Challenges facing Human Resource managers

Q/1 Business environment is changing everyday and bringing new challengers to the HR managers. What are the challenges faces by Hr managers at British Gas in the UK?

The ultimate goal of any organisation is to gain success in the market it is operating in. In order to achieve the aim organisations need to generate an agent that operates in a variety of real world environments. It is crucial to include some mechanisms that allow it to operate in a dynamic environment, one that changes over time independent of the actions. Certainly there are environments that do not change with time and are static but these are usually small organisations that are limited in size and scope.

Traditionally the environments used to be static but the trends in the market are changed, the static and well predicted market changes have been distorted to dynamic and ever changing market situations. To deal with the changes in the market and achieve their ultimate goal organisations need to consider not only the external but also the equally important internal constituencies.

Among all the internal factors employees can be said as one of the most important part. The role of the employees for the endurance of any organisation is well acknowledged in today’s modern dynamic and competitive business world. Therefore employees have been the centre of attention and are being invested in by the organisations by providing them training and development, competitive remuneration and other benefits.

Thus in today’s dynamic market environment when organisations have felt the need of taking care of their employees, they can also sense the necessity of professionals who can deal with the above mentioned problems. This is where HR managers come into the picture who deals with all the issues related to the employees. The role of the Human Resource manager has been developed with time from just administrative roles to modern role of strategic partnership. (Bratton and Gold, 2007).

British gas which is renowned energy brand in United Kingdom is a part of Centrica. British gas is operating in an intense rivalry and in order to stay ahead in the race to success they have to consider all the stake holders including employees. British gas recognises that their success has been dependent upon the capabilities and dedication of their employees, and as a result they are committed to meet their people needs.S

The different changes within the business environment can be summed up using PEST analysis, which includes the changes in both the internal and external environment. PEST Analysis is a simple, useful and widely-used tool that helps you understand the “big picture” of your Political, Economic, Socio-Cultural and Technological environment. As such, it is used by business leaders worldwide to build their vision of the future. A diagram showing different components of the Pest Analysis can be seen below.

This framework helps the HR manager along with other management to deal with different changes in the environment the organisation is operating by which they can provide a good working environment.

Now let’s analyse the changes within the different aspects of PEST analysis and the challenges it brings to HR managers in British Gas.

Political:

The political factor of Pest analysis deals with the effects of government policy. Inasmuch as government policy is worked out through legislation, it encompasses all legal elements of this analysis. This includes items such as government stability, taxation policy, and government regulations. Government stability is not a major issue in Western economies but plays a vital role. (Henry, 2008).

Although In Europe UK is said to be the least protective legislation but still has many laws that can influence and ensure the smooth running of the businesses.

Firstly there are many laws regarding the equal opportunity within the organisation. Any organisation has to consider candidates for recruitment and selection irrespective of race, gender, age and religion (CIPD). Avoiding any of the mentioned factors means discrimination which has its negative aftermaths and can damage the organisation. British gas has taken many steps in order to avoid this discrimination which would be discussed in detail later under Recruitment and Selection. Laws for health and safety at workplace have also been imposed and organisations should comply with it in order to make a safe working environment.

British gas as being in energy related industry needs to consider this aspect in depth. It is role of a HR manager in particular to deal with the related issues. British gas considers health and safety for their employees and the environment as being fundamental to their business objectives. Conventionally Health and Safety was not considered in depth but in the modern world there have been many changes with laws ensuring a safer working environment. (British gas webpage).

There are many changes made to the laws with time. Other laws for HR revolve around things like pay rates, fair competition, taxation and fair dealings with employees. The laws for these factors do change with the change in government as well and British gas has always been ahead with regards to the laws.

Equally important is the discussion about the privatisation of British gas in late 1980s which actually had a vital role over the HR dealings within the company, example being the job losses (from 91,599 in 1986 to 78300 in 1992) which were made because of the privatisation, this had a real impact over the HR and they dealt with it in superior manner to keep their retained employees motivated. (International labour organisation, Sectoral activities programme)

Economy:

Economical changes such as economic uncertainly, changes from manufacturing to service or knowledge economy, mergers and acquisitions activity and increased energy and fuel costs. In a knowledge-based economy, the most important business investments involve investing in personnel, putting HR managers at the centre of some of economic debates. Issues related to human capital and people management are now among the most important challenges in business, bringing the expertise of HR managers to the core not only of business but also of nation economic competitiveness. Understanding the broader business and societal implications of these trends will be crucial how to address their resulting challenges at the organisational level and will require HR managers to be well informed about macroeconomic developments.

