HRM Functions and Practices
Strategic planning is a tool used by organizations to outline their objectives and vision as well as to direct how they will be achieved. A business assesses its existing situation and projects further directions in order to decide on each stage of development. In many aspects, the human resource function should align with a firm’s strategic goal. It will assist in putting in place a workplace structure that is more suited to achieving the objectives of the company. The human resource function manages employee talent and talent development across the whole business; by coordinating the human resource function with the strategic plan of the company, the human resource team may concentrate on hiring talent specific to the requirements of the company.
Existing customers and stakeholders might gain from a human resource function that works effectively with the strategic strategy of the firm. A human resource has the tools and knowledge necessary to grasp the anticipated demands better when they are aware of the organization’s overall objectives and goals. In turn, the human resources division may offer more beneficial support across the firm, enabling improved resource allocation through this approach.
Maersk was recognized for providing its staff with in-depth, superior training, which initially paid off for them. The management of human resources in Maersk’s organization has been influenced by current global conditions in their sector in a number of different ways. The business expanded from being a small family-owned business to having over 110,000 employees multinational conglomerate with over 1000 operations in 130 countries (Groysberg & Abbott, 2013). As a result of the larger workforce, which comprised workers from varied racial and ethnic origins, Maersk soon learned that there were HR issues that needed to be addressed and handled differently. Due to worker diversity, it was impossible to treat every employee equally. Thus the virus forced each person to conform to the organizational culture. In order to ensure that people were developing for the succession plan and entering the firm knowing the organizational culture, Maersk had to adjust the training and development inside its organization.
Staffing
Maersk soon discovered that other companies were attracting long-tenured staff to depart the organization. To promptly fill the vacancies left by departing staff, the recruitment procedure had to be altered. A more diversified workforce needed to be assembled since the present recruitment procedure was becoming less and less successful as the firm expanded internationally, and the management style needed to evolve to accommodate succession planning. To keep up with the company’s expansion, the management team needed to make rapid and effective adjustments. In order to assess what might be done to realign the management’s activities with the corporate values, the chairman assembled 50 of the firm’s top managers. The conference led to a review of the company’s core values.
Employers start their hunt for candidates by evaluating the differences between hiring internal and external prospects. Internal candidates are chosen from within the organization, either via promotion, personal development, or succession planning. Employer outreach, social media, and application tracking systems are used to find people from outside the company. The hiring procedure for available opportunities in internal roles when the firm hires from within is another difference between internal and external applicants. Some businesses have a rule that permits available positions to be distributed to internal staff members before being made public.
Training
Any organization’s development and success depend heavily on the process of training. Companies are aware of how beneficial training and development is for their workers since it attracts workers who want to advance within the organization and supports workers who want to stay with the firm for a long time. Companies are aware that employees require exceptional job competence, awareness of industrial, technical, and competitive trends, as well as the capacity to acquire and use new information continuously. This goes beyond only operational know-how. Long-term objectives and succession planning of the business may benefit more from using training and development to improve staff talents.
A crucial component of an employee’s first training and growth after being employed or throughout the pre-hire process is conducting training assessments. An effective and efficient program that will enable the business to have lower turnover rates and guarantee that workers are a good match for the company is using evaluations to assist the organization make a clear choice on a candidate. Organization, task, and person analysis are performed using a training needs assessment. An organization analysis looks at the resources, methods, and environments that an employee will encounter at work to decide what kind of training should be prioritized for them.
Task analysis involves assessing the job description and requirements to ascertain the tasks performed in particular employment. This makes sure that the essential duties and skills are relevant to the job’s scope. Throughout this review, Maersk HR collaborated with the department heads to carry out a job-task analysis in order to create a methodical breakdown of the customer service position into its components and divisions. This assessment helps identify the tasks that must be performed in order to finish the work, as well as the essential skills, knowledge, and abilities. The information acquired during this review is utilized to develop the performance standards, training, and metrics that should be applied for this function.
Determining which workers need training and how to accomplish that training and development for that individual are both parts of person analysis. Various businesses adopt a third-party evaluation method to ascertain the demands of employees. A training plan should include SMART—Specific, Measurable, Achievable, Realistic, and Time-Oriented objectives. There are numerous methods to apply SMART objectives, but Maersk Corporation needs to update its guiding principles and build closer bonds with its staff. Starting with the particular concerns, they would locate any dangers or issues within the firm.
