Now keeping in mind, that before a company can gain IiP accreditation it must understand the strategic implications for the business. It must also undertake a review in the standards to identify any gaps in current training, and then make a commitment to meet those standards that would then result in a commitment by employees also. Organisations must also take the upper hand on planning on how individuals and teams are to be developed to achieve these goals. Lastly, they must evaluate the outcomes of training and development for individuals and the organization as a basis for continuous improvement.
Where organisations have had problems in making the changes required for IiP, it has often been because line managers have not been fully involved in the process. Devices such as the use of a steering group or working party, training workshops for managers and IiP checklist for team leaders can all help to get the managers on board.
Nevertheless, it does seem as if IiP can help to change the culture of an organization and is an effective development too. I would recommend other organizations to consider the IiP standard in order to improve the organization itself and the development of their employees for the new economy.
In addition, online training has become quite popular over the years. For example e-learning is the use of the internet or and organisational intranet to conduct training on-line. The primary advantage of e learning is the cost savings and its access to more employees. The pressure of acquiring suitable trainers is reduced and employees can learn at their own pace. In addition e learning may attract external sources oppose to tradition training tools that focused on employee only.
The retention of staff is another main role and responsibility of the HR manager, because, after the company has spent so much money to train and develop staff, they want to ensure that staff remains working for the company. Some strategies that the HR manager can use to ensure this is achieved, would be to encourage profit sharing to employees, ensure a good pension plan and good compensation packages are offered to them. A clean and safe working environment is also necessary. Once these are in place, then there should be no reason for the employee to leave.
In human resources, the field of compensation looks at the pay structures within organisations. Compensation packages must be fair and within the legal framework. Reliable technological advances with respect to compensation planning direct today’s new economy. Many Web based implementation software allows employers to proficiently process employee’s performance appraisal, base pay recommendation, promotions and bonus or incentive pay. Take for example, a commonly used website called Salary.com offers a software named CompPlanner. CompPlanner enables effective “pay for performance” strategies with comprehensive performance programs that track competencies, skills and objectives with flexible weight, rating scales, appraisal forms and links to financial rewards. This award winning compensation management application delivered as an online, on demand service to organisations of all sizes; direct a multitude of advantages over planning compensation packages. The features accompanied by this reliable software are flexible and functional. It allows managers to verify employees pay alongside their performance. Secondly, it allows managers to work under proper compensation procedure in order to regulate salary expenses. Thirdly, it encourages instantaneous two-way discussions between managers and human resources. CompPlanner also ensures that equitable monetary rewards to employees such as bonus, performance merits and long-term incentive programs are delivered.
Having the CompPlanner software is an advantage in itself, but there is software that compliments the CompPlanner perfectly, the CompAnalyst. The CompAnalyst offers a complete set of functionality to help company’s market-price jobs, compare their jobs to the market, and run valuable reports and analytics about their pay practices. Having access to such programs will create an identity for employers on the competitive market, and will definitely make them stand out in the new economy.
Since, this program is a demand on service type software it takes away the cause of having to go beyond the budget line. Therefore, it minimizes budget expenses by reducing total cost of ownership. All mangers have to do is log on, download and there it is, ready to work with. Salary.com CompPlanner is a workable, reliable and economical source for compensation planning and I recommend it for any organisation willing to compete in the new economy.
The smooth running man or woman is an essential feature of any company and for some industries, people are not just important but are the key factor for successful organization performance. In the past managers have relied on performance appraisals to ‘manage’ performance. Being in existence for so many years, you would think that performance appraisals have been perfected. Well think again, performance appraisal has been victims to subjective remarks by superiors for many years. By the introduction of Performance Management, managers now take ownership for managing their staff, and individuals are now responsible for managing their own performance in line with their accountabilities.
Performance management is defined as the process of creating a work environment or setting in which people are enabled to perform to the best of their abilities. The key principles underpinning successful performance management is that everyone should know what is expected of them and how their performance will be measured. They should be clear about which are the principal accountabilities of their job. Performance should be focused on measurable outputs, in terms of quality and costs and time. Manager’s responsibility is to coach and guide employees to develop their performance within their job.