Social:

Social factors include cultural changes within the environment and are often referred to as socio-cultural. This includes health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. (Henry, 2008).

HR managers may increasingly find themselves dealing with the impact societal trends, such as 24/7 work culture, changing family pattern, and a growing emphasis on work/life balance have on time-related issues in the workplace. Benefits linked to flexible working and controls over schedules are likely to continue to be in demand. Possible changes to the bargaining power of employees and women, in particular, could make meeting this demand a higher priority to employers. Finding ways to continue to engage workers with high levels of responsibility and skills but who may not be able to work full time may become more important. This will be exacerbated by the need to find enough skilled workers which could potentially pose a challenge in the coming decades as education cost rise and skills requirements increase.

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Technology:

Any organisation needs to be the pioneer of the new technology and to be ahead in the competitive race in the market in order to lead. This undoubtedly has a major impact on HR as they need to train their staff accordingly and make them flexible enough to adapt to the changes within the technology.

For HR managers, the efficient use of technology has emerged as a key skill. Recruitment strategies can also be affected by Changes in the technology while major advancement in e-learning could influence training strategies.

Q/2 Comment on how HR activities contribute to the success of British Gas. Use any 2 HRM Models to explain you answer?

Employees are the most important factor needed for the survival of any organisation and HR is responsible for catering the need of the employees and establishing a relation between the organisation and its employees. In order to succeed in the modern world it is provident that there need to be effective HR activities which could help the employees feel as a part of team rather than being alienated. Only then it can have the competitive advantage over their rivals and the employees would work hard and whole-heartedly in the favour of the organisation they are working for.

In British Gas employees do feel valued and as a part of team only because of the effective HR activities. We now will discuss the HR activities in British Gas in accordance with two HR models which have helped them to be in the lead in their market.

David Ulrich Model

The first model which we will discuss is the David Ulrich Model. The model we made by David Ulrich in the year 2000, who is said to be the HR guru. In the model he proposed that the centre of attention for all the HR activities must be on the contribution to organizational success. He further explained that the key to excel organizational performance is to ensure that human resource’s activities are in line with the organization and focusing on productivity, service and quality.

Below is the diagram showing David Ulrich model.

Productivity can be explained as the output per employee. With the increase in competitive rivalry incessant improvement in productivity has a significant role. British Gas has been considering the significant importance of the afore-mentioned aspect of the model. With the view of increasing the productivity British Gas has been investing £24 million every year in their Engineering Academy to continue their exceptional training for engineers working there. The Academy eve achieved ‘grade one’ performance in a 2007 Ofsted inspection. In the academy employee are provided with related training which helps them to be more effective and efficient with regards to productivity.

Quality of the products and services delivered extensively affects organizational success in the long run. The quality of products and services can provide competitive advantage to any organization. The quality of products and services is directly interlinked with the growth and performance of the organization as a whole, therefore it requires equal attention. The stress on quality requires continuous changes aimed at improving work processes.

HR management considerations should be included in order to indentify the barriers and service blockages and redesigning operational processes. The process should also involve the employees as well rather than just the managers. The above mentioned activities should be done with accordance to the organization’s mission.

British Gas itself explains that its the service they provide to the customers which gives them competitive advantage over their rivals and sets them apart in the marketplace. The British Gas Academy of Customer Excellence has also been set up which underpins their aim to consider their customers as one of the key stakeholders. The academy provides training to the front-line employees.

Warwick Model of HRM

Bratton & Jeffery (2007) proposed the Warwick model in which Harvard framework has been extended with 5 elements including Inner context, outer context, business strategy content, HRM context and HRM content. The model explains the link between the changes in internal and external and both the content and context in it. The strength of the model is that it underpins the important environmental influences on HRM. Below is the diagram showing the model.

Outer context

Inner context

Business strategy content HRM context

HRM context

Basically HR Manager of British Gas firstly plans their future strategy and recruits people accordingly mostly through external sources like advertisements in newspapers, magazines and through employee referrals. Firstly they screen all the applications and then select candidates based on their potential, knowledge and experience mostly through face-to-face interview. Successful candidates are put through induction and are provided with continuous training.

