Critical analysis of the HR system
The purpose of this task is to present a critical analysis of the HR system used by the chosen companies, and to identify and analyze their HR practices, strategies and culture. The chosen companies are American Express and Facebook.
In the literature of human resources, there is no universally accepted definition of HR system (Chadwick, 2010; Jiang et al., 2012). However, many HR authors like Schuler and Kathy Monks have general acceptance towards the concept of HR system and its composition.
It is defined HR system as systems involving numerous different levels (Monks et al., 2013). It is also defined to be a system that comprises of HR process and practices and HR policies (Schuler, 1992).
An effective HR system is also defined to be a system that links outcomes at the level of organization and organizational member. It was analyzed that an effective HR system is a high performance system with outcomes that bring economic gains for organizational performance (Boxall and Macky, 2009).
Towards the HR system strength, it is considered that it power of such system is a linking mechanism to share and collaborate, from shared perception, behavior and attitude among the organizational member (Bowen and Ostroff, 2004).
Thus, it can be understood that HR system is consists of planned activities, processes and policy and philosophy to guide and support the organizational members to achieve high performance thus, accomplishment of the organizational goals.
It can be added that an effective HR system focus on building employee engagement, organization commitment and trust on HR practices aligned with organizational goals. Thus, the HR system includes HR philosophy, method/ processes, and practices.
The HR system at Facebook have been making use of HR system and HR software that in-house developed to meet their organizational needs and to manage their employees in an effective way.
The HR philosophy is to consider their organizational members as essential corporate assets and place importance on the member’s value thus; HR processes in the company has high focus on the recruitment and retention practices more than its products.
The HR system includes payroll, hiring and onboarding, document management-tax forms, training, talent management and benefits management. The electronic HR system used at the company includes Facebook’s HR Information Systems, compensation admin tool for employee equity and vesting, and employee career app to guide their career development (Salesforce, 2014).
The HR processes in Facebook are analysed to be knowledge sharing processes, training processes, employee engagement processes and communication processes.
The policies in HR highlights on its employee as valuable assets, choice on joining teams/ projects, free gourmet food, excellence in recruiting, innovation, economic rewards and employee benefits (like four months’ paid leave for new parents), and biannual performance review.
It is assessed that the exiting HR system at Facebook has been effective for the company that emphasis on promoting the HR philosophy, policies, processes and practices.
It is also analyzed that the HR system at the company has been supporting its business and meeting its business/ organizational needs. The system has considered employee leave, employee engagement, performance tracking and management for the company benefit.
Considering the resources, talent and capability the company should continue to develop their HR system software that meets their business needs. The company should place importance on the HR audits to assess their HR system and related activities to identify their gap in their efforts and actual practices.
In the broader scope, human resource strategy deals with most appropriate ways to execute the HRM policies, however in company like, American express it includes various activities like, recruitment, training, appraisals and compensation.
Apart from that the entire HR strategies is aligned with human resource planning as per the change in future and business market trends. HR system applied at American express covers the human resource planning and other functions HR management (Monks et al., 2013).
In concern to HR department, there are positions related to recruitment and placement etc. or else can be roles for training development managers. Additionally, facilitation of compensations and benefits are managed by compensation analyst or salary administrators.
In relation to this, organisation has upgraded is HR system while adopting the new technologies in place. This company maintains the employee information data base that eliminates the need of keeping the hard copies of employee files and facilitates the organised record of employee data accessed through virtual and electronic system (Dhamija, 2012). On the other hand, it maintains the separate payroll system for data integration of all employees.
As American express has modern HR system in place, it has built the employee self-service. Through accessing it, employees can see, check and update their information.
Employees also can submit their leave requests, update their attendances, communicate with their peer groups and check the scheduled activities (Singh et al., 2012).
Apparently, employees can check salary, slips and amount of deductions and employment related documents. These self-service portals can be connected through mobiles and accessible for employees anywhere that leads to ease and convenience for managers and employees.
