The Nature And Practice Of Human Resource Management In Organizations
Introduction to the Case Study
Jamjoom Pharma is a well-established pharmaceutical company in Saudi Arabia. The company started in Jeddah in the year 2000 with less than ten to improve its customer service to its clients. The associates or the employees. The head office is still located in Jeddah City. Currently, the company has over five hundred employees in different departments of the company such as the factory, sales, marketing, and registration. There is also an export team in twenty-one countries. The company has a rapidly growing and successful track record contributing to 4.1 percent in the pharmaceutical market in Saudi Arabia (Jamjoom Pharma 2012).
Since its inception, Jamjoom Pharma has grown and emerged as one of the leading pharmaceutical companies in the Afrasia region. Jamjoom Pharma’s markeextendsnd from the Middle East, the whole of Africa, and the CIS region just to mention a few. As a company, Jamjoom has dedicated its resources to building a market share in these areas. As a result, the firm has improved its competitive advantage while the companies that are rigid to changes are left behind. This eventually can lead to drastic losses in profit and market share and growth, its products have also been widely accepted. This strategy has resulted in the success of the company. With the growing number of employees in the company, Jamjoom Pharma’s plan is to be enlisted as a top ten company in the pharmaceutical market in Saudi Arabia. To achieve this goal a supportive corporate function has been established. The Human Resource Department in Jamjoom Pharma was created in 2003 to support the exit-re-entry visa from Saudi Arabia and IQAMA cards to other nationalities within the organization since Jamjoom has more than 80 percent of its team who are of non-Saudi nationality.
Definition of HRM
Armstrong defines HRM as a planning process that requires the use of and the combination of logical processes to employee approach. He adds that HRM involves all processes of developing a system that will lead to the success of the employees and the company at the same time. In other words, HRM should focus on the well-being of the effecting the rate of premiums. For instance, an insurance firm that operates with many employees (Armstrong 2009). The second definition of HRM is that it is a unique process of managing employees. Through this kind of management, the competitive advantage of the company is attained. After the attainment of the competitive advantage then is used to make plans for the company. This is only achievable if three aspects are integrated, the structure of the business or company, the cultural aspect of both the employees and the business, and the human resource or personnel in the company (Storey ed 1991).
The Objective of HRM within an Organization
In an organization, HRM aims at ensuring that the organization attains its goals and visions. Through maximization of organizational effectiveness and capability, HRM helps the organization achieve its goals by making the best use of the resources available (Armstrong 2009). As Mathias, (2011) explains for organizations to achieve the goals they need to take care of the human capital or the intellectual capital by considering employees as the most precious resource. Through this mechanism, the organization can attain important core competencies. Some of the organizational objectives may include building a competitive advantage by the ideal future state. Obstacles are not just corporate investing in its people. Armstrong and Baron (2002), People who have collective skills, abilities, and experiences deploy these interests into the organization by making a significant contribution to organizational success. This creates and constitutes a resourceful, competitive advantage.
Schuler and Jackson (1987), are of the view that HRM is a system. Through this system, the company or business can understand its employees making it easier to motivate and retain them. Besides, the HRM system is created to ensure that employees creatively survive in the organization helping it achieve its goals.
Scarborough and Elias (2002), explain that HRM consists primarily of human capital. It is this human capital that links organizational practices and its employees. If linked successfully, then the organization or company can successfully achieve its goals. The HRM process should, therefore, contain a clear appraisal system, a career management system, a proper rewarding system for its employees, and a proper recruitment system (Armstrong, 2009).
In Jamjoom Pharma, the HR department and team coordination to produce an annual appraisal that is used to discuss with its employees. The content of the appraisal report may include business behavior, teamwork, attitude, innovation, time management, and commitment towards customers. Consequently, it may include the measurement of how employees run the business to comply with corporate calibration, development plan agreements, and additional skills the employees need to improve their productivity. For example, in February 2012, there were some complaints regarding salaries in the company. To respond to this complaint the company contacted the third party to run a transparent survey in other pharmaceutical companies to measure the productivity per head in each company. The survey revealed that Jamjoom employees needed to have a salary increment it was then that the company increased its employee’s salaries.
