However, all these measures are long-term ones, and these decisions should be combined with short-term policies addressing unplanned absences. GS Plumbing management needs to identify major causes of absenteeism basing on employee survey. Furthermore, GS Plumbing has to develop a clear absence policy, with specific control procedures of employee attendance, warnings regarding absence and procedures of justifying absence (Rothwell and Sullivan 2005). It might also be effective to sign a contract with a medical company and assigning a corporate physician to help the employees who often claim to be sick without confirmation. However, the major problems causing absenteeism are insufficient compensation, low motivation and weak corporate culture. Thus, GS Plumbing should develop a strategy incorporating all these issues into company’s set of goals.
3. Selection, recruitment and retention issues
Another significant HR problem of GS Plumbing is high turnover rate, and recent inability of the company to match job offers. The demand for plumbing services is growing, and this creates more opportunities for plumbers. Like other companies in the field, GS Plumbing should consider balancing compensation levels with current rates and introducing non-financial benefits. In addition to developing a positive reputation for GS Plumbing, Alan as HR management representative should perform analysis of reasons causing employees to leave. The costs of turnover include the expenses for selection, recruitment, costs of having a vacant workplace and impact on customers (Barrow and Molian 2005). It can be recommended to interview employees leaving the organization twice: briefly – before the leave takes place, and in a more detailed way in 6 months after leaving (Barrow and Molian 2005). Former employees can be a source of feedback regarding current business practices of the company and major deficiencies. This feedback should be used for identifying weak points in functional and strategic roles of HR department. Also, analysis of reasons to leave the company might lead to better profiling of potential candidates, “changes in appraisal process and employee recognition” (Beardwell and Claydon 2007, 165). Thus, interviews of former employees can help to achieve better employee selection, recruitment and improved retention. Also, such interviews might give background for creating clearly defined HR policies supported by a set of documents (employee handbook, HR manual etc.).
GS Plumbing can also offer reconsideration of compensation level, new non-financial bonuses or career advisor services to employees who wish to leave the company. Other retention practices might include rewards for performance (e.g. the new payment system mentioned in the previous section), professional trainings and performance appraisal process (Curson and Skidmore 2010). Existing workforce tendencies also indicate that GS Plumbing also needs planning on further improvement of qualification for employees, and in addition to that HR department should perform a needs analysis for major categories of employees.
4. Benchmarking of HR function
Since the problems of GS Plumbing HR department are rather diversified and refer to different areas of human resource management, benchmarking HR functions can be recommended. Generally speaking, benchmarking is a process of selecting best business HRM practices and adapting them to the organization in order to improve performance. It is important to note that best practices can be adopted not only within a given industry (e.g. plumbing), but within any industry or organization known for its outstanding human resource practices (Stredwick 2005). HR benchmarking can be applied in such areas as “overall effectiveness of the company, effectiveness of HR department, recruitment process, development and training, absenteeism and turnover, compliance, occupational safety and health” (Mahoney-Philips and Adams 2009, 6).
Benchmarking process for GS Plumbing can be divided into the following steps (Secord 2003):
- Selection of a process for benchmarking
- Analysis, mapping and evaluation of this process at GS Plumbing
- Comparison of GS Plumbing practices regarding the chosen process with other organization (showing better results in this progress)
- Selection of targets for improvement
- Adaptation of the chosen organization’s best practices to GS Plumbing
- Implementation and monitoring of changes
For successful benchmarking, it is necessary to identify the leaders in HRM, most appropriate organizations to benchmark with and practices which can be adapted to the environment of GS Plumbing and to determine the areas causing the majority of troubles (most likely, 20% of areas contain 80% of problems). Also, analysis of common business processes within the industry (e.g. comparison with competitors) and common performance measures should be conducted, in order to perform successful evaluation and monitoring of changes (Mahoney-Philips and Adams 2009). While implementing changes, Alan Arrowsmith should also determine the employees who contribute mostly to the success of organization, and who can be critical for implementing changes.