British Gas does consider the fact that monetary rewards is only one of the many needs of the people and therefore provides them with many non-monetary social needs such as flexible working hours and a better and relaxing working atmosphere. Employees within British Gas are also appraised regularly so that they know how well they are doing.

Keeping in mind the broader aspect of the business HR manager maps the link between inner and outer context followed by an approach which leads to the changes in the content as referred in Warwick Model.

Along with this HR managers also connects their activities of Planning, Integration, Staffing, Developing, Motivating, Designing, Managing Relationships, Managing change and Evaluating by keeping in mind the everyday changing business environment. But apart from this I think to survive and maintain a good market position in this globalized, competitive, innovative and rapidly changing business environment British Gas must change their ‘Mechanistic Structure’ to ‘Organic Structure’ which is very flexible and innovative.

The HRM strategies at British Gas satisfy customers to the highest but surely not at the expense of their employees needs which helps them to lead in their industry.

Q 3 Describe Recruitment &Selection strategies that have been taken by British Gas to enhance organisation performance?

Recruitment and selection is said to be one of the main role of a HR practitioner, as they need to ensure that they choose the right staff. While going through the process they need to consider many factors including equal opportunities without the factor of discrimination. In order to ensure this, there are laws to avoid discrimination against race or ethnic origin, religion and belief, disability, sex and age. The ones who avoid this practice will indeed break the law and will have to face the consequences (Tackling Discrimination, 2009).

K Aswathappa (2003) defines recruitment as ‘a process of finding and attaching capable application for an application for employment. The process begin when new recruit are sought and end when their application are submitted. The result is the pool of applications from which new employees are selected.’

Derek Torrington (1987) states that ‘Planning the right people in the right place at the right time is seen to be essential to achieving rapid growth. The emphasis is on balancing the projected demand for and supply of labour, in order to have the right number of the right employees in the right place at the right time’.

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In terms of recruitment and selection it is important to carry out thorough job analysis to determine the level of skills/technical abilities, competencies, flexibility of the employee required etc.

Since 2003, British Gas has done a lot of work in order to improve the diversity in their workforce which helps them in their customer base and is a response to changing demographics as well. With the increase in demand and the competitive rivalry British gas had to attract more employees and for that the HR managers dealt with it in a well-mannered way. Carole Willsher, Recruitment and Diversity specialist, explains ‘ We tend to use the analogy of a pond gone; if we don’t recruit women, that’s over half the pond gone ; if we don’t recruit people from an ethnic background, that’s about another 10% gone, and we’re left with only a very small part of the pond to fish from.’

The process of recruitment and selection at British gas is shown in the following diagram.

Acknowledgement

Initial Review

Online Application

Assessment Centre

Second Stage

Job Offer

<http://www.britishgasacademy.co.uk/index.asp?pageid=92&show=1#process_1>

In the process candidates have to complete an application form and online test which is then acknowledged by an email upon successful submission. The submitted application is then reviewed and candidates are updated within 14 days. After the successful initial review the candidates are required to give a telephonic interview for some job roles which is then followed by the assessment centre where the candidates go through a face- to- face interview, practical tests (for some roles) and role plays. After careful consideration of the entire application process candidates are then offered the job within 14 days of the assessment centre.

Recruitment and selection is done by both internal and external manners. As mentioned earlier in order to attract a vast group of applicants HR managers at British Gas use both the ways.

Internal recruitment includes promoting the current staff or moving them from one department to other. It also includes the referrals made by the current employees. The advantage with internal recruitment is that it allows the organisations to know the strengths and capabilities of their existing employees which help them to allocate them accordingly.

As mentioned earlier, the main objective of British gas is to increase the number of applications for the different vacancies in order to attract a wide range of talent as possible. For this they use the different types of external recruitment strategies. Some of these strategies are as follows:

Tester days:

British gas regularly runs women only and BME tester days, with the specific aim of attracting women and ethnic minorities into engineering and apprenticeships.

Partnership working:

British gas also use different partnerships with different organisations in order to focus on under-represented groups including Jobcentre Plus, Windsor Fellowship, Women and Manual trades.

