Professional Documents
Culture Documents
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Point 2
1.1 Assess a range of different factors which impact on an
organisation’s business and its HR function
PESTEL
The PESTLE analysis is a method for the analysis of main variables (Political, Economic,
Sociological, Technical, Legal and Environmental) impacting an institution from outside. It
provides experts with insight into the external influences surrounding their company. The
research is modular enough that companies can use it in several different situations.
(PESTLE Analysis | Factsheets | CIPD, 2019)
Political Factor
Economic Conditions
The economic climate has a huge effect on the way companies work. It describes interest
rates, inflation, exchange rate, job standards, general demand, etc. Globalisation has
resulted in greater competition and many UK-based companies have had to slash prices and
outsource a substantial portion of their jobs to overseas countries as labour costs are lower.
HR will help management to be aware of what is happening in the current environment and
to be able to deal with changes in the economy.
Social
Social factors are an important aspect of the modern population. Aging workforce, evolving
family dynamics, foreign jobs are just some of the problems that HR wants to resolve while
deciding how to recruit potential applicants and how to maintain current employees.
Technological advances
Technology advances have a continuing external influence on companies. New systems and
equipment can boost the efficiency of a company, but they can also reduce the size of the
workforce and therefore save resources and maximise the income of a company. HR aid
with this process by looking at where the redundancies would be produced.
Legal
Organisations must conform with all rules, legislation and laws. HR divisions are under
intense pressure to change business practices and processes to remain legally compliant.
These Laws extend to all aspects of HR, including recruiting, preparation, compensation,
termination, etc. fines may be levied if businesses are found to be in violation of the
regulations.
Environmental
Factors that could impact on the environment are sustainable and ethical. Issues such as
recycling of recycled goods, climate change and the handling of hazardous waste.
Businesses must consider changes in the environment and their own practices that could
have an impact on the environment.
Point 3
2.1 Analyse the forces shaping the HR agenda
In a fundamentally changed economic climate, the conventional business model cannot
guarantee the survival of companies. To solve issues such as globalisation, climate change,
technology, competitiveness, socioeconomic differences and demographics, companies
need to look past the bottom line of profit and loss. They need to be mindful of their social
and environmental commitments to ensure that their use of scarce resources is sustainable.
Generations X and Y, Traditionalists and Baby Boomers are cohorts with distinct attitudes,
beliefs and aspirations. They need to be recognised by the company, and HR can put
policies in place to involve them.
Flexibility in terms and conditions of job offers is central to HR practice. Short-term contracts
are more common, eliminating redundancies during transition. Subcontracting, self-
employed professionals, contractor staff and zero-hour contracts are on the rise. This has
changed the way that HR historically hired workers on lifelong, full-time jobs, ‘job for life.'
The success of organisational change (cultural and structural) depends on how employees
are handled. Change can create friction; HR plays a vital role in handling this by creating a
community that supports change.
Increased competition affects how HR role organises itself and approaches goals. Big and
private sector businesses that are privately owned will focus on raising sales and will have a
large HR function and follow styles close to the Ulrich Model (1998) (Shingal, 2018). This
includes a shared support centre for HR, which handles all of the day-to-day 'transaction'
facilities around the company. There will be a team of HR experts in areas such as reward
and learning and development. Shift managers are responsible for ensuring that the visions
and principles of the companies are pursued. HR corporate associates collaborate closely
with executives and administrators by supporting and shaping business planning and
execution. There are several advantages to this work, such as lowering costs and improving
the level of customer service. (Buahene, 2021)
The HR role of small and medium-sized companies (SMEs) usually consists of a general HR
operating alongside organisational management. HR contractors can be taken to big and
small companies to work with tasks and depart after completion. They bring a wealth of
experience and skills, working with a variety of organisations. (Business Issues and the
Contexts of Human Resources, n.d.)
Point 4
2.3 Explain the key strategy formulation and implementation and
HR’s involvement
According to (Taylor and Woodhams, 2016) there are three alternative approaches for
strategy formulation
The Action Plan shall be drawn up by senior management who control the external and
internal conditions.
