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MANAGEMENT COLLEGE OF SOUTHERN AFRICA (MANCOSA) ASSIGNMENT COVER SHEET SURNAME
LOUW
FIRST NAME/S
CLINTON BRIAN
STUDENT NUMBER
117226
MODULE NAME
HUMAN RESOURCE MANAGEMENT
ASSIGNMENT NUMBER
1
TUTOR'S NAME
Lailah Imandin
EXAMINATION VENUE
CAPE TOWN TO BE CONFIRMED
DATE SUBMITTED
04-Apr-11
SUBMISSION ( )
1ST SUBMISSION
RE-SUBMISSION
6 EASTFORD STREET
POSTAL ADDRESS
KNYSNA 6570
E-MAIL
CONTACT NUMBERS
[email protected] WORK:
044 3850310
HOME:
044 3851366
MOBILE: 0823754303
COURSE/ INTAKE
MBA YEAR 1 - JANUARY 2011
DECLARATION
I hereby declare that the assignment submitted submitted is an original piece of work produced by myself. DATE: 04 April 2011
SIGNATURE:
TABLE OF CONTENTS
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Question 1…………………………………………………….3
1.1 Introduction………………………………..…3 1.2 Content……………………………………….3 1.3
Conclusion…………………………….…….6
Question 2…………………………………………………….7 2.1
Introduction…………………………………7
2.2
Content……………………………………..7
2.3 Conclusion…………………………..…….10 Question 3…………………………………………………….12 3.1
Introduction…………………………………12
3.2 Content……………………………………..12 3.3 Conclusion…………………………………14
Question 4…………………………………………………….15 4.1 Introduction…………………………....…15 4.2 Content…………………………………….15 4.3 Conclusion…………………………………18
Bibliography………………………………………………....19
QUESTION 1: NOKIA
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Nokia applies specific HRM practices that focus on attracting and retaining good employees. Discuss the significance of this strategic approach to talent management that is adopted by Nokia making them a leader in the mobile phone and telecommunications industry.
1.1 INTRODUCTION In order to understand Nokia’s success in the mobile phone and telecommunication industry, it is important to understand the history behind Nokia’s meteoric rise in this highly competitive industry. 1.2 CONTENT According to Lewis (2005, p178), there is no single key to Nokia’s success. The factors are numerous and varied and can be grouped into three categories, namely, external factors, internal management and the ‘Home Turf’ factor.
Firstly , external factors include the connection between Finland and Russia. For many years Finland’s economy was boosted by massive exports to Russia. Russia was highly dependent on the Finnish government to provide them with material for their war effort.
Secondly, Nokia’s internal management system is based on a horizontal or flat organizational structure that is based on employee involvement through a decentralized decision-making process.
Thirdly , the ‘Home Turf” factor refers to their education system, state encouragement and cultural factors. Nokia’s education system is ranked number 1 in Europe which means that Nokia has a well-balanced workforce on its doorstep that are able to meet its recruitment needs locally for the critical research and development. State encouragement is in the form of funds made available by the Finnish Government for industrial research and design. The Finnish state can afford it because they don’t spend a lot of money on military research and design. What really set Nokia apart from its competitors are their cultural characteristics. They operate confidently and quickly and most of all, humbly. The strategic approach to talent management by Nokia is the skill or art of recruiting and attracting the best possible person for a specific job, integrating them into the company’s
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culture and developing and retaining current workers in order to fulfil current and future organizational goals. Nokia’s main focus is to recruit and attract workers who are key to the success of the business or function because they •
Lead the company or unit
•
Possess core knowledge or skills
•
Take on business-critical roles
Nokia uses the following HRM practices to achieve the objectives of the company: SELECTIVE RECRUITMENT AND SELECTION
New workers are not merely recruited and selected on the basis of their knowledge and skill of a specific job, but whether they will fit in the overall culture of the Nokia Corporation. This does not, however, mean that they will only employ workers from Finland. They soon realised that in order to continue operating in a highly competitive global environment they will have to attract employees from other countries. Nokia’s recruitment policy basically consists of person-organization fit (optimum fit between the organisation’s culture and the recruit) as well as diversity (promote creativity in the workplace). TRAINING AND DEVELOPMENT
Noe et al (2010, p273) defines training as a planned effort to facilitate the learning of job-
related knowledge, skills, and behaviour by employees . The main focus of training is to ensure the improvement of the performance of the employee and that the task is done properly and efficiently. Nel et al (2010, p 446) states that training must be result-oriented, it must focus on enhancing
those specific skill and abilities to perform the job, it must be measurable, and it must make a real contribution to improving both goal achievement and the internal efficiency of the organisation.
