibility of the human resource department in an organization is to recruit and select right people for right job, provide training and development to new employees, motivate the workers, evaluate the performance of the company and employees and manage the human capital resources of the company (Wright et al. 2014). Maintaining employment relationship is essential as the employees are the most crucial part of the organization. The HR department of the organization should focus on selecting the people who have good employability skills such as leadership skills, motivations, teamwork, flexibility and time management skills. Management of workforce is essential in an organization as employees come from different background and culture and work together to accomplish the goals of the organization. Human Capital Management is a method used to manage the human resources of the organization where the employees are considered as capital assets of the organization whose future value can be developed by proper investment at present. Proper human resource management helps in gaining a competitive advantage to the firm. The most important part of the business aspect is management employee and its team that is managing human capital (Bratton and Gold 2012).
Importance of effective HR strategies in terms of creating competitive advantage
The rise in competition and globalization is making it essential for the businesses to develop strategies that make the brand and the company unique in terms of its services and its quality of the products that it provides. Best products can be achieved by managing the human resources of the company efficiently. If the employees of the organization are efficient and happy then they will indulge in producing the best quality products that will help the firm achieve competitive advantage (Rewards and Plans 2013). It is important for the firms to create good Human Resource strategies to create a competitive advantage for the organizations. It is essential for the firms to motivate workers so that they are encouraged to produce and innovate a new product for the company at a low cost that will help the firm create a competitive advantage for the organization. Strategic business objective helps the firm achieve a great success in global marketplace and business. Lack of planning and implementation results in low productivity and profitability that ultimately creates a bad reputation of the firm. Google Company is very efficient in managing its human resource capital. The company aims at maximizing the human capabilities of the employees. Many directors overlook the importance of human resource at early stages of development, but it is essential to plan proper strategies to utilize the human resources properly and maximize the benefit. Management of human resource does not only start when there is large number of employees. In fact it starts with just a single person working as well (Budhwar and Debrah 2013).
Human resources as a source of competitive advantage
Managing human resource helps the firm create a competitive advantage through many ways. If the company wants to maximize profit then it is essential to manage the operations of the firm by minimizing its costs. Management of operation also includes managing human resources. Strategic planning helps the firms to minimize the human resources cost that in turn will help the firm reduce the cost and maximize its profit. Skilled employees also develop plans to reduce the internal cost that adds an advantage to the firm. It also helps in expanding operating margins. Managing employees is also essential as it helps in increasing the productivity and profitability. High employee morale, skills and engagement helps in increasing productivity and profitability (Stone 2013). The human resource strategies should include hiring people that have high employability skills as it helps the organization develop superior products for which the firm can charge premium rates. It also helps the firms maintain its quality of service and products that also adds to achieve the advantage of the firm. Proper training and development also helps the firms in developing the skills of the employees that can be used for the advantage of the company. The right team at organization contains of employees that has several years of work experience, strong operational management, exceptional client service and high quality work attitude (Hendry 2012).
The employees of the organization are the key differentiators of the firm to attain the competitive advantage. The main responsibility of the HR department is to retain the employees and satisfy them and create a competitive advantage scenario for the organization. The HR department should analyze the performance and encourage the workers to work harder. Reward and recognition is one of the strategies that can be used in order to motivate the workers to work harder. Compensation should be given to the employees that work hard and achieve the target set by the company. The human capital of the firm should be viewed as the company’s valuable assets that bring the organization success. There are many factors that affect the HR strategies. These include technological advancement and economic growth that are the external factors that impact the practitioners of the HR practices. The strategic Human resource is linked with the strategic planning of business (Kim et al. 2012).
The human resource is the strategic partner in providing sustainable competitive advantage to the company. The VRIO framework that was developed by Barney in 1995 is one of the most significant tools to achieve sustainable advantage thorough Human resource practices (Andjelkovic et al. 2013). It includes:
Value- the main aim of the HR should be to increase revenues and decrease costs by developing a proper plan. The HR department helps in creating value for the organization. For example the Google considers its employees as the most valuable assets. It believes in increasing employee satisfaction along with customer satisfaction (Pesic et al. 2013).