This company also facilitates the online training portals in order to attend the different learning and training sessions of various domains. It is helpful in creating the learning culture at workplace.
As it is the financial service provider it has different finance related training available on the portal (Debroux, 2017). The upgraded HR system is an effective way to educate the employees about company data regarding market share, profit and revenue of every quarter.
company has separate portal that contains the latest data regarding this. Also it is useful tool for the employees in order to access the information about company policies and compliances.
On the other hand, company use the traditional as well as contemporary source of recruitment and selection of candidates. In most of the instances, company hire the new candidates through suggested referrals of existing employees (Evans, 2012).
It is noticeable fact that career development programme of company helps in order to save the company cost of hiring the high designation employee as with the impact of this programme employees are reaching to the group of higher management.
In this way, it can be stated that American express has organised and organised HR system consisting new and modern features that add the value to the HR activities and cut down the additional time.
American Express is a multinational company deals in financial services achieved the its global reputation, reliability and service excellence. At the same time, its HR practices and strategies play significant role in order to connect the organisational strategic goals to work force from upwards to down wards hierarchy during the perusal of success (Nankervis et al., 2016).
It also depends on companies best fit approach as it aligns the HR strategies and organisational strategies in similar direction. HR strategies aims at integrating the both organisation culture and employees through following set of actions including training and development of workforce based on organisation vision and gaols.
In concern to this, American express has opted the following HR Strategies in order to strengthen the workforce as it believes that employees are the valuable assets for the company.
American express applied leader centric focus model in order to build the leadership qualities in employees and also for establishing the great culture of leadership. At the same time, this organisation facilitates the mentoring to employees having interaction with senior leaders in order to support, guide and create the bridge of communication (Edwards et al., 2016).
The success rate of leadership development program is very high as 91 % of higher leadership positions occupied internal promotions.
Career Development: Global Rotation Program
In regards to this, American Express gives the opportunity to some selected employees to work into different market segments under the Global Rotation program. In this programme, high performers are offered to work in different roles all across the enterprise.
Selected employees generally sent for three to four round of rotation duration of six to eight months (Cascio, and Boudreau, 2016). Also, the performance and growth of employees are monitored by a dedicated central team bases on which future role is determined.
Health Living Programme
American Express launched the health living programme in order to maximise the level of employee engagement and participation. This programme aims at promoting better health and healthy living standard of employees and their families so that their productivity on work can be enhanced and improve productivity (Uen et al., 2012).
Moreover, this programme covers the countries like, India, Japan, Taiwan, Australia and Asia Pacific etc.
Flexible work: “Blue Work”
American Express’s work flexibility program is grounded on the role of employees and nature of job. This programme is result of an initial survey in which found that many employees spent their time outside office that effects the productivity, efficiency and organisational performance.
Therefore, organisation build this programme to arrange the flexible work schedule. At the same time, this programme is categories the workspace in four types: Hub, Club, Roam and Home (Ahmad, 2013).
In hub-bases employee category employee need to log into office location and club employees go office thrice in a week as they work part time or work from other locations. Furthermore, in home category there are number of female workers connect with business.
Reward Blue: Company-wide rewards & recognition programme
This is the most effective HR strategy of American Express that practices for motivating the employee and keep their morale high. In this, company celebrate the employee appreciation month for rewarding the employees (Fisher, 2015). Also, company uses the non-monetary, personalized e-cards to praise the employees and employees can also nominate each other for Blue Award.
These HR strategies work in order keep the individual goals and organisational goals on same page. Also, these strategies are helpful for the having culture of leadership quality, healthy, efficient and highly motivated workforce that contribute in achieving the organisational goals.
In the words of Potter and Schuller HR Strategies are fruitful when it connected through its surrounding and business environment. It includes internal and external fit to the business related to operation, marketing and competitive strategy and HR policies.
Above mentioned HR strategies are best fit in order to peruse the organisational goals while identifying and meeting the needs of organisations (Kämpf-Dern and Pfnür, (2014). At the same time, it helps to maintain and attract the efficient and highly skilled workforce in the organisation implementing through upwards to downwards communication channels.
