Sunday, May 2, 2021

Sustainability in Business and Human Resource Management

 


Sustainability is the topic of the century. It’s an important issue for people across the globe, and as climate change continues to affect our lives, we are constantly trying to find new ways to increase our sustainability and do our bit for the planet.

What does Sustainability in Business Mean?

Business sustainability means to operate without negatively impacting the local and global environment, community, or society as a whole.

For leaders, business owners, and administrators, sustainable corporate practices are becoming imperative. Industry form a big part of the climate change discussion due to its reliance on land, resources, fossil fuels, and non-stop production and consumption. The first step to business sustainability starts with businesses being mindful of the issue and understanding how and why they need to make changes.

To be environmentally mindful, a business needs to consider more than just profits. A sustainable business observes what is known as the triple bottom line. Accordingly, a business makes its profits by being socially accountable and protecting our use of the globe’s resources.  

Why is Sustainability Important for Business?

Beyond helping to battle global challenges, sustainability can drive business success. Research shows that companies with high Environmental, Social, and Governance rating have a lower cost of debt and equity, and that sustainability initiatives can help improve financial performance while fostering public support (Spiliakos 2018). In this circumstance, ‘doing good’ and ‘doing well’ go hand in hand.

(Spiliakos 2018)

How will Sustainability Benefit Business?

Being a more sustainable business can support to become more efficient, improve brand value and reputation, provide a platform for innovation, help attract and retain staff, achieve better growth, cut costs and strengthen stakeholder relations (Sustainable Business Network 2020).

Two gaps to be mindful of – In order to address sustainability appropriately, organisations need to bridge two critical gaps:

  • ‘The knowing-doing gap’: one study found that, where 90% of executives find sustainability to be vital, only 60% of organisations actually integrate sustainability in their strategy. And only 25% have sustainability incorporate in their business model (Haanaes 2016).
  • “The compliance – competitive advantage gap’: nevertheless, more organisations are seeing sustainability as an area of competitive, only 24% act on the knowledge. However, all organisations should to compliant, and these topics would be addressed separately (Haanaes 2016).

How Human Resource Management Could Contribute to Sustainability in Business


Amongst other functions, Human Resource (HR) management is critical in supporting a business to: 

  • Improve the effectiveness of policies and procedures.  
  • Manage corporate governance and ethical issues beyond economic performance. 
  • Support the realignment of the company’s future direction.  

HR can be a corporate’ moral scope by promoting policies and best practices that are sustainable for both people (in and outside of the company) and the environment.  

These goals aren’t easy to achieve, but good HRM can facilitate communication between managers and employees, as well as contribute to culture change within the organisation.  

Human resources link ethical principles, CSR, and HR functions together, creating a map to sustainability. HR professionals can support and embed sustainability in ways such as:

  • Engagement techniques focused on open and transparent communication. 
  • Motivational theories based on extrinsic and intrinsic values. 
  • Regular meetings in accordance with the principles of respect and understanding. 
  • Applying analytical capability to best align them in the direction the organisation is headed. 

The aim is to embody a sustainable environment that doesn’t just focus on economic factors, but also on HR and their relationship with the surrounding environment. Therefore, the aforesaid people-focused skills are vital to a sustainable business. 

Conclusion

Sustainability is a key focus area for modern business world. The HR Management is one of the most important functions in the organization to deliver a sustainable business.


Reference


  • Spiliakos, A. (2018). What Is Sustainability in Business? | HBS Online. [online] Harvard Business School Online Blog. Available at: https://online.hbs.edu/blog/post/what-is-sustainability-in-business [Accessed 01 May. 2021].


  • Sustainable Business Network. (2021). Why should my business become more sustainable?. [online] Available at: https://sustainable.org.nz/guide-to-sustainability/ [Accessed 01 May. 2021].


  • Haanaes, K. (2016). Why all businesses should embrace sustainability. [online] IMD business school. Available at: https://www.imd.org/research-knowledge/articles/why-all-businesses-should-embrace-sustainability/ [Accessed 01 May. 2021].


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Human Capital

 



Human capital is a term used in management literature to refer to the value of employees and their skills, knowledge, and ability. Human capital reporting allows management to measure and set out the value of human capital within the employer.