2. Emergent strategies are evolutionary and emerge over time when and when the
enterprise must adapt to changing circumstances. This are not intended to be top-
down, but rather trial and error.
(Riley, 2017) Strategy formulation is where an organisation determines where it is now and
where it wants to be in the future and the process by which it can get there. Effective
strategy requires an organisation to set clear and realistic objectives, allowing for some
flexibility.
The corporate strategy concerns the general intent and reach of the company to fulfill the
needs of the stakeholders. It will serve as a model for decision-making for the whole
company.
The Competitive Strategy set shows that the company can succeed effectively by
achieving market dominance over its rivals.
The Operational Strategy is the way various business sectors work to deliver corporate and
business unit objectives. It would carry out the preparation and use of personnel,
procedures, and services.
The McKinsey 7S model built in the 1980s is a strategic analytical tool that reflects on seven
main organisational elements: policy, structure, processes, common principles, style,
personnel and skills (appendix 1). Using this model, companies will see if their goals are
matched and completed.
Figure 3 McKinsey 7S Model
The model used must be better tailored to the needs of business. IKEA uses the McKinsey
7S model for its strategic management strategy (Dudovskiy, 2017). This model illustrates
how the different components of a company can be aligned to maximise overall
effectiveness. These elements are classified as hard or soft. The model emphasises the
close linkages between the elements, so that change in one induces change in the other.
The focus of the strategy formulation is the recognition of the missions and objectives of the
organisations, but consideration is often paid to the tools needed to make it a success.
Vision and purpose are the framework on which the plan can be developed, the core
principles and the core goals.
The principles of the organisation and the business strategy should be matched,
considering the values of members, partners and the ethos of the organisation.
Internal and external environmental scans, using SWOT, to determine internal strengths
and vulnerabilities and external opportunities and risks.
Analyse existing strategies and business models using a distance review to define the
gap between the present plan and the future climate. The assessment of the present
corporate culture and the determination of the potential culture needed for the effective
execution of the plan must be carried out.
Define a competitive strategy by formulating the right organisational and practical methods
to meet targets and obtain competitive advantage.
The implementation of strategies by working on a strategic plan and then delivering the
intended outcomes requires activities such as resource allocation, operational structure,
processes and change management techniques.
Strategy Evaluation can be monitored at three levels: suitability, acceptability and viability.
Implementation needs to be controlled and, where applicable, updated and/or new
techniques created. (Dudovskiy, 2017)
The role of HR at the highest level in strategy is to:
All through this process, it is crucial for HR to articulate the changes to be introduced around
the company and to help workers resolve opposition by building a community that supports
change.
Point 5
2.4 Examine HR’s contribution to business ethics and
organisational accountability
Ethics is defined as the moral philosophy, usually the discipline that governs and concerns
an individual on what is morally right or morally wrong. Ethics cover dilemmas and suggests
the wisest decision with integrity and following the morals. (ethics | Definition, History,
Examples, Types, Philosophy, & Facts, 2021)
Accountability refers to the ownership and initiative, at the workplace. This would refer that
an employee should step up in doing the best for the interests of the organization (Roubler.,
2019.
Traditionally, companies were supposed to be concerned solely about the bottom line.
Nowadays, they take larger issues into account and have corporate social responsibility
(CSR). Organisations need to follow ethical practices to fulfil legal and societal standards,
e.g. the Human Rights Act (1998). In the organisational context, ethics is a collection of
moral standards and beliefs that characterise the operations and decision-making of the
company at all levels and relationships with all stakeholders. Kew and Stredwick (2010,
p.361) quote “values underpin ethics and the values of an organisation underpin its business
ethics”.
HR creates, executes, and controls all legal standards and procedures. They foster a society
that is conducive to the moral values of industry. (Taylor and Woodhams, 2016) HR may
incorporate an ethical culture through a variety of approaches such as.