Rareness- the HR department should also develop a plan that utilizes the rare characteristics of the employees to gain competitive advantage. It is the responsibility of the HR department to develop plans and strategies that help the firms to create unique characteristics that is differentiated from other competing firms. The recruitment process, compensation schemes and culture at Google has helped the organization maintain its sale and service at improving its quality (Pesic et al. 2013).
Imitability- it is the responsibility of the human resource department to develop the characteristics of human resources of the organization that cannot be imitated by its competitors. This means focusing on the culture and the unique characters of the organization.
Organization- a firm must be organized in order to absorb the sustained competitive advantage so that the firm is able to exploit the human resources. Google uses many strategies to increase the employee happiness and satisfaction (Pesic et al. 2013).
Strategic HR issues relevant to the overall performance of Google
Application of HR strategies helped Google become the third most valuable firm. The survival lines of the organization during the economic downturn and recession is the efficient management of the human resource department. Google was nominated as the best company to work for America by the employees of the company. Google is a technology and service provider company that is based in California, United States. The company has a high brand name because of its culture, trust, wealth and resource that it shares. The company has also been identified as one of the most attractive organizations to work for. Management of human resource in the organization started as soon as the company was founded that in the year 1998. Since then the company has seen only 4.3 percent of the employee turnover voluntarily (Storey 2014). The main aim of the HR department at Google is to hire the best employees of the world by developing a strategically plan in compliance with the business strategies. The employees of Google take pride in being addressed as geeks. The development of the best business strategy and HR strategy has been a bench mark for Google’s success and growth. They not only develop an approach but also apply it in their practice. The strategic HR issues at Google begin with recruitment of right employees for the job. At second step comes the training and development process where the employees of the company are given tremendous opportunities to learn and grow. The compensation structure of the company is also very commendable. The main aim of the HR department at Google is to use the best employees of the world for the benefit of the company by keeping the employees happy and satisfied (Purce 2014).
Importance and relevance of HRM in a changing environment
The globalization and changing environment is increasing the role of human resource management. The responsibility and the importance of the human resource department are increasing. The changing environment of human resource management includes managing workforce diversity and the employees at the organization that come from different background and culture. The changing role also includes economic and technological change, globalization, organizational restructuring and changes in work and job of the employees (Wagner III and Hollenbeck 2014). Since employees from different background and culture coordinate to accomplish the goals of the organization it is essential to manage this diverse workforce keeping the interest of the people. It is the role of HRM to provide a more flexible work scheduling with the women capturing the maximum section of the organization with the changing environment. The increase in the workforce diversity puts immense pressure on the HR department of the organization. It is essential for the HR department to create harmony in the diverse workforce in order to avoid conflict between the employees (Bardoel et al. 2014).
The economic and technological change has also changed the pattern of employment and occupation that in turn has changed the role of the HR department. Traditionally the role of the HR department was just to select employees but now it includes training, development, recruitment, selection, performance appraisal, and motivation and performance management. It is essential for the HR department to understand the issues that the employees face at workplace and try solving them. This increases the employee satisfaction. It is also essential to motivate employees to work hard in order to achieve and accomplish the goals and the targets of the organization. The organizational restructuring has made the organization more competitive in the global world. The role of the HR department is to train the employees in a way that helps the firm achieve competitive advantage. Changes in the organizational structure put a challenge on the human resource department in the form of consequences that employees face due to the change. These include human cost associated with economic downsizing and changing role of the employees in the global world (Brown et al. 2015).
Human resource management at Google
The performance management of Google includes various variables such as customer satisfaction, employee satisfaction, communication, management of work force diversity, problem solving abilities. As of 2013 the number of employees at Google Company accounted was 47,756. The main human resource strategy of Google includes policy of innovation. The managers of the Google Company encourage the employees of the Google Company to spend twenty percent of their time in doing the work on the projects that interest them. The policy is known as Innovation Time Off (Mohdin 2016).