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The use of eLearning opportunities and personal coaching as training delivery methods suggests that Nokia uses both the traditional (coaching) and contemporary delivery approaches (Internet and intranet-based training). These methods are able to produce better outcomes for the same price or the same results at a cost saving. It also has the following advantages, namely self-pacing, flexible timing, reduced time to train, no travel time or costs and greater retention On top of these, there are some extra benefits to be obtained by delivering training and development over an intranet with the intranet available on the desktop; the training can be delivered just-in-time; the training materials can be easily updated centrally and lastly the training can be fitted around normal work tasks EMPLOYEE INVOLVEMENT
Job autonomy, which reflects the extent to which a job allows the freedom, independence, and discretion to schedule work, make decisions, and select the methods used to perform tasks (Hackman & Oldham, 1975). Increased autonomy will allow individuals greater flexibility in how they define their role because they will have greater discretion in deciding how to perform the work (Fried, Hollenbeck, Slowik, Tiegs, & Ben-David, 1999; Troyer, Mueller, & Osinsky, 2000). Job autonomy, self-responsibility for personal development, general participation in decisionmaking, etc., is part and parcel of what is known as ‘The Nokia Way’, meaning that it all will lead to a healthy work environment that will definitely have benefits in terms of its efficiency. Employees are more committed and satisfied because they feel they are valued as key
internal
stakeholders
and
are
empowered
in
the
decision-making
process.
COMPENSATION
The incentive compensation system of Nokia is designed to get the best out of its employees. It is based on the following two aspects: financial compensation (high salaries, bonuses and stock options) and compensation in terms of a variety of possibilities (flexible working hours, teleworking, mobile working, and sabbaticals, just to name a few)
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Nokia try not to have a one dimensional approach to its compensation philosophy, meaning that you can’t motivate employees by giving them high salaries only. It is highly unlikely that you will find an employee that will be satisfied with his or her salary. The best way to motivate your staff is by creating an environment where the employee feels appreciated. If employees feel appreciated they tend to be more productive and loyal to the company. If your employees are happy, engaged, and know that you feel they are doing a great job, they’re going to stay. 1.3 CONCLUSION More and more companies realise that in order to gain and maintain their competitive advantage, they have to create a culture, value system, operating philosophies, leadership style and management philosophy that cannot be recreated by your competitors. I believe that is just what Nokia has done by the way that they have incorporated their HRM practices their strategic approach to talent management.
QUESTION 2 ‘Selective recruitment and selection, training and development, employee involvement and compensation are the key HR practices applied to achieve the organisational goals.’
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Provide a discussion on the importance of how a strategic fit between HR practices and its context (HRM) and the overall strategy of the organisation, as in the case at Nokia, leads to a more successful organisation
2.1 INTRODUCTION Due to the ever changing nature of the global business environment, more and more companies realises that human resources can be a unique asset that can provide sustained competitive advantage. People are viewed among the most important resources to firms and human resource strategy would be central in achieving competitive advantages. 2.2 CONTENT The management of the human resources should be in perfect fit with the management of the ADMINISTRATIVE
organization
ONE-WAY
TWO-WAY
as a whole and itsINTEGRATIVEstrategic plans. LINKAGE
LINKAGE
LINKAGE
LINKAGE
STRATE GIC PLANNI NG
STRATE GIC PLANNI
STRATE GIC PLANNI
NG
NG
STRATEG IC PLANNIN G
HRM
HRM
HRM
HRM
function
function
function
function
Figure 1: SOURCE Golden and Ramanujam (cited in Noe et al, 2010)
Four levels of integration (Figure 1) exists between the Human Resource Management function and the strategic management function, namely •
Administrative Linkage – The lowest level of integration. The human resource function is detached form the strategic management process.
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•
One-Way Linkage – The human resource function is only informed of the strategic plan by the strategic management function.
•
Two-Way Linkage – The consideration of Human Resource issues during the strategy formulation process.