Legislation impacts the contribution of HRs to ethics by enforcing legal responsibilities, roles,
and ethical coercion where they are required to behave ethically, but not legally. They have
a legal and ethical responsibility to process the sensitive data of workers, e.g., by modifying
the General Data Protection Regulation (2016/679 EU) in May 2018, further limit the
presumption of agreement in a standard contract.
Issues involving gender equity raise questions about ethics and transparency for HR and the
association. The Gender Equality Act 2010 prohibits inequality between men and women in
terms of wages and conditions of work. Companies can comply entirely with the regulations,
but may also be kept liable, e.g., if there is a gender wage difference.
Merger or acquisition can create obstacles for HR and the company. HR must ensure that it
fulfils its regulatory responsibilities, in which it also has a responsibility to ensure its workers
and larger partners are handled in compliance with the ethical principles of the company.
CIPD has the following responsibilities that the HR needs to carry out in the scope of
business practices:
iv. Stewardship
The HR should show appropriate and equal practices in the treatment of
employees
Effective action should be taken against workers who do not obey ethics
at the workplace.
This should encourage appropriate growth and human practices to allow
workers to enhance their customer loyalty skills.
Point 6
3.1 Evaluate Business performance and the role of HR in business
planning and the change management agenda.
The need for the effective business performance is important to have an efficient and
effective process that aligns the employees with the strategic objectives (Carpi, Douglas, &
Gascon, 2019). Below are three examples of this can be measured within an organisation.
Benchmarking is a simple way for a company to analyse its activities. Gaps and
shortcomings may be identified by comparing of better-performing organizations.
Benchmarking should be extended to methods, operations, and processes.
The gain for companies is that they work on areas that can be given extra consideration and
can produce fast results and changes if they are well run. Limitations of this method are, it
helps to recognise areas that require change, but it does not have a solution and needs
creativity. It produces data that does not clarify how it has been done. It does, however, have
innovative ways of working and fresh thinking. Comparisons with business peers are far
more important than comparisons with one's past results. (eFinanceManagement, 2018).
Kaplan and Norton (1992) identified four areas for measurement (Torrington et al., 2009):
1. Financial
2. Customer
3. Internal Business Process
4. Learning and Growth
Important elements need to be established in each of these fields and a way to assess their
current level and any improvements achieved. If a measure shows a divergence from the
target actions, this may be corrected.
The BSC cannot produce fast results and needs time and meticulous preparation to execute
them. Success needs a solid, systematic approach.
Learning and Growth includes the intangible drives like the human capital and the
operations capital. Usually measurement areas are:
Job satisfaction
Learning and Development
Innovation
For example, teams have KPIs on meeting mandatory training sessions logged into man
hours, measuring the satisfaction and continuous learning hours.
Key performance metrics are figures that small business owners should monitor to measure
the performance of their organization. If a company may be compared to a computer, KPIs
would help the business owner decide if all the components are running smoothly. Although
some KPIs are commonly available, essential KPIs for monitoring often differ throughout the
industry. In most sales organisations, for example, it is helpful to track the number of leads
produced and which marketing plan has led the most. The magazine marketing department
will also monitor industry-specific KPIs—the renewal rates for both subscribers and
advertisers. (How to Evaluate a Company's Performance)
Change Management
They will be active in the initial phase of the initiative and will recognise and prepare
the leaders and teams needed for organisational reform.
They will need to evaluate and provide assurance on the effect on the company and
stakeholders.
Communication among all those affected by the transition is the secret to the
implementation of this process.
Measure the effect of the transition initiative on human resources, assess and report
on, for example, absentee levels, staff reviews, turnover, preparation, etc.
Reassess job activities and procedures
Look at where expenses can be minimised – mergers and acquisitions
Profile, ability and terms and conditions of the workers
Individual responses to the potential changes will be different, each employee will be in a
particular role in terms of transition, either positive or negative. The role of HR in resolving
this is to build a corporate culture that supports change, ensures appropriate contact,
ensures employee engagement in any change; HR interventions; and handles perceptions
and conflicts. (Taylor and Woodhams, 2016)
Kurt Lewin created one of the key models for interpreting corporate transformation back in
the 1940s which still holds true today. His paradigm is known as Unfreeze – Shift –
Refreeze, which applies to the three-stage phase of change he outlines. Lewin, a physicist
as well as a social scientist, explained organisational change using the analogy of modifying
the shape of a block of ice. (Appendix a).