On the other hand, it can be problematic for the company during the economic expansion when organisation stand in the competition of finding the qualified employees.
It can increase the cost for the company as best fit depends on the nature of business and HR strategies cannot be remain same forever, it needs to be change as per the dynamic environmental movement (Hussain and Rehman, 2013). Thus, it can be recommended that American Express must adopt the suitable best fit in order execute the HR strategies successfully.
Facebook always focused on recruiting the best employee of their steams. It is listed number one employer brand in 2013 has most satisfied employee and focus on the excellent recruitment practices (The Guardian, 2019). At the same time, employees tend to face every new challenges in order to perform their best. In concerns to this Facebook applies the following HR strategies.
Flexible Working Environment
Facebook provides flexible working environment to its employees to work. At the same time, it considers the employees as high value corporate assets. It facilitates the with some unique choices to their workforce. Similarly, it allows the employees who performed on a projects for a year to pick the nest projects of their interest’s and the team accordingly (Brockbank et al., 2012) .
They can work on selected project for a month and in case they peruse their interest can continue further. Thus, the flexible and creative working environment keeps the morale high of employees and maintain their thirst in order to learn more along with achieving the organisational goals.
Content Based Recruitment
This organisation is very keen in order to adopt the excellent recruitment practices and in order to hire the highly talented creative and qualified workforce according to their business needs. In relation to this, it is found that Facebook adopts the contest based recruitment practice (Downey, 2015).
In this way, candidate is tested on basis of what they can create and develop fort the organisation. Company organise contest based on developing the business solution, formulating plan for new products and ask the participants to do the practical analysis. Thus it is the best and cheapest way to find the best talent available in the market.
Rewards and Benefits
Facebook provides the fair and reasonable salary packages to its employees in exchange of their services. In relation to this, it provides 21 days of paid time every year (mandatory month off) including new employees. Apart from that, it has provision of parental leaves for couple and amount of $4000 baby cash for bear the expanse of new baby born (Ko and Hur, 2014).
Furthermore, it allows the employees for drop out at any point of time and also provides free of cost food its more than 3000 plus employees that fin into any global fast food group. These benefits satisfy the employees in the company and motivates to stay back.
The system of performance review in this company has been conducted transparently and based on the performance and projects done in respective appraisal cycle. Apart from that, it organise the appraisal review activity in twice in year in every six months (Junco, 2012)
Thus, helps top management to get insight about the employee’s progress and their issues so that be resolves on time. The transparent performance review enhances the loyalty level of the employees towards the organisation.
On the basis of above discussion, it can be suggested to Facebook that its HR strategies needs to be vertical fit with their competitive strategy to achieve competitive advantage. In the similar manner, it will be beneficial for the company to align its human resource management practices top the organisational management resources (Adams and smit, 2014).
The best part of such practice is that it connects the human resources towards to primary actions of the organisation. On the contrary, in this approach bottom line employees can feel less connected and valued. Apparently, it can also affect the authenticity of the management decision and effect the performance and effectiveness of the organisation.
Cuture refers to the belief, values, norms and behavior that form a unique and differentiating environment. In the place of work, it is the continuation of a values and attitude that forms an organization culture to guide and influence the activities and action of the organizational members and the behavior of the leaders.
It is considered that a high trust culture needs to be developed for organizational success by following ethical practices and being honorable (Pfeffer and Jeffrey, 1998). Thus, the best practices in HR are related to leading an organization to attain its high performance.
The company values emphasize on ‘Be bold’ (taking risks), be open (informed decision, information sharing and access to lot of information), focus on impact, move fast, and build social value.
Thus, the culture of company encourage the employee to take risk, and experiment with new ideas, fail and learn to improve and to keep the focus on indentifying and solving most relevant issues to have a greater impact (CNBC, 2017).
