Human Resource Management Assignment Business Essay
Human Resource Planning can be defined as a systematic analysis of Human Resource needs in order to ensure that appropriate number of employees with the necessary characteristics and skills are available when they are required. [Mondy et (1996)]
Therefore Human Resource Planning helps the organization to anticipate their future Human Resource requirements and to identify ways and means to meet those needs. In broader sense Human Resource Planning can be explained as a key component of every organisation’s strategic business planning and it identifies, administrate and evaluate the human resources requirements to meet organizational goals. In addition Human Resource Planning assess the availability of qualified resources to meet the organisation requirements and also to ensure competitive advantage. Human Resource planning helps to retain the talented employees and also to attract fresh skilled employees in to the organisation.
Human Resource planning can be done on a short term (less than one year), medium term (one to three years) or long term (three to five years) basis. This planning process ensures that people will be available with the relevant talents and skills when and where the organization needs them.
When we look at the Human Resource Management Process, human resource planning is a vital component of it. The main stages involved in the HRM process can be illustrated as follows.
Human Resource Management Process
Human Resource Planning
Recruitment
Selection
Training
Performance Appraisal
Compensation
Employee Separation
To study Human Resource Planning and how does it contribute in achieving an organisation’s goals, I have selected the Central Bank of Sri Lanka (CBSL) for my study purposes. This is one of the largest organizations in Sri Lanka which plays a vital role in the Sri Lankan economy. Lets now get a glimpse of the Central Bank of Sri Lanka
Central Bank of Sri Lanka
The monetary authority of Sri Lanka is called the Central Bank and this was established two years after the country’s independence which is in year 1950. Central Bank of Sri Lanka (CBSL) was established under the Monetary Law Act No.58 of 1949. Mainly responsible for the conduct of monetary policy in Sri Lanka, the Central Bank also has wide supervisory powers over the financial system in the country.
Following the amendments to the Monetary Law Act in December 2002, The Central Bank of Sri Lanka is a semi-autonomous body which is governed by a five member Monetary Board, comprising the Governor of the Central Bank of Sri Lanka as Chairman, the Secretary to the Ministry of Finance and Planning and three members appointed by the President of Sri Lanka, on the recommendation of the Minister of Finance, with the concurrence of the Constitutional Council.
Since its formation the Central Bank’s focus and functions have evolved, in response to the dynamic economic environment. According to the amended Monetary Law Act (MLA) in 2002, the objectives of the Central Bank were streamlined to enable it to pursue its core objectives and to free it of the multiple objectives that were originally assigned to it. The two core objectives of the Central Bank:
a) Maintaining economic and price stability
b) Maintaining financial system stability
a) Maintaining Economic and Price Stability
In simple terms price stability means low inflation. Experience has revealed that when there is low inflation the interest rates are low and thus the economy performs well. An environment such as this allows an economy to reach its desired growth. This kind of situation hamper to an economic growth which is sustainable. Therefore the Central Bank of Sri Lanka with its monetary policy measures tries to maintain economic and price stability.
b) Maintaining Financial System Stability
Financial system stability refers to the effective functioning of the financial institutions and markets with absence of crisis in banking, currency and balance of payments. Such an environment is favourable for investors and depositors resulting growth in investment and the economy. Thus in order to have a stable financial system, the Central Bank of Sri Lanka tries to maintain a stable macro-economic environment, effective regulatory framework, well organised financial markets, safe and robust payments infrastructure and sound financial institutions.
Apart from the core functions the Central Bank of Sri Lanka is responsible for issuing currency and management in Sri Lanka. It also does the following agency functions.
i) Employees’ Provident Fund Management
ii) Foreign Exchange Management
iii) Public Debt Management
iv) Regional Development
v) Financial Intelligence
vi) Provincial Office Monitoring
When we consider the CBSL, it is like the heart of the economy of Sri Lanka thus as mentioned above needs the sufficient employees, with the right blend of talents & skills and performing their jobs according to the organisation needs to make sure that Central Bank caters to the demands of the country. Therefore it is now clear that Human Resource Planning plays a major role in an organisation.