Performance management delivers a clear and concise job description that allows the employee to understand their primary responsibilities and duties. One major advantage is that managers and subordinates are allowed to negotiate requirements and accomplishment based on the outcomes and measures. This system provides effective orientation, education and training needs to promotional and career oriented staff, through an effectively designed compensation and recognition system that targets contributing and efficient staff.
The introduction of Performance Management is relatively new so therefore the continuation of its processes should remain in existence for organisations to grow in the new economy.
In striving to satisfy its goals and achieve its objectives the organisation cannot operate in isolation from the environment of which it is part. Organisational stakeholders are individuals or groups who have an interest in the operations or activities of an organisation or the behaviour of its members. Organisational stakeholders include employees, consumers, community and environment, government, providers of finance and other organisation or groups.
Organisational survival is dependent upon a series of exchanges between the organisation and its environment. These exchanges and the continual interaction with the environment give rise to a number of broader responsibilities to society in general. Whenever companies decide to bring attention to social responsibility, in my view is simply good business sense.
Employing skilled individuals from the community is a superior way of showing social responsibility. When selecting potential staff, organisations should consider the abilities and knowledge applicable to the company, effective customer relations and interpersonal skills.
On the contrary, when organisations choose not to partake in corporate responsibility, it affects the immediate community. For example, a manufacturing firm, on the verge of closing down in a small community, may improve manufacturing efficiency and create shareholder value, but also create a lot of pain for the people who lose their jobs and for the communities in which they live. A major investment in new manufacturing capacity, however, might add value for shareholders, create new jobs, and bring additional revenue into the community’s economy. It is virtually impossible today, to create shareholder value without creating consequences, good or bad, for other stakeholders. So managers today must increasingly address other stakeholders’ concerns, through both their actions and the information they provide on the consequences of those actions.
The purpose of training is to improve knowledge and skills, and to change attitudes. It is one of the most important potential motivator. In order to help improve and maintain the availability and quality of staff, considerations should be given to external courses and training opportunities linked to the educational system. Take for example the National Gas Company of Trinidad and Tobago recently introduce a Graduate Training Program, this program exposes trainees to the company’s operations and activities. The National Gas Company expects successful trainees from the training program to occupy the role of professional and knowledgeable staff for further growth and development for the organization.
When drafting up training packages, organizations needs are to be meet concerning the local community. Considerations need to coincide with stakeholder’s needs and wants. In addition, organisations can donate sponsorships to promote or create social and recreational events. The National Gas Company of Trinidad and Tobago Limited (NGC) has donated the sum of $50,000 to the Piranha Aquatics Swim Club to assist with the development of the George Bovell III Aquatic Centre which is to be located in Cocorite. This act indicates that NGC management participates in corporate social responsibility, giving back to its community.
The truth of the matter is that all stakeholders expect some form of compensation once an output or an investment is taking place, from an allied organization. There are a few types of compensation arrangements that can be distributed throughout different kinds of stakeholders. Generally, employees are the one’s that mainly benefit from compensation. Employee’s often exchange their labor output for some form of compensation in the end, which is basically in the form of salary, wages and other benefits. This type of compensation primarily satisfies stakeholders physiological needs and in some instances, motivational needs.
Shareholders are the owners of a company. Organisations often invites stakeholders to undertake the risky investment of buying shares form their organisation. Shareholders have the potential to profit if the company does well, but that comes with the potential to lose if the company does poorly. Generally, all shareholders are interested in, is the dividends and capital growth on their shares.
The government also receives compensation from local organisations such as corporation tax. Corporation tax is levied by the annual profit a company makes, different rates are used for different level of profits. Also, tax rates may vary depending on whether profits have been distributed to shareholders or not. Profits, which have been reinvested, may not be taxed.