It is critical to set achievable goals, and it is necessary to have a tool that will enable one to track progress and maintain motivation. Making a realistic timetable will make it easier to plan how to carry out the goals (Bjerke & Renger, 2017). The job description for a customer service-care business partner includes many components of a needs assessment. Examining job descriptions and identifying the activities performed in the role promotes task analysis. They search for traits in interpersonal interactions, conflict resolution, and negotiation. Additional significant responsibilities pertaining to the organization and human analysis are also mentioned in the job description.
Maersk is now experiencing problems with turnover and needs to spend less time on administrative activities so that more time can be spent on workers, making sure managers are trained, and doing what is necessary to prepare people for advancement within the firm. Setting those initial, reasonable expectations will enable Maersk to screen out the undesirables and concentrate on strengthening the organizational structure. The last SMART target stage is Time-Oriented; Maersk would invest time redesigning the onboarding process during this process so that workers could spend more time working and being productive. Employees will be happy overall and learn how to increase efficacy thanks to the approach.
The needs assessment component aids in determining the Customer Service-CARE Business partner at Maersk’s training needs. The requirements analysis will assist the human resource managers in making sure that the company employs the appropriate tools, technologies, and financial components when setting SMART targets. The results of each evaluation of the organization’s training needs will be valuable for both the present state of the business and its long-term goals. The Maersk management will create a training program as part of the SMART goals that will help current workers advance their careers within the firm and provide a solid basis for new hires when they begin working there.
The job analysis will assist the company in gathering important data during the process and aid in the selection of training programs and materials that will be more efficient training techniques for a long-term solution to turnover and growth. The person analysis is similarly useful in guiding companies away from sending staff members to classes that will not benefit them in their existing positions. For instance, managers might not participate in the same training as staff members, but specific diversity or cultural development training might be mandated for all staff members.
To lower the rate of turnover, the organization wishes to create excellent employees. The Maersk Customer Service CARE Business Partner training program must include experiential learning techniques and adult learning concepts since adults learn best via hands-on activities and things they may have already done. It could be difficult for them to comprehend if adults were just ordered to perform anything without any explanation. In addition, it is crucial to perform a training needs assessment to develop a strong staff base with qualified trainers who will restore the firm to its once-superior growth.
Evaluation
Performance management enables workers to grow professionally inside the firm as well as realize their maximum potential in line with the aims and objectives of the business. With the use of this data, HRM may make judgments that could impact an employee’s chances of getting promoted, getting fired, getting transferred, and getting paid differently. To ensure that the strategic plan is in line with the corporate culture, the whole organization—HRM, the organization, and managers—must be aligned throughout this process. Different types of performance evaluations, such as a consistent evaluation, a less formal plan, an unorthodox evaluation, or a disciplinary evaluation, can be used to evaluate an employee’s work and offer constructive feedback. Every employee receives an evaluation every six months or once a year. By including training and development, managers will be able to approach employees in a more impartial manner and apply a more effective evaluation process.
Employees will respond favorably to a superior who maintains control of the dialogue while paying attention to the workers and using good listening techniques. It may not always be easy for a manager to conduct these discussions. Therefore, allowing managers to finish training before assessments gives them insight into the crucial points they should use. In order to be on the receiving end of the comments, managers should also take their performance reviews before presenting them to the team. Through this method, supervisors will be able to rectify or recognize errors from prior performance reviews, and employees will be able to accept the manager’s feedback. The purpose of the performance review is to guarantee that the employee is focused on areas that need to be improved for the organization’s future, as well as to help them develop for the growth of the upcoming year.
The approaches for assessing performance that is based on traits, behaviors, and results vary substantially from one another. A group of human attributes, including those pertaining to demeanor, outlook, work ethics, leadership abilities, loyalty, critical thinking, and others, are collectively referred to as traits (Bauer et al., 2021). This evaluation technique is most useful in a variety of circumstances, such as when a business wants to discover future leaders by differentiating important features and evaluating individuals in accordance with the necessary attributes (Bauer et al., 2021). The major duties are the basis for the behavioral assessment method, which focuses on the employee’s behaviors in a specific context. For instance, a server at a café might be evaluated depending on whether the employee greeted the freshly arriving clients right away or replied poorly. Results-based appraisal system evaluates the results brought by the employee to the company (Bauer et al., 2021). For example, the appraisal would consider the number of sold housing solutions for a real estate agent.
This approach is related to two significant occasions where an employee’s performance in various areas of their job was either alarming or fairly successful. An illustration of this strategy would be a worker who persuaded a client to stick with the business by carrying out an action that was unusual or unexpected for that worker. The outcomes technique focuses on an employee’s successes and is motivating for those who are results-driven and accomplish their task by generating high sales figures or above-average production outputs.