According to the Central Bank statistics the staff strength of the Bank is 1489 and this comprises of Staff Class, Non-Staff Class and Minor Employees. When observe the age distribution of the CBSL employees it was noticed that there are 13.2% of employees over the age of 46 and also 19% over the age of 50. This highlights the importance of Human Resource planning as to fill the staff who will be retiring there needs to be medium and long term planing.
Table 1 : Staff Strength of the Central Bank of Sri Lanka
Staff Class
Non-Staff Class
Minor Employee Class
Deputy Governor
2
Grade V
72
ME III
32
Special Grade Officer
10
Grade IV
129
ME II
3
Staff Officer Grade IV
56
Grade III
85
ME I
134
Staff Officer Grade III
88
Grade II
283
TOTAL
169
Staff Officer Grade II
180
Grade I
97
Staff Officer Grade I
318
TOTAL PERMANENT STAFF
1489
TOTAL
654
TOTAL
666
Contractual Employees
8
TOTAL STAFF
1497
Source : Central Bank of Sri Lanka internal data as at 31st December 2010
Table 2 : Age Distribution of the staff of the Central Bank of Sri Lanka
AGE DISTRIBUTION
30 & Below
31-35
36-40
41-45
46-50
51-55
56 & above
459
125
117
129
198
284
185
30.7%
8.4%
7.8%
8.6%
13.2%
19.0%
12.4%
Source : Central Bank of Sri Lanka internal data as at 31st December 2010
B. Recruitment & Selection Planning
In general Recruitment and Selection are considered as one process. But in Human Resource Management “Recruitment” refers to the process of attracting the right type of applicants to the job position and “Selection” refers to process of selecting an individual from the pool of applicants and absorbing in to the organisation. Recruitment & Selection Planning is needed to make sure this process is cost effective and also to get the right talent in to the organisation.
If we look at the CBSLs policy on “Recruitment & Selection”, the CBSL aim is to to obtain the best skills required to perform a particular job in the optimum manner while bridging the knowledge and skills gap of the Bank. In CBSL there are main 3 categories of employees namely Staff Class, Non-Staff Class and Minor Employees. These employees are recruited under the normal recruitment policy of the CBSL but some employees are recruited under special circumstances using the lateral recruitment policy. Selection process followed by CBSL when recruiting each category of employee are summarized in the table below.
Table 3 : Summary of the Recruitment Process of the CBSL
Recruitment
Category
Process
Normal Recruitment
Staff Class Grade I
a) Determining the competency needs of the Bank
b) Determining the minimum qualifications and experience required to fill the identified skill gaps
c) Advertising the vacancies
d) Holding a written examination and one or more interviews
Non Staff Class Grade II
a) Determining the number of vacancies in the NS Class
b) Determining the minimum qualifications and experience required
c) Advertising the vacancies
d) Holding a written examination and one or more interviews
Minor-Employee Class Grade I/Grade II (Drivers)
a) Determining the number of vacancies in the ME Class
b) Determining the minimum Qualifications
c) Advertising the vacancies
d) Holding a written examination (optional)
e) Holding one or more interviews
Minor Employee Class Grade II (Drivers)
In respect of the candidates for driver vacancies, a driving test is held, in addition to the procedures relating to the requirements of Minor Employee Class Grade I
Lateral Recruitment
a) Appointing a Job Evaluation Committee
b) Justifying the necessity of lateral recruitments by the respective Head of Department
c) Preparing the Terms of Reference (TOR) of the post.
d) Determining the appropriate salary point and the grade on which the prospective employees are supposed to be recruited.
e) Advertising the post.
f) Holding a written examination and one or more interviews.”