Companies that are faced with numerous competition and challenges require employees that will strive for the success of the company. For example, employees must be able to handle extra working hours with enthusiasm. All these tasks require an employee with a solid psychological contract to make them work even harder. A psychological contract concerns the perceptions of both parties in the employment relationship as explained by Guest (2007). Additionally, as the psychological contract may be a form of silent contract between the employer and employee, for instance, requiring the employer to provide the employee with training, good working conditions, work and personal life balance, a bonus, career pathways, and compensation if the employee chooses to leave the company in return the employee is expected to give the best efforts at work to increase the company’s profits and growth. This paper will outline two HRM functions, the employment process, and performance appraisal systems for Jamjoom Pharma
In Jamjoom Pharma, most employees have a psychological contract but this is dependent on the market feedback. This is a safe approach since it keeps the company on up to date strategies to remain the second or third best choice for the employees influencing employee retention.
Identification of hard and soft approaches in managing people
The concept of HRM is associated with the strategic approach to managing people. The proper approach to managing people should aim at adding value to the organization. According to Legge, there are only two approaches to managing people (Legge, 1987). Hard approaches to HRM focus on communication through a tough language. It emphasizes quantitative, calculative, and business strategic aspects of management. The hard approach reduces people to objects and they are assessed by their skills and attributes that the organization requires (Storey 1987). In this approach, employees are seen as a cost to the organization as well as factors of the production process. The soft approach, on the other hand, is more human focusing on human relations. This approach focuses on treating the employees as the most valued assets of the organization to improve the organization’s competitive advantage. Employees are involved in the activities and decision-making of the organization (Legge 1995). This kind of management approach assumes the low employee commitment approach that aims at producing reliable and outstanding performance (Walton 1985). Jamjoom Pharma assumes the soft approach whereby it involves the company employees in the decision-making process. For instance, when employees ask for a salary increment the company took a step, conducted research, and eventually increased employees’ salaries. Also, in soft HRM the organization focuses on training to develop individual employee skills.
Recruitment and Selection
Recruitment is the process of attracting people promptly, sufficient in numbers, and with appropriate qualifications to apply for jobs in a particular organization. Selection, on the other hand, is the process of choosing from a group of applicants the individual best for a particular position and the organization (Mandy, R. W. 2008). Recruitment is a vital process for the Business Ethics, Hoffman, W. M., Frederick, R., &Petry, E. S. (2009). The ethics of organizational transformation: mergers, takeovers, and corporate need to expand own human capital, the risk of choosing the wrong candidate can cause the failure of job and operation entitled for while a right candidate can rise business to a maximum extent. HRM has some responsibilities that include recruitment, selection, monitoring, measuring, and appraising their attitude and performance in different ways. The steps in the recruitment process are;
This is the initial step in the process of recruitment. It entails the drafting of the vacant positions’ job specifications, indicating the responsibilities that are major and minor, the qualifications, experience, and skills needed, the grade level of pay, starting date, and whether the employment is temporary or permanent. Special conditions should also be included if any is needed (Jamjoom Pharma 2012).
b. Strategy Development
After it is clear how many candidates are required for the vacant position, the next step is to the identification of the best strategy for recruiting the candidates to the organization. Before the strategy is chosen certain considerations must be placed in mind. For example, whether to use the company candidates or select from outside; the type of recruitment method to be used, the geographical area to be considered when searching for the candidates; the source of recruitment to be practiced and the consequence of activities to be followed after recruiting candidates into the organization (Jamjoom Pharma).
Here the job seekers are attracted to the organization. Two main sources are used to attract the right candidates, first the internal and external resources. These steps may include some form of advertisement that is published in newspapers or company websites. Internal sources could include asking the employees in the company to recommend the right candidates for the job.
This is an integral part of the recruitment process. Sometimes screening is viewed as the starting point of the selection process. The selection process starts only after the candidates have been shortlisted. For example, in a University advertisement that requires filling the post of professors, applications are received in response to the advertisement. The candidates are then screened and shortlisted on their eligibility basis and suitability. It is only then the screened candidates are invited for seminar presentations and personal interviews (Jamjoom Pharma).
