Murrindindi Shire Council Experience
Human Resource management (HRM) has been seen as either having a traditional or contemporary approach. This paper will define both approaches.
The HR aproach undertaken by the Murrindindi Shire Council (MSC) which was my organisation up to three months ago will be reviewed in this context as well as identifiable costs or opportunities that exist.
Human Resource Management is the management of an organisations staff/personnel to meet the needs and achieve the purpose of the business in an efficient and effective manner.
HRM is defined by Kramer McGraw Shulder (1997,p.10) as having having three purposes being
? To ensure quality of worklife and
It has been observed in particular that organisations tend to be very good at the legal compliance as it is legislated as it has some serious consequences if not adhered to. What is generally overlooked is the financial implications of dot points one and two.
Effective human management can contribute to not only product output but also product quality.
HRM managers are operating at three distinct levels as explained by Kramer McGraw Shulder (1997,p.30) strategic, managerial and operational
-Operational levels (short term) can be disseminated down to lower level management or team leaders as they involve straight forward and traditional levels of HR
– Managerial Level (short term)
This level and following tend to be the levels of strategic importance to the organisation
– link functions to organisational strategies
Strategy as a process is defined by (Shaun Tyson 1997 p. 278) is a mechanism for achieving a desired objective. It can then be said that the Human Resource Strategy needs to be aligned with the organisations business strategies or corporate objectives. In effect one of the mechanisms to be used is that of Human Resources.
Miller defined strategic HRM as those decisions and actions which concern the management of employees at all levels in the business and which are related to the implementation of strategies directed towards creating and sustaining competitive advantage (Miller, 1987 p.352).
HRM will aid the organisation through the change (responsive) process via its long term and medium term HR strategies.
The Change theory for Organisation Development (Robbins 1994, p.813) defines Organisational Development as a planned long-range improvement process, based on humanistic democratic values. It uses change interventions grounded in behaviour science knowledge, which seeks to improve organisational effectiveness and employee well being. He is in effect advocating the same long-term objectives as Kramer McGraw & Shulder to ensure the organisations effectiveness, which will in turn effect the organisation’s bottom line.
Traditionally HRM departments have had limited opportunity to be involved in the strategic functions of the organisation. HRM was refereed to as
Personnel management and is noted by Kramer McGraw Shulder (1997,p.18) as dealing with activities such as recrement selection, compensation, and training.
It could be said that traditionally HRM has revolved around process rather than strategy. With the growing knowledge in the field and recognition that effective management of this vital resource can effect the bottom line human resource management is now an important part of the total Organisations management.
This has been explained by Kramer McGraw Shulder (1997,p.7) as .. Contemporary thinking on HRM tends to see it more broadly distributed organisational competence, including line managers, rather than just a group of specialists in an HR department.
In essence Kramer McGraw Shulder is arguing that HR is an organisational responsibility that should be filtered down through all levels of management. It is broader than simply compliant to process but should be strategic, evolving and responsive to change.
I agree with this statement, as many operation functions are process driven in that providing the process is well defined the basic HR functions below can be very simply implemented either by line managers or general operational staff.
The basic HR functions common to most organisations are as follows Kramer McGraw Shulder (1997,p.7, 8)
? Planning for Human Resource needs
? Staffing the organisations personnel needs
? Performance Management and review
? Improving Employees and their work environment
? Establishing and Maintaining effective working Relationships
Change in simplistic terms is defined (Robbins 1994,p.885) as making things different. Change management in the context of HR could therefor be defined as contributing to making things different through human resources.
Changing the way people behave is the core of change management with the purpose of maximises the organisation’s efficiency.
The goals of the organisation can be achieved through the link between the external environment, internal environment; organisations make up, culture, management and human resource policies.
Buchannan & Boddy (1992) explained three competencies in relation to change which are reinforced in Kramer McGraw Shulder (1997,p.25). It is suggested that there is a Technical, Controlling (traditional) and a process agenda.
The third competency is where the HR skills are required in communication, leadership, team building, negotiation and leadership.
It is important to align the organisations strengths and internal capabilities to that of the external market (Kramer McGraw Shulder (1997,p.53) ie strategies including that of Strategic Human Resource Management.
A number of models are discussed by Kramer McGraw Shulder (1997,p.56).
The model most aligned with change at BMSC through the amalgamation of Councils process undertaken in 1995 is that best described by Dunphy and Stace (1992; 1994). Their model suggests that the human resource strategies and policies used will determine to what degree an organisation will change to bring it back into align with the into strategic fit within its environment.
The four approaches are defined, Kramer McGraw Shulder (1997,p.62) as
Murrindindi Shire Council Experience
MSC had a strong CEO who entered a very unstable environment. The State Government had a wide range of performance indicators and measures that were to be adhered to and thus the CEO in this instance was very task orientated which not only served to meet the high level of requirements set but also required staff to be rewarded appropriately and to have a lead part in a new system and way of delivering Local Government.
Human Resource strategies were predominantly traditional with a major amount of effort put into position description development, performance appraisal etc.
As the Council was required to adhere to strict business principles to meet the requirements of legislation the organisation was carved into a number of Business Units and put to open tender.
As could be imagined the service delivery sectors are quite diverse ranging from statutory functions through to Road Maintenance and delivery of meals. The time lines were short and the human dynamics and emotions were extreme through this process.