The culture guides the employee behavior and actions to be active and prompt to learn and to grab opportunity to build more. The company gives significance to information sharing, access to maximum information for an effective decision making ensure positive impact for the company. In addition, the company held high value to put up social value for global users in connecting to each other (Feitelson et al., 2013).
It can be evaluated that the strategic hiring process contributes in the development of unique culture at Facebook and as the quality of employees hired at Facebook reflect the company values that ensures that each new organizational member understand and go with the company values and business direction to achieve organizational goals.
Thus, Facebook culture is assessed to be open, flexible, creative and risk-taking. These four aspects of culture hold high relevance in the company and supporting in advancing their workforce performance and development and have lead to high employer attractiveness worldwide.
The flexibility in corporate culture is important for the business as it is operating in dynamic industry and allows them to address the issue/ problem take timely and effective decision for their social media business. The open culture in the company has promoted transparency in their work/ business operations and practices, treatment of their staff, opportunities for employee growth, organizational growth, responsibility, and accountability.
The open culture is evident from its hiring practices to promotions to employee development to its different socials activities. In Facebook, the high performing work practices (HPWP) are analyzed to be their unique hiring/recruitment, a six week on-boarding strategy, biannual performance management review and employee reward programs.
Some of the best practices followed by the company are its continuous investment in leaning, training and workforce skill and knowledge development, and transparency in goals (Newman and Sheikh, 2014) to ensure better decision making and management of resources and project timelines.
On the other hand, the culture value of move fast has led to cultural issue in the company, as it assessed to be an issue for employee work-life balance as there is pressure to move fast. In addition, it is stated that performance review system has developed a culture any disagreement is down casted by the managers/ leaders (CNBC, 2019).
It can be criticized that though Facebook is making use of several best practices to attain a high performance but it seems that these practices are not adopted on a consistent basis across different functions or departments. Thus, best practices incorporation needs to be in all the areas and levels of organization.
Thus, it is recommended to the company that it needs to identify the practice need or gap associated with the move fast culture and performance review culture. New best practices needs to be identified such as focus on employee comfort, and additional reward or recognition system to deal with this growing culture crisis. Next can be to appraise the new best practices guileless to ensure the best practices are implemented as per the needs of the organization.
The culture of American Express is considered to be highly data driven and ‘test and learn’ kind. The data driven and high learning culture have been posing a positive influence on the employees’ job satisfaction level, work behavior and leadership behavior.
Thus, it can be assessed that culture support the employee creativity, innovative thinking and encourage them to learn from their trials within financial services industry.
The data driven culture has allowed the members to improve their decision in different business areas like marketing, and risk management and has been contributing in achieving competitive superiority. The culture values at the company also give relevance to the work-life balance of employees, investments in training and employee development and attractive reward and recognition system (Alexander et al., 2015).
In American Express, the high performing work practices are analyzed to be their mentoring and leadership development tactics, performance appraisal, reward and recognition program, multi-disciplinary work teams and innovation program. The culture also focuses on the diversity which has promoted team work and collaboration.
On the different side, there is issue in relation to low confidence of employee leading to job insecurity culture due to massive layoffs by the management. This is likely to impact the level of commitment of employees towards the company and can affect the ongoing high performing culture in upcoming time.
It is recommended to the company to develop a safe workplace culture for its workforce that capture their positive thoughts and develop loyalty for the organization.
It can be judged that the company has less focus on the developing a solid infrastructure for their low performing employees thus, it seems that some of the best practices followed by the company require slight modification towards employee training and their development.
In order to implement HR best practice, the company needs to invest more in training and development program to develop focus on specific skills building and specific domain knowledge development in relation to the technological advancement to fit with the data driven culture.
The training opportunities are considered to be best practices in improving the existing workforce moral, and also match the value placed on leaning by millennial workforce (Darwish et al., 2013). Also, the company can engage in development of employee selection tools to ensure that right employee is selected with required skills and knowhow.
The above sections provides an insight and understanding of an effective HR system of the two companies and way to aligning their HR practices with the organizational goals and to implement the best HR practices that matches with their organizational requirements.
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