Targeted Advertising:

They also use a range of ways and media to appeal to its target audiences. They use advertising in magazines like Bliss and Sugar. They also redesign their special webpage for recruitment regularly.

Attracting a wide range of candidates is not the only purpose of the managers but also to select the right staff. For that a right recruitment process has to be applied. A diagram is shown below which illustrates the different stages of the recruitment process within British Gas. The only way to increase the performance of the organisation is to have an efficient process.

Q 4 Explain how HR training and development helps British Gas to develop highly competent staff and teams. Describe use of variety of HRD methods taken at British Gas.

According to Mackey (2003), in our lifetime of learning we meet many people who contribute to our knowledge, and in today’s world training is seen as an essential aspect in HRM practice. Training is often seen as something that is work related – on-job training, off-job training or employment training schemes. Many organizations aspire to be learning ones, but it takes dedication to achieve this. It requires commitments from everyone to allow individuals to manage their own development and to support the process through coaching, feedback and outgoing performance management. Trainers have a key role to play in the creations of a learning environment. The typical role of Training & Development functions has been to respond in a reactive manner to the training and development needs to other functions throughout the organization.

British gas always ensures that it provides effective training at all levels, which can help its highly competent staff and teams to develop. In order to offer continuous training for their engineers British Gas is investing £24 million each year in their British Gas Engineering Academy. The Academy also managed to achieve ‘grade one’ performance in a 2007 Ofsted inspection. They have also aligned their apprentice scheme to the Duke of Edinburgh’s Gold Award, which actually provides enhanced personal development and life skills to the trainees.

As any other company British gas also believes that it is the customer service which helps them to lead in the competitive race. The British Gas Academy underpins their aim to put customers at the heart of everything they do. The Academy therefore also provides training to their front line employees.

Building on the success of our engineering academy, the customer service academy encourages best practice and knowledge sharing. By co-ordinating activities nationally, this new structure improves the consistency of our training design and delivery.

Effective training to the employees leads to improve quality of the process they are working into. One of the key skills of a trainer is the ability to design training programmes and learning experiences that are innovative, exciting and fun. Trainer should also identify individual learning styles and respond to the needs of the business. The field of training and development (T&D) has undergone changes that reflect the dynamic factors in the corporate world overall. T&D’s objectives continue to shift from a focus on programmed instruction (and behavioural and task analysis), to performance-system analysis. Learning is now defined as a competitive strategy in the global workplace. Therefore, trainers must engage in defining strategic goals, analyzing organizational processes and providing better systematic performance within the business context.

Increased need for improved performance requires more efficient ways to identify, recruit, and improve the training and education of the workforce. As traditional, hierarchical organizational structures are increasingly transforming to self-directed, cross functional, process oriented, and knowledge-based models, both organizations and individuals are increasingly faced with the new challenges to maximize the organizations competitive edge, and to meet new standards of excellence in performance. First, in order to understand what is nowadays expected from management trainers and educators, it is essential to understand how current perceptions of the manager’s job and responsibilities have developed. Then, it will be argued that the adoption of a simple solely task-related model of training – often used to train managers from developing countries – has proved to be inadequate.

Therefore, a realistic management training model ought to include the “task related” and “people-related” aspects of the manager’s job as well as the trainee’s own development, in its design and content. Based on the above a more realistic approach to management training and development will be offered and some of its implications for trainers and training institutions will be discussed and certain conclusions will be reached.

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Evaluating Training & Development:

This has always been a key topic for trainers. T&D that is not delivering the expected results is likely to be potentially harmful to the organization, demotivating to learners and damaging to the reputation of trainers. In today’s business world evaluation has taken on even greater significance than in the past. Evaluation is undertaken with the purpose of encouraging improvement. When evaluation is planned, it is done with the intention of analysing results and implementing suitable changes in a timely manner followed by further evaluation. Such cyclical approaches agreeing standards, evaluating, improving, checking standards and so on are the basis of really useful evaluation processes for each aspect of the training and development process.

The focus is on maximizing the use of resources, maximizing the likelihood of business success and maximizing the impact of staff motivation. One needs to critically evaluate each T&D event in which you are involved. This is as true for a week-long course as it is for an individual coaching event. The more one evaluates, the more one learns, the more quickly the business will benefit and the more quickly individuals skills will develop. Each type of T&D event will have its own type of evaluation, but each has the common aim of change and improvement.