Feature of a classical tax system which includes corporate taxation is double taxation, in that profits made by a company are subject to corporation tax, but further tax (usually income tax) is payable by the company's shareholders when the same profits are distributed by way of a dividend.
Therefore, even though corporation tax is mandatory, my key point is that the state is compensated in some way.
The Performance Management system develops s culture in which the value of individuals to the organization is fully recognized. The system allows employees to assess their behavior, skills and knowledge. By providing clear job description employees now have a clear view of what is expected of them, and how they can be evaluated.
Therefore, individuals now take responsibility for the continuous improvement of business processes, their own skills and contributions. It also gives employee a sense of empowerment, that is, by giving them control over and responsibility for their work. Self-empowerment often gives employee a sense of autonomy and job contentment.
Performance management opens a two-way communication between the manager and the individual, this is often so because of occasional informal reviews conducted throughout the year.
When performance management becomes practical within an organisation, it reflects well for employers and the organisation as a whole. Customer service employees are often driven by the pay by performance reward system. Hence, once employees increase their standard of work customers are then purely satisfied and when customers are satisfied investors and impending investor are contented.
In order to satisfy customer needs particularly in service industry, can participate in evaluating the performance of an organisation. For example, customer suggestion sheets that restaurants, banks and other service industry provide in order to assess customer views on the performance that they receive. By being a part of, stakeholders feel a sense of pride and well-being.
High performance should be related to such factors as increasing profitability, improved service delivery or obtaining the best results in important areas of organisational activities.
High Performance Work Systems (HPWS) is a system that management officials or human resource practitioners design to enhance employee skills, commitment and involvement such that employees become a source of sustainable competitive advantage. The impact of a high performance work systems is targeted to organisation productivity.
When companies operate within a high performance work system, staffing procedures may be altered. Employers may administer one or more employment test prior to hiring an employee. Such as personality test, this is often used to assess whether individuals have the potential to be successful in jobs where performance requires a great deal of interpersonal interaction or work in team settings. In addition, the job knowledge test, provides useful feedback to employers regarding needed training and development.
Hiring successful applicants following intensive and extensive recruiting is another practice under this system. Employers invest more in both extensive and intensive recruitment for top-level jobs and relatively little at the bottom. This may be, due to the low turnover in employee occupying top management positions and the high turnover of employees at low-level jobs. Low-level workers often seek higher paying job contrary to top-level worker, who are merely comfortable being in a desirable position.
With regards to internal staff, in order to retain internal staff, employers who base promotions on merit and high performance rather than seniority shows flexibility when reviewing performance in the current workforce. Also, non entry-level jobs should be held back in order to promote internal promotions. This gives employees a sense of security where their job is concern, and organisations reap high morale throughout.
The benefits of training are numerous, but under a high performance work system, training should be flexible and effective. One of the key practices along HPWS is training employees to work several jobs and have numerous skills. This practice allows the workers to handle several jobs simultaneously so as a result productivity is increased.
Cross-functional team training has also proven to be effective, this creates a cohesive environment and allow workers to actively and continuously improve their work processes and redefine their jobs. Planned learning now works best when it is organized around team-related issues and cross training for teamwork activities.
Part of the initial evolution of HPWS was the realization that people were not strongly motivated by marginal increments in their pay. The initiators acknowledge that satisfaction indeed in doing reward work were important.
Compensation for performance, such as performance related bonuses, can encourage higher level of staff performance. The rewards usually relate to the achievement of certain goals either personal, team or organisational or a combination of all
The high performance work system high incentive plan incorporate new ways of rewarding employees. Pay for performance is a method used to measure an employee’s pay based on their performance. Pay for performance pay can come in the form of various methods. Commission are referred to as percentage payments on sales or turnover, that is paid on an individual or group basis; common in sales, retailing and other branches of distribution. This type of incentive creates a competitve drive for employees to maximise their sales potential.
Also there is the knowledge based pay which employees are rewarded base on their acquisition of knowledge, skills and abilities that are relevant to their work. For example doctors, mechanical engineers and management executives are specialist whose pay is based on their knowledge as measured by educational level.