Compensation
A basic written declaration that outlines the company’s stance on employee remuneration is known as a compensation philosophy. Maersk is able to choose the appropriate methods of employee compensation since they adhere to the same values and business tenets. The business compensation philosophy is a policy that was developed in partnership between human resources and line managers. It serves as both a guideline for employee remuneration and a symbol of Maersk’s dedication to its workforce. When Maersk switches from an administrative to a strategic HR role, they concentrate on key areas to ensure that the appropriate people are hired for the right positions.
The HR compensation process and the strategy of the company’s purpose and values are both aided by the talent management process. A grading mechanism that set a limit on annual bonus earnings was one of the features the corporation included in a worldwide pay system for its top leaders. Maersk emphatically reaffirmed its commitment to utilize yearly short-term incentives to reward achievement. Maersk also performed scenario planning by taking a look at a 5-year plan to handle any future demands.
The business created the policies, incentives, and perks for its employees using the Danish Companies Act, which is still in use today. The case demonstrates that Maersk’s pay system is made up of a number of elements, including short- and long-term incentives, discretionary perks, stock options, and the management board’s salary. Discretionary benefits are those that an employer voluntarily offers to its employees. They may be offered in a variety of ways, including through employee assistance programs, add-on healthcare benefits, and support with transportation and education (Armstrong & Mitchell, 2019). It is advantageous that Maersk’s discretionary perks are not mandated by law. Employees seem to find benefits to being highly enticing, and Maersk is able to attract and retain the best individuals by creating clear, performance-based objectives as well as a competitive benefits package. They might be able to attract and retain the finest staff if they provide benefits like health insurance, dental care, vision coverage, and a reliable retirement plan.
Pay for performance commitment was also put into place, which grants staff an annual bonus depending on their performance. This may also be referred to as a performance appraisal. Overall attendance, employee leadership, communication skills, cooperation and teamwork, customer experience, and numerous more factors that help an employee learn from themselves and how to progress with the company are included in pay for performance testimony or performance appraisals.
The philosophy permits the board members to be compensated via fixed base salaries now that Maersk has introduced the management board compensation. The philosophy of compensation is influenced by the market. As a result, the ideology alters in tandem with changes in Maersk’s job market worth. The corporation wants to recruit fresh talent to join its ranks as well as retain current employees, so it raises salaries and perks in an effort to do both.
A salary survey can be useful to a company for a variety of reasons. The frequency of surveys might be every six months, every year, or every two years. The procedure often includes both personalized and standard surveys. A few select peer firms will be the focus of custom questionnaires that try to answer very precise questions. Common surveys are regularly published and attempt to encompass the same range of industries and professions each year (Armstrong & Mitchell, 2019). The salary survey should be used in the first place to guarantee that the business can maintain its competitiveness.
HR professionals need to be aware of changes in the labor market so they can modify compensation levels and skills for jobs that are tougher to fill or that are no longer in demand. When determining the pay survey and compensation for a post, HR experts find the job criteria to be very helpful. Regular involvement in compensation survey evaluations will assist a company in spotting pay disparities before it is too late. Legal compliance is the second value of salary surveys to an organization. Having consistent participation in this data collection will ensure that the company is in legal compliance and will not be at risk or have threats to price-fixing, which is an agreement among competitors that raises, lowers, or stabilizes prices on competitive terms.
A business may invest up to 80% of its overall sales on employee pay and benefits. Therefore, salary surveys can help preserve that investment. Due to outdated remuneration, there is a probability of loss or turnover with such a high level of risk; surveying can shield a business from this loss. Last but not least, pay surveys may assist with organizational decision-making. Consistency is crucial when utilizing a salary survey, which can help to develop a company’s overall compensation strategy and form plans that will take staff turnover and growth into account.
References
Armstrong, S., & Mitchell, B. (2019). The essential HR handbook: A quick and handy resource for any manager or HR professional. Red Wheel/Weiser.
Bauer, T. N., Erdogan, B., Caughlin, D., & Truxillo, D. M. (2021). Fundamentals of Human Resource Management: People, data, and analytics. Sage.
Bjerke, M. B., & Renger, R. (2017). Being smart about writing SMART objectives. Evaluation and Program Planning, 61, 125-127.
Groysberg, B. & Abbott, L. S. (2013) A.P. Møller – Maersk Group: Evaluating strategic talent management initiatives. Harvard Business Review. No. 9-412-147.