Magoosh GRE

Human Resource Management Approaches

| February 8, 2017

Introduction

In any organization, the human resource force is one of the most vital assets. In this regard, it is vital for organizations to ensure that they formulate and implement human resource management policies that will optimize employees’ contributions so as to maintain competitiveness in their different industries of operation (Armstrong, 2008; Marchington & Wilkinson, 2005). There are different approaches that different organizations use to ensure that their employees are at their optimal productivity. Some of these approaches include recruitment of highly qualified staff members, providing occasional training for employees to improve their competence at work, fair remuneration, and employee motivation (Ulrich et al., 2008). Scholars in the field of human resource management have proposed several models that can be used in managing people. Some of these are scientific management and human relations theory (Taylor, 2013; Thompson, 2011). The scientific management approach emphasises on managing employees to increase efficiency by using monetary motivation (Taylor, 2013). The human relations approach is based on the notion that using monetary rewards is not the only way in which employees can be motivated. They can also be motivated through other social factors like being praised, promoted or making developing in them a sense of belonging (Thompson, 2011). This paper intends to examine human relations and scientific management concepts by comparing and contrasting human resource management approaches at TGI Friday’s and Christians against Poverty, one of the Sunday Times 100 best not for profit organizations. The paper also discusses whether both approaches to management are relevant in the 21st century, and whether not for profit organizations should manage their employees in a way that is different from companies whose main objectives are profit maximization.

Management at TGI Friday’s

TGI Friday’s is a restaurant chain with its UK head offices in Luton (TGI Friday’s, 2014). Based on an employee survey carried out by the Sunday Times, the company ranked third among the 25 best big companies. The survey sought to establish the employees’ perceptions of the way they were being managed. The company also ranked third on the overall 100 best companies to work for in the United Kingdom (The Sunday Times a, 2013). The good ranks that the company holds among the best companies to work for reflects the effectiveness of the company’s human resource management approaches. Management of people at TGI Friday’s displays both the human relations and scientific management approaches. With reference to the human relations approach, performance is enhanced by the creation of an effective working environment and instilling a sense of belonging in their employees (Thompson, 2011). The scientific management approach is also used through offering monetary bonuses and retaining productive employees and dismissing the unproductive employees (Taylor, 2013). Examples of these approaches at TGI Friday’s is further discussed below

Human Relations Approach

Recognition

Employee recognition is defined as giving employees a positive feedback to let them know that they are valued by their colleagues and workmates in the organization. Wright et al. (2012) argue that for employee recognition to have an impact in the progress of an organization, it needs to encourage employees to increase their efforts towards attaining organizational goals. According to Karen Forester, the TGI Friday’s managing director in the UK; employee recognition has been part of the company’s culture since it started in 1965 (TGI Friday’s, 2014). One way in which the company recognizes its employees is through the use of achievement badges, which are given to employees as a form of appreciation for their achievements or extraordinary contributions they make towards the company. The company also has a program where employees are nominated by colleagues based on their performance, and are later gifted through different treats. For instance, in January 2013, TGI Friday’s UK flew 400 employees to a party that was held in Florida (The Sunday Times a, 2013). Whereas such employee recognition efforts may be costly and could cut down on the company’s profitability, the organization believes that it is a “huge deposit in the emotional bank account”.

Creation of a Conducive working Environment

The organizational environment also has a role to play in the productivity of employees. There are several approaches that have been suggested by researchers on the approaches that can be used to create an organizational environment that enhances employee productivity (Armstrong, 2008). One of these is creation of an open and transparent form of communication across the organization. By so doing, all employees will have a feeling that their opinions are valuable to the organization. This also instils a sense of belonging in the employees (Aula & Siira, 2010). Another approach that can be used in creation of an effective work environment for employees is ensuring that there is a work-life balance for employees (Bratton & Gold, 2012; Miner, 2005). To attain work-life balance, employees ought to be given the chance to fulfil other goals and responsibility in life apart from their work. These include responsibilities to their families and the community, spiritual needs and personal growth, among others (Clutterbuck, 2003). Other approaches include encouraging a team spirit in the organization, provision of a job security assurance and offering training to improve employee competence (Orlitzky & Frenkel, 2005).

As opposed to typical fast-paced food restaurants, TGI Friday’s employees have the assurance that their jobs are secure. With reference to a research carried out by the Sunday Times, 86% of the company’s employees felt that they had secure jobs. With regard to instilling a sense of belonging in its customers, the company has a tradition for treating each of its 4000 staff members in the UK as family (The Sunday Times a, 2013). According to Karen foster, the company’s UK managing director, “We never call them staff or employees, we call them family and we treat them like family” (Martin, 2013). This also creates a sense of teamwork, which is also a factor that improves employee productivity.