The job specification is not important at the screening stage since applications are screened for the qualification, knowledge, skills, abilities, interest, and experience mentioned in the job specification. The candidates that do not qualify are then eliminated from the selection process. The techniques used for screening candidates vary depending on the source of supply and method used for recruiting. The preliminary applications, de-selection tests, and screening interviews are common techniques used for screening the candidates.
e. Evaluation and Control
The evaluation and control involve looking at the cost incurred during the selection phase. Some of the costs include the salary of recruiters, administrative expenses, the cost of time spent in preparing job analysis and advertisement, the cost incurred in recruiting unsuitable candidates. Considering these costs, the employer must establish whether it is necessary to recruit candidates into the organization. The method of recruitment is also put to test here. Also, the necessary control measures are put in place to cost saving in the whole process. After understanding the practices involved in the recruitment process, it is necessary to understand the recruitment process in India.
In Jamjoom Pharma, the method of choosing the appropriate candidate by the line manager or the Human Resource Coordinator is usually electronically done. LinkedIn and recruitment agencies in Egypt are used to screen to select the best candidate.
Legal Aspect of Selection
It is right to argue that Jamjoom Pharma chooses its candidates from Egyptian citizens since it is estimated that 90 percent of healthcare providers are of Egyptian nationality. Since there is a restriction, where only men are allowed to drive in Saudi Arabia most of those selected are male since women are not allowed to enter particular premises.
Performance management involves a combination of delivering success in organizations through the improvement of the output of the human resource or people through the development of teams and individual contributors (Armstrong and Baron, 1998). Performance management has been numerous been linked to employee performance and objectives of the organization. Performance managements go together with the identification, measuring, and development of the organization. Performance management aims to enhance the production of high-quality leaders who can successfully face challenges and changes within the organization as a result producing competent results in the organization. Performance management includes several skills such as;
This is an effective way of preparing for the future. A successful organization must have a clear plan for its activities. A planned strategy is only successful if the organization’s employees are involved. In the Business models, business strategy and innovation. Long range planning process, the goals of the organization are identified, and employees are given a clear path for channeling their efforts to achieve the organizational goals. The regulatory requirements for planning employee’s performance include setting up the standards and elements for any performance appraisal plans.
The elements for measuring performance are supposed to be easy to measure, easy to understanding of employees, can be clearly verified by the investors, those that incorporate principles of equity, and easily achievable by the company. Using critical elements employees are accountable as individuals for the assignments and responsibilities. To ensure the attainment of these targets, the plans set should work for both the company and employee and easy to adjust to the changing work requirements and demands. When effectively used these plans are beneficial working documents that can often be discussed (Jamjoom Pharma).
Monitoring ensures that every project is followed up until its goals are attained. Through monitoring the performance, plan effectiveness is measured through a feedback mechanism. For monitoring to be effective, it is important to include employees in the monitoring plan. For example, employees can be asked about their reviews on a particular program, and how effective it is for employee motivation. Monitoring offers an opportunity for the project supervisors to determine how well the employees are finding the working standard in the company. Monitoring can help provide the acceptable working standards in the company and which employees deserve a salary appraisal or a rise up the ladder of employment. At the same time, monitoring can help identify problems in the company projects before it is too late (Jamjoom Pharma).
The HRM should focus on addressing and developing the needs of its employees. The monitoring and planning strategies should be dedicated to building a happier employee lot creating a successful organization in return. Some of the developmental strategies include employee training for the acquisition of skills; skills can also be introduced through practice, for example, the company can introduce new tasks that require particulars skills. Employees can also be encouraged and motivated for higher performance, such as salary increments, recognizing the effort of the employees. The introduction of new technology is also another developmental strategy; this can make employees eager to participate in technological projects. The performance management plan is another chance for the company to identify the needs of its employees (Jamjoom Pharma). At the same time, areas for improving good performance stand out and help in the improvement and recognition of employees who have done well improving their performance even further.