•
Integrative Linkage – It is dynamic and multifaceted, based on continuing rather than sequential interaction
Nokia’s leadership in the mobile communication industry is a based on the successful use of the integrative linkage approach. In order to understand Nokia’s success, the diagram below illustrates how to align or ‘fit’ HR strategy with organizational strategy and human capabilities. The conceptual model (figure 2) describes the orientation of the relationships between four HR strategies and HR capabilities based on strategic value and uniqueness as strategic capability of employees.
Figure 2: SOURCE: Iranian Journal of Management Studies (IJMS) Vol 2. No.2. June 2009 HUMAN RESOURCE CAPABILITIES Strategic value: The significance of human capital is reliant on their potential to contribute
to the competitive advantage or core competence of the firm. Uniqueness: Refers to the degree that skills cannot be duplicated and imitated by current or
potential competitors.
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1 Firm-specific core employees. They are essential to the firm. They can make a significant
contribution to the firm’s strategic objectives. Human capital is both valuable and unique; it embodies the knowledge base around which firms are most likely to build their strategies. 2 Generic key employees: Human capital that has strategic value but limited uniqueness.
The value of these employees provides an enticement to employ these workers internally. 3-Idiosyncratic allied employees: Firms would rely on alliances or partnerships for human
capital that is unique but has insufficient strategic value to employ internally. 4 Generic ancillary employees: These employees do not have unique or sufficient strategic
value. Employees in this category are prime candidates for outsourcing. ORGANISATIONAL STRATEGY
Miles et al (1978: p38) classifies companies according to their "adaptive patterns of
decision" , ranging from the most aggressive organisations, the prospective companies, to the least pro-active, the reactor companies. Prospector: This is the most competitive of the four strategies. It involves active programs to
expand into new markets and stimulate new opportunities. Analyser: The analyser is in between the defender and prospector. They take less risk and
make fewer mistakes than a prospector, but are less committed to stability than defenders. Most firms are analysers. They are seldom a first mover in an industry but are often second or third place entrants. Defender: A defender strategy necessitates finding, and maintaining a secure and relatively
stable market. Rather than being on the cutting edge of technological innovation, product development, and market dynamics, a defender tries to insulate themselves from changes wherever possible. Reactor: It is obvious that a reactor has no proactive strategy .Their responses are forced by
macro environmental pressures. This is the least effective of the four strategies. HUMAN RESOURCE STRATEGIES
Different HR strategies are required for different types of employees.
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Commitment HR strategy: It is for employees who have both high strategic value and
uniqueness. Productivity HR strategy: The focuses is on the acquisition of human capital and the
deployment of skills for immediate contribution for Generic key employees, who have high strategic value, yet low firm specificity. Compliance HR strategy: Generic ancillary employees, with low value and uniqueness are
contracted externally for decreasing their administrative expenses and retaining a significant degree of employment flexibility by outsourcing nonessential functions, using temporary employees, developing employee leasing arrangements, Collaborative HR strategy: Idiosyncratic alliance employees, who have high firm-
specificity, yet low strategic value, are served as a possible source of differentiation. 2.3 CONCLUSION Nokia has shown that it has found the ‘right’ alignment between the Human resource strategy, organizational strategy and human capabilities. However, it may be too onedimensional to postulate that a single optimal set of Human Resource strategies is ideal, or can be utilized in all situations.
QUESTION 3 Discuss how reorganizations and massive layoffs, (for example, Nokia, in the spring of 2003), affect employees in terms of their attitudes and morale and discuss how HRM can contribute to organisational performance and general employee well-being in times of organisational change (reorganization, downsizing).
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3.1 INTRODUCTION
Nokia plans to close the Jyväskylä site and concentrate mobile devices R&D in Finland at Tampere, Oulu, Salo and the Helsinki metropolitan area. The planned closure of the Jyväskylä site is an unfortunate, yet unavoidable measure. We must adjust our resources to reflect reduced market demand in order to maintain our competitiveness also in the future," says Peter Røpke, Senior Vice President, Devices R&D, Nokia. (Published February 11, 2009 on http://press.nokia.com) Reorganizations and layoffs are part and parcel of the highly competitive nature of giant corporations such as Nokia. The reasons for this might be to reorganize their capital structure when they have accumulated losses and, in the case of Nokia, to maintain their competitive advantage. 3.2 CONTENT EFFECTS OF REORGANIZATIONS AND MASSIVE LAYOFFS ON EMPLOYEES
Change or reorganizations is happening faster than ever. Some of the effects are as follows: •
The most common and initial response is resistance, because workers feel change is beyond their control. This in turn leads to higher levels of stress.