What is Human Capital?

The human capital could be a loose term that refers to the educational achievement, knowledge, experience, and skills of an employee. The theory of human capital is comparatively new in finance and economics. It states that organizations have an incentive to pursue productive human capital and to add to the human capital of their existing employees.

Human Capital Theory

In the 1960’s, Nobel Prize winners Gary Becker and Theodore Schultz pointed out that education and training were investments that could add to productivity (Becker 1975). As the globe accrued more and more physical capital, the opportunity cost of going to school declined. Education gradually became an important component of the workforce. The term was also approved by corporate finance and evolved part of intellectual capital, and more broadly as human capital.

Why Human Capital is important and why does it matter?

Smart leaders are aware of the importance of human capital as a competitive advantage. Organisations that focus on engagement, well-being, organisation culture, and employee development in their organisations tend to outperform their competitors.

The effective utilization and engagement of an organisation’s human capital have also been proven to have a direct impact on a wide range of organizational KPI’s (Key Performance Indicators), including efficiency, employee revenue, product quality, work safety, and customer fulfillment.

The Gallup organization’s 2017 State of the Global Workplace report ties employee engagement – a sense of being very involved and keen about their work and workplace – a wide diversity of business outcomes and the overall performance of the workplace culture.

They reported that most employees are not engaged; worldwide, the percentage of adults who work full time for an employer are engaged at work is just 15%.

The report also offers compelling statistics that show how business units in the top quartile of global employee engagement perform versus those in the bottom quartile.

·         Higher productivity: 41% lower absenteeism and 17% higher productivity

·         Lower turnover: in organizations with high employee turnover, highly engaged business units achieve 24% lower turnover

·         Better product quality: highly engaged business units experience 40% fewer quality incidents (defects).

·         Better customer experience: highly engaged business units achieve 10% higher customer metrics and 20% higher sales. 

                                                    (Clifton 2017)

Effective human capital management isn’t solely essential for ensuring the health and success of your business but to enable you to compete in an increasingly competitive world. 

By making human capital, a priority, the organizations able to attract, retain, and engage the talented, high-performing individuals you want to be successful, from finding the right talent, to onboarding and supporting the employee experience throughout the employee life cycle.

Measuring Human Capital: Why?

Attempting to measure and develop human capital just since it is “good practice” will never help an organization to accomplish your goals. One needs to know why it is being done in order to get the most out of it.

On that note, pleased find below few reasons why organizations should measure its human capital.

  • To determine it’s human capital’s ROI (return on investment) – human capital is an asset that the organisation invest in and expect to get a return on. Once you calculate what your return is on your human capital investment, you will be able to judge the efficiency and effectiveness of your human capital.

  • To identify gaps in human capital – It’s quite simple; when you measure what you have, you will be able to see what you don’t have! The gap becomes even clearer when you consider your organisation’s overall objectives.
          An example, if your company’s objective is to be the best service provider in the IT industry, 
         then  having exceptional IT skills is an essential attribute that your human capital needs to       
         possess. But if your organization’s objective is to be the highest-grossing retailer, then exceptional
         IT skills probably aren’t going to be at the top of your list!

  • To bond, the gap in your human capital - Just similar with any other analyses, their overall objective is recognizing what you have, what you are lacking, and then determining how to bond the gap between the two in order to achieve your organization’s goals.

          It is critical to keep in mind your organization’s objectives during all your analysis, and 
          especially when bridging any gaps in human capital. You must ensure that how you bond the gap
          supports your organisations goals. For instance, you might think that any gap might easily be     
          resolved with the right training program. However, if your organisations corporate strategy is to 
          be the lowest-cost provider, then spending a large sum of money on a training program might not
          be the best answer.

Key Takeaways: Human Capital

  • Human Capital the intangible economic value of an employee’s knowledge, skills, experience, and social qualities that contributes to a person’s skill to perform work in a manner that produces economic value.
  • Education and health are key qualities that improve human capital and directly contributes to economic growth.
  • Both employers and employees make significant investments in the development of human capital.
  • Human capital theory is an effort to quantify the true value of an investment in human capital and is closely linked to the field of human resources.

