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Title:

Assignment topic:
Identify an innovative approach to strategic human resource development in an organisation
of your choice. This approach should represent a new direction in response to identified
organisational needs and environmental demands.
For example, the chosen strategic HRD approach could address the needs of a specific
strategic group, reinforce organisational positioning, address management
development/transition needs, focus on talent management or retention/re-engagement of
high achievers.
Write a short case study about this innovative approach to strategic human resource
development, emphasising:
The historical background and environmental conditions that led to its development,
A description of the approach, attitudes and behaviour involved in the innovation,
The strategies that were employed and which ones contributed most to the success of the
innovation in strategic human resource development,
Your evaluation of the pros and cons of this approach.
You can find examples of relevant cases through your reading of books and journal articles
and/or through research via the Internet.
Word count (from the start of the Introduction section to the end of the Conclusion
section): 2,500 words








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Executive Summary
This paper is based upon Credit Management & Debt Recovery Pty Ltd (the Company or
CMDR) located in Adelaide, South Australia. Although based on a real world example, I
have disguised the Companys true identity due to the sensitivity of the information
discussed.
My Proposal identifies the issues encountered by an organisation as it strives to achieve
sustainability and growth. A critical analysis of the concepts, theories and principles provides
the foundations for aligning human resources function with Companys strategy. My
recommendations increase the capacity for the Company to achieve its long term goals by
initiating an evolving framework fortified by integrative linkage.








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Proposal for Strategically Managing the Human Resource Function at Credit
Management & Debt Recovery Pty Ltd
Contents
1. Introduction ........................................................................................................................ 4
2. Section A - Background Information ................................................................................. 5
2.1 Board of Directors & Legislative Compliance........................................................................ 5
2.2 The Company .......................................................................................................................... 6
2.3 Organisation Structure (Appendix B) ..................................................................................... 6
2.4 Rapid Growth & Sustainability ............................................................................................... 6
3. Section B - Areas of Improvement and Justification for Change ....................................... 7
3.1 Legal & Accounts Operatives ................................................................................................. 7
3.2 Accounts, Admin & Support Department ............................................................................... 7
3.3 Senior Management ................................................................................................................ 8
3.3.1 General Manager ............................................................................................................. 8
3.3.2 Two Credit Managers & Recovery Manager .................................................................. 8
3.4 Human Resources Function .................................................................................................... 9
3.5 Development of HRM Practices ............................................................................................. 9
3.6 Organisational Structure ....................................................................................................... 10
3.7 HR Manager Appointment .................................................................................................... 11
4. Section C - Recommendations ......................................................................................... 12
References ................................................................................................................................ 13









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The area of HRD is, according to Strategic Human Resource Development in Organisations
(Yorks 2005) informed and influenced by fields such as adult education, adult
development, organisational psychology, economics and organisational theory.


















