Human resource management practices and strategy

¶ … Human Aspect Within a Corporation

In the fast paced and hyper competitive environment most companies find themselves embroiled in, the human aspect critical to a company's success can often be brushed over or in some cases, overlooked altogether. In the strategic planning process, many organizations fail to realize that their own employees are their most valuable asset. In fact, employee satisfaction and motivation are so critical to an organization's success that those firms who fail to grasp this concept are not only caught in a downward spiral that involves a loss of market share to the competition, but also the power it has to attract and retain highly skilled and competent employees in the future. One such company that made the mistake of forgetting the value of its employees is Nortel Networks, a giant global telecommunications company now struggling for its very existence. This paper will identify many of the human resource problems currently facing the telecommunications giant, as well as provide paths the organization can take to reestablish itself through its employees by using concepts and methods found in the book Human Resource Management: Gaining a Competitive Advantage by Raymond A. Noe (Editor), John R. Hollenbeck, Barry Gerhart and Patrick Wright.

The mistakes made by Nortel during the 1999-2002 timeframe concerning its employees are numerous. For one, the sudden economic downturn within the telecommunications industry in general focused the company's attention on the external environment and away from the employees responsible for day-to-day operations. Communication channels seemed to dry up overnight, and employees were left to speculate as to their immediate future. In addition, managers, once judged by the level of feedback they provided, were suddenly too concerned about their own immediate future to worry about motivating the masses. These same managers, once empowered to make the decisions necessary to keep their groups functioning effectively, were now striped of all powers and left to wait for the next major layoff decision. In effect, the organization stopped functioning as a well-oiled machine as it focused on everything but the employees who had helped catapult it to success in the first place.

In addition to employee loss of moral, many of Nortel's hiring processes lacked continuity and structure. For instance, candidates were often hired without being prescreened by the human resource department based on whom they knew or by sending the resume directly to the hiring manager. Although this system seemed to work for a while, in effect it allowed many unqualified employees to be hired as well as created a gap in the hiring process by cutting the human resource department out of the loop during the employee evaluation process. Along with the above, the company utilized a system where bonuses and pay increases were based solely on the individual assessment of managers that often left employees feeling cheated. And, although the company often stressed open-door policies, it failed in may respects to give its managers adequate training in the communication process necessary for successful employee/manager relations.

Many of the problems faced by Nortel during the so-called "fall of the telecommunications industry" still exist today as the organization struggles to regain its position as a leader in the industry. For one, many employees and managers still feel as if they have no power in the areas that directly concern them such as advancement possibilities, open-door policies, and the day-to-day operating decisions that they once handled as a routine matter of course. The barriers associated with multi-level decisions and red tape, once abolished, were rebuilt almost overnight leaving many feeling frustrated and afraid to make any decision lest it put them on the next layoff list. In general, employees were left feeling used, abused, and unappreciated, and their sense of security totally gone.

Although the human resource problems facing Nortel today are many, there are steps the organization can take to reestablish the trust between itself and the employees who are vital to the organization's success. First, the company must take proactive steps to reestablish the communication channels including that of effective feedback. Second, Nortel must find a way to empower its employees to make the business decisions needed in order to both regain and retain market share. In addition, the organization must develop pay and recruiting policies that not only motivate employees, but provide the company with a competitive advantage as well.

When communication processes within an organization break down, effective feedback is cut off at the source, and the manager's ability to directly motivate employees' dies as well. In order for any organization to function effectively, communication must flow openly in all directions and be free of unnecessary and confusing clutter. Without effective communication systems, firms cannot meet organizational objectives or goals. In order for Nortel to reopen the communication channels with its employees, it must encourage its managers to reestablish both upward and downward communication. Managers should be instructed to pay attention to the conversations overheard in the hallways, around the water cooler, and sent through the email systems in order to get a true feel for the concerns of employees. Once management acquaints itself with these concerns, effective feedback channels must be established in order to address them directly. Management must encourage two-way communication at all levels within the organization. Management must ensure that some face-to-face communication occurs so that the employees can take advantage of both verbal and nonverbal behaviors that lead to building trust.

Next, Nortel must assess the effectiveness of its current feedback channels and take whatever action necessary to ensure they are being used as a tool to motivate as well as clear up any misinformation within the department. Ineffective feedback not only harms the organizations effectiveness, it also stifles the creative process. Line managers as well as those within the human resource department must be trained to evaluate both verbal and nonverbal feedback.

Such feedback is critical because it provides employees with a method of discovering if their input is being accurately received and understood. It provides a means for both employees and employers to assess both the information given and received based on the perceptions of others.

