Strategic Human resources Management (SHRM)

StrategicHuman resources Management (SHRM)

Thegoal of human resource management is to increase the productionoutput of organization in line with set objectives (Armstrong,2007: 92).The basis of Human resource management practice has its origin onTaylors scientific management theories conceived during theindustrial revolution in Europe (Taylor, 1911:33). In the quest toimprove the production process, Taylor narrowed his scientificmanagement theories on workforce development as an important input inimproving economic efficiency in the manufacturing industries(Torrington, 2008: 615).Taylor’s perspectives on labor sparked great inquiries on laborrelations leading to great research by other scholars like Mayo 2003(reprint), Abraham Maslow 1943 and Fredrick Herzberg 1989, whodeveloped great theories on labor management. Motivated by Taylorscientific management tenets (Taylor, 1911:35), these scholarspursued extensive research on labor management through practicalindustrial studies on organizational psychology, behaviors andoverall labor management practices.

Sinceearly 20thcentury there has been a tremendous growth in the field of humanresource management owing to the increased need of labor andmanagement issues concerning workers. Initially, the functions of HRinvolved basic administrative and transactional work dealing withpayroll and benefits issues within the industries. In this case humanresource management existed as a specialist area in personnelmanagement (PM). In the late 20thcentury, PM was further developed to include administrative functionssuch as labor relations, payroll and benefits management,recruitments and employees development. As modernization andincreased industrialization set in, the practice of HR changedconsiderably to include other aspects as training, recruitment,conducting performance appraisals, reward and legal industrialrelation management.

Humanresources management has grown in design and structure as the need tomaximize employee output and achieve organizations strategicobjectives continues to rise. Globalization improved technologicaladvancement, changes in the recruitment process, more trained andexperienced workforce has made it necessary to shift human resourcemanagement from traditional practices to a more diversified humanresource management. There has been a great shift from personnelmanagement to Strategic human resource management that entailsmaximizing employees’ performance and balancing organizationalpractices with employees’ needs and government regulations.

HRnow deals with managing people and other aspects that relates tolabor within organizations through policies and procedures that arealigned along strategic organization objectives. In strategicmeasures HR now deals with initiatives such as talent development,reward, succession plans, diversity, inclusion and dealing withindustrial labor relation issues. In the contemporary laborenvironment, companies are strategizing on retaining, attracting anddeveloping employees’ knowledge as part of maximizing organizationproductivity. In the same line, organizations are now focused onreducing employee turnover while maintaining skilled employees. Inthe modern work environment the cost of hiring new staffs is high andthere exists risks in acquiring new staffs that cannot match thepotential of replacing an experienced employee. SHRM is needed inmodern organizations in order to increase productivity and reduceemployee turnover most organizations are offering attractivebenefits and job satisfaction to motivate workers and lower turnoverrates. In the same line, these improved HR changes are adapted toalign organization strategic goals with employees’ goals. SHRM isnow focused on the needed in modern organizations to optimize theeffectiveness of job design for employees, managing their performanceto attain job requirements and providing greater job satisfaction andenhancing employees’ motivation to achieve a sustainable andcompetitive organization performance.

Asnoted, SHRM is concerned with enhancing the equilibrium betweenorganizational practices and the needs of the employees. The HumanResource profession is now a specialist area in which the humanresources department is divided into specific areas with certaintasks and responsibilities been devolved to particular individualmanagers (Armstrong, 2007: 209 Henderson, 2008 123). In addition,SHRM is concerned with promoting employers brand through employeemotivation, development and retention, adapting a flexiblemanagement, talent management continuously addressing employee’sissues so that the organization becomes a preferred place to work.

Previously,HRM was concerned with procedures and policies of changing jobdesign, employees’ expectations, performance, management, rewards,employees’ voice and other labor relations aspects (Hall,Torrington, Taylor &amp Atkinson, 2011: 133).Today human resource tasks have changed and shifted from the task oftraining and development to that of managing the knowledge worker. Inthe modern world, many people are learned and skilled and as such thehuman resource practices have shifted to improving learning anddevelopment of the workers. There is a growing need for SHRM in themodern organizations to align HRM policies and practices withorganizations strategic objectives as a way of ensuring organizationcompetitiveness.

Changesin the environment that affect HR Profession-The Future of HR

Technologicaladvancement has changed the field of human resource management someorganizations have now adopted such practices as electronic humanresource management and outsourcing. This change in environment andpractices is aimed at reducing costs and improving overall efficiencyin the human resources department (Hall,Torrington, Taylor &amp Atkinson, 2011: 133).The integration of outsourcing and the use of EHR in the HRM practicehas reduced the work of human resource managers and on the other handimproved employee management services.

Thepurpose of the research paper

Humanresources management and the need to embrace SHRM has now become animportant and broad field that needs extensive research to assess theimportance of SHRM in improving the overall efficiency oforganizations.

Strategicanalysis on issues in HRM practice at Hilton Hotel

HiltonHotel has embraced strategic human resource practices that recognizeits employees as critical in the business success andcompetitiveness. The human resources at Hilton are facing challengesin the hiring process and have embraced internal and external methodsof recruiting and selecting candidates. The use of e-technology isone SHRM of an outsourced online recruitment method. In addition, theHotel has an internal recruitment and development practice thatensures talented employees are harnessed and progressively trained toincrease their competitiveness.