Then there is bonus earnings or pay levels which is based on the assessment or appraisal of an employee's (or team's) performance against previously set objectives, usually part of a performance management system. This is often executed on an annual basis, after employees have been appraised based on performance throughout the year.
High performance by staff often reflects positively on the organisation. Hence, the reason organisation feel the needs to give back to its employees. Profit Sharing or profit related pay are bonus or share options based on the organisation's profit performance; this is widespread in the private sector, where share options are often important for senior managers.
Other than monetary rewards organisations can compensate individuals by initiating perks. Perks are benefits given in addition to one’s salary such as occupational pensions, heath benefits, accessed loans, membership of social elubs etc. Perks are generally a good method of tempting new employees and retaining valuable staff.
Pay is often the most important staff motivator and incentives and perks must not be seen as a substitute for a good pay scheme. However, they are not always expensive for business and some are tax-free.
Work now requires more knowledge and skills than ever before, i.e., organizations are more dependent on human capital as an intangible asset. As a result, organizations are, or it would appear they should be, interested in optimizing the way this asset is managed. Establishing an effective performance management system is an organization's way of doing just that.
To tie performance to rewards (the key to motivating performance), organizations need to have accurate measures of individual performance. To develop, individuals need feedback about their strengths and weaknesses. One of the primary tools used to measure performance are performance appraisals. The process of performance appraisals is reviewing employee performance, setting new performance objectives, documenting the review, and delivering the review verbally in a face-to-face meeting.
Performance management reviews are intended to give employees feedback on performance, set new performance objectives and justify human resource decision such as salary actions.
Performance appraisal provides employee with a yardstick by which their performance and results will be measured. Its intention is to improve future performance by all staff members.
Globalization is the rapid increase in cross-border economic, social, technological exchange under conditions of capitalism. Today organisations often strive to keep up with the global challenges they face on a day-to-day basis. Almost every organisation mission is to expand and gain international recognition and revenue in the future. Therefore, firms need to be fully aware of the challenges beyond their local environs.
The need for assigning appropriate employees in other countries involves careful selection and placement. Leadership plays an important role in individuals who are selected for global assignments.
When staffing global assignments, the factor of cost must be taken into consideration. The cost of hiring a professional or manager in another country can place a heavy figure on an organisation staff budget. Often, the cost of placing a key manager outside Trinidad and Tobago triples the manager’s annual salary. Other costs such as housing expenses, living expenses and tax equalization payments are also calculated.
Global organisations can be staffed in a number of different ways, including with expatriates, host country national and third country nationals. Each staffing option presents some unique human resource management challenges. For instance, when staffing with citizens of different countries, different tax laws and other factors apply. Human Resource professionals need to be knowledgeable about the laws and customs of each country represented in their workforce. When selecting staff for global assignments, employers should provide a realistic view about the life, culture, and work ethics associated with the foreign country they are being sent to. A precise job description of the job must be done. The description should note the responsibilities that would be unusual in the home nation, including negotiating with public officials; interpreting local work codes; and responding to ethical, moral and personal issues such as religious prohibitions and personal freedoms.
When selecting candidates for global assignments a list of factors should be considered Firstly, the hosting country cultural issues, differences and acceptance of diverse cultural demands and customs are important areas to be examined. Secondly, the personal characteristics of individuals assigned, must be in concurrence with the host country. Many global firms demonstrate that the best employees in the home country may not be the best employees in a global assignment. Thirdly, one of the most basic skills needed by employees is the ability to communicate orally and in writing in the host country language. Inability to communicate adequately in the language may significantly inhibit the success of the employee. Finally, the preference and attitudes of spouses and other family members are major staffing concerns. Often employees turn down global assignments due to family considerations and spouses’ careers.