Source : Central Bank of Sri Lanka Internal data ( Human Resources Department)
C. Training & Development Planning
Though in general the words Training & Development are used mostly together, these two words have two different means in the field of HRM. Training refers to providing the individual employees the opportunity to enhance their knowledge and skills and the levels of competence to perform the tasks of the job effectively and efficiently. Employee Training can be considered as a short term activity because it aims to provide necessary skills for the employees’ to perform the current job.
When we consider the Development, according to Walton (1999) “Human Resource Development involves introducing, eliminating, modifying, directing, and guiding processes in such a way that all individuals and teams are equipped with the skills, knowledge and competences they require to undertake current and future tasks required by the organization.” So this clearly explains that development can be considered as a long term activity for the organisation.
In the Central Bank of Sri Lanka, the local training of staff is managed by a specially established unit called “Centre for Banking Studies (CBS)”. This unit conducts evening presentations, organise special guest lectures as well as public lectures in order to continuously update the knowledge of the staff.
The foreign training needs of the CBSL staff is handled by a special division called the “Training Division” which is a sub unit of the HR Department. The staff is selected for foreign training based on their merits, performance and the need of the bank. The staff members selected for foreign training will get the opportunity to train at world’s best organisations such as the Bank of England, International Monetary Fund etc. Foreign training opportunities are given in countries such as Singapore, Australia, England, Switzerland, Malaysia, Thailand etc. Before and after the foreign training the staff members need to face an interview and also once they complete the foreign training and return they have to do a presentation to share the gained knowledge with other colleagues.
D. Employee Motivation and Staff Appraisal
Employee Motivation
Simply motivation can be explained as the driving force which help individuals to achieve their goals. According to Shaun Tyson (2006) “motivation may be defined as an inner force that impels human beings to behave in a variety of ways and is, therefore, a very important part of the study of human individuality”.
In early 1900s employees were considered as another input into the production process. But Elton Mayo from 1924 to 1932 (Dickson, 1973) from his Hawthorne Studies researched on employee behaviour and he changed the above thinking of employees and explained that employees are individuals and are not motivated solely by money thus employee behaviour is linked to their attitudes (Dickson, 1973). Therefore “human relations approach to management” was introduced to the world by the Hawthorne Studies, thus the needs and motivation of employees become the primary focus of managers (Bedeian, 1993).
Maslow’s theory, Herzberg’s theory, Vroom’s theory, Adams’ theory, and Skinner’s theory are the most popular theories introduced for understanding of motivation. Among these theories Maslow’s need-hierarchy theory considered as the most important and primary theory as others were developed analysing the Maslow Theory.
Maslow theory he explains that employees have five levels of needs (Maslow, 1943): physiological, safety, social, ego, and self- actualizing. A major fact that Maslow introduced was that lower level needs had to be satisfied before the next higher level need would motivate employees. In more similar thinking Herzberg’s work categorized motivation into major 2 factors: motivators and hygienes (Herzberg, Mausner, & Snyderman, 1959). Motivators are also called intrinsic factors, for example individual achievements and recognition by the organisation, results job satisfaction. Hygienes also called extrinsic factors, for example changes in salary and job security, results job dissatisfaction.
According to Victor Vroom’s “Expectancy Theory” he argues that employee effort will lead to performance and performance will lead to rewards (Vroom, 1964). Rewards may be either positive or negative, more positive the reward the employee will be highly motivated. Similarly, more negative the rewards the employee will be less motivated.
Then John Stacey Adams in his “Equity Theory” explains that employees strive for equity between themselves and other workers. Equity is achieved when the ratio of employee outcomes over inputs is equal to other employee outcomes over inputs (Adams, 1965).
Finally according to Burrhus Frederic Skinner in his Skinner’s radical behaviourism theory simply states behaviour as a function of environmental histories of reinforcing consequences. Those employees’ behaviours that lead to positive outcomes will be repeated and behaviours that lead to negative outcomes will not be repeated (Skinner, 1953). Thus the managers should positively support employee behaviours that lead to positive results which will benefit the organisation.