Theaim of this study is to

  • Critically assess the nature and practice of SHRM in international organizations

  • Evaluate the link and application of SHRM in quality service delivery to customers with a focus on Hilton chain as the international organization.

  • Assess the common practices in SHRM

  • Assess and compare the current and contemporary issues in HRM theory and practice

Methodologyof the study

Thestudy will adopt a qualitative literature review analysis on theworks of great human resource theorists such as Armstrong 2007,Salmon 2001, Tyson 1955, Mitzberg 1989, Drucker 1995, Armstrong 2007,Taylor, Becker 2006, Torrington, Hall 2011 and Henderson 2008. Inaddition, the qualitative review will analyze the works of greathuman relation theorists such asElton Mayo, Abraham Maslow and Herzberg in order to assess the natureof HR practices in relation to employees. The literature review willassess the human resource management arguments and assumptions givenby these theorists and their applications in the SHRM practices.

Literaturereview

StrategicHuman resources Management (SHRM)

Accordingto Armstrong (2007:218)and Mintzberg(1989:163)strategic Human Resource management, has its basis on the recognitionof employees as important assets in organizations and sustainablebusiness success is achieved when the employees’ needs are alignedto the organization goals (Salmon,2001: 123).Essential components of SHRM involve having an effective practice ofrecruitment, selection and development of the human resources(Tyson 1995: 105).Simultaneously, strategic human resources need to be concerned witheffective management of talents to ensure compatibility withorganization goals as well as enhancing job satisfaction toemployees this eventually contributes to higher employee performance(Armstrong,2007 Henderson 138).

Furthermore,effective SHRM means creating an enabling environment for employeelearning (Salmon,2001: 133).Contributing to the changes in the Human resource field, theoristsagree that human resources management has undergone great changes andnot a mere labeling process from personnel management to SHRM in therealization of employees as key to organization success andcompetitiveness (Armstrong,2007:213). Mintzberg(1989:131)observes that, unlike traditional PM, HRM has gone beyond thetraditional role of managing employee’s capacities and relations tointegrating employee management as part of corporate objectives(Mintzberg, 1989: 123).

Humanresource management now entails aligning organizations visions andobjectives to those of employees’ in order to enhancesustainability and competitiveness of the firm (Hall,Torrington, Taylor &amp Atkinson, 2011: 90).SHRM role goes beyond recruitment training and employee rewardmanagement to focus on the process of managing organizations practice(Becker &amp Huselid, 2006:124).In addition, SHRM focuses on the management of employees anddeveloping them to enhance high performance, achieve organizationgoals and contributing to organizations sustainable competitiveadvantage (Armstrong, 2007: 159)

Resourcing

Whyresourcing

Strategicrecruitment is an important aspect in any organization that embracesSHRM. The goal of resourcing is to attract, select and absorb theright candidates in the organizations (Salmon, 2001: 103). Tyson(1995:115)is of view that, although there are various ways of resourcing theprocess of effective recruitment is precarious and involves variousissues such as costs, time, matching job description and candidateskills to ensure that prospective employees possess the rightknowledge, skills and competencies. Mintzberg(1989: 115)stated that, efficiency could be achieved in the recruitment processif organizations deliberate on the effective methods of recruitmentthat are most suited to its organization (Mintzberg,1989: 163).The process of resourcing can be summarized in Henri Fayol’s (1917:67) perspective as a process that encompasses the organization,forecasting, planning, coordinating and controlling the selection ofthe right candidate for the organization (Salmon, 2001: 146).

Thereare two resource methods used by most corporations in recruitingsuitable employees this is through internal and the external method.According to Armstrong (2009: 130), the process of employeerecruitment should focus on individuals with the right attributes,knowledge and skills. By recognizing that employees are strategicassets in the organization, the process of recruitment should applySHRM in order to match and optimize job description with the rightcandidate (Salmon,2001: 143).

Theinternal approach of employees’ recruitment which is also referredto us organic growth is applied when employees are internally sourcedby promoting lower cadre employees within the organization(Salmon,2001: 143). In most cases, emerging jobs are internally posted inboards or passed through emails to existing employees. In thisprocess, the human resource management shuffles through existing teammembers and selects staffs to be promoted without necessarily fillingthe former position. Thisprovides opportunities for personal and professional development andthose who start as a part-time job employees could get long-termcareers.

Externalrecruitment is achieved when the human resource managers use externaladvertisement to search for the right candidate to fill internalpositions (Becker&amp Huselid, 2006:144).In this case external tools such as newspaper advertisements,websites, bureaus, job fairs, referrals, televisions and social sitesare used to advertise and source for candidates. Outsourcing and theuse of online software is getting popular in the modern societyHenderson, Iain, 2008: 114).

Themerit of internal recruitment is that individuals possess somefamiliarity with the company’s culture and assimilate and adapt tothe organization culture faster than employees sourced from outside.In addition, internal recruitment is more efficient in terms of cost,time, training and formalities compared to sourcing employees fromoutside (Becker&amp Huselid, 2006:134).External sourcing of employees, on the other hand, is effective inthat it enhances tapping of candidates who have not been exposed toorganizational culture bringing employees with new ideas. Externalrecruitment also enhances equal employment opportunities toindividuals and enhances diversity in the workforce (Armstrong, 2009138).

Inthe modern world, the job market is flooded with learned andinexperienced candidates this has created a serious problem for mostfirms in the section of the right candidate with the required skills(Tyson1995: 111).In the event of multiple jobs from an organization, job analysis isnow done before the recruitment process takes effects this isnecessary in order to determine the skills, knowledge, ability andthe personal characteristics required for the job.