Personnel welfare was not therefor high on the agenda and the driver for process improvement was competitive costs. The fear of losing your job was extreme as there was no fall back position, you specialised in one delivery of service and the market was not big enough when you were relying on 100% of your market being with council.
It is worth noting that Murrindindi Shire Council (Employment 120 people, Budget of $12 Million) did not have a HR department and won an award in 1996 for HRM from the Australian Institute of human Resource Management).
MSC employed a Director of Organisational Development which oversaw many of the HR initiatives developed by the senior executive of which policy development was a key role.
Detailed staff satisfaction surveys were undertaken which resulted in policy formulation to address concerns or initiatives raised. By addressing staff satisfaction productivity was observed to increase. Initiatives that resulted were improved working conditions, staff newsletters and meeting to address communication problems. saving were made in regards to efficiency improvement, reduced re-work and a general overall productivity or output increase.
In Murrindindis case staff as well as management developed the initiatives and policy that was ultimately refined by management and approved by the Chief Executive.
This is similar to the model as described Kramer McGraw Shulder (1997,p.32). The broad consultation in this case ensures ownership and commitment to the policy by staff.
As noted the HR function at MSC was coordinated by the senior executive therefore the functions as described by Kramer McGraw Shulder (1997,p.32) of selection, interviewing, training, evaluating, rewarding, counselling, promotion and firing were disseminated throughout the organisation. The chasing up of information and interpretation of information was therefore left up to the managers including organisation of appointments, preparation etc. In this case I believe money was wasted by paying up to $50 per hour for managers to undertake where one person could probably keep a tab on the total operations.
Training is noted by Kramer McGraw Shulder (1997,p.467) as having a positive impact for the individual, the organisation and the nation. He goes on to explain that it increases the earning and career development opportunities for individuals.
MSC saw training as an important part of the change management process and the setting up of its staff for success. The senior executive developed a strategy/policy to skill up staff throughout the organisation in Total Quality Management, Strategic Planning and business planning to prepare them for open market. Directors , line managers and select staff were trained appropriately and were able to use their skills to achieve massive operational savings and still deliver the same outcomes. These were achieved through process improvement and work re-design. Savings were measured at up to 20% in the first six months after the training policy was introduced.
Financial gains were also gained via linking salary increases to productivity improvement through enterprise bargaining agreements.
Training in general is coordinated centrally to address computer skill needs, occupational health and safety or more generally organisation deficiencies. This does produce savings in course costs and more importantly staffing efficiencies.
Payment and performance appraisal coordination is undertaken centrally with reporting through systems to senior management and the Chief Executive via structured reports and key indicators. Such things as absenteeism are monitored and reported. Staff surveys are undertaken annually and any change is measured against the systems/processes that were put in place top measure cause and effect. Savings to the organisation can be measured via staffing hours, budgets, casual labour required and in some cases outputs.
Innovation is one of the most powerful ways in which an organisation can either get a competitive advantage. HR innovation was undertaken by senior management and although no new innovations were introduced many systems such as QA, process improvement, safety mapping system etc were introduced through the training strategy and then implemented through the workforce with significant savings.
Kramer McGraw Shulder (1997,p.34) highlights the need for HR staff not to overburden line managers with paperwork and administration. It therefor must be lean and reduce costs themselves. MSC by not having a HR department is able to do this however there is a tendency to put off or not implement organisational policies in lieu of what is seen as more urgent works. This therefore has to be watched closely by directors in order not to drop the ball so to speak.
Although in Murrindindis case the HR functional role is dispersed throughout the organisation the direct reporting of organisational HR is undertaken by the Organisation Development Director. This enables the Chief Executive to be fully informed and for the Director to take on a strategic approach to HR. The Director is also responsible for customer surveys and internal surveys which allows him to have a clear sense of whether the organisation is achieving is corporate objectives and community obligations. Positive and negative comments are then fed back to the executive team.
It is also worth noting that as Local Government the driver for meeting the communities needs is not entirely the bottom line but is also the services we deliver and the way or quality in which we deliver them. HR initiatives and policies are therefore directed to words outputs and efficiencies within to reach those outputs ie delivering value to the community.
Value of service=Quality+Cost
Kramer McGraw Shulder (1997,p.35) notes that more and more human resource management is pushed down to line managers, it is suggested at least one fifth of time is spent of HR issues. In my position as Director Infrastructure Services at Murrindindi and now Bendigo at least 40% of my time would be spent on HR management. My role includes motivation, reinforcing, training and development of staff. The remainder of time is spent on organisational strategy development and implementation.
Employees also play a role in HR through self-managing teams and decision making.
The five roles as described being Policy, provider, auditor, innovator and adaptor were seen by Kramer McGraw Shulder as being needed to show the value of a HR department. I have explained that in MSCs case these functions are disseminated throughout the organisation with the exception of the duties of the Organisational Development Director.
Human Resource management is a necessary function within an organisation both traditionally but more importantly strategically in being a key tool to the shaping of Human Resources into being able to deliver long term strategic goals.
This is summed up quite nicely by Kramer McGraw Shulder (1997,p.252) as
Human Resource planning by definition is a derived function. That is, before an organisation can plan for its needs, it must know something about its organisational goals and strategy. Thus, Human resource planning takes on strategic importance because it requires that that human resource strategy and objectives be linked to organisation strategy objectives.
In other words they are saying that Human resource management and organisational management are intertwined and a systemic approach must be taken.
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