Scientific Management Approach

Evaluation of employee performance

The scientific approach to human resource management emphasizes on increasing efficiency in employee productivity. One of the ways in which this can be done in an organization is through the evaluation of the performance of employees in periodic intervals (Taylor, 2013). Employees that are not competent enough ought to be trained or given a certain time to improve. If they fail to improve in performance, they are dismissed and replaced by more competent recruits (Bloisi, 2007). This also takes place at TGI Friday’s. There was a period in time when the company needed to redefine its culture and redefine itself. To do this, some brutal approaches were undertaken to ensure that only the right staff members were left in the company. This involved carrying out an assessment of each member of the company and classifying them according to their contributions. As argued by the company’s UK managing director, “Everyone in the organisation was assessed and classified as ‘players’, ‘wannabe players’ (who needed more training), ‘potential players’ (who could go either way) and ‘assassins’ (who had the ability to sabotage the transformation project)” (Martin, 2013). The group of employees that was referred to as the assassins was dismissed from the company, a step that resulted in the improvement of the company’s performance. This is an ideal approach of increasing the efficiency of the company, which is quite synonymous to the scientific management approach.

Monetary Motivation

To motivate employees, TGI Friday’s also uses the monetary approach. Employees at the company receive annual pay reviews. In 2013, members of the company’s kitchen staff were offered a 9.5% pay rise as a gesture to appreciate their contributions to the company (The Sunday Times a, 2013). Even though the monetary incentives are used to motivate the company employees, they are used alongside other forms of incentives. The reason for this is that when monetary incentives are used exclusively by a company, it may limit the creativity and innovation of employees (Adeogun, 2009).

Management at Christians against Poverty (CAP)

Christians against Poverty (CAP) is a not-for profit organization operating the United Kingdom. It specialized in debt counselling, a charity work that that is based in different local churches across the UK (Christians Against Poverty, 2013). It offers solutions and hope for people who are in heavy debts by providing advice to the affected people on the ways in which they can generate income to enable settle the debts and relieve themselves from the associated stresses that could be even detrimental to their health. Apart from helping the company’s target populations to get out of poverty, CAP has also received recognition by the Sunday Times as being among the best not for profit companies to work for (The Sunday Times b, 2013). In a study that was carried out by Sunday Times on opinions of the company’s employees about how they felt about their leadership and whether they enjoy working at CAP, there was a 95% positive response that indicated that employees loved to work for the company. 97% of the employees indicated their pride in being employed by the company, while 99% of the employees believed that the company makes a positive contribution in society (The Sunday Times b, 2013). Just as was the result at TGI Friday’s, this response from the company employees indicates that the approaches used in the human resource management of the company is appropriate. The main difference that exists between TGI Friday’s and CAP is that whereas TGI Friday’s incorporates monetary incentives in employee motivation, there is no evidence that indicates that CAP uses the same.

The Human Relations Approach

Communication at CAP

In any organization, effective communication is one of the factors that contribute towards an improvement in employee performance. Communication often depends on the structure of the organization. Hierarchical organizational structures are characterized by vertical communication channels, where employees pass information to managers through their immediate bosses (Adeogun, 2009). On the other hand, adhocratic organizations are characterized by horizontal communication channels, where employees are free to address top managers in case they need to pass across a certain message (Ulrich et al., 2008). The structure at CAP is adhocratic, based on the fact that senior managers and employees interact to share information that id positive for the organization’s progress. Not only does this reduce the channels through which information it passed, but also motivates employees by providing them with a sense of belonging (Armstrong, 2008). They are also motivated to contribute more towards the organization because they know that their opinions and ideas matter. Effective communication at CAP was demonstrated in 2012 where there was a restructure of client service teams in the organization. When staff members that had been adversely affected by the reshuffle voiced their concerns, the original restructuring plans were changed (The Sunday Times b, 2013). In another demonstration of effective communication at CAP, there was a Dragon’s Den-style event, where teams were established to propose improvements on the company’s operations. All the proposals were presented, and a vote was made to select those that had to be implemented immediately. Afterwards, the managers pledged that they will ensure that the suggested proposals will be implemented (The Sunday Times b, 2013). This clearly indicates that the company involves its employees in decision making.