Thereare various approaches used by different organizations in therecruitment process, the most commonly used approaches are in-housemethod, social media recruitment, through employmentagencies-outsourcing, executive search, employee referrals or throughjob search engines (Becker&amp Huselid, 2006:120).

Employeerelations

Employeerelation is defined as the science of managing, enhancing andfacilitating the welfare of employees. According to Rousseau(1996:134), in his contribution to the social contract argued thatemployees expect their organization to provide and enhance theirgrowth through learning and positive feedback from the HRM.Torrington(2008: 619) statedthat, the work of human resources manager entails aligning the humanresource with the organization strategy, listening and responding toworkers, giving the employee a voice and facilitatingtransformational change within the organization.

AbrahamMaslow (1943: 387) in his hierarchy of needs argued that individuals’actions and behaviors are influenced by their innate andpsychological needs that need to be satisfied. In his perspective, heobserved that, human beings are goods and should be treated well inorder to realize their self-actualization (Salmon, 2001: 127). Assuch, organizations should create an enabling environment in whichworkers have healthy work relationship with others. In this case, HRMpractices should enhance the environment in which individuals canachieve their self-actualization inn order to tap their innerpotential. Becker&amp Huselid (2006: 112) arguedthat individual needs should be satisfied in order to enhance theirwellbeing and development (Becker&amp Huselid, 2006:134).As the needs of the employees are satisfied their job satisfactionimproves and their performance is enhanced.

Organizationsneed to provide employees with good remuneration as a way ofsatisfying their basic needs and enhance their safety needs this inturn satisfies their psychologically self ‘esteem.’ In addition,organizations should recognize and appreciate employees’contributions in decision making and good work relations as part ofpromoting their self-actualization (Henderson, 2008: 208). Elton Mayo(2003:112) did an extensive industrial research on human relations inworkplaces and he discovered that high job performance depended oneffective human relationships within work groups. In his conclusion,he discovered that the overall job performance of employees was to agreat extent dependent on social issues within the organization whichaffected their job satisfaction (Becker &amp Huselid, 2006: 178). Inhis summary, he argued that individuals perform well in organizationswhen treated as members in a group that is when they perform as ateam contributing towards achieving specific organizationalobjectives. In addition, employees need to be rewarded either bymonetary or non-monetary incentives, a good work environment withmanagement creating an effective teamwork that enhances morecooperation.

EltonMayo (2003:92) and Abraham Maslow (1943:145) theory proposed the needof enhancing psychological contract with employees, eliminating workdiscrimination, promoting equal and opportunity to all employees(Maslow 1943: 133).Becker&amp Huselid (2006:130), perspectivesare that organizations that conform to the SHRM perform well whenemployees’ needs are integrated with organizations goals. Salmon,(2001: 126) argued that, human beings have needs for socialrelationships at work and would, therefore, conform to organizationalnorms and culture as a way of enhancing their acceptance. Humanresources managers should view employees as individuals with needs tobe satisfied in the same way employees are used to achievingorganization goals(Torrington, 2008: 219).It is, therefore, imperative for the organization management tointegrate employees’ goals with those of the organization asespoused by human relation theorists.

Managingperformance and reward management

Becker&amp Huselid, 2006:130), are of opinion that, effectiveHRM practice rests on effective and timely management of employees’performance through a satisfactory reward system. Most organizationalbehavioral and psychological theorists recognize that effectivereward and benefits to employees are effective in enhancingorganization performance (Rousseau 1996:209). Abraham Maslow(1943:143) was emphatic that, individuals perform and exploit theirpotential when their needs are effectively met through properremuneration and job recognition that satisfies their basic,psychological and self-actualization needs(Drucker1955: 116).

Oneof the most strategic human resource management tenets in the modernworld is the ability of the managers and supervisors under thedirections of the Human relations Department tomanage employees` performance continuously througheffective training and development of employees’ capacity and anappropriate reward structure (Salmon, 2001: 143). In this case,reward system exists to motivate and influence employees to improvetheir performance, enhance their responsibility and capacity to worktowards the set organizational goals (Boxill &amp Cowel 1997: 13).Ideally, the reward system is not only concerned with the motivationof employees through financial packages but also involves givingemployees non-financial rewards like recognition, development,training and increasing employee’s responsibility. Benchmarking isan important aspect in assessing the performance of employees inthis case employees’ performances are compared through certainperformance metrics or targets.

Benchmarkingis an important aspect that guides in important strategic decisionmaking within the organization where various aspects are evaluatedagainst particular performance indicators. This is critical,especially on employees’ performance as it helps organizations toplan ways of improvement. Strategic human resources managemententails engaging in effective performance management cycle thatentails yearly and holistic employees’ performance assessment(Salmon, 2001: 123). In this case, employees’ job performance isassessed through regular job performance appraisals as part ofenhancing their career development and improving their reward system(Drucker 1955: 116).

Performanceappraisals are beneficial to the organization as they give importantfeedback information on employee job performance, level of motivationand aid the HMR in gathering important organizational feedbacks whichare used in making important decisions (Salmon, 2001: 156). Ingeneral performance appraisals are effective in facilitatingcommunication within an organization, promote trust within theorganization, enhance goal setting, performance improvement and inthe determination of the training needs for the employees (Becker&amp Huselid, 2006:124).The feedback given to the employee to therefore critical inrecognizing any short comings in performance and identifyingadditional training and development needs are identified to improveperformance (Armstrong, 2007:121).