As compared to other Departments like IT and Finance, T&D is also one of the important departments in the organisation as its trains people in the organisations who with their full potential & calibre help the organization to achieve its set goals with high quality &standards.

Q5 What role Performance Management plays in achieving higher performance at British Gas? Describe use of variety of performance appraisal strategies taken at British Gas.

Staff development doesn’t just happen. It takes a conscious and concerted effort on the part of the manager to support and encourage their employees’ initiative. It requires a continuous attention of both the employees and the supervisors or the managers involved. Performance appraisals are undertaken to let an employee know his/her performance and compare it with the expectation of the organisation as a whole. The process involves clarifying the job role, job description and responsibilities and explains how the role can contribute to the wider goals of the organisation.

It is important that the employees understands how their performance contributes to the overall performance of the company. This direct connection helps to encourage team play and shared responsibility within the company, although the performance objectives should be individual and agreed between the employee and the manager.

In a performance appraisal employees also get the opportunity to give their feedback about the working conditions and any advices which could be helpful for the organisation to improve their productivity. In order to ensure an effective performance appraisal the manager should keep a record of the process which could be helpful for the future reference.

There are many different types of performance appraisals. Following are some of them which are mostly used at British Gas:

Top-down Appraisals: According to Harrison (1995) this category of performance appraisal involves the line manager undertaking the formal appraisal of the employee. Managers in this type of appraisal can be biased and may be less open, honest and can lead to the favouritism factor. In such situations another manager or HR specialist can be involved to act as a moderator in the process.

This is seen as a very traditional type of performance appraisal and is rarely practiced in the modern world. It was used at British gas as well but is replaced by other new frameworks and other types of performance appraisals.

Self Reviews: Harrison (1995) explains that self reviews are based on the idea that employees are most familiar with their work and their involvement is vital. They have proved to be superior to supervisory reviews in identifying individual strengths and shortcomings. The biggest problem with this approach lies in the fact that this violates the traditional mores regarding the proper relationship between the boss and the subordinate.

Upward Appraisal: Harrison (1995) describes that in this technique, the views of the employees, who report to the appraise (manager) are considered and can also be an important dimension of management development. It is effective in an organisation which has an open and supportive culture and which encourages participation as a legitimate element,. Upward appraisal may be threatening for a manager and uncomfortable for the subordinate appraisers.

360 Degree Feedback: N. Bahra (1997) states that “This method is an assessment technique lies at the heart of many successful organisations. This briefing aims to provide an objective method of assessing an individual’s performance in a number of critical and non-critical areas.” This method being used in many big organisation in the modern world and is hence used at British Gas as well. Harrison (1995) explains that this is a way of limiting the effect of the top- down appraisal scheme and building on the positive aspects of self, peer and upward appraisals. This method includes peers, subordinates, internal and external customers and the managers.

Its aim is to achieve a broader view of employee performance. It can increase customer focus, support team initiatives, decrease the hierarchical approach and provide greater employee evaluation. It is an assessment technique which lies at the heart of many successful organizations. This briefing aims to provide an objective method of assessing an individual’s performance in a number of critical and non-critical areas.

REFRENCES

Book References:

Bach, S. (2005) Management Human Resource: Personnel Management in transition. Oxford: published by Blackwell publishing.

Henry, A. (2008), Understanding Strategic Management. published by Oxford.

Bratton, J. and Gold, J., (2007) Human Resource Management: Theory and Practice. 4th Edition, London: Publisher Palgrave Macmillan.

Bernardin and Beatty (1984). Performance Appraisal : Assessing Human Behaviour at Work. Published by Kent Pub. Co.

Torrington, D., Hall, L. and Taylor, S. (1987): Human Resource Management. Sixth edition, Spain: Printed by Mateu cromo artes graficas.

Aswathappa, K. (2005) Human Resources and Personnel Management. 4th edition, New Delhi: Published by Tata Mcgraw-Hill.

Mackey, D. (2003) everything you ever needed to know about training. London: published by Kogan Page Ltd.

Taylor, P. (2003) How to Design a Training Course. London: Continuum publication.

Harrison, H. S. (1995) Advanced Appraisal Methods: General Certification Supplement. Oxford: Published by H2 Co.

Bahra, N. (1997) 360 Degree Appraisal. London: Published by FT Pitman.

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