1. Introduction
Further to the Boards instructions, I am pleased to present my Proposal for Strategically
Managing the Human Resource Function at Credit Management & Debt Recovery Pty Ltd
(the Company or CMDR).
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This Proposal should be read in conjunction with the Independent Review dated 9 March
2014 (Appendix A) and the Company Structure & Hierarchy Diagram (Appendix B). The
Proposal is divided into the following three sections:
A. a summary of the background information regarding the Human Resources
Management (HRM) issues at CMDR;
B. areas of improvement and justification for implementing changes; and
C. benefits I hope to achieve through the implementation of my recommendations.
2. Section A - Background Information
My summary of the background information will include a brief discussion of the Company
before a thorough and detailed analysis of the key issues is conducted.
2.1 Board of Directors & Legislative Compliance
Sources of company law in Australia include common law, statute and a companys
constitution. Directors must put the interests of the Company before their own; acting with
due diligence and in good faith (per Whitehouse v Carlton Hotel Pty Ltd, 1987, 162 CLR 285
and ss180-184 Corporations Act, 2001 Cth; as cited by Cannings & Wheeler, 2011).
When a business is established, responsibility for HRM often falls to the founders as there is
usually insufficient resources available to immediate set up an HRM department or employ a
dedicated HR professional (Krenn, 2013).
At the very least, awareness of the legislation surrounding human resources is essential for
safeguarding the Company against legal employment issues and fines. It appears that the
Directors have taken the first step towards human resource compliance through the hiring of
the HR Officer in 2008 (Appendix A, 2.). Given the HR Officers qualifications include
Health & Safety and Training & Assessment, it could be said that the Company has attempted
to proactively manage these aspects. Regulatory compliance can even be used to the
Companys advantage. Outwardly projecting a company-wide commitment to employees can
demonstrate adherence to ethical principles. The Company gains competitive advantage
through the resultant positive image which is created.
However, the Executive Directors state that human resources has traditionally been viewed
as a minor, internal and administrative role (Appendix A, 2.1). This suggests the significance
and value of effective HRM has been overlooked. Given effective HRM is said to enhance
company performance by contributing to employee and customer satisfaction, innovation,
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productivity and reputation (Noe et al, 2013, p. 5), such an oversight has the potential for
severe consequences.
2.2 The Company
Following the Review (Appendix A), it is clear that the Board (and the senior management)
have good reason for concern. The Company provides credit management and debt recovery
services to SMEs and Local Government Departments and has suffered a decline in
performance in recent years (Appendix A, 1.). The dysfunction has surfaced at ground level
within the Legal and Accounts Operatives department (Appendix B). As this department is
fundamental to the Companys core service offering, the survival of the entire organisation
relies upon the ability and achievements of these ground troops.
2.3 Organisation Structure (Appendix B)
Reviewing the structure, the Company appears to have grown top heavy (prima facie, at
least). However, the CFO maintains that the business model is profitable and further
speculates as to the cause of the issue (citing lack of experience, refer Appendix A, 3.1 and
3.2). The CFOs opinion that the Operatives lack experience is correct (yet also obvious).
Excluding the Team Leader, the 12 Operatives have an average length of service with
CMDR of just 5 months (refer Appendix A, 5.6).
2.4 Rapid Growth & Sustainability
Sustainability describes the ability of the Company to survive in a dynamic competitive
environment (Noe et al, 2013, p. 14). The Companys founders in 1995 probably took an
informal approach towards HRM, which may have given an entrepreneurial advantage in
terms of a high degree of flexibility of managing the HR related problems (Krenn, 2013).
This might be the reason that the Company experienced approximately 12 years of success
and steady growth since its incorporation in 1995 (Appendix A, 1.). This supports the CFOs
comments regarding the successful nature of the actual business model.
In the long run, however, taking an informal HRM approach fails to maximise the value of
human capital - optimal results cannot be achieved consistently (Welbourne & Cyr, 1999
cited by Krenn, 2013). As the total workforce is now 28 employees (excluding non-executive
directors, refer Appendix B), the Company has reached the point at which greater
consideration must be given to strategic HRM if it is to truly strive for sustainability. Indeed,
management research suggests HRM is a critical factor for the survival, growth, and
sustained development (Cardon, 2003; Leung, 2003; cited by Krenn, 2013).
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3. Section B - Areas of Improvement and Justification for Change
Referring to the findings of my Review dated 9 March 2014 (Appendix A); I have identified
the key areas for improvement and will put forward justifications for such implementing
changes.
3.1 Legal & Accounts Operatives
Larkin & Burgess (2013) state that employees become knowledge gatekeepers; in that
retention allows for the value in their experience, knowledge and skills to be transferred from
individual to organisation. This demonstrates the importance of employee retention but also
highlights how voluntary turnover can become a chain reaction (for example, a reaction to
lack of adequate training of the new recruits).
Kaye (1999) states that in Australia, strategy has an outward economic focus and employee
considerations are often neglected. Employees are considered to be a commodity or resource
to be managed, rather than individuals who have entered into an employment relationship.
SHRM seeks to ensure the needs of the employee are met whilst simultaneously serving the
needs of the organisation. Investing the time in retaining employees who prove to be suitably
placed and appropriately productive is crucial as turnover costs are substantial and damaging.
Fig. 1. '5 ways to reduce turnover' (2014).