Some countries have varying government controlled employment processes that require foreign employers to obtain government approval in order to hire local employees. Many countries, including Trinidad and Tobago require foreign workers to apply for work permit or visas. For example at the North West Regional Health Authority, human resource managers often requires multiple legal documents such as work permits, copy of identification and school certificates when recruiting internationals. These requested documents provide a legal framework when hiring expatriates, in return expatriates gain legal residence in the residing country.
Training represents a significant expenditure in most organisations. For global firms the most brilliant strategies ever devised will not work unless there are well-trained employees throughout the world to carry them out.
One of the key challenges organisations face when intervening into the global market is to understand the global corporate cultural differences of the corporate world. Each country has its own distinctive culture, therefore human resource managers must invest in preparing talented and knowledgeable employees with adequate cross-cultural training. Cross cultural training attempts to train expatriates to adapt and appreciate the culture of the respective country. It prepares employee to transit into a new working environment.
In some cases the host country of may utilize a different language apart from the employee’s own. Therefore, even it may not be mandatory, organisations can train employees to learn to speak the language of the host country. In doing so allows the expatriate to communicate effectively with respective business officials.
Global training needs to be flexible enough to accommodate local cultural and language issues, and the variable training needs that result from market demands in different parts of the world.
Many managers often agree that establishing a global compensation system is extremely complex. Organisations with employees in different countries face some special compensation issues. Variations in laws, cost of living, tax policies, and other factors all must be considered when establishing compensation packages for staff. In addition, the values of various monetary currencies must be tracked and adjustments made as the currencies rise or fall in relation to currency rates in other countries.
One significant global issue in compensation design is how to compensate the employee from different countries. The acquisition of pay equity among division is important when planning global compensation.
Global employees are those that are deemed fit to work internationally. There are three types of global employees. Firstly, the Host country nationals, which are citizens who works in their own country but employed by an organisation headquartered in another country. Secondly, the Third country national is one who works in another country but employed by an organisation from another country other than its own. Finally, the Expatriates are one who works in another country but employed by an organisation of its own country.
In designing a compensation system, an organisation must decide whether local wages are to be paid to Host country nationals, or whether, more global wage levels are to be considered. Many global employers pay local wages to most employees, except those in senior management and technical positions. Take for example, back in 2003 workers dropped their tools in protest of exploitation by the management of Atlantic Liquid Natural Gas Company (ALNG). The ALNG employers were accused of paying “slave wages” compared to their parent company in Europe. This escalated, even though the host country employee resided in a country with high unemployment rates and not to mention, they would have been compensated significantly less than if they worked for local employers.
Decisions about the compensation levels for third country national are often a function of the originating country of the employee. For example, Indonesians who are working in turkey may be paid wages that are similar to or lower than those of locals. However, a German engineering manager working in Thailand is likely to be paid about the same as or more than in Germany, much like an expatriate.
There are two primary approaches to international compensation for expatriates are the balance sheet approach and the global market approach. The balance sheet approach is a compensation plan that equalizes cost differences between the international assignment and the same assignment in the home country of the individual or firm. It has been estimated that the total employer costs for an expatriate, including all allowances, is three to four times the expatriate’s salary.
Unlike the balance sheet approach, the global market approach views international assignments as continual, not just temporary, if they may take employees to different countries for differing lengths of time. The global market approach attempts to be more comprehensive in providing base pay, incentives, benefits and relocation expenses regardless of the country to which the employee is assigned. Further, the reactions of host country nationals to the pay practices for expatriates must be considered. Therefore, the global market approach to compensation requires greater flexibility, more detailed analyses and significant administrative effort.
Evaluating employees from a global point of view is a challenge in itself. Varying cultures have different expectation with regards to performance
NOTES AND REFERENCES
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Herbertson Lain, MD of Manpower Flexibility interviews PLC www.flexibility.co.uk
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Charlene Marmer Solomon Top Ten Creative Staffing Methods, , hr.monster.ca
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Sir Brian Wolfson, (1996) Chairman of Investors in People UK Management and Organisational Behaviour, pg 694.
- L.P Mullins Investors in People Management and Organisational Behaviour, pg, 699.
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