Now that you know why you need to measure human capital, make certain you take all the right steps to assure its optimal development!


Reference

  • Gary S. Becker. "Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education." National Bureau of Economic Research, 1975


  • J. Clifton. (2017). The Gallup organization’s State of the Global Workplace. P. 4 to 7. Available at: https://www.gallup.com/workplace/238079/state-global-workplace-2017.aspx?thank-you-report-form=1 [Accessed on: 29 April 2021]










 



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Wednesday, April 28, 2021

Importance of Career Development in Organisational Success

 

The process of organisational career development is very important for both employees and employers. Managing career development is a matter of growing challenge for organizations as it needs to be mindful and align individual employee aspirations with business objectives of the organization. Developing a career development strategy will help employees to take one’s job serious and see it more as a career as it's linked to his or her long-term aspirations.


Job-hopping mindset has become more common around the globe, smart organisations have identified this trend and have implemented strategies to have an atmosphere of growth where employees are able to identify the opportunities for career advancements that exist within the organisation. These organizations help employees to plan a path that may carry them through the whole of their working life, as finding a good employee is much more challenging than retaining an existing one. 


The Importance of seeing a Career as Steps of Development 

This idea of observing an employee’s career as a whole and designing diverse sets of recognized training, developmental activities, and relationships at each phase is recognized as career development (Noe, 2010). Traditional training programs emphasize educating specific competencies related to the employee’s present job, employee development programs target skills, knowledge, and behaviors that better prepare the employee for future positions; career development includes both training and development.

The combination of precise job training, employee development, and linking career development set up to the process needs a high level of strategic thinking and planning; such a plan cannot be based purely on an expected future return from the employee. It takes robust direction and broad views to be able to acknowledge what training and developmental experiences are necessary for employees to grow in their positions so that they are positioned correctly in the organisational hierarchy and support the organizational vision. Whereas this may need some level of investment on the part of the organisation, understanding and supporting career development, impacts the organization’s ability to draw in and retain high-performance employees, a combination that may lead to a long-term organisation-wide competitive advantage.


Why is Career Development So Important for Organizations?

  • Attracting top talent: Although recently the globe has been faced with a tight job market, in competitive fields employers must focus their efforts on attracting the top talent. Competitive employment packages that go beyond traditional compensation and benefits can be key to their accomplishment.

  • Job satisfaction: It is often said that “A happy employee is a productive employee.” Job satisfaction is very vital since most of the people devote a major share of their life to their working place. Furthermore, job satisfaction has its effect on the general life of the employees also, since a satisfied employee is satisfied and happy human being. An extremely satisfied worker has healthier physical and mental well-being (Janardhanan & George 2011).

  • Retaining employees/reducing turnover: Through organizational commitment, career development opportunities help to retain employees and thus prevents turnover. 

  • Productivity and Financial Returns: Employers can also increase efficiency and financial revenues by capitalizing on their employees via career development. 

Because organizations have to stay current in technology, business practices, and advances in their industry, an organization that embraces career development processes can keep employees up-to-date on advancements in the industry while, keep staff motivated and retain the knowledge pool within the organization ensuring its competitive edge in the market.


Reference


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Tuesday, April 27, 2021

Will Chatbots Replace the H in HR?


Automation and Artificial Intelligence (AI) are swiftly moving the globe we live in, and many of the current job roles would get affected in the coming years.                                                                                                                                                                                     

Automation will bring considerable efficiencies to many of the roles, but it also may replace some of the roles. On the bright side, automation will create new jobs that involve the kind of thinking machines cannot do. When you have so many tasks to handle in a day, you might feel like automating a few of them to move things faster.


What is a Chatbot?

A chatbot is an application that can take your place when you are unreachable. A Chatbot is a computer program based on AI designed to simulate conversations with humans, especially over the Internet. They are simple software applications that imitate human or written or spoken human speech for simulating interaction with an individual. There are numerous chatbot platforms used by many businesses all around the globe. 


How do Chatbots Work?

Chatbot helps like a human serving as a help desk. So, when the end-user opens a dialogue box for discussion, the Chatbot becomes the medium that responds.