3.2 Accounts, Admin & Support Department
Although the CFO is extremely knowledgeable of the operations of his Department, retaining
the decision-making tasks has the potential to slow down the strategic growth capacity of the
Company. As a Director, he should be approaching management at Board level only. At
present, he appears to be micro-managing his Department as he is unable to delegate
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decision making responsibility to the individual members. The CFOs role should be
escalated to strategic level and the day to day management delegated to an alternate manager
(for example, the General Manager). This is also critical for succession planning.
3.3 Senior Management
The Senior Management were first to raise the issue regarding staff morale. Indeed, senior
managers and HR staff must consistently monitor the environment, organisation goals and the
mix of staffing levels - turnover can very quickly result in a severe depletion of critical
human resources (and knowledge).
3.3.1 General Manager
The General Manager states he has had great successes implementing performance bonuses
and commission within the Sales Division and suggests this as an incentive for the Legal &
Accounts Operatives. However, whilst this may work for the Sales Division, profit sharing
can be detrimental if not applied effectively. Employees focus may shift towards obtaining
monetary gains and the Companys core values may be neglected.
3.3.2 Two Credit Managers & Recovery Manager
Guest & Woodrow (2012), referring to the evidence of McGovern et al. (1997) and Brewster
& Larsen (2000), state that it is a common assumption that many line managers are reluctant
to accept responsibilities for the implementing HR practices. This certainly appears valid in
relation to this particular level of management given their delegation of day to day
management of the Legal & Accounts Operatives to the Team Leader (who is responsible for
cracking the whip).
The two Credit Managers and the Recovery Manager complain that there must be an issue
with the recruitment methods as the quality of Operatives in recent years has been
dreadful. Given their involvement with staff recruitment and termination (Appendix A, 2.2),
such fault appears to partly fall to them. However, it may be that they lack the selection,
interview and recruitment skills required of such tasks. Without the support of a more
experienced HR expert, they are unable to successfully build human capital value.
Selection of human capital through the recruitment process traditionally focusses on the basic
characteristics (for example, education, knowledge, skill, etc). However, characteristics do
not necessarily result in productivity, rather they provide the foundation. Productivity stems
most directly from the actual behaviours of employees. Many highly skilled employees can
exhibit mediocre or below standard performance in certain settings (Wright and McMahan,
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2011). This is where creativity and innovation by HRM offer vital selection techniques
ensuring valuable employees are chosen and retained long term.
3.4 Human Resources Function
The current HR function consists of the HR Officers role, its interaction with the Executive
Directors of the Board and its further limited interaction with the remainder of the Company
(Appendix A, 2.). The HR Officer appears to fulfil an administrative function within the
Company at present. Her qualifications cover OH&S and training & assessment (although it
is not entirely clear that this the latter is being put to good use, considering she has limited
knowledge of the Companys core service offering refer Appendix A, 2.4). The Executive
Directors traditional view of the HR function needs addressing (minor, internal and
administrative role). In modern times, the HRM functions involvement in administrative
tasks is decreasing and its role involving strategy, change and employee advocacy is
increasing (Noe et al, 2013, p. 7).
3.5 Development of HRM Practices
On examining the Companys structure, the HR Officer appears to have been isolated from
the rest of the Company; having been excluded from the Accounts, Admin & Support
Department and being made to report directly to the Executive Directors (Appendix A, 2.1 &
Appendix B). However, worthy of note is the ongoing contact the HR Officer retains with the
Companys formulators of strategy (ie the periodic meetings held with the Executive
Directors referred to Appendix A, 2.1). Top-level managers and HR professionals believe the
most effective method for developing the future HR professionals is to place them into
experiences that help them understand the business, its strategy and HRs role in contributing
to it (Noe et al, 2013, p. 13). Fig. 2 provides a benchmark for the HR Officers role in their
long term development.