Motivation Factors at the CBSL
In the Central Bank of Sri Lanka there are many motivational factors namely, comprehensive medical benefits, housing and vehicle loans at a very low interest rate, foreign training, post graduate studies funded by the CBSL and also the salaries etc. The salaries are revised once in every three years and annually the salaries are adjusted for the cost of living purposes. In addition, to maintain work life balance many recreational activities such as yoga classes, swimming facilities, badminton facilities, a state of art gym and also outdoor sport facilities such as Cricket, football and basketball are provided for the staff.
Staff Appraisal
According to Dick Grote, staff appraisal also commonly known as performance appraisal is a method by which the job performance of an employee is evaluated in terms of quality, quantity, cost, and time ideally by the relevant line manager or supervisor.
Staff appraisal is a complete analysis of an employee’s recent successes and failures, personal strengths and weaknesses, and suitability for promotion or further training.
In general, following are the aims of a performance appraisal:
* Provide employees a feedback on their performance
* Identify further training needs
* Facilitate to organizational rewards
* Form a basis for salary increases, promotions etc.
* Provide an opportunity for communication between employee and the management
Staff Appraisal at the CBSL
When comes to the staff appraisals on a yearly basis all staff members need to prepare a goal statement with their supervisors. Then at the end of the year these goal statements are compared with the employee’s achievements. Appraisals are done by the supervisor for their immediate staff and staff will be given the opportunity to discuss their concerns.
The only weakness I see in this method is that its not a 360 degree staff evaluation. In a 360 staff evaluation the staff member will be evaluate by all parties involved not only the supervisors. With the current method at the CBSL to evaluate the staff there can be favourations. Thus I would like to recommend the bank to implement the 360 staff evaluation method. At the same time the cost and the time taken for this method is a discouraging factor in practise for larger organizations. A copy of the staff appraisal form from CBSL is provided in the appendix 1.
E. Management Style
Simply Management Style can be explained as an overall method of leadership used by a managers.
In an organization managers have to perform many duties and play many roles and how they handle various situations will depend on their style of management.
According to Robert Tannenbaum and Warren H. Schmidt (1958, 1973) “Management styles are characteristic ways of making decisions and relating to subordinates”. According to various studies over the period there are five main Management Styles can be identified and they can be summarized as follows;
1. Autocratic Management Style
The autocratic style is characterised by a top-down communication model. In some organisations most decisions are made by the top management thus the information is passed from top management to bottom management.
2. Democratic Management Style
Democratic management is all about consultation and feedback from the employees. This management style allows the employees to take part in decision-making, thus most decisions are agreed by the majority.
3. Bureaucratic Management Style
Bureaucratic management style involves effectively and efficiently maintaining processes and procedures designed to ensure quality output. In this style comparatively decision-making systems are often costly and slower but can be more reliable and safeguarded against employee or manager abuse, for this reason government organisations prefer bureaucratic management style.
4. Paternalistic Management Style
In this management style similar to Autocratic style, communication is generally downward, but feedback to the management is encouraged to maintain morale. Due to this fact this style is highly advantageous as it engenders loyalty from the employees, leading to a lower labour turnover, as this style also emphasis on social needs.
5. Laissez-faire Management Style
Laissez-faire Management style simply means a “delegate” approach to management. In general many employees feel more motivated and committed more when they feel that they are in control and have the responsibility thus in some circumstances Laissez-faire Management style works for the organisation.
When we consider Central Bank of Sri Lanka, most of the managers have adopted a mix of democratic and bureaucratic management styles and the reason behind this is that CBSL is a semi government organisation. The employees are given the opportunities to provide their feedback and employees do take part in decision making process but there are many processes and procedures to follow and decision making system is comparatively slower.