As mentioned already,  Chatbots are the best application of Artificial Intelligence, they can be easily divided into two categories. The simpler Q/A bot needs a minor skillset and knowledge base and is limited to answer only a specific set of questions while the smarter machine learning Chatbots connect the full potential of AI.

For being an effective bot and ability to offer related answers, the Chatbot mostly employs four major parameters as Text Classifiers, Suitable Algorithms, Artificial Neural Networks, and Natural Language Processing (NLP). All these aspects subsidize to the overall bot functionality and intelligence of the Chatbot.


Will HR Jobs be Automated?

The answer to that question depends on the specific HR role and the tasks performed. Automation will affect all HR jobs, and already has, but to a different degree.

As McKinsey shows, certain kinds of responsibilities are expected to be automated than others. Technical ventures, such as data collection and data processing, are likely to be automated. (Most of the organizations might have already begun automating some of these functions.) Other types of work, such as managing people, planning, or creative work are much less likely to be automated.

This explains why HR administrative jobs have a 90% chance of being automated by 2035, according to a study from Oxford University, but HR managers, directors, and officers are much less likely to be replaced by robots. A robot can spit out data, but it can’t create a strategic plan or mediate a conflict between two employees.

In short, robots are likely to take over routine HR tasks, while the HR tasks that require creativity, problem-solving, decision-making, or people skills will remain the domain of humans.


Reference




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Why Strong Values are Important for Modern Organizations

 


Having clear company values help the management to ensure that all employees are working towards a common Goal. Values support the company's vision and its culture. That is why every single business decision must be aligned with these values. A business lacking values would not survive in today’s competitive and complex world.


Values – Why are they Important to any Company?

Values are what support the vision, shape the culture, and imitate what a company considers as important behaviors. They’re the core of the company’s identity. Some organizations emphasis generally on the technical competencies but often overlook the primary competencies that make their organisations run smoothly — values. Creating a strong set of values delivers both internal and external advantages to the company:

  • Values help companies in the decision-making processes. For instance, if one of your values is to stand behind the quality of your products, any products not reaching the suitable standard are inevitably rejected.


  • Values educate clients and potential customers about what the organization is about and simplify the identity of the organization. Especially in this competitive world, taking a set of specific values that voice to the public is definitely a competitive advantage.


  • Values are becoming prime recruiting and retention tools. Through the ease of investigating organisations, job explorers are doing their study on the identities of the organizations they are applying for and considering whether or not these organisations hold the values that the job seekers think about as vital.

A recent Harvard Business Review article by Dr. Natalie Baumgartner, Chief Workforce Scientist at Achievers, discovers why culture needs to line up with organization values. She refers to LinkedIn survey that recommends 26 percent of employees would decline a fancy title and 65 percent would accept lower pay before dealing with a poor workplace environment.


Values Drive Culture

Just like home, values are the foundation for ‘HOW’ everything occurs in a workplace. The values of employees along with their knowledges, upbringing, and so on, combine together to form the base of company. A decent value structure has employee wellbeing at its core, and that, in turn, drives growth for a business. Successful organization like Google, Microsoft, Amazon, etc. All of them have a thriving set of ethics to make everyone's lives easier. 


Values initiates from the topmost. The Chief Executive Officer sets and leads from the front. Why does the senior leaders have a vast role in transferring them to every corner of the organization? Since leaders have the authority to decide the direction and define the daily actions of employees. That’s why implementing values is tougher than just writing them on a piece of paper.


How to Identify and Implement Values in an Organization

Start by creating value statements. At present, define how you would want people to work with others in your organization. Also, focus on how the organization will value customers, suppliers, community, and everyone else who’s involved. Once you have this list, create value and proceed, implement.

Identifying values is nothing like analyzing your kitchen and listing a grocery list. Likewise, one cannot copy them from the value page of another organization. Lastly, a long list of values are not required. ‘More the merrier’ won’t work here, so six to seven is a good number at the start.


