The Changing Context for Shrm

The changing context for SHRM

1. Major concern for organisations is to recruit and retain the right number of staff with the appropriate skills and experience
2. Cost and quality of labour play important role in the delivery of an organisation’s strategy

The changing nature of work

1. Result of broader economic changes, majority of is employed in service organisation, it also shows a signification growth in knowledge work
2. Employers are utilising labour in different ways

1. Temporary and part time contracts to match supply to demands and growth of the business
2. Growth of virtual teams – employees in different geo location working on various time zones connecting through modern communication technology
3. Increase in service work resulted in “emotional” and “aesthetic labour” – who need to manage their emotions and to appear in prescribed way

1. All the above brings out that if the business are expecting different things from workforce, then there is a need to change the way they are managed

Growth of Service work

1. The five attributes that identify services from primary, secondary, manufacturing, and agri sectors are

1. Intangibility – services have an intangible element which cannot be touched
2. Perishability – service work cannot be stored or stockpiled
3. Variability – customer’s expectations may vary within the services
4. Simultaneous production and consumption – what employee produces is consumed at the same time by the customer
5. Inseparability – Customer cannot be separated from the service process
6. Part of production – Customer is also part of the production process.

1. Korczynski notes that not all services work will possess all of these attributes, like back office work is less likely to be perishable as information can be saved and used later
2. Frenkel identified the following five characteristics of service work

1. Service work is labour intensive – containing labour cost is likely to be a top management priority
2. Symbolic behaviours (attitude, dress) and social skills of employee’s form part of product – to be considered in job design and in the way HR are managed
3. Service work may involve other – more often customer
4. Service work is often required “on demand” and may require coordination of various skills to deliver the service
5. Services more often require customisation hence there is a limit to standardise the processes

Work place flexibility

1. Flexibility for organisations

1. Recruitment across the globe to delivery – exploit the low cost labour from other countries

1. Flexibility for Individuals

1. Flexitime
2. Compressed working hours
3. Annual hours Contract

HR Approaches to Service Industry

1. 1970’s – Let’s apply to services what we do to manufacturing with regards to quality

1. Lead to production line approach (Taylor’s Principle)
2. Standardisation
3. Lead to scope of customisation being low

1. Classification of Service Industry (Service Delivery through Frontline employees)[pic 1]

Front line

     Top Management

Lead to a Social order Change

                                Customer[pic 2]

                Management                        Employee

1. Customer became part of the process

Critical Perspectives of Services Industry

1. McDonaldisation – Directing behaviour of Customer – Making it more predictable
2. Co – Production – Customer is part of the production process
3. Restricted Menu – offerings – Make it more efficient – less variability – reduced choices helps is reducing customer expectation variability – personalisation a key feature in service industry
4. Close co-ordination – Back end operation and front end customer facing team for better delivery to the customer

Customer Cult

1. Service industry resulted in a new concept called Customer “Cult” / Culture – Customer is the King, characterised by

1. High customisation – variability in needs of the customer
2. Customer Sovereignty - The power of consumers to determine what goods and services are produced. The theory suggests that consumers, not producers, are the best judge of what products benefit them the most
3. Leading to more choices
4. Value Added Services – to meet customer sovereignty and to provide customer delight
5. Establishing of service recovery process

This was different from how to manage the service as per McDoaldisation view

New Service Management School

Advocated the following

1. Creating of Standard operating procedures
2. Careful selection of staff – (Frontline or customer facing}
3. Empowerment of the frontline or customer facing staff
4. High quality of training and High investment on Training
5. It’s all about team work

“Best Practices” and “Best Fit” approach to HR management

The characteristics of best practices can be identified from the list of HR set of practices that were listed by best practice proponents championed by Pfeffer (1994).

1. Employee development
2. Promotion and other incentive as a reward for employee performance
3. Career progression
4. Fair appraisal exercise
5. Structured communication system
6. A well-structured recruitment process
7. A friendly working environment (Removal of Status Differences)
8. High Commitment Management System
9. Use of team

Advantages of Best Practice

1. Employees Training and Development
2. Performance Appraisals as Motivational Tool - Performance appraisals allow individual performance to be assessed which can serve as a production benchmark for operational performance.
3. Better Communication System
4. Effective Use of Teams Leading More Effective and Efficient Outcome

HRM Best Fit Model

This approach is also known as the contingency model and proponents of this approach assert that there is no universal way of doing things as what might work well in one place may be unsuccessful in another place. This calls for the alignment or contingent relationship of business strategy to organization HRM practice (Miles and Snow 1978).  Advocates of this approach suggest vertical integration where control can be achieved through human resources practices and process is taken as the key element (Jackson and Schuler 1995)