Point 7
3.2 Assess and utilise sources of business and contextual data for
planning purposes
Data obtained may be primary or secondary, qualitative, or quantitative. Primary data are
new data that are gathered primarily for the field of research in which they have been
collected. Secondary data is information that has been historically researched and used to
correlate with existing figures. As noted in Taylor and Woodham (2016, p.94) 'Bryman and
Bell (2015) point out that qualitative evidence is typically focused on terms and definitions,
rather than on the compilation and examination of statistics. In comparison, quantitative data
typically includes numbers and can be evaluated using statistical analysis tools.
Interviews: qualitative data
Normally performed in one on one or group interviews. Questions are usually open-ended
and conversational. The concerns should apply to the study being investigated. Interviews
may be helpful where analysis is needed to examine problems in depth, especially when
performance evaluation is being investigated.
When the progress metrics have been accepted, evidence must be analysed to determine
how successful the overall performance assessment structure is and opportunities for
change. HR should check with senior management on steps to take until the findings have
been analysed. After consultations between both senior and middle managers and
employees about how changes should be made, an action plan needs to be implemented.
It is essential HR and management follow through with the expected approach. Investment
in success management pays returns by producing the following:
Organisations need to track turnover due to expense, efficiency and maintaining professional
staff. Issue with turnover can be identified by using research, benchmarking, and a needs
assessment. To produce more beneficial outcomes these metrics should be collated both
internally and externally. After collating and analysing the results, it should be decided to
what degree there is a problem with attrition and what interventions can address this.
Metrics would indicate how many workers are leaving the company in the timeframe
researched, usually one year. Results should show patterns and offer information why
workers are quitting. HR and management can determine what goals / plan to execute
based upon what the issue is. It is important there is continuous monitoring and assessment
to assess the advantages relative to the cost. Successful practices to reduce attrition are
training, rewards, and team bonding exercises.
Benchmarking should be used as a market method for finding any gaps or changes needed
to stay competitive. Insights obtained from benchmarking against rivals are e.g., pay and
incentives. Dashboards are a simple and manageable way for HR to track measurements,
also known as primary performance measures (KPIs).
Absenteeism: quantitative measurement
High absentee levels are a symptom of job discontent and can lead to employees resigning.
Qualitative data obtained for absence is useful for an organisation as sickness, especially
long-term absence is very expensive. Variations between various places of the sector may
be representative of issues.
Data may indicate patterns and trends in absence, which need to be detected. Popular
methods used to classify absence are as per Stable Working Lives (2012):
Where a concern has been proven to occur, absence and well-being interventions may be
designed with the use of the following:
Key of business data is that it is always related and must be matched to the general plan of
the company. Quantitative evidence is quantitative and can give detailed and reliable
interpretation. Qualitative is more arbitrary and unless rigour is applied in its set, it may offer
misleading outcomes. (Vulpen, 2017)
Appendix A
Lewin’s Change Management Model (Lewin's Change Management Model: Understanding the
Three Stages of Change, n.d.)
Unfreeze
This step requires the HR to prepare the organisation to accept the change necessary to
meet with business objectives of the company. For this, the HR needs to challenge the
attitudes, beliefs, behaviours and attitudes of the employees.
Change
This is the important step which requires the HR to resolve the uncertainty by formulating
effective strategies for the making the changes required at the workplace to be implemented.
This requires the HR to manage the communication and time which are the two key
constraints for making the change.
Refreeze
This step requires the HR to manage the outcome of the change such that the same are
being embraced by the employees. This requires the HR to train and employees and make
aware about the benefits of the change after the same is implemented within the business
environment.
Reference
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