Report for MPC Finances Board of Directors, outlining the HR related problems and a proposed HR strategy to overcome these

issues.

Tom OBrien 19/03/2010

Introduction MPC Finance needs to address a number of HR related issues, which are affecting its performance. Issues are concerned with reward management, performance, training and development, employee motivation, recruitment and selection, and industrial relations. A HR strategy will be proposed to rectify these issues.

Findings The graded salary structure used is creating problems as salary progression is slow, thus effecting employee motivation. It is discussed by Green and Heywood (2008: p710 - 728) that performance-related pay is associated with increased overall satisfaction, satisfaction with pay, satisfaction with job security and satisfaction with hours. Introducing PRP would be appropriate as job roles are concerned with targets and regional staff are working long hours, which seem to go unrecognised. The performance management system requires change, it allows little information exchange between managers and subordinates. The views of Fox (2009: p52 - 56) Increased oversight from upper managers and HR professionals improves review processes; showing that further communication enhances reviews and appraisals. Performance appraisal is a systematic process that assesses the performance of an employee and measures his contribution to the organizational objectives Redd and Manasa KVL (2009: p72 - 80). The journal of Management Development relates to a study regarding the receptiveness of appraisals to sales people, results indicated that salespeople have positive perceptions regarding the appraisal processes (Pettijohn et al 2001: p754). As MPCF is made up of similar professionals, performance appraisals are appropriate. Limited opportunity for progression effectively de-motivates employees, proved by high absenteeism and labour turnover within regional offices. Development is used in, increasing employee retention, employee performance, organizational performance and attracting potential employees and are used to increase job satisfaction and motivation (Capraz et al 2009: p699 - 711). Employee development can be fulfilled through training. Employees are using legacy systems, further training with new systems, although unproductive to begin with, will increase performance. This will in turn increase employee motivation. Issues regarding the lower respect of employees in regional offices compared to the headquarters need to be rectified. Regional offices need to be modernised which will improve the working environment. Improved working conditions have been directly linked to reducing labour turnover and absenteeism, and increased employee motivation (Gupta and Mishra 2009: p509 - 519). Elton Mayo believed workers are better motivated having social needs met whilst at work. The Human Relation School of thought focused on managers taking more interest in workers, consulting them over procedures, with the opportunity to provide feedback. He realised that workers enjoy interacting together (tutor2u, date unknown). MPCF could introduce feedback sessions and out of work social activities, bringing together employees from all regions, improving motivation. Recruitment can be expensive and this is an issue as MPCF is trying to keep costs to a minimum. The use of word of mouth recruitment can be used however in conjunction with more professional recruiting methods. Some advantages gained from word of mouth recruitment are candidates have already been vetted by an employee, are usually a better fit with the company and job, and have better understanding of the business. (Yakubovich 2006: p307 - 334). Word of mouth is used as a method of internal recruitment when current employees are competent to progress into management positions. Its necessary that women of all ethnic groups should be promoted to these positions, providing they hold the correct

competencies. Gender equality in management helps to ensure a healthy and balanced working environment (Bono and Duehr 2006: p815 - 846). When using job centres and agencies to recruit it is imperative that job roles are clearly defined, resulting in the correct calibre of applicants. MPCF could suffer industrial disputes as many employees are joining a white collar union. Employees join unions as they see mangers as them and the subordinates (themselves) as us, creating a divide in the organisation. With employees joining unions, they may campaign for higher wages, which managers want to avoid. One way to avoid unionisation is adopting a sophisticated human relations approach requires investment in staff development and use of a wide range of human resource management policies to substitute for the services unions provide for members (Redman and Wilkinson 2009: p214). MPCF will need to adopt this approach; identifying ways of how they can develop individual employees. Conclusion To conclude, problems that will prevent MPCF to perform and to achieve long-term success are listed below. y y y y y y Graded salary structure. Performance management concerned with limited information exchange. Limited opportunity for employee development, with the lack of training and the lesser number of women at management level. The lack of respect and privileges shown to regional employees. Recruitment techniques being inferior and attracting substandard applicants. Employees joining unions through feeling of discontent.

Recommendations Management must implement the following recommendations to rectify HR related problems, which will allow MPCF to achieve higher standards of performance and increase motivation. y y y y y y y A performance related pay structure Performance appraisals, with the opportunity for employee feedback. Training for employees with the new IT systems. Modernisation of regional offices and the bringing together of employees. The use of word of mouth recruitment to be used for internal management positions. Clearly define job roles when using agencies. A HR approach that substitutes the services that unions provide.

Signed

Tom OBrien

References Capraz, B. Kececioglu, T. and Kuruogullari, Y. (2009) Employee development by performance related pay system: a case study on blue collars constar Turkey, Ege Academic Review, Vol 9, issue 2, p699 711.

Duehr, E. and Bono, J. (2006) Men, women and managers: are stereotypes finally changing, Personnel Psychology, Vol 59, issue 4, p815 846. Fox, A. (2009) Curing what Ails performance reviews, HRMagazine, Vol 54, issue 1, p52 56. Green, C. and Heywood, J. (2008) Does performance pay increase job satisfaction, Economica, Vol 75, issue 300, p710 728. Gupta, B. and Mishra, S. (2009) Workplace motivators and employees satisfaction: A study of retail sector in India, Indian Journal of Industrial Relations, Vol 44, issue 3, p509 519. Manasa, K.V.L. (2009) Role of training in improving performance, IUP Journal of Soft Skills, Vol 3, issue 3/4, p72 80. Pettijohn, L. Parker, S. Pettijohn, C. and Kent, J. (2001) Performance appraisals: usage, criteria and observations, Journal of Management Development, Vol 20, issue 9/10, p754. Redman, T. and Wilkinson, A. (2009) Contemporary Human Resource Management 3rd Edition, Ft Prentice Hall. Tutor2u. (Date unknown) Motivation Theories http://tutor2u.net/business/gcse/people_motivation_theories.htm, Date accessed 16/03/10. Yakubovich, V. (2006) Passive recruitment in the Russion urban labour market, Work and Occupations, Vol.33, No.3, p307 334.