Nokia Human Resource Management
Keywords: nokia human resources, nokia hrm
Nokia is a leading company in the mobile phone and telecommunications industry. Nokia applies specific human resource management practices that focus on attracting and retaining good employees. These HR practices include selective recruitment and selection, extensive employee development, internal promotion opportunities and career development, employee involvement in decision making and pay for performance. Empirical research shows that these practices enhance employee satisfaction, organizational commitment, employee retention, employee presence (obverse of absenteeism) and loyalty (Boselie et al., 2005). In other words, part of Nokia’s success might be caused by good people management. However, how do reorganizations and massive layoffs, for example in the spring of 2003, affect Nokia’s employees in terms of their attitude and behaviour? And how do these critical incidents affect the employees’ perception of Nokia’s HR practices listed above? Finally, we shall discuss how certain HR practices can overcome problems caused by reorganizations and massive layoffs. In other words, how can HRM contribute to firm performance and general employee well-being in times of organizational change (reorganization, downsizing)?(1)
2.1. DEFINITION OF HUMAN RESOURCE MANAGEMENT
Human Resource Management (HRM) is the function within an organization that focuses on recruitment of, management of, and providing direction for the people who work in the organization. HRM can also be performed by line managers. HRM is the organizational function that deals with issues related to people such as compensation, recruitment, performance management, organization development, safety, wellbeing, benefits, employee motivation, communication, administration, and training. HRM is also a strategic and comprehensive approach to managing people and the workplace culture and environment. Effective HRM enables employees to contribute effectively and productively to the overall company direction and the accomplishment of the organization’s goals and objectives. HRM is moving away from traditional personnel, administration, and transactional roles, which are increasingly outsourced. Human resource management is now expected to add value to the strategic utilization of employees and that employee programs impact the business in measurable ways. The new role of human resource management involves strategic direction and human resource management metrics and measurements to demonstrate value.(2)
Various management and Human Resources specials define Human Resource Management (HRM) differently, placing emphasis on different aspects of HRM. Some definitions include:
“Human resource management (HRM) refers to the policies, practices and systems that influences employees’ behaviour, attitudes and performance. Many companies refer to HRM as involving ‘people practices'” (Noe, Hollenbeck, Gerhart & Wright, 2008:4).
“the process of managing human talent to achieve an organisation’s objectives” (Snell & Bohlander, 2007:4).
“the productive use of people in achieving the organisation’s strategic objectives and the satisfaction of individual employees needs” (Nel, Werner, Haasbroek, Poisat, Sono & Schultz, 2008: 6)
3. DISCUSSION / OBSERVATION AND OPINIONS
3.1 Discussing the strategic approach to talent management adopted by Nokia…
The phrase “talent management” is now being used to refer the activities to attract, develop and retain employees.(3)
Competitive advantage – arises from discovering and implementing ways of competing that are unique and distinctive from those of rivals, and that can be sustained over time’ (Porter, 1994). Committed employees can bring about competitive advantage to the company especially when there is no lack of contentment.
3.2 Discussing the importance of how a strategic fit between HR practices and its context & overall strategy of the organisation leads to success.
Strategic HR orientation is defined as the alignment of HR Planning, selection, performance evaluation, compensation, development and staffing practices with the business strategies of the organization. The traditional role of HR is the attraction, motivation and development of human resources according to current and future requirements. However, HR can also develop and sustain competitive advantage. This suggests that the head of HR function should be included in strategic decision making by senior management. This will enable the HR direction to formulate HR strategies that support organisational strategies. (Maximising the return on HR Investment)
It is critical that input from the HRM function is considered and that people-related issues are contemplated (Noe et al, 2008).
The unique organizational culture, the specific technological environment and the Finnish model of industrial relations (IR) in which multiple stakeholders (including trade unions and government) have a significant impact on the organization have contributed to Nokia’s success. But how did they do it? What are their secrets of success, in particular with respect to people management? More than 15 years of worldwide empirical research on the added value of HRM and performance in different sectors shows that HRM matters.1
3.3 Discussing reorganisations and massive layoffs affecting employees and how through effective HR practices employee wellbeing and organisation can be achieved.