Drucker(1955: 124) postulated that there is need for management objectivessuch as smart criteria for improving the performance of theemployees. After the performance appraisals, organizationalmanagements must set objectives to achieve this is in line toimproving employees’ performance. The objectives set should beachievable, assignable, realistic and time bound (SMART).

Asnoted in the literature, employees are motivated by goodremuneration, good working environment, recognition, training anddevelopment and opportunities for career progress. It is alsoapparent that, the human resource management needs to integrate theHR practices with process that enhances employee’s output bymaximizing employee knowledge, commitment and flexibility.

Theabove theories show that in the modern organizations SHRM shouldpromote an egalitarian work environment which eliminates workdiscriminations promotes equality, increase cooperation, knowledgedevelopment and align employees’ needs or rewards to organizationgoals. In all these respect, internal and external fitness of theorganization will be enhanced. Effective SHRM means improvingemployees’ participation in organizational activities, providingjob satisfaction and enhancing high productivity.

Analysisand Discussion

Inthis case, an analysis for SHRM and best practices application in thehuman resource management at Hilton Hotel International will beundertaken.

SHRMat HILTON Hotel

Metric#1 The Competitive advantage of HRM at Hilton

HiltonHotel competitive advantage rests on the passion, high standard andcommitment of its staffs that provide exceptional services to gueststhis is achieved by recognizing the contribution of employees(Maxwell &amp Lyle, 2002: 251). The Hotel management created anorganizational structure and cultural fit that enhance and promoteprofessionalism among employees. This approach is consistent withArmstrong, (2007: 123) and Taylors scientific management theory(1911:23) that advocated structuring and recognizing employeecontributions as part of enhancing organization competitiveness.

Metric#2 Improved HRM at Hilton Hotel

Thehuman resource management at Hilton Hotel has integrated theorganizations strategic objectives with employee’s needs. As partof maintaining excellent and professional services to clients, Hiltonmanagement has continuously engaged in programs aimed at motivatingemployees and improving their knowledge. The hotel industry has vastcolleges and Universities that provide employees with progressivetraining needs.

Inaddition, reward strategy encompasses financial and non-financialrewards such that employees receive remuneration for contingent payand other employee benefits(Salmon,2001: 123).In this way by internally developing the personnel the firm hasenhanced and reinforced employees’ commitment to quality customerservices leading to achievement of organizational goals (Drucker,1955: 112). The analysis indicates that there exists a correlationbetween HR policies and practices and the corporate strategy of theHotel.

2011 2012 2013

Learningand development per FTE$2000 $2300 $2400

Promotionrates 12 13 16

CareerPath ratio 10 20 30

Theabove table indicates that the Hilton Company has progressivelyimproved its workforce through learning and development, providingopportunities for promotion and offering excellent career path ratio.These strategies have in turn improved the organization goals throughquality customer services and job satisfaction among the employees.

Metric#3 Linking Corporate strategies to HR

Onestriking feature of SHRM at Hilton hotel is the integration oforganization strategies with the HR polices. Hilton strategies are toimprove on its performance targets in hospitality, integrity, goodleadership, teamwork and promoting ownership within the organization.In order to achieve performance targets, the HR practices have beenlinked to these organization targets. This is achieved throughpromoting professionalism among the staffs and motivating them toimprove their performancewithinnovative e-learning courses, contribute to the Hilton’sorganizational learning culture (Boardman &amp Barbuto. 2008). Itsuniversities, on the job training and the fast tracking of itsuniversity graduates ensures that its retains the best and committedemployees (Claycomb etal,2006 Kapiki 2012, Hilton worldwide .com).According to Salmon, companies that integrate corporate strategy withSHRM record high production performance and moving beyond personalmanagement to SHRM (Salmon, 2001: 103).

Metric#4 Strategy rationality

TheHR strategies employed by Hilton are rational and this is evident inthe performance output realized by the Hotel. The level of customerloyalty has increased as a result of excellent customer services.Drucker (1955:113) observed that the way organizations treats itsemployees is reflected by the satisfaction level of the clients thatthey get from the organizational employees. In this context, the HRstrategies employed by Hilton Hotel are rational as evidenced fromthe production output reflected in its success over more than fortyyears in the hospitality business.

Metric#5 HR strategies determinedby Hilton management

Mostof the SHRM adopted by the Hotel has been determined by the HR andthe general management. However, employees have a great stake indecision making within the hotel and they are involved in thedevelopment of these strategies. Becker (2006:112) and Starner(2014: 2) conferwith these sentiments by arguing that good HR strategies mustintegrate employees input for them to be acceptable and effective(Becker &amp Huselid, 2006:124).

Metric#6 Best fit &amp best practice

HiltonHotel observes a high-performance system practice in order to enhanceworkforce efficiency and the competitiveness of the firm. This isachieved through selective hiring process, enhancing employmentsecurity, promoting team works, satisfactory pay levels, extensivetraining and creating an environment of information sharing (Salmon,2001: 124). Hilton Hotel has created its brand image and empire byintegrating the needs of their employees as part of the organizationgoals through effective SHRM (Maxwell &amp Lyle 251). The hotel hasmany loyal customers and continues to exhibit global competitivenessdue to effective HRM practices as espoused by organizationaltheorist.