Measuring the performance of employees is an essential task and also is time consuming. Google has found a new strategy to evaluate the performance of its employees that is less time consuming. This strategy is known as Objectives and key Results or OKRs where the employees set the objectives for themselves and then outlines quantifiable results that help the employees achieve its objectives. Google is the only company to use people analytics to reinvent HR. The main success of the company lays to the performance management strategies that the company follows (Sullivan and Sullivan 2013). Since the main strategy of Google is to create an innovative environment by providing innovative service it requires new people to fulfill the criteria. It is essential for the firm to shift its strategic move towards management of employees of people at workplace. Innovation comes from people and for innovation it is essential to recruit the right people with good employability skills. The main challenge is to shift the functions of HR from traditional policies to the modern one in order to drive innovation (Antonioli et al. 2013).
The human resource department is different in Google from the other HR functions at the other companies. The human resource department at Google is known as people’s operations that aim at maximizing the satisfaction of employees. The department that looks over the decision of the employees is the people analytics team (Rathi and Lee 2015). The decision at Google is based on data and analytics.
Google’s top people management approaches are given as below:
- Leadership characteristics and role of managers- Managers play an essential role in decision making and recruiting people. If they are not able to hire the right people for the right job then it will be difficult for company to create innovation. Even the performance of managers is evaluated twice at Google.
- The PiLab- it is a group at Google that is responsible for to determine the most effective approach for managing and people and creating most effective and productive environment in the organization.
- Retention algorithm- mathematical tools are also used to evaluate the employee’s performance and determine the employees that are likely to create a retention problem.
The other approaches that the company uses are improving diversity, effective hiring algorithm. The company is also involved in calculating the value of top performers and workplace design drive collaboration. The company uses the dataset to convince the employees (Inc.com 2013).
The compensation strategy at Google is also competitive in nature. It helps in creating high quality employees at people stay motivated to work better. The employees are given ample amount of opportunities for career development that helps in professional and personal development (Rathi and Lee 2015).
Recruitment and selection
Proper recruitment and selection of the employees in an organization helps in attaining organizational success. It also helps in increasing the employee performance of the organization. The first stage of the Google Company of then HR process is recruitment and selection of the best employees of the world. Thousands of people work in Google that consider the company as their second home. The main responsibility of the human resource department is to recruit and select the appropriate person for the vacant seat in the organization. Selecting and recruiting right people for right job helps the firm save its valuable resources as it does not have to spend much time and resources in providing training. The quality of the employees helps the organization attain success. If the HR department selects employees that have good employability skills then the productivity and profitability of the firm increases as employees indulge in creating product that is cost effective and unique in nature. Right selection of employees also adds a value for the organization. It will also help the firm maximizing the profit and save the cost. Hiring is the strategic function of the human resource department in an organization (Date 2014).
The success of Google Company depends on its high quality human resources that are selected through proper recruitment process by the HR department of the organization. The organization ensures that the recruitment process helps in selecting adequate workforce as per the requirement of the company. The company also ensures that the retention process of the company is such that it is able to retain the best employees of the company. The human resource department uses variety of sources both internal and external to hire the best employees of the world. Various selection techniques are used such as promotions, and transfer to maintain the internal recruitment sources of the Human resource department. It also indulges in campus recruitment so that the best students of the universities are hires on the organizations recommendation (Garner 2012).
Employees can be hired through advertisement and social media as well. The companies also use direct and indirect methods of recruitment. The indirect methods include recruitment through advertisements and the direct method includes contacting with the interns and the future employees of the company. The human resource department is very efficient in the company. The recruitment and selection have influence on not only the organizational success but also employee performance. The selection criteria at Google include the applicants to have skills such as creativity, smartness, drive for excellence and alignment with the organization. It is not essential for the employees to have work experience. The criteria for the selection of employees are based on the goals and objectives of the firms. Its main aim is innovation and the strategy for selection depends on the strategy of innovation (Kehoe and Wright 2013).