Being the heart of the economy of Sri Lanka which deals with many organisations in Sri Lanka and abroad, I think the decision making system should be faster. Therefore it will be more effective if the CBSL can adopt paternalistic management style when ever it is necessary.
F. Conclusion
Absorbing the right talent and efficiently deploying human resources are the two effective methods which organisations can distinguish themselves from their competitors, thus in uncertain business settings strategic human resources planning aids the organisations to have the right staff to strive for success.
Since Human Resource is completely unique compared to other resources such as plant & machinery, money etc. this resource which feels, think and also get motivated needs to handled carefully with a proper plan. Ultimately this is the resource which takes decisions and also works with all the other resources in a organisation thus special attention and proper planning to manage this resource is a must in every organisation.
Effective Human Resource planning forecast future employee requirements. Talented staff retention and absorbing the right skills can be easily managed with this approach.
Not only that it helps to minimize cost to the organisation and also to get the required staff to fill the vacancies on time. In addition this approach helps to have smooth transitions of jobs and ultimately aid the organisation to run the operations smoothly.
G. Bibliography
#
Author
Year
Publication Name
Name of the Book
1
Shaun Tyson
2006
Butterworth-Heinemann
Essentials of Human Resource Management (Fifth Edition)
2
Alan Price
2007
Thomson Learning
Human Resource Management in a Business Context (Second Edition)
3
Michael Armstrong
2006
Kogan Page
Strategic Human Resource Management, A guide to action (3rd edition)
H. References
http://www.cbsl.gov.lk/ accessed on 27th, 28th & 29th March 2011.
Internal data accessed on 25th & 26th March 2011
Maslow, A. H. (1943). A theory of human motivation. Psychological Review, July 1943. 370-396.
Dickson, W. J. (1973). Hawthorne experiments. In C. Heyel (ed.), The encyclopedia of management, 2nd ed. (pp. 298-302). New York: Van Nostrand Reinhold.
Bedeian, A. G. (1993). Management (3rd ed.). New York: Dryden Press.
Herzberg, F., Mausner, B., & Snyderman, B. B. (1959). The motivation to work. New York: John Wiley & Sons.
Vroom, V. H. (1964). Work and motivation. New York: Wiley.
Adams, J. S. (1965). Inequity in social exchange. In L. Berkowitz (ed.), Advances in experimental social psychology. New York: Academic Press.
Skinner, B. F. (1953). Science and Human Behavior. New York: Free Press.
Robert Tannenbaum and Warren H. Schmidt (1958, 1973) – How to Develop a Leadership Pattern
Dick Grote: Employee Performance Management Blog – accessed on 2nd April 2011
Mondy et (1996)
I. Appendix -CBSL Appraisal Form (specimen) CENTRAL BANK OF SRI LANKA
PERFORMANCE EVALUATION FORM – 2010
Name of Staff Member & ID No.
:
Name of Supervisor
:
Department
:
Id. No.
:
Title
:
Department
:
Reports to
:
Period: 01/01/2010 to 31/12./2010
PART 1
PART 2
Self Evaluation
Supervisor Evaluation
To be completed by the staff member based on Goal Statements
To be completed by the supervisor based on Goal Statements
Goal 1
Weight
Goal 1
Weight
Performance Rating
5
4
3
2
1
Performance Rating
5
4
3
2
1
Staff Member’s comments
Supervisor’s comments
Goal 2
Weight
Goal 2
Weight
Performance Rating
5
4
3
2
1
Performance Rating
5
4
3
2
1
Staff Member’s comments
Supervisor’s comments
Goal 3
Weight
Goal 3
Weight
Performance Rating
5
4
3
2
1
Performance Rating
5
4
3
2
1
Staff Member’s comments
Supervisor’s comments
Goal 4
Weight
Goal 4
Weight
Performance Rating
5
4
3
2
1
Performance Rating
5
4
3
2
1
Staff Member’s comments
Supervisor’s comments
Goal 5
Weight
Goal 5
Weight
Performance Rating
5
4
3
2
1
Performance Rating
5
4
3
2
1
Staff Member’s comments
Supervisor’s comments
Total Weighted Performance rating (Rating 1 x Weight 1) + (Rating 2 x Weight 2) + ….. +(Rating 5 x Weight 5) + …….