•
Fear of the unknown, for example will we lose our jobs.
•
If they don’t lose their jobs, will they be asked to do more with fewer resources?
•
Employees become rattled, distracted and start to worry about their future at the company.
•
Will they have to be retrained or acquire new skills?
•
Workers lose their sense of purpose and creativity.
It is totally natural for workers to react in ways mentioned above. It is therefore the responsibility of the total management structure of the company, including the Human Resource Management team, to try and allay the fears of their employees. The attitudes and
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morale of the employees are a determining factor in the overall productivity and organizational performance of the company. HUMAN
RESOURCE
MANAGEMENT’S
ROLE
TO
IMPROVE
ORGANIZATIONAL PERFORMANCE
Management plays a vital role in the process of reorganization and downsizing. The following steps can be taken to lead the staff along to a healthier work environment regardless of the changes. 1) Clarify the Purpose of the reorganization and downsizing A memo from Nokia CEO Stephen Elop to the staff stated very clearly that Nokia faces troubled times. If they want to regain their market leadership, reorganization and downsizing is inevitable. According to Stephen Elop, the way things have been was inadequate. Therefore, it is important for management to show them why the change at hand will enhance work productivity as well as benefit them personally. Until the staff is convinced that the change is even necessary they will have a hard time to make the changeover. 2) Clarify the Vision Through the Change Unfortunately, Stephen Elop did not clarify the vision he envisaged in the memo. This caused a lot of uncertainty and insecurity amongst staff. It’s imperative to give specifics on what the company will look like through this transition period. The clearer the strategy and plan, the more supportive and at ease workers will be. 3) Facilitate the reorganization
If management allow the workers to share their ideas and opinions it will be easier for the workers to buy in to the whole idea of reorganization. The first thought that goes through the mind of a worker when change comes is, how will this impact me or my department personally? They also want to know how they will benefit from this process. HOW TO IMPROVE EMPLOYEE MORALE DURING TOUGH TIMES
As already stated, there is a direct link between employee morale and productivity, because the happier and satisfied employees are, the higher their productivity. It is more important than ever to keep the morale of employees high when companies face tough economic times.
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The task of the Human Resource management team would be to find ways to make significant contributions to organisational performance and the overall employee well-being during the process off reorganization and downsizing. Managers can try to minimize the effect of reorganization and downsizing by lessening the anxiety and stress that is associated with the possibility of a job loss. Simple strategies that can help employees refocus their commitment to their organization: •
•
EMPLOYEE RECOGNITION AND AWARDS
Recognizing an employee's personal successes by giving awards is common practice in most workplaces. Employees feel that they are valued; this gesture encourages employees to demonstrate their loyalty to a company.
•
•
PROFESSIONAL TRAINING AND DEVELOPMENT
Professional training and development is an important strategy for building employee morale, and is essential to keeping up with the constant technological transformations that occur in the workplace.
•
•
DEVELOP PERSONAL RELATIONSHIPS
Managers should get to know their workers by taking a personal interest in their lives. Simple strategies like remembering birthdays, asking about employees about their hobbies or interests, and learning about their family life are effective approaches for building personal relationships with workers.
•
•
HOST OFFICE PARTIES
This is an effective way for employees to get to know their co-workers in a less formal setting.
•
EMPLOYEE SURVEYS
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•
A useful strategy for managers to learn how workers feel about their job and the company is to conduct employee surveys.
•
COMMUNITY SERVICE PROJECTS
•
This will allow employees a chance to interact with their co-workers and the broader community.
3.3 CONCLUSION Job losses and reorganizations will always be distressing. The least that management can do is to make the process just and fair.
QUESTION 4 An organisation needs to create an employer brand where the labour market will perceive the organisation as an employer of choice. Examine how Nokia, through their various HRM practices endeavours to create this unique value proposition.
4.1 INTRODUCTION
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Employer brand is defined by Minchington (2005) as the image of an organisation as a
‘great place to work’ in the mind of current employees and key stakeholders in the external market (active and passive candidates, clients, customers and other key stakeholders). 4.2 CONTENT Employer branding is therefore concerned with attracting, engaging and retaining initiatives targeted at enhancing a company's employer brand. An employer brand proposition (otherwise referred to as an employer value proposition, employee value proposition or EVP) is just as important as a company’s a customer brand proposition. The human resources and talent management group also employs marketing principles to attract, engage and retain talented candidates and employees, in the same way that marketing employs to attract and retain clients, customers and consumers. Employer branding is extremely important to a company such as Nokia in order for them to maintain their competitive advantage. It is important to attract and retain the right talent to your company. Employee value proposition or EVP aids to define what the company would most like to be associated with as an employer; highlight the qualities that distinguishes the company from its competitors; and clarify the ‘give and get’ of the employment agreement.
The following model shows elements that can be part of an effective EVP.SOURCE: http://bridgecnslt.com/buzz/2011/02/01/employer-brand/
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The Nokia Employee Value Proposition consists of four fundamental elements to motivate, involve, and maintain employee satisfaction and well-being at work. These four elements are: •
The Nokia way and values
•
Rewards
•
Professional and personal growth
•
Work-life balance
Nokia utilizes the following HRM practices to create their unique value proposition:
SELECTIVE RECRUITMENT AND SELECTION Employees are recruited from over 120 countries. Nokia is committed to an inclusive and diverse working environment. It leads to creativity and innovation. Nokia have a Graduate Program that offers exciting opportunities to graduates and Nokia. The purpose of the program is to develop their talent pipeline for the future by bringing in new talent and innovative thinking.
Top graduates from recognized universities and MBA schools are targeted to join the program to: •
acquire skills and capabilities needed by the business
•
engage, develop and retain high-potential talent for future leadership roles
TRAINING AND DEVELOPMENT Training and development programs are designed so that employees will be able to develop, both personally and professionally at Nokia. They offer an integrated package of classroom training, on-the-job learning, individual coaching, and mentoring. Employees are encouraged to learn through active participation by trying new roles at Nokia. In 2007 Nokia spend almost EUR 70 million on employee training for Nokia employees.
EMPLOYEE INVOLVEMENT
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Employees lead or participate in projects that have a global impact. A flat organizational structure allows for inclusive decision-making at all levels. It characterizes the Nokia Way. Nokia encourages open discussion and debate. The annual globally conducted "Listening to You" employee survey is a powerful way of getting feedback from their employees on a range of important issues. The "Ask HR" feedback channel on their human resources Intranet allows every employee to comment or ask questions about Nokia’s people practices and processes, even anonymously, and they will receive a prompt and openly published response.
COMPENSATION It is characterized not only by high salaries, but also in terms of a variety of possibilities to create a personal work-life balance reflecting special attention to a flexible working understanding in line with the interests and preferences of the employee, such as mobile working and teleworking, flexi time, time off and health-care services The bonus system is designed so that employees have the opportunity to share in the success of Nokia. Short-term incentive programs allow Nokia to offer immediate rewards for employee and team achievements. Long-term rewards include the stock option plan that may allow employees to share in sustained company success. 4.3 CONCLUSION Employer branding is a must for today’s businesses. Nokia uses its brand to help attract talent as a magnet attracts metal, the most interesting thing is that you won’t have to consciously engage yourself in those ‘recruiting’ stuff; Your brand will do the initial hard work for you.
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BIBLIOGRAPHY Armstrong, M, (1999 ) A Handbook of Human Resource Management Practice , Kogan Page Limited. Boselie, P (2010 ) Strategic Human Resource Management : A Balanced Approach, Utrecht University and Tilburg University. Elop, S. (2011), ‘Burning Platform’ Memo http://blogs.wsj.com/tech-europe/2011/02/09/full-text-nokia-ceo-stephen-elops-burning platform-memo/ Gay, C. (2011), Creating a compelling employer brand to attract, retain and engage top talent http://bridgecnslt.com/buzz/2011/02/01/employer-brand/
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Miles, R. and Snow, C. C. (1978) Organizational strategy, structure and process , New York, McGraw-Hill. Minchington, B (2006) Your Employer Brand – attract, engage, retain, Collective Learning Australia. Nazir, N. Employer Branding: The Series. http://hubpages.com/hub/N-EBS Nel, P.S., Werner, A., Haasbroek, G.D., Poisat, P., Sono, T. and Schultz, H.B. (2008)
Human Resource Management 7 th Edition. Cape Town: Oxford University Press Southern Africa. Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M. (2010) Human Resource
Management: Gaining a Competitive Advantage 7 th Ed. McGraw-Hill. Nokia as an employer http://www.nokia.com/careers/nokia-as-an-employer/nokia-as-an-employer-subpage Seyedjavadin, S.R, Zadeh, M.H. (2009)
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