HR audit mentioned in the first sub-section should identify a number of areas where improvement is required. As a start for benchmarking process, it is possible to recommend to Alan Arrowsmith to focus on these areas and processes, and to select the competing organization (which managed to address unplanned absenteeism and turnover) as the sample for benchmarking.
5. HR evaluation and top management issues
GS Plumbing also experiences a number of top management issues. First of all, Greg Smith has almost transferred own functions to Alan Arrowsmith, while Alan should focus on own role of HR manager. The company has expanded during the decade, and while such delegation of rights was possible when the company only emerged, currently such combination of multiple senior management roles by one person is not effective. One of quick and rather obvious solutions is to train Gail White, the receptionist, to act as HR manager, and to delegate the evaluation and planning tasks to Alan. In general, senior management should consider hiring 1-2 people for assistance, since receptionist and accountant also feel overloaded, and if the company continues growing, this will lead to stress and financial losses.
There are also issues with strategic planning: Greg Smith makes rough estimates that about 30% of workload are pre-planned tasks, and almost fails to estimate the unplanned workload. This leads to financial uncertainty, and might also be one of the causes for ineffective and stressful situations regarding work allocation. In this situation, HR evaluation function is barely implemented. Senior management needs to acknowledge the importance of HR evaluation function, and to implement it at three levels: as measure of perceived effectiveness, measure of return on investment and measure of performance (Philips 1996). HR staff should be involved into evaluation procedures, and this process should continuously experience the phases of implementation of changes, measurement and control.
Versatile analysis of HR department issues at GS Plumbing has shown that the company needs a formal audit of its HR function aimed at identification of problem areas. Among these areas, such issues as high turnover and pirating of employees by competitors and high unplanned absenteeism rates were addressed in separate subsections of the paper, and appropriate methods of improving HR function and performance were selected.
For areas and processes causing major problems, it is possible to recommend the strategy of benchmarking the experience of organizations with better characteristics in these areas. As a start, a competing company with lower turnover and absenteeism rates can be chosen as an example company for benchmarking. However, best HR practices can be adopted from any industry, and thus benchmarking should not stop after adopting the best practices of competing firms. It should also be noted that senior management of GS Plumbing needs to change the approach to HR evaluation, and accept this HR function as one of the variables shaping long-term strategy of the company.
Barrow, C. & Molian, D. 2005. Enterprise Development: The Challenges of Starting, Growing and Selling Businesses. Cengage Learning EMEA.
Beardwell, J. & Claydon, T. 2007. Human resource management: a contemporary approach. Pearson Education.
Cook, Mary F. 2006. The Complete Do-It-Yourself Human Resources Department, 2007 Edition. Aspen Publishers Online.
Curson, J. & Skidmore, T. 2010. Retaining a high quality workforce – keeping hold of the family silver. Strategic HR Review, 9(5): 17-23.
Dillard, J. & Rogers, R. & Yuthas, K. 2011. Organizational change: in search of the golden mean. Journal of Accounting & Organizational Change, 7(1): 5-32.
Grensing-Pophal, L. 1999. The HR Book: Human Resources Management for Business. Self-Counsel Press.
Mahoney-Philips, J. & Adams, A. 2009. Getting the measure of HR. Strategic HR Review, 9(1): 5-9.
Rothwell, W.J. & Kazanas, H.C. 2003. Planning and managing human resources: strategic planning for human resources management. Human Resource Development.
Rothwell, W.J. & Sullivan, R. 2005. Practicing organization development: a guide for consultants. John Wiley and Sons.
Secord, H. 2003. Implementing best practices in human resources management. CCH Canadian Limited.
Stredwick, J. 2005. Introduction to Human Resource Management. Butterworth-Heinemann.
Torrington, D. & Hall, L. & Taylor, S. 2008. Human Resource Management. Pearson Education.
Philips, J. 1996. Accountability in human resource management. Gulf Professional Publishing.