Catering for Employees’ Wellbeing

Ensuring that the well being of employees is catered for is another approach that CAP uses to motivate its human resource force (Meyer & Allen, 2007). According to the research that was carried out by the Sunday Times, the company has an 88% score on how effectively it addresses the wellbeing of its employees. One of the ways in which the company addresses the wellbeing of its employees is through setting aside a full day every year, referred to as the wellbeing day. On this day, employees are informed on how to maintain a healthy lifestyle, encouraged to use the staff gym. Several group exercises are also carried out (Christians Against Poverty, 2013). Another approach that is used to address the wellbeing of employees is through organizing motivational talks to empower them. Matt Barlow, the chief executive director of CAP, gives regular motivational speeches to the company’s staff members, which mainly aim at inspiring them to attain their potential in life while at the same time ensuring that they adhere to their moral principles (The Sunday Times b, 2013). This has increased the faith that employees have in him and the company. When employees are aware that the company is concerned about their well being, there is an increased likelihood for them to be more committed to the organization (Orlitzky & Frenkel, 2005).

Incentives

As opposed to TGI Friday’s where employees are provided with monetary incentives in form of bonuses and salary increments, the incentives that employees at CAP get are usually in form of free drinks and fruits, a cycle to work program and being provided with free sports facilities (The Sunday Times b, 2013). There is also a program where employees are nominated by managers for awards, depending on their performance. When employees make contributions that are beyond what is expected of them, they are recognized and awarded. Far from financial rewards that are given in most companies, the rewards that are given at CAP include meals, cinema tickets or chocolates. The annual salary of a caseworker in the company is at £21,164, of which employees believe is a reasonable pay for their efforts (Christians Against Poverty, 2013). Being a not for profit organization, this explains the fact that there are no incentives in form of financial reward.

Relevance of the Human Relations and Scientific management in the 21st Century

To establish how relevant these approaches of human resource management are in the present-day organizational environment, it is vital to have an understanding of the principles that govern them. The scientific management approach has four core principles (Taylor, 2013). The first is referred to as the replace rule of thumb work approaches. These approaches have to be arrived at by carrying out a scientific study. The second principle is that every employee in the organization ought to be scientifically selected, trained and developed, as opposed to letting them train themselves with work experience. The third principle is that managers ought to cooperate with employees so as to ensure that they are strictly adhering to the operational methods that have been scientifically developed. The fourth principle is that work ought to be equally divided between workers and managers to allow managers to apply the principles of scientific management to plan duties for workers (Taylor, 2013). Critics of this approach of management argue that it increases work monotony and reduces avenues through which employees could provide feedback to their managers (Ulrich et al., 2008). However, there is still relevance of this approach in present-day human resource management. One of the principles that are still applicable is that employees ought to be scientifically selected, trained and developed by organizations (Taylor, 2013). Even present-day organizations have certain criteria that they use in selection and recruitment of their employees, and also emphasize on training them so as to make them more capable in executing their responsibilities (Bratton & Gold, 2012).

The human relations approach to management is based on three underlying principles (Thompson, 2011). The first principle is decentralization, where hierarchy that is often employed in classical management is replaced with providing employees with greater autonomy. The second is participatory decision making, where employees ought to be involved in the decision-making process of the organization. The third principle is that managers need to develop employees that are self-motivated (Thompson, 2011). This management approach is supportive of an organizational structure that is adhocratic (horizontal), and against the hierarchical organizational structure. Given that present-day organizations are becoming less hierarchical and more horizontal, it can be thus stated that the human relations approach to management is quite relevant in the 21st century (Ulrich et al., 2008).

In regard to whether not-for-profit organizations and organizations that aim to maximize their profits need to apply different management approaches, this is quite debatable. Whilst the objectives of these organizations might differ, it is vital for both to ensure that their employees are motivated and efficient. The main aspect that may differentiate not for profit organizations with the profitable ones is that while employees in not for profit organizations may not prioritize monetary incentives, those in profitable companies expect such incentives to be incorporated in their motivation strategies.

Conclusion

As aforementioned in this study, human resources are the most important assets owned by any organization. Therefore, human resource managers ought to use people management strategies that motivate employees to increase their contribution towards attaining organizational goals. Two main approaches to people management have been addressed here. These are the scientific management approach and the human relations approach. Explanation of these approaches has been done by comparing management approaches in two organizations ranked among the top 100 companies to work for in the UK. One of the companies, TGI Friday’s, is a profit oriented company, while other, CAP is a not for profit organization. Similarities and differences that exist in the human resource management approaches of these companies have been highlighted in this report. In establishing the relevance of scientific management and the human relations approach of management, future research should carry out a more in-depth analysis of the advantages and disadvantages of both in the present-day organizational environment.

References

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