From the time to time, organizations find it important to summarize their employee’s performance. This helps in comparing performance over time or across a set of employees. Organizations need to identify their best-performing employees or department; this is where rating comes in. Rating is a tool used for evaluating employees or a group of employees against the constant elements in the performance plan (Anon., n.d). Rating as a tool can be used to determine performance appraisals.
There are many techniques used in performance appraisal. One is through appraisal interviews. The primary aim of appraisal interviews is to improve the performance of the employee. During the interview, the employee can communicate to the employers, at the same time the employee can communicate to the employer what his or her overall performance appraisal stands. This is also an opportunity for the employee to clarify any misunderstanding regarding the performance appraisal by the management who went for a strategy known simply as satisficing to make the decision. Normally managers are forced by their employer.
The 360-degree appraisal is a mechanism, which requires the employees and other subordinate staff to rate each other anonymously. The information received is then included in the person’s performance reviews. In this kind of appraisal, feedback is obtained from employees on how they think about each other performance. The 360-degree appraisal can be used to determine how the employees function as a team.
Competency-based involves understanding the skills and competencies of the employees. The competency of an employee is critical to the achievement of organizational goals. The employees are listed down according to the skills that the organization needs. For example, they may be rated based on their educational qualification. The employees that do not meet the performance threshold scale set, and then their issues are addressed in the Performance development plan. Competency appraisal could be based on the responsibility of each employee. A competency-based appraisal is used to encourage focus hence improved performance among employees. Also, such a system is used to encourage feedback in the organization.
Other appraisal mechanisms include critical incidents, self-appraisal or narrative reports, rating scales, comparison with objectives. All these mechanisms are used to motivate, understand employees better at the same time encouraging high performance among the employees.
Like any other tasks in the organization, performance appraisals are affected by several challenges. The first and most common is employee resistance to the appraisal method used or general appraisal. Employees are prone to resist processes or actions that they think will jeopardize their job security. Appraisal performance mechanisms closely scrutinize employees and employees may view the whole process negatively. At the same time, this may happen if the whole appraisal process is not explained to employees on what it intends to achieve.
Another obstacle to performance appraisal is if only employees are subjected to the system. If the system is likely to explore some form of discrimination among the company employees, then it will create an obstacle to the whole process. Also, if the senior management of the company is not committed to the appraisal method or the results then these can be an obstacle to consequent appraisal plans.
Lack of a proper appraisal mechanism is essential for the appraisal performance process. The process is supposed to be fair to all employees. For example, managers should not be subjected to a different appraisal mechanism from the subordinates. Employees need to be provided with solutions to their problems during the appraisal process, and if the mechanism used does not provide a solution, then they are likely to resist the whole appraisal process.
Jamjoom Pharma has a comprehensive appraisal process. The primary aim of appraisal at Jamjoom Pharma is to give bonuses to employees. After each appraisal period, an increase in salary increase percentage is reflected in the employee’s salary. With flexible working HRM working practices, the achievement of flexible employee has achieved hence the high commitment to their projects. Employees are less fatigued since they have fewer or flexible working hours. If the HRM practices are not flexible then flexible employee commitment is less likely to be achieved. Consequently, the establishment of a good working environment is primary for the success of the company. For example, Jamjoom Pharma gives its employees an annual international trip to increase inter-relations and encourage information exchange and acquisition of new skills. At the same time, family gatherings of all employees are held every quarter to show that the company cares about the employees’ welfare by giving their families a unique experience.
Conclusion and Recommendations
The main of this paper is to demonstrate how Jamjoom Pharma embraces different HRM practices to improve its competitive advantage. At the same time, the paper looks at identifying the main HRM strategies that Jamjoom Pharma adopts. Jamjoom focuses on a soft approach to Human Resource Management such as training of the company employees, and strategies to improve the company’s competitive advantage. The soft approach to employee management focuses more on the welfare of the employees while the hard approach focuses on the achievement of the company’s goals and sees employees as objects to be used to attain this goal.
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