2011 2012 2013

Extensivetrainings per staff yearly 10 13 14

Rateof sharing information 56% 57% 59%

Payper staff (annually) $30,000 $45,000 $50,000

Thisbrief analysis indicates the ‘best fit practices’ utilized byHilton Hotel as part of its strategic management. The data indicatesthat employees are competitively rewarded, trained and the level ofinformation sharing is high in the organization.

Metric# 7 Corporate Strategies formulated in line with HR policies

Aspart of embracing effective HR practice, Hilton Hotel has formulatedand operationalized many successful strategies within theorganization globally. These strategies involve flatterorganizational structure with horizontal cross-functional teams,creating a culturally fit organization with highly trained anddeveloped personnel’s(Ulrich,&amp Brockbank, 2005: 124).The most- notable strategy formulated by the Hilton was the‘Equilibrium’ service strategy that focused on balancingorganizational demands and employee’s demands this is in line withMaxwell, &amp Lyle, (2002: 211), suggestion that there is need toalign employees needs to organization strategies (Salmon, 2001: 133).Hilton Group has a decentralized matrix structure with each teamhaving an executive head who manages the team. In accordance toArmstrong and Henderson perspective that SHRM should be integratedwith organization goals to enhance an overall success, SHRM policiesat Hilton are linked to the Equilibrium organization objectivesthrough the human resource strategy dubbed ‘Esprit.’

Exampleof Hilton strategy

2011 2012 2013

Numberof staffs per individual HR 100 50 30

Managementspan of control (Employees

Permanager) 60 40 30

Thisanalysis indicates that Hilton has embraced a decentralized structurein which number of employees per individual HR and line manager hasbeen decreased to enhance work management and improve the welfare ofthe staffs. This is in accordance to Henri Fayol (1917 76)perspective on principles of staff management strategies. Fayol,argued that organizations that adapt the principles of staffmanagement transforms the organization and management of the wholeorganization (Fayol 1917:84).

Resourcingat Hilton Hotel

Metric#1 Contemporary resourcing method

HiltonHotel through its Esprit program conducts the selection andrecruitment in a systematic and strategic manner. However, the firmhas faced challenges in the hiring process and, therefore, hasadopted an e-technology and outsourced some hiring tasks to humancapital agency-Oracle. The firm manages and defines parameters forrecruitment such as salaries, responsibilities and conducts thehiring process on behalf of the firm. By adopting internal andexternal hiring processes, Hilton Hotel has been able to improveefficiency in hiring time and quality of candidates (Maxwell &ampLyle, 2002:252). This perspective is in accordance to Armstrong(2007: 112) views that, organizations should strategically adopt theright selection method in order to acquire the right candidates inthe most cost effective manner.

Metric# 2 Efficiency of Recruitment methods at Hilton Hotel

2011 2012 2013

MetricDescription

Vacancyrate per year (Globally) 20,030 21300 34000

AverageTime taken to fill all vacancies through

(Internalmethods) 90 days 60days 40days

External methods (outsourcing) 20 days 15 days 10days

Timetaken to fill Executive positions (internal) 40 days 30days 10days

Externalmethods (outsourcing) 20days 15days 10days

Timetaken to fill management positions (internal) 30days 25days 15days

External(outsourcing) 20days 20days 15days

Vacancyturnover rate (external-outsourced method) 56% 67% 70%

Theabove table simulation indicates that there has been a greatimprovement in saving time when recruiting staffs through outsourcedmethods than internal methods at Hilton Hotel. According to Salmon(2001:113), HR should develop effective recruitment strategy thatattracts and retain the hiring of the right people with the rightcompetences. Based on the length of time taken to fill the openvacancies at Hilton Hotel, it is evident that, outsourcingrecruitment process is effective in saving time and in theacquisition of a diverse workforce. The findings support HenriFayol’s principles of effective staff recruitment and managementprices (Fayol, 1917: 213).

Metric# 3 The diversity of Employee recruited at Hilton Hotel

2011 2012 2013

ExternalHire rate 22% 45% 57%

Femalehire ratio 35% 35% 48%

Diversityhigher ratio 45% 47% 50%

Ageratio (below 30) 56% 59% 67%

Above30yrs 44% 41% 33%

Theabove tabulation indicates the Hotel has embraced effective strategicmanagement approaches that promote diversity across employees ofdifferent ages, culture, race and gender this has a higher chance ofenhancing more productivity and diversified workforce.

Metric# 4 Costs per Hire

(Metricsvalues represent global figure) 2011 2012 2013

ExternalMethod (junior employee) $2000 $2300 $2500

Executive $3000 $3500 $3400

InternalMethod (junior employee) $500 $600 $ 700 Executive $700 $750 $800

Theabove table indicates the costs incurred in hiring junior andexecutive employees at Hilton. It is clear that external recruitmentis more costly compared to the internal method. However, the externalmethod is favored for its efficiency in saving time and work. Thispractice is in accordance to Becker observations that HRM practicesshould go beyond PM to implementing the most efficient way of labormanagement (Becker&amp Huselid, 2006:124).