Downsizing is a strategy which focuses on the planned elimination of considerable numbers of staff, in the interest organisational effectiveness (Noe et al, 2008).
Identify the link between HRM practices, employee wellbeing at work and performance. A preliminary staff survey of employees provides a brief overview of the link between HRM practices, employee well being at and performance.(Baptiste, 2007, A new dimension for HRM, Tightening the link between employee wellbeing at work and performance, 284)
The downsizing results in the survivors having negative perceptions of the company, seeing it as cost dominated and hard nosed (Pollit, 2006:9) and employee morale down. HR strategies to address the impact of the downsizing strategy on surviving employees and to address the people issues created by the mergers and acquisitions include:
The restructuring of the organisation into three key trading divisions with new names, structures and cultures resulting in the old divisions between employees (as a result of the merger) falling away as all employees had something new and fresh with which to identify (Pollit, 2006). This resulted in employees being open to other changes.
The HR team introduced and defined fundamental behaviours for the group which were referred to as ‘FIT’: fairness, intergrity and transparency (Pollit, 2006).
HR gradually harmonised the disparate employee benefits amongst the staff and management (which were the result of different benefits structures in the organisations that were merged). Changes to the benefits provided were also based on feedback provided by employees in an employee survey. These include:
- Full employee assistance programmes
- More social events such as family days
- Improved long-service and retirement awards
- Improvements in provision for maternity and paternity responsibilities
- Congratulations awards for employees getting married, having babies or completing further education courses
- The establishment of staff shop facilities and family food discounts at the organisation’s pubs (Pollit, 2006)
These changes were also introduced to change the view of many employees that Wolverhampton and Dudley breweries was hierarchical, traditional and remote. Other changes that were introduced to address this negative perception were the removal of all reserved (named) parking spaces as well as the refurbishment of offices as open plan offices (Pollit, 2006)
The company also started life long seminars which addressed everything from hair care to salsa dancing – “while there is no direct link to company performance, other than through improved morale, it got many employees back into learning who had been missing out and who now feel confident to attend our more mainstream programs” (Pollit, 2006)
According to the SHRM, see figure 2, six competencies which HR professionals require to successfully participate in an organisation’s strategic management process include the following:
Credible Activist – HR professionals need to be credible and respected. They should have a point of view and challenge assumptions while keeping commitments (SHRM, 2008).
Operational Executor – HR professionals need to be able to efficiently and effectively administer the day to day work of HRM (SHRM, 2008).
Business Ally – HR professionals must understand the internal business as well as the external factors which impact on business success.
Talent Managers / Organisational Designers – HR professionals need to be able to develop individual employees, teams and the organisation which they support (SHRM, 2008).
Culture and Change Stewards – HR professionals must have the competence to understand and evolve an organisation through periods of change.
Strategy Architects – HR professionals need to be effective business partners and should work together with the organisation to formulate and implement competitive business strategies (SHRM, 2008).
3.4 Examining how Nokia through HRM practices achieve to create employer brand and become employer of choice.
”W&DB is now a confident and successful business, well respected by the City and an organization that current employees want to work for and employees of competitors are keen to join”, said Steve Rowlands. ”A key factor in this transformation has been the HR strategies and initiatives developed in order to address employee engagement, allowing old prejudices to be replaced with a new identity and optimism where the results really do speak for themselves. ”And the process goes on. In the last two years W&DB has made a further four acquisitions with similar requirements for reductions in employee numbers. But a new culture, combined with the learning from the previous acquisitions and the freedom to implement them in a timely manner, has resulted in extremely successful integrations with the maintenance of employee-satisfaction scores. ”Improvement never stops and the fact that employees now want to be part of the group and their respective trading division on a long-term basis means that we now need to review our career-development and succession-planning tools and techniques and provide people with a real vision of how the fact that we have three businesses within one group offers them opportunities rarely available with other employers”. (HR at W&DB)