In addition, this feedback will allow Nortel to determine whether or not it needs to make adjustments in order to reach its goals. Not only will it help prevent many of the harmful consequences associated with noise in the communication channel, it will also help guarantee that the listener perceives the senders words correctly.

Nortel managers who use the feedback system will improve the accuracy and productivity of both groups and individuals. By clarifying instructions or statements by restating the sender's message, both managers and employees will come away from the communication process with a better understanding of not only what was said but also what was meant. This feedback process will provide another benefit in that it will increase each individual employee's satisfaction with his or her job. When employees feel that the boss is actively listening to what they have to say, it increases their sense of importance and self-worth, and makes them feel as if they are a valuable part of the organization.

To achieve this goal of an effective feedback system, Nortel managers must be trained by the human resource department or an outside training company to ensure that they have well developed listening and paraphrasing skills. Second, the feedback must be formatted in such a way that it does not make the employee feel as if he or she is under attack. The manager must ensure that the feedback is directly related to the context of what was said and not the individual saying it.

Effective and productive feedback works in both directions. While it is true that employees need feedback to function properly in their roles, management needs feedback also. Nortel managers can encourage such feedback by rewarding it when it is given. For instance, management can compliment the feedback giver in front of other employees, or offer some type of reward for the best employee suggestions. When feedback is given, management must set aside some time to follow-up with the employee so that the employee will know his/her suggestion was not merely swept under the rug. When in doubt, both employees and managers should ask for clarification before tabling the subject at hand. Trying to guess at what another actually meant can often lead to frustration, loss of valuable time, and a loss of productivity and employee moral for the organization.

Along with rebuilding the employee/employer relationship in terms of trust by way of effective feedback and open communication channels, Nortel must also develop new ways to motivate its employees. First, the organization must work on giving employees a sense of security. Many of the employees retained by the company have lost friends and co-workers to the layoff lists, leaving them feeling vulnerable themselves. When employees do not feel as if the company has their best interests at heart, they are unlikely to go above and beyond in their daily work. When employees feel unappreciated, innovative and creative thinking is stifled, and the employees do only what is expected of them to keep from getting fired or otherwise reprimanded.

In order to rebuild the company to its position before the downfall of the telecommunications industry, Nortel must find new and innovative ways to motivate and empower its employees to go above and beyond what is normally expected of them. To do this, the company must ensure employees' basic desires and needs are met such as security, safety, and a sense of belonging. In short, Nortel must take steps to make employees feel valued and appreciated.

One way in which the company can achieve this goal is to ensure that individual job designs motivate employees. For instance, the employee must feel as if the work he or she is currently doing has the potential to lead to advancement. The human resource department must see that the right person is hired for each individual job. Further, the company can use both job enlargement and job enrichment techniques to motivate individuals as well as inspire loyalty. By increasing the depth and scope of jobs, Nortel can empower its employees by giving them responsibility for many aspects of the planning, organizing, and controlling processes of their jobs.

The company must once again tear down the walls associated with red tape and give its employees back the power to make any necessary decisions that fall within their authority and scope of expertise. Managers must bridge the gap between themselves and employees by once again establishing participative management practices so that employees feel as if they have some control and say in the decisions that affect their future. Not only will such empowerment processes serve to foster an atmosphere of trust and security, they will also motivate and inspire employees to work towards the strategic goals of the company itself.

The degree to which empowerment policies will work will be dependent on the amount and quality of communication available within the organization. In this way the human resource goals of empowerment and feedback strategies are tied together. This means Nortel must share both positive and negative information so that employees can make informed decisions and understand the impact of their actions on the company's bottom line. In a day and age where communication is vital, secretive strategies will no longer work. Nortel must share any and all vital information, and then, empower its employees to act upon it.

Although the above human resource concepts deal mostly with the relationships and interactions of management and employees, the human resource department itself must guarantee that adequate training for managers is available to make these strategies a success. Beyond that, Nortel must see that its human resource department has the correct systems in place for effective job analysis, validity in the selection process, as well as competitive and fair pay practices.