Metric# 5 Employee retention and exit rates

Inorder to enhance a higher retention rate, Hilton hotel provides itsnew employees with a learning and career development opportunitythrough its Universities. Online job training and fast tracking ofuniversity graduates ensure that the Hotel retains new recruits whoare qualified and committed. Recognitionis received through certificates of achievement, employee of themonth and year schemes and a Star Bond Scheme. It is also Hilton’sInternational’s policy to provide salaries and benefits thatattract and retain suitable Team Members and reward good performanceand the achievement of targets (Boardman &amp Barbuto, 2008hiltonworldwide.com, 2009).

Suchtangible and intangible benefits conforms to Maslow’s (1943: 123)and Herzberg (1989 113) theorems on effective employee relationstrategies that improve the motivation and productivity of employees.These theorists argued that, employees perform their best when theirneeds are catered for through proper remuneration, good workenvironment, recognition and participation in decision making.

AtHilton Hotel, the HR has integrated SHRM with organization goals aspart of improving the overall performance of the firm this hasresulted in increased customer base and significantly increases inthe return on investment (ROI). Mayo (2003:121) and Herzberg(1989:123) observed that human beings have intrinsic needs which whensatisfied motivates individuals to become active and exploit theirpotential. By adopting these perspectives of these theorists, HiltonHotel has been able to recruit, retain and reduce exit rates (Becker&amp Huselid, 2006:124).The decentralized organizational structure and independence ofemployees promotes motivation and high performance that has led toimproved organization productivity.

(Metricsvalues represent global figure) 2011 2012 2013

Total90 day Turnover Rate

(Permanentand non-permanent) 17000 16780 12300

Totalfirst year Turnover Rate

(Voluntaryor involuntary) 13000 11000 9000

Voluntaryturnover 10,000 9800 9500

Costof Voluntary turnover $2000 $2300 $2500

Thetabulation above indicates that employee’s retention rate at Hiltonis moderate and not alarming. The turnover rate after ninety days ofrecruitment is low, and this could be attributed to advantageousstrategic human resources management practices adopted by HiltonHotel.

Metric# 6 The trends of labor market

2011 2012 2013

25-30years hire ratio 55% 58% 70%

35-45years hire ratio 47% 60% 43%

45-70years hire ratio 30% 33% 23%

Thetable illustrates the hiring process at Hilton based on the labormarket trends this tabulation indicates that the labor market hasmore young unemployed graduates than older people. However, HiltonHotel embraces strategic Equilibrium strategies in which diversity ispromoted. Most of the executive and management positions are filledexternally and only older and experienced candidate are recruited.

Metric# 7 Resignation rate at Hilton Hotel

2011 2012 2013

Resignationrate 3000 2450 1450

Asa result of implementing SHRM best practices the resignation rate atHilton Hotel has decreased. This could be attributed to improvedemployee motivation practices that involve competitive rewardsystems, professional development, learning and development, goodworking environment and employee participation in decision making.Hilton has put in place effective SHRM that promotes employees needsand interests thereby enhancing their retention (Steinberg,1999: 147).

Metric# 8 Succession planning Rate

2011 2012 2013

Successionplanning Rate 3450 4520 4520

Hiltonbelieve that, employees who have been in the company are well versedwith the organization work culture and are better placed insuccession planning than external candidates, hence it advocatesorganic growth within the company.

Employeerelations

Metric# 1 Organizationallearning

Throughthe Empirical strategy Hilton has enhanced employees’high-performance system providing employees with employment security,promoting team works, high pay, extensive training and creating anenvironment of sharing information. This is in accordance to Mayo2003, Maslow 1943 and Herzberg 1989 perspectives on the importance ofcreating effective organization work relations. Hilton hotel providesits new and existing employees progressive training that enhancesemployees’ career development through its Universities programs.Online job training and fast tracking of university graduates ensurethat the Hotel motivates and develop the staff potential.

2011 2012 2013

No.of Extensive trainings programs

Perstaff yearly 10 13 14

Metric# 2 Employee voice and Engagement

2011 2012 2013

Rateof sharing information

(Employee’sparticipation in decision-making) 56% 57% 59%

Therate of engagement and employee participation in decision making atHilton Hotel is high. This could be attributed to effectiveimplementation of SHRM and recognizing the potential of eachemployee. In most departments, employees are left to practiceindependence and choice when carrying out organization tasks.Consequently, this has led to a more motivated and empowered staffthat is responsible and active. These findings conform to Mayo2003:87 Maslow 1943:372, theories of creating an enablingenvironment in which employees participate actively in organizationdecisions(Mitchell, 1982: 86).

Metric# 3 Equal pay and minimum wage

2011 2012 2013

Payper staff (annually) (lower cadre staffs) $30,000 $45,000 $50,000

Overtimeper Employee (annually) 340hours 200 hours 150hours

HiltonHotel remunerates its staff equally and depending on the amount ofovertime allocated. As a part of improving its SHRM efficiency, theHotel management decreased the number of overtime hours and increasedthe number of junior staffs this was aimed at creating a favorableenvironment for staffs as espoused by organization managementtheorists (Steinberg,1999: 143-157).

Metric# 4 Equal job opportunity and non-discrimination

Employeesat Hilton Hotel are offered equal opportunities during selection,training remuneration and participation in decision making of thefirm (Maxwell &amp Lyle, 2002: 251). All employees have a chance tomake their independent decisions on tasks to accomplish, techniquesto use in performing their work (Tyson1995: 65).These tenets are in liaison to human resource theorists who arguedthat fair human treatment in organizations leads to more motivation(Armstrong&amp Stephens 92).In addition, promoting equal opportunity and non-discriminationpractices in workplaces is one tenet of moving human resourcemanagement from PM to SHRM.