Total Weighted Performance rating (Rating 1 x Weight 1) + (Rating 2 x Weight 2) + …. +(Rating 5 x Weight 5) + …….
(5- Outstanding) (4 – Very Good) (3 – Satisfactory) (2 – Below Standard) (1- Needs Significant Improvement)
Note: Form can expand for additional goals
PART 3
COMPETENCIES CONTRIBUTING TO PERFORMANCE – 2010
NAME OF STAFF MEMBER
:
ID. NO.
:
TITLE
:
DEPARTMENT & PERIOD
:
Competency
5
4
3
2
1
Rating Number
1.
Teamwork ¾ effectiveness as a team member and willingness to assist other staff
2.
Diligence¾dedication to completing work effectively
3.
Time Management¾efficient management of time on the job
4.
Responsibility and Commitment¾integrity and commitment to the organization
5.
Communication¾the ability to clearly communicate with others verbally and in written form
6.
Knowledge¾the level of technical knowledge in the staff member’s field of expertise
7.
Initiative¾the ability to be creative and resourceful in solving work-related problems
8.
Analytical Ability¾the ability to identify and analyze problems and generate appropriate solutions
9.
Self-Development¾the ability to continuously learn and develop oneself professionally
10.
Motivation to Contribute to the Organization¾concern for the willingness to contribute to broader organizational objectives
11.
Ability to Influence Others¾the ability to effectively influence others within and outside the organization in order to achieve work related goals
12.
Decision-Making¾the ability to use effective judgment in handling everyday work situations
13.
Administrative Ability¾the ability to manage and motivate staff
Comments : (Please add additional comments regarding staff member’s competencies)
Total Rating
(5- Outstanding) (4 – Very Good) (3 – Satisfactory) (2 – Below Standard) (1- Needs Significant Improvement)
Note : Competencies 1 – 13 for staff officers , Competencies 1 – 10 for non-staff officers, Competencies 1 – 4 for minor staff employee
PART 4
OVERALL PERFORMANCE OF STAFF MEMBER
Taking full account of achievement of key functions and responsibilities and your rating of the ‘competencies’ contributing to performance, give your overall assessment of the staff member’s performance, using the following scale :
Performance Rating (70%)
Total weighted ratings for performance
² weight (.7) Number of goals ² Highest Rating (5)
Competencies Rating (30%)
Total ratings for competencies
² Weight (.3)
Number of competencies considered (13, 10 or 4) x Highest Rating (5)
OVERALL RATING
(Performance ratings) + (Competencies ratings) ² 100
PART 5
LEARNING, TRAINING AND DEVELOPMENT PLAN – 2011
LEARNING NEEDS
KNOWLEDGE/SKILLS
HOW WILL LEARNING BE ACQUIRED
– e.g. READINGS, CONFERENCES, PROPOSED TRAINING PROGRAMMES, COMPUTER ASSISTED INSTRUCTION ETC.?
ALL BANK RELATED LEARNING SHOULD HAVE DIRECT APPLICATION ON THE JOB/FOR PROFESSIONAL DEVELOPMENT PURPOSES. FOR EACH KNOWLEDGE OR SKILL AREA, DESCRIBE HOW IT WILL BE APPLIED ON THE JOB OR WILL BENEFIT THE BANK IN THE FUTURE
PART 6
CAREER DEVELOPMENT PLANS
Describe your career development plans and aspirations — Where do you see yourself 3-5 years from now at the Central Bank?
Please also add any additional comments you may have.
Name & ID No. of Staff Member
:
Signature:
Date:
Staff Member’s Comments:
Name of Supervisor:
Signature:
Date: