Employee Outsourcing

HR outsourcing (also known as HRO) is the process of sub-contracting human resources functions to an external supplier.

There are many ways in which outsourcing human resources can be done:

·       Business process HR outsourcing (also known as BPO), where an external supplier manages discrete HR activities, such as payroll administration or recruitment, or perhaps the whole human resources function.

·   Shared service HR outsourcing, where only the transaction or administrative elements of HR’s activities are subcontracted to an external supplier. This may include the personal interface with employees.

·  Application (and facilities) service HR outsourcing, where external providers look after the technological (and physical) infrastructure to support human resources activities.

Outsourcing human resources or some of its processes to an external provider is a major business decision as, while it may be cost-effective, it introduces new elements of risk, including:

·         Loss of control

·         Impact on the employer/employee relationship

·         Loss of flexibility

·         Failure to deliver cost benefits

·         Legal or regulatory requirements

·        Industrial relations issues

The operation of any HR outsourcing arrangement should be governed by a service level agreement. This will define the required standards of performance by both parties and any penalties for non-compliance. A service level agreement is a crucial document and must be negotiated with great care to mitigate the above risks.

People management plays a crucial role in delivering organisational performance. In today’s modern, knowledge economy this is more true than ever before. The decision to outsource human resources is therefore not to be taken lightly.

There are many circumstances in which outsourcing HR services can deliver tangible benefits to the organisation, for example by freeing HR professionals to devote more time to a strategic role supporting organisational performance.

Advantages and disadvantages of HR outsourcing

Potential benefits of HR outsourcing

·         Reduced cost

·         Increased efficiency

·         Access to improved HR IT systems

·         Improved management information (including human capital metrics)

·         Access to HR expertise not available internally

·         Increased flexibility and speed of response

·        Philosophical reasons (for example the organisation is outsourcing a number of its support functions, of which HR is just one part)

·         Reduced risk

·         To free HR resources to operate more strategically.

Potential pitfalls of HR outsourcing

·     Don’t outsource what you don’t understand. The HR outsource provider will only have to subsequently solve the problem (at a cost) and the provider’s solution might not be most suitable from your organisation’s perspective

·         HR outsourcing does not absolve the organisation of good people management practices nor of overall responsibility for the provision of HR services

·         Loss of local knowledge and processes which instead reside with the outsource provider

·         Standardization of processes in line with outsource provider not organisational preferences.

NB. Where this process involves the outsourcing of human resources to another country, this is known as HR offshoring.

References

HR outsourcing (HRO) – an in-depth guide 01 May 2019, Market Information https://www.personneltoday.com/hr/hr-outsourcing-hro-an-in-depth-guide/

Performance Management System

What is Performance Management System? 

Performance management system is the systematic approach to measure the performance of employees. It is a process through which the organization aligns their mission, goals and objectives with available resources (e.g. Manpower, material etc.), systems and set the priorities.

The competency, skills and knowledge gaps are also identified through this process which can be improved by providing guidance, trainings, coaching and mentoring to employees or teams at different levels and designations. It optimizes the results through a proper channel and process which reduces the conflicts and grievances among teams or employees.

It aims to continuously monitor and measure the performance standards against the desired goals and objectives.

Purpose of Implementing Performance Management System

Managing employee’s performance is the key objective of establishing systematic Performance Management system in an organization. These process servers’ six main purposes in the company:

1.      Strategic 

The system is a tool which should be aligned with overall organization goal followed through department goal and individual goals. The organizational strategic goals should be linked with each activity performed by every department or employee.

2.      Administrative

The system is also set the deciding factor of employee’s promotion, demotion, salary increment, transfer and terminations. It enables to identify the performers, non-performers or under performer employees in an organization. It merits the competency and skill level of employees. Hence, it clearly defines the administrative role as well and supports the management decisions.

3.      Communication

It is the effective communication channel to inform employees about their goals, job responsibilities, key deliverable and performance standards. Further, it is also a structure method to indicate the key areas of improvement required by the employee in order to improvise his performance. Further it provides the platform to learn and train on skills, and knowledge for better performance and results.

4.      Developmental

It is the structure method of communicating the positive feedback, improvement areas, and development plans.

5.      Organizational Maintenance

This system is the yardstick of measuring employee, department and organization achievements and evaluating  the performance gaps through various tools and techniques. Hence, it maintains the health of the organization and its performance standards.

6.      Documentation

It reviews, feedback and forms should be documented and maintained periodically by every organization. It would enable them to look forward, set new targets, design developmental needs, design training and learning programmes, and career progression of employee and for department. Hence, it helps in driving the organizational needs to desirable objectives.

Benefits of Performance Management​

In today’s global environment where the market is evolving at a very fast pace, it is important for an organization to understand the benefits of performance management. Therefore, managing employee’s performance is the ultimate need of an organization. The employees are considered as an asset by the organization. The system serves various benefits to the organization, which are as follows: 

1.      It supports to provide data to find the skills and knowledge gaps of employees in order to improvise them through training, coaching and mentoring systems.

2.      It motivates employees to take new challenges and innovate through structure process.

3.      It provides new opportunities to employees for their growth and development in their professional careers

4.      It defuses the grievances and conflicts among team members through proper performance evaluation system.

5.      It assesses the employee’s performance fairly and accurately against the performance targets and standards.

6.      Employees would enable to provide better results because of clarity on their performance targets.

7.      Performance management system provides the platform to discuss, develop and design the individual and department goals thorough discussion among manager and their subordinates.

8.      The under performer can be identified through performance reviews and can raise their skills levels objectively. It quantifies the learning needs through individual development plans or performance improvement plans as well.

References

PERFORMANCE MANAGEMENT SYSTEM 2018, Market Information.

https://www.hrhelpboard.com/performance-management/performance-management-system.htm
HR Video & Events

What Are Organizational Politics in the Workplace?

To understand business or workplace politics, it helps to first consider the politics definition. Most people are familiar with the primary definition of politics – the activities associated with governing a place or region. These can include debate between parties in power, a set of beliefs or principles and other facets that involve belief and governance.

However, it’s the secondary politics definition that concerns the workplace through organizational politics, or what is commonly called “office politics,” and that includes efforts made in an attempt to improve one’s status or to increase one’s power in the organization.

Consult business dictionaries and they’ll tell you that organizational politics are when one pursues an agenda of self-interest in the workplace while having little regard for the effect it will have on the company’s success in achieving its goals.

What Is Meant by Organizational Policies?

Two things are at the heart of politics – relationships and policies. It’s easy to believe the two are separate matters, but policies in workplaces often dictate relationships or at least the way relationships are enjoyed and nurtured.

Organizational policies guide the way in which employees and the organization itself act or behave regarding both the employee’s interests and the company’s interests. These are the guidelines, rules, operating procedures and principles outlined by the company’s ownership or administration, which are then expected to be adhered to by all people in the firm. From email guidelines to attire to hierarchy to company holidays, these are all policies one can expect to be defined by the company.

Contravening these policies can cause conflicts or lead to reprimands. The way these policies affect workplace interactions can influence the organization’s political climate, which in turn can impact office politics. Navigating policies and benefiting from using them to one’s advantage (or suffering the consequences thereof) form the heart of corporate politics and power.

Corporate Leadership and Politics

Organizational politics can often come down to relationships and allies in the workplace. Who has power over the direction of your career? Who can be of benefit down the line? Who will make the best teacher? What’s the best stance for negotiating your contract? Which projects would best benefit your career in the long run? Can you make an open secret of your career ambitions so management understands that you're in it to win it?

All of these questions and their answers are examples of what defines politics in the workplace. It’s strategy and methodology that will affect how you succeed in your career. It has nothing to do with what the company’s shareholders will receive or what the sales bottom line will be in the third quarter but is instead entirely about your future in the firm.

When corporate leaders favour one person over another for where he went to school or his speaking style or boardroom appeal, that’s part of politics too. It’s not objective or tangible, like how Robert has the highest sales success in his division and therefore gets the biggest bonus. Instead, it’s a subjective belief based on interpersonal relationships and interaction.

Playing Politics

History is rife with people who felt they were above playing politics but then got upstaged by peers. Anyone who believes politics are optional for any corporation or organization is due for a shock when one realizes that politics exist in every environment and are unavoidable. Whether you choose to participate is up to you, but make no mistake – politics will be played whether you suit up for them or not.

References

·         Harvard Business Review: The 4 Types of Organizational Politics

·         Forbes: What I Learned About Office Politics That Changed My Career

·         Inc.com: Why and When You Need to Play Office Politics

Power Orientation and Power Distance

Power orientation refers to the beliefs that people in a culture hold about the appropriateness of power and authority differences in hierarchies such as business organizations. 

Some cultures are characterized by power respect. This means that people in a culture tend to accept the power and authority of their superiors simply on the basis of the superiors’ positions in the hierarchy. These same people also tend to respect the superiors’ right to that power. People at all levels in a firm accept the decisions and mandates of those above them because of the implicit belief that higher-level positions carry the right to make decisions and issue mandates. Hofstede found people in France, Spain, Mexico, Japan, Brazil, Indonesia, and Singapore to be relatively power respecting.

Power Distance has been defined as the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally. This represents inequality (more versus less), but defined from below, not from above. It suggests that a society's level of inequality is endorsed by the followers as much as by the leaders. Power and inequality, of course, are extremely fundamental facts of any society. All societies are unequal, but some are more unequal than others.

Table 1 Ten Differences between Small- and Large- Power Distance Societies

Small Power Distance	Large Power Distance
Use of power should be legitimate and is subject to criteria of good and evil	Power is a basic fact of society antedating good or evil: its legitimacy is irrelevant
Parents treat children as equals	Parents teach children obedience
Older people are neither respected nor feared	Older people are both respected and feared
Student-centered education	Teacher-centered education
Hierarchy means inequality of roles, established for convenience	Hierarchy means existential inequality
Subordinates expect to be consulted	Subordinates expect to be told what to do
Pluralist governments based on majority vote and changed peacefully	Autocratic governments based on co-optation and changed by revolution
Corruption rare; scandals end political careers	Corruption frequent; scandals are covered up
Income distribution in society very uneven	Income distribution in society rather even
Religions stressing equality of believers	Religions with a hierarchy of priests

The above table lists a selection of differences between national societies that validation research showed to be associated with the Power Distance dimension. For a more complete review the reader is referred to Hofstede (2001) and Hofstede et al. (2010). The statements refer to extremes; actual situations may be found anywhere in between the extremes, and the association of a statement with a dimension is always statistical, never absolute. In Hofstede et al. (2010) Power Distance Index scores are listed for 76 countries; they tend to be higher for East European, Latin, Asian and African countries and lower for Germanic and English-speaking Western countries.

References

Hofstede, G. (2001). Culture's Consequences: Comparing Values, Behaviors, Institutions and Organizations across Nations. Thousand Oaks, CA: Sage (co-published in the PRC as Vol. 10 in the Shanghai Foreign Language Education Press SFLEP Intercultural Communication Reference Series, 2008)

Hofstede, G. (2006). What did GLOBE really measure? Researchers’ minds versus respondents’ minds. Journal of International Business Studies, 37, 882-96.

Hofstede, G. (2010). The GLOBE debate: Back to relevance. Journal of International Business Studies, 41, 1339-46.

Hofstede, G. & Bond, M. H. (1988). The Confucius connection: from cultural roots to economic growth. Organizational Dynamics, 16, 4-21.

Hofstede, G. & Hofstede, G. J. (2005). Cultures and Organizations: Software of the Mind

(Rev. 2nd ed.). New York: McGraw-Hill. For translations see www.geerthofstede.nl and “our books”.

Hofstede, G., Hofstede, G. J. & Minkov, M. (2010). Cultures and Organizations: Software of the Mind (Rev. 3rd ed.). New York: McGraw-Hill. For translations see www.geerthofstede.nl and “our books”.

Organization Culture and the role of the Leadership

“Culture and leadership are two sides of the same coin. When organizations start or when groups start there is always a leader who has a preferred way of doing things, and those preferences by definition are going to be imposed on the group members. If you don’t like the way I run this group, I’ll replace you. The leader’s values and preferences are the first ways that a group or organization does things and if that works it becomes eventually the culture of that group. So in a very real sense, founders and leaders create culture.” (Tim KUPPLER 2014)

Organizational culture, or corporate culture, compromises the attitudes, experiences, beliefs and values of an organization. It’s the specific collection of values and norms that are shared by people and groups in an organization which control the way they think and behave that has an impact on the organizational performance. It is necessary to shape and reshape the culture as teams evolve over the time, to face two basic challenges in business operations; integrating individual into an effective unit and adapting effectively to the external environment to survive.

We know that a company’s culture plays an important role in employee engagement, discretionary effort, teamwork and loyalty and that an organization’s culture impacts the company’s bottom line.

Further the leadership of the company is the primary shaper of the culture. It’s important to understand which leadership styles and behaviour have the most impact on culture. The background of people, group dynamics, operating environment, work condition, leadership style, structure, compensation policy/composition and social issues are factors that form the ‘natural organization culture’ (Kishu Gomez 2019)

By culture I mean the shared beliefs top managers have about how they should manage themselves and other employees and how they should conduct business (es) (Lorsch, 1985: 95)

References

Culture and Leadership two sides of the same coin: Available from:<https://www.tlnt.com/culture-and-leadership-theyre-simply-two-sides-of-the-same-coin/> [14 March 2014]

Kishu Gomez 2019, Sunday Observer: Biz Talk, The Advertiser