Metric# 5 Grievances –Employee Relation

2011 2012 2013

No.of Grievances (globally)

(ThroughUnions) 300 213 112

ArbitratedGrievances 234 189 98

%Grievances Closed 89% 95% 98%

Thedata above indicates the process of handling grievances amongemployees at Hilton.

Thisshows that Hilton has had effective human relations within itsdepartments and through employee trade unions. The rate of solved andclosed grievances indicates the firms’ capacity to create anenabling environment in which staffs issues are solved amicably(Lunenburg 201).This is an important aspect of SHRM in HR practice.

Metric# 6 Labor Unions

Aspart of enhancing employee relations Hilton Hotel encourages staffsto join labor unions in order to discuss important issue affectingthem. It is the strategic HRM objective to promote workers freedomand participation in Unions as a way of addressing collectivechallenges. This component of HRM allows for listening and respondingto workers collective needs and facilitating transformational changewithin the organization through collective bargaining power of tradeunions (Tyson1995: 105).Similarly, Hall and Becker (…) observed that employees perform wellin their tasks when they are assured that their grievances areconsidered by the management

Metric# 7 Union Representation at Hilton (globally)

2011 2012 2013

Employeesbelonging to trade unions 135,000 145,000 150,000

(Fulltimeemployees)

Part-timeemployees 65,000 75000 87, 0000

No.of trade Unions 3 4 4

TheHRM practices at Hilton encourage each employee to participate intrade unions as a way of discussing issues that arise from work orthe management. Through this process the Hilton has been able toimprove on overtime allowance, reducing overtime hours and givingemployees health and insurance benefits (Tyson1995: 67).The overall result is that, these unions have considerably reducedgrievances and unprecedented strikes. In reference to Tyson 1995:123and Salamon 2001:132, industrial relation perspectives, they observedthat modern HRM needed to embrace trade unions as importantcomponents in decision making for SHRM.

Metric# 8 Communications and sharing information

Armstrong(2001) noted that SHRM in the performance of employees requireintegrating employees ‘voice’ in the management and formulationof organization strategies. In particular, employees feel part of theorganization when communication flows freely in two- ways from themanagement to employees and vice versa (Tyson1995: 105).Hilton embraced a decentralized organization structure with fewemployees under one manager as a way of breaking the communicationhierarchy.

Similarly,as part of SHRM Hilton encourages two-way communication betweenmanagers and employees. The performance management process is anotheravenue for employees to communicate and voice their opinion withtheir manager/supervisor. Giving such voice to the employee enablesbuilding trust between management and employees and creating a teamspirit amongst employees.

Managingperformance and reward management

Metric# 1 Job Performance and career development

2011 2012 2013

Promotionrates 12200 13500 16000

CareerPath ratio 10000 20330 30012

Employeeperformance at Hilton Hotel is above average because the managementhas put in place effective strategies of motivating and maintainingtheir workforce. It is recorded that, historically, Hilton Hotelpromotes its staffs from within this is critical in promoting careerpath. There is an effective HRM practice that allows employees todevelop and contribute optimally to organization goals. Thestrategies deployed by Hilton Hotel of giving each employee equalemployment benefits career paths and promotion are in accordance tohuman relation theorists argued that employee recognition andappreciation maximizes their output(Becker&amp Huselid, 2006:154).

Metric# 2 Human Capital Return on Investment (annually)

2011 2012 2013

Returnon Dollar Investment per employee $50000 $60,000 $70,000

Inaverage the rate of return on employee investment at Hilton indicatespositive results. This could be attributed to performance managementand reward system applied by the HRM to motivate workers (Tyson1995: 85).Hilton Hotel clients attribute their loyalty to the hotel due toquality service received from the hotel employees this has seensales and profit increase at the Hotel. Becker argued that, whenemployees are rewarded competitively, their output also increases(Becker&amp Huselid, 2006:104).

Metric# 3 Annual life cycle and benchmarking performance

Aspart of ensuring that employees are satisfied with the organizationstrategies, the HRM institutes yearly performance appraisals toascertain the level of job satisfaction among its employees. Inaddition, through the performance appraisals the Hotel getssignificant feedback on employees. Performance appraisals are keytenets to SHRM in modern organization.

Metric# 4 Job Performance and reward system

HiltonHRM policy is torecognize positive contribution continuouslyby all workers by giving them certificates of merit, pronouncing thememployees of the month and providing salary schemes that arecommensurate with efforts input by employees. The aim is to enhance amotivated staff that can proactively engage in more meaningfulservices to the firm. Henderson, (2008 87) and Mayo (2003 112)postulated that workers contribute effectively when their needs areaddressed this is one strategy of effective SHRM, that Hilton Hotelhave successfully implemented. This could also account for the lowrate grievances within the firm and high customer loyalty.

2011 2012 2013

Payper staff (annually) (lower cadre staffs) $30,000 $45,000 $50,000

Benefits(medical, insurance and other allowances) $10,000 $15000 $20,000

No.of Extensive trainings programs

Perstaff yearly 10 13 14

Metric# 5 Aspects of Employees motivation

Employeesare motivated by good work environment, rewards, participation indecision making and career progress. Hilton Hotel has the mostcompetitive reward and benefit system for its employees. In addition,employees are actively involved in organization strategy formulationsand making independent choice in regard to their tasks this hasenhanced a motivated workforce, reduced turnover rate and increasedemployee performance. Hilton hotel has surpassed this mark byintegrating employee needs and motivation with its corporatestrategies.