Job analysis is the systematic collection and recording of information concerning the purpose of a job, its major duties, the conditions under which it is performed, the contacts with others that job performance requires, and the knowledge, skills, and abilities needed to perform the job effectively. In order to ensure that the company is hiring the right individuals for available job openings, the Nortel Human Resource Department should obtain information by: (1) watching individuals do their jobs, (2) conducting interviews with individuals and their superiors, (3) having individuals keep diaries of job-related activities, and (4) distributing questionnaires to be completed by job incumbents and their supervisors. The company can then take the information obtained and rewrite its job descriptions so that they are updated with the new skill sets needed in today's technological environment. Armed with these revised job descriptions, Nortel can then target its recruiting dollars and efforts towards specific avenues that will attract desired individuals and college graduates to the company. With these job descriptions and job specifications, the human resource department can then compare the skill sets of applicants with the needed skill sets of jobs within the company in both the selection and recruitment process. These same tools can be used again in the performance appraisal process to determine if new hires or existing employees are performing at desired levels, and again in the compensation process to match employees' levels of skills with the level of pay that will provide the company with a competitive advantage in the market place. In addition, these same documents will aid the human resource department in assessing which jobs can be combined or expanded to help cover the holes left by the layoff process.

The company must also use the selection process to determine the best candidates for the open positions. Although today's economic downturn is devastating for employees and employers alike, it can provide Nortel a larger pool of employees to choose from. In order to make adequate assessments of candidates, the selection processes utilized by the company must have validity, which is the degree to which a measure actually assesses the attribute that it is designed to measure. As applied to selection, validity addresses how well a selection device actually predicts a candidate's future job performance. To ensure validity, Nortel must conduct studies to determine the validity of its existing selection methods, and revise them where necessary. When sent resumes from prospective employees, the human resource department must take the time to validate the information given before scheduling interviews with the hiring mangers. To ensure a greater degree of validity in the interviewing process, the human resource department should develop a system for structured interviews in which the interviewer has a predetermined set of questions that are asked in sequence with virtually no deviations. This structured type of interview will not only yield more valuable data, it will also prevent the interviewer from probing interesting or unusual issues that may arise.

The organization must also take a serious look at its compensation practices to ensure that they are not only fair and equitable, but also competitive in nature. At the foundation of most major compensation systems is job evaluation, the systematic process of establishing the relative worth of jobs within a single organization in order to determine equitable pay differentials among jobs. The human resource management team must reevaluate its pay policies in terms of the additional responsibilities given employees due to layoffs as well as those offered by the competition. This compensation system must consider internal, external, and individual equity in developing pay structures and allocating individual pay. The first step should be an external audit of the labor market to determine the current rates of pay for benchmark or key jobs.

To both motivate employees and retain an equitable and fair pay system the company should consider initiating a pay for performance system in which individuals are rewarded fairly based on individual achievement. In today's competitive environment, linking pay to performance will allow the company to see that it's employees perform in a way that best meets the organizations needs and long-term strategic goals.

While Nortel does use a pay for performance system, many of its employees feel that it is both unfair and subject to interpretation by one's immediate supervisor. For instance, in a general meeting senior managers and directors are given a certain amount of money they must divide among the employees of their group based on each individual employees performance. To ascertain the percentage increases each employee will receive, the individual's immediate supervisor conducts a yearly evaluation. Within each group, only a certain number of employees can achieve the "excelled" rating which allows for the highest pay raise. So, according to Nortel policy, if only two members of a group can actually be awarded the "excelled" status, and yet three employees honestly achieved it, one of the three would be knocked down to a "met expectations" level and given a lower percent pay increase based solely on the reviewing managers judgment or bias.

In order to achieve fairness and equity between all employees, Nortel must do away with this method of pay for performance plan or else revise it so that all employees actually receive the percentage increases they are entitled to. This means that the company must do away with its methods of only allowing a select few to earn specific achievement scores and find a way to award every employee for what they actually contributed. One way the company could do this would be to initiate group-based rewards. In this way, each individual group would be awarded a set amount for achieving their goals with the sum being divided equally among group members. While this method also creates aspects of unfairness in that some members of the group may contribute more than others, it takes management bias out of the equation and gives employees a fair chance of getting the rewards they actually deserve. Another solution to the above problem would be to establish quarterly appraisals and have the yearly raise based on the sum total of all four. In this way, management bias is unlikely to skew the outcome for several reasons. First, in most cases there will be too many appraisals for the manager to keep up with in his/her head, which would take favoritism out of the picture to a large degree. Second, since the amount each department will get for raises is often determined at the end of the year, managers cannot "downgrade" employees at the last minute in order to reward a bigger raise to someone else. What the employee gets will be a direct result of all performance appraisals instead of only one conducted at the end of the year. Frequent evaluations also solve the problem many managers have of trying to remember each goal achieved during the year by each individual employee. While the solutions also pose a few problems, employees are more likely to view then as fair. Nortel must find a way to fairly reward its employees, even if it means getting rid of the pay for performance plan altogether.