Conclusion

Organizations’ culture can be used to separate it from competitors. It allows organisation to create a differentiated brand, attract and retain loyal employees, and build robust relationships with customers, suppliers, and partners. Since culture represents unique values, competitors cannot replicate it. The only requirement is that organization is true and committed to it’s values that represent company culture. Having values on a plaque on the lobby wall is not sufficient. One must always act and behave in alignment with values. This means only hiring employees that share your values and making business decisions with values in mind.

If the values are strongly running in the organization, employees experience motivation and high engagement levels throughout their work lives. So, don’t underestimate the power of values in creating an engaged workplace. They have the authority to change the landscape of your organization. Which choice are you going to make?


Reference



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Monday, April 26, 2021

360-Degree Performance Appraisal in Organization

 


360-Degree performance appraisal is a system or method during which employees receive confidential, anonymous feedback from those that work with them. This usually covers the employee's manager, peers, and direct reports. The feedback received is usually anonymous and confidential. The basic procedure is generally the distribution of a digital form through a system that needs to be submitted by the people concerned.


Why Organisations need a Performance Appraisal Framework?


Organisations are met with the challenge of promoting innovative productivity improvement among workers. Hence, productivity plays a vital role in the organisation’s competitiveness. Thus, innovation supports efficiency through the new uses of technology in the business, enhanced industry systems, meeting changing customer demands, and better systems and processes (Business Victoria 2016). For an organisation to evolve, people working within it must be involved in processes that improve the organisation’s productivity. Fourie (2008) is of the opinion that organisational success depends on a suitable recognition and reward system. The recognition and rewards may be used to increase performance in organisations that have adopted the 360-degree performance appraisal. Therefore, a complete performance policy must be developed that aligns pay (or other incentives) to performance.

Let’s look at why adoption of performance management frameworks are widespread amongst top organizations around the globe.

  • Performance Management - This type of performance appraisal method aligns employee rewards/recognition with a company’s performance. The data collected from the feedback is used for the review of an employee. With the size and frequency of the data available you can effectively track and develop the performance of your workforce.

  • Employee Development - This is one of the main reasons why companies opt for an all-round feedback system. Human resource management applies these data from the survey to fill the gaps in the skillsets of the employees. This ensures that the organization is up to date with skills in-line with the current trends in the industry.

  • Onboarding and Training - Companies want to have a structured way of training and getting new employees on board. It helps the companies recognize the kind of skills required and make arrangements for fresh new talent. Also, it helps companies to elect on a promotion. It helps to inform the administration with the strength and weaknesses of a new leader. This makes certain that the company doesn’t lose an excessive amount of time adapting to changes. These are generally the motives why companies opt for such an appraisal system.

“We all need people who will give us feedback. That’s how we

improve. – Bill Gates”


 Advantages and Disadvantages of 360-Degree Performance Appraisal System

 Appraisal management system could be a very powerful asset for the business. Yet, every system has its own advantages and disadvantages.

Advantages of 360-Degree Appraisal System

  • Self-development of employees
  • Fair and accurate reviews
  • No biasing with 360-degree feedback
  • Motivate workforce
  • Provides a comprehensive view of employee performance
  • Convincing opinions from participants
  • Better morale of employees
  • Positive work environment
          Disadvantages of 360-Degree Appraisal System
  • Process could be time-consuming
  • Sometime peers and subordinates might not give objective feedback
  • Needs proper training to give proper feedback
  • Data mix concerns
  • Concerns on confidentiality might hamper objective feedback – especially from subordinates
  • Sometimes too much data with conflicting views
  • Data is not available to everyone. Can create a suspicious environment 
     Conclusion

      The 360-degree performance appraisal makes a working atmosphere that inspires worker participation. It is a suitable system for succession planning, training, and professional development (Riboldi & Maylette 2007). Henceforth, there was no relation between the 360-degree performance appraisal and labour efficiency. The system is not a result of inherent labour productivity problems. It is a method that takes advantage of a focused organisational approach to combine employee appraisal and participation. The system can be used for developing employee capital in organisations. Thus, the staff will have the ability to solve organisational problems (Brewster et al. 2003). Therefore, the 360-degree approach was able to reduce the spoilage rate in the organization.

    
    Reference    

  •       Business Victoria, 2016, Increase profitability and staff retention with an innovative culture, State Government of Victoria, Melbourne

  • Fourie, D., 2008, ‘An examination of an incentive system to maximize performance in an automobile manufacturing environment’, thesis, unpublished, Rhodes University, Grahamstown.