Fig 2. The 2007 HR Competency Study involved the participation of over 10,000 HR
professionals and their line management. Six major domains of HR competencies
emerged and are depicted below (Ulrich et al, 2008).
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In the short-term, however, it is unlikely that the HR Officer will have sufficient enough
impact upon the Company strategically. This is despite her direct line to and interaction with
the Directors. Training takes time and, as she has little understanding of the Companys core
service offering and the Directors have no formal HR qualification (Appendix A, 2.4), the
Company simply cannot afford to risk not recruiting an HR Manager at this critical point in
time. Until this gap is acknowledged by the Directors (and indeed the entire Company), the
matter is still only being dealt with from an organisational level. Becker & Huselid (2010)
state that strategy is about discovering how to earn prots above and beyond what might be
expected from operational excellence.
3.6 Organisational Structure
Research into HRM argues the potential impact upon the strategic management process of a
company, especially during the growth phase. As the size of an organisation grows, a more
strategic approach to HRM, based upon a formalised HRM structure, can positively
contribute to performance outcomes, growth and survival (Rutherford, Buller, & McMullen,
2003; Welbourne & Andrews, 1996 cited by Krenn, 2013).
Wei (2006) summarises two types of fit of strategic HRM as horizontal fit, being the
coordination among a variety of human resource practices, and vertical fit, which is more
concerned with the compatibility between HR practice package and a firms strategic pursuits
(refer Fig. 3).
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Fig 3. According to the interpretation of the principles by Wei (2006), a fundamental
characteristic of strategic HRM is fit this denotes the utilisation of human resources to
help with goal achievement.








The fit between HR practices and strategy changes as an organisation advances through its
stages (Baird & Meshoulam, 1988). However, without first establishing a suitable structure
for implementing effective HRM, much of the theory cannot be applied to any lasting degree.
Noe et al. (2013, p. 157) defines organisation structure as the relatively stable and formal
network of vertical and horizontal interconnections among jobs that constitute the
organisation. Over the years, as the Company has experienced growth, degrees of
centralisation and departmentalisation within the structure have clearly become distorted and
dysfunctional. However, criticising the Companys structural configuration in any detail falls
beneath the scope of this paper and, in my opinion, taking a more holistic approach is of
greater value.
3.7 HR Manager Appointment
In order to reinvigorate HRM and align culture with strategic mindset and direction for the
Company, I propose the appointment of an HR Manager (refer Appendix C). Becker &
Huselid (2010) state that designating a strategic job begins with a top down analysis that
begins with the business strategy, and concludes with an assessment of how a role fits into
that strategy. Without causing drastic changes to the existing hierarchy, I have restructured
the Companys existing configuration based on workflow (refer Appendix D) and integrative
linkage (appointing an HR Manager as per Appendix C).
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Establishing the strategic management process first within the HRM department allows the
opportunity for its own existence to be reviewed. A full assessment of its alignment with the
Companys mission, values and mission can be conducted. Once the HRM departments own
practices are implemented, it can lead by example and drive strategic alignment within the
Companys other departments. An example project which the HR Manager may wish to
undertake upon appointment can be viewed at Appendix E.
4. Section C - Recommendations
Ultimately, I hope to achieve a linkage of the HR functions with the strategic goals of the
Company. This should improve performance by cultivating an organisational culture that
embraces innovation and flexibility (Truss & Gratton, 1994). Starting with the HR
department and driven by the newly appointed HR Manager; strategic HRM effectiveness can
be continually monitored as it filters through to the different departments within the
Company.
It is impossible for the Company to achieve its strategic goals without the right number of
employees performing adequately with the requisite knowledge and skills. My
recommendations can therefore be summarised to include a soft restructure of the Company,
the appointment of an HR Manager and an evaluation of the individual job designs.
Implementing my recommendations will result in improved employee retention, greater job
satisfaction, and sustainable long-term growth.





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References















Yorks, L 2005, Strategic Human Resource Development in Organizations, South Western
College Publishing, Mason, Ohio.