It is essential for the HR department to be efficient while selection of employees as the success of organization depends on the characteristics that the employees posses. Since people at organizations work as a team the performance of the other employees greatly depends on the characteristics of the employees that are selected. It is essential for the organizations to select those employees who can motivate others to work hard. Various selection processes are there that the company can use. Google uses many selection techniques such as interview, on the job tests, preliminary screening and online tests (Manzoor 2012). Different steps and selection process sis used for selecting employees for different positions. For example for the post of manager the head official of the organization takes and interview and the decision of hiring depend in that person only. The question pattern and the interview questions also differ. The on the job tests are usually arranged for the trainees and interns that join the company only for a short period of time as a temporary employee. It is also essential for the employees to have a fit in culture in order to survive in the new job environment (Truss et al. 2012).
Training and development
Training and development of new employees at organization is also essential for the development of organization as well as enhancing the employee performance. One of the major responsibilities of the human resource department is to train and develop the employees of the organization to achieve the goals and objectives of the firm. Providing training and development leads to increase in employee productivity and profit. It also helps in improving retention rate and customer satisfaction. Proper training also gives the ability to the employees to think differently for creating a new product. Effective training also saves labor and cost of the organization as the same labors are now able to complete the work at lesser time. It creates a better workforce at organization (Ulrich 2013). Training and development improves company’s financial standing as it helps in saving the costs and time of the employees and the organizations. When the employees know exactly what they have to do it helps the employees save time and cost. It also helps in solving the problems that employees face. It also reduces staff turnover and also increases the customer satisfaction by fewer complaints being registered. The output and the performance of the employee also increase. Training helps in increasing the employee morale. It also enhances the loyalty of the employee towards the company. A company that provides good training opportunities to its employees is less likely to leave the company. Since the employees are less likely to leave the company the turnover cost also decreases (Ford 2014).
Google Company also offers effective training programs to its employees so that the employees are able to maximize their capability. Training also helps in creating an innovative workforce. It is also essential for the human resource department to examine the performance of the employees and provide the training accordingly.
The main benefits of training and development are:
- Training and development helps in removing the performance deficiencies of employees.
- It also creates a stable environment in the organization providing greater flexibility for growth and development.
- Accidents and mishaps at office can be avoided. Also the employees produce less of defective products due to training and development that they get.
- Training and development also serves an effective source of recruitment.
- The human capital is expected to increase the return in future due to the investment at present.
- Training and development also reduces absenteeism, complaints and turnover of employees.
- It also helps in increasing the profitability and productivity of the organization that in turn helps the firm create a unique brand name among its competitors (Jiang et al. 2012).
Recommendation of training strategies for Google
There are various strategies that Google can adopt to train its workers in order to maximize the employee performance. The first step is analyzing the needs of the organization and then forming the strategies on the basis of these needs. The needs analysis includes cost benefit analysis, organizational analysis and work analysis. For example suppose the company is planning to develop a new product so it is essential for the organization to conduct its need analysis and form a new requirement list and then train the employees accordingly. The main objective of the human resource department should be to use the needs analysis to maximize the benefits through training program. The second stage is to design a program that combines the company’s relationship with its employees using relational model. The training strategies and techniques involves discussions, simulations and on the job training. Training helps the employees understand the details of the work that the employees do (Anitha 2014).
Various types of training strategies are:
- Technology based learning that includes methods such as web based training programs, or basic pc based programs.
- Stimulators are another strategy that is used to imitate real work experience.
- The third strategy is on the job training where the trainer trains the employees in the process unit itself.
- The other types of training strategies are group discussions, lectures, coaching and mentoring. It also includes outdoor training (Hrebiniak 2013).
Managing human capital is the most important role of the human resource department. The responsibility of the human resource department is not only to recruit and select the right people for right job but also to train and develop employees so that they are able to achieve the goals of the firm. Strategic Human resource policies help in creating competitive environment for the firm. Training and development and recruitment and selection help in increasing the performance of employees and also lead to organizational success. The human resource department is efficient at Google Company that aims at hiring new people in order to create innovation.
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