  • Ahmed., 2021, An Overview of Employee Development? [Blog Entry] 01st February 2021, Available from https://blog.vantagecircle.com/employee-development/ [Accessed on 24th April 2021].

  • Dutta., 2021, 7 Easy Steps to Build a New Employee Onboarding Process? [Blog Entry]29th January 2021. Available on https://blog.vantagecircle.com/employee-onboarding/ [Accessed on 24th April 2021]

  • Riboldi, J. & Maylette, T., 2007, ‘Using 360 feedback to predict performance’, T&D 61(1), 48–52.

  • Brewster, C., Carey, L., Dowling, P., Globler, P. & Wärnich, S., 2003, Contemporary issues in human resource management: Gaining a competitive advantage, Oxford University Press, Cape Town.



        
     

Jan 16, 2018



    
     

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Wednesday, April 21, 2021

The Psychological Impact of Working from Home


 

In year 2020 organization have seen a rapid shift towards working from home and this has created a new set of challenges leading to a significant psychological impact on employees. But experience in year 2020 have shown that with the right leadership and management approach, these can be overcome.


The worldwide lockdown of businesses, industries, and school closures took place to contain the outbreak and prevent a health system overload and fundamental challenges for both employees and employers across the world. The working environment has significantly changed with thousands of jobs lost, disappearance of some occupations, and dramatic growth in new occupations and employees were turned overnight into work from home.


The sudden shift to a remote work setup has been stressful for many employees, partly due to the challenges of information technology systems that were implemented to facilitate working from home. The restriction caused by the privacy setting, connectivity capabilities, and server limitations caused employees much anxiety and restlessness to the point that they are unable to be productive.


Employees also faced challenges in managing time due to the work from home initiative. In most cases, employees were no longer confined to a 8.30am to 5.00pm schedule as employees found it difficult to demarcate the office and personal time. They had to work beyond 5pm even sometimes without knowing that they are consuming personal time for office work and also sacrificing relationships, family and health. 


Working from Home made everyone to accept certain behaviors  where the line between someone’s professional and personal life has disappeared.  Therefore, it’s vital for people and organizations to familiarize themselves with the best practices to incorporate in order to sustain a stable and productive pace of work that takes everyone’s wellbeing into account.


How will we change productivity to this new set of circumstances? It will be our personal challenge to find the balance between work, leisure, childcare, and chores. A main organizational challenge will be understanding the different realities and create flexible processes to accommodate these circumstances.


How do Organizations Create better Working Environment for Employees Working from Home?

To overcome these issues, the companies have made few changes to their day to day work by introducing policies like requiring a ten-minute break between meetings, implementing meeting-free days each month, avoid scheduling meetings after 5.30 pm and during holidays, etc.. These helped to reduce the psychological pressure of being constantly online.


Besides looking for a solution form employers to resolve some of the current problems faced by those working-from-home, individuals who are working-from-home, may also need to do something for themselves to stimulate productivity. For instance, stretching or doing yoga in between work hours. Exercising has been found to stimulate endorphins and serotonins so that employees are not feeling depressed or overwhelmed by their work demands. A regular exercise of 20 to 30 minutes a day would drastically reduce their rate of anxiety, as has been proven in many scientific studies (Erica and Jackson 2013), thereby eliminating any psychological and mental influences.


Further, some organizations have implemented

  • Hosting / promoting virtual social events such as online quiz, games, sharing your personal talent etc.
  • Establishing casual platforms where employees can share work-from-home selfies, stories or experiences.


In my opinion, these simple changes could boost the psychological impact on employees, and I believe that in the long term wider systemic change is needed.


Reference

1)  https://blog.workana.com/en/entrepreneurship/teamwork-identifying-each-members-potential/

 2) Erica M. Jackson (2013), Stress Relief: The Role of Exercise in Stress management, ACSM’s Health & Fitness Journal.

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Sustainability in Business and Human Resource Management

  Sustainability is the topic of the century. It’s an important issue for people across the globe, and as climate change continues to affect...