Metric#6 Smart Goals formulated by Hilton HRM

As part of enhancing more performance the organization institutedstrategies aimed at strengthening the workforce through the Espritprogram. These strategies include developing individuals throughtrainings, developing an enhancing environment for sharing,integrating performance to rewards and recognition, and aligningthese strategies with corporate culture. The smart goals adapted byHilton hotel are in line with SHRM practices that go beyond thetraditional PM to modern HRM where employees’ needs are integratedwith the overall organization goals. Smart goals set by Hilton as anintegration of employees needs with organization goals

Integrity

Employees to ensure that the right things are always done

Teamwork

Involving everyone optimally in organization goals and management

Ownership

Employees to be responsible for decisions and actions on the Hotel customers

Hospitality

Staffs to give quality and unique guest services

Always

Maintain discipline and urgency in serving clients

Metric#7 Benefits of performance

Effectiveintegration of SHRM with corporate strategies has enhanced highperformance from employees, higher customer satisfaction,organization growth, good work relations and improved brand image ofthe company. Henderson (2008:123) and Armstrong (2007: 134) observedthat, integrating the strategic management approaches in the HRMenables organization to have great prospects for more growth.

Metric#8 Level of Employee Satisfaction-Performance appraisals

2011 2012 2013

Employeelevel of satisfaction with SHRM 51% 59% 76%

Practicesat Hilton Hotel

Accordingto recent performance appraisals by Hilton Hotel, results indicatedthat most employees are satisfied with the organization’s HRMpractices. In particular, employees are satisfied with career growthprospects offered by the Hotel, total reward package, good workenvironment, participation in decision making and overall employeerecognition (Tyson1995: 105).These performance appraisals are conducted annually throughquestionnaires and employees are encouraged to fill anything positiveor negative. Drucker (1955) stated that, employees’ feedbacks areimportant when planning for SHRM and the overall corporatestrategies. When employees’ feedbacks are constantly recorded, theorganization management is able to improve on its weakness.Furthermore, employee participation in decision making and appraisalsis one important aspect of integrating SHRM with corporate strategiesand a shift from PM to SHRM.

of Tables used

SHRM-3Resourcing -7Employee relation- 5Performance- 4

on analysis and findings

Theanalysis of SHRM application in international Hotel industry (Hilton)reveals that, the firm has to a large extent deployed an effectiveSHRM strategy that has in turn led to the growth and profitability ofthe Hotel. In particular, the HRM practices go beyond the traditionPM to integrate employees’ goals with organizational goals. Theunderlying motivation was the realization that employees areimportant assets in any organization. As such, Hilton management hasset an effective SHRM practice that enhances the selection,acquisition, retention, development and progressive employeemotivation practices. These strategies have in turn promoted,enhanced and created an active, responsible and self-motivated staffswho give excellent services to clients. The basic strategic Humanresource practices employed by Hilton Hotel are Learning anddevelopment, competitive remunerations and benefits, promotingemployee independence, employees participate voluntary in decisionmaking and creating a decentralized organization structure.

Conclusions

Humanresources Management goes beyond Personal Management to focus onintegrating personal needs with those of the organization. Thisentails applying effective strategic management approaches thatembraces all aspects of employees’ aspects and align them in linewith the organization goals. In particular, SHRM focuses ondeveloping, investing and recognizing employees as important assetsthat make the organization successful. Humanistic and organizationmanagement theorists agree that, it is only through investing inhuman resources that organization can successfully achieve theirgoals.

HiltonHotel is an exemplar of how effective SHRM application contributes toorganization success, happy clients and competitive workingenvironment. In particular, Hilton Hotel has applied various criticalSHRM in their HRM practices. Its bundle of SHRM practices termed‘Esprit’focuses on the ‘soft’systems, designed for the development of the individual, developing asupportive culture, mutually-supportive integration andperformance-related rewards and recognition with alignment betweencorporate and organization culture (Maxwell &amp Quail, 2001).

Theseinclude recognizing the potential of all employees, competitiverewards packages, developing a progressive learning to all employees,enhancing a supportive culture in which the organizational structureis decentralized to make communication feasible between themanagement and staffs. In addition, the Hilton Hotel has alignedemployees’ services, rewards in line with organization goals bysetting the best fit practices in SHRM and SMART goals.

Recommendation

  • In line with its e-technology and outsourced recruitment services, the hotel needs to use at least two other recruitment methods in order to diversify the location and source of staffs

  • The hotel needs to include team building picnics and vacations as a way of increasing teamwork and break organization barriers that impede two-way communication process.

  • As part of developing employee’s career and enhance motivation, the HRM could try rotational work shifts to enhance employee productivity shifts breaks monotony and boredom occasioned by working in the same area

  • As part of integrating SHRM to employee needs and organizational goals, HRM should rewards to the best employee who engages in social responsibility or takes exemplar initiatives and innovations on behalf of the organization.

  • Performance appraisals need to be conducted quarterly especially for new employees recruited externally.

  • The Hotel should have opportunities for the less skilled and learned as part of promoting social responsibility and improving their wellbeing.

  • The hotel also needs to enhance a more ‘ownership’ feeling on employees by encouraging them to buy the company’s shares, this would improve their performance and increased responsibility as well as enhancing more retention rate.

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