AQSA

Strategic Human Resource Management

Assignment: 2
Dr. Shahnawaz Adil
The hidden leverage of human capital

The KLOs obtained from this article:

1) How can companies utilize their human capital in difficult times? If they have to lay-off
employees, how can they make sure to preserve the key talent?
2) Powering key relationships across customers, employees, and shareholders.
3) Refocusing staff on what's important at the company by prioritizing strategic roles and
clarifying individual goals.
4) Maintaining return on compensation by forging stronger links between the pay people get
and the results they achieve more implementable in manufacturing and processing setting,
where productivity and quality of the product matters
5) Best strategies focus on all three groups of stakeholders, customers, employees,
shareholders and follow through with this approach in tough times as well as luckiest
ones.
6) Contacts across, and proactive engagement of, customers, employees, and shareholders in
helping to solve specific business problems go a long way toward smoothing the
implementation of effective solutions of the problems.

Argument:

Recession is the basic problem. How companies can make sure they don’t lay-off their
employees, keep the head count intact and the business running by following the strategies
explained above. The author states that even if the companies can't avoid lay-offs, they can at
least reimagine their business processes, hire the right people for the right job talent
management, who's worth keeping and who isn't. 2022 is a time of recession itself, many startups
over the world had laid off more than half of their workforce, because their business model
wasn't strong enough to sustain the harshness of these challenging times. They hired the best
people from the top MNCs, the most experienced ones, provided them with an ideal
environment, gave them trainings, employees were happy, but the companies still failed
somehow, why? Because sometimes the workforce can do only so much to save the organization
if the business models got no potential to survive.

Producing sustainable competitive advantage

through the effective management of people:

The KLOs obtained from this article:

1) Success of a company depends upon the management of its employees.

2) Base of any company are its employees. They have the power to take the company out of
large crisis, when handled the right way sympathetically, provided with rewards etc.
3) If the workforce is neglected as a contributing factor in the competitive success the
results might be terrible.
4) Thirteen principles of managing workforce (Employment Security, Selectivity in
Recruiting, High Wages, Incentive Pay, Employee Ownership, Information Sharing,
Participation and Empowerment, Self-Managed Teams, Training and Skill Development,
Cross-utilization and Cross-Training, Symbolic Egalitarianism, Wage Compression,
Promotion from Within, Taking the Long View, Measurement of the Practices and
Overarching Philosophy).
5) More wages, incentive pay, employee ownership are some different forms of rewards.
The paradigms of competitive success have changed, instead of cutting the expense after
the workforce it is important to reward them in a way suitable to the company.
6) Whatever the field of industry is, whatever the product is and whatever the working
principles of the companies are, valuing and rewarding the workforce is utmost
important, no matter which way the rewarding is done.
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Argument:

 This article is filled with substantial examples of why the employees play a vital role in
the sustainability of any organization, although porters 5 fundamental competitive forces
shouldn’t be neglected.
 Application of these 13 principles for managing workforce can’t conceal the
shortcomings of any other factor (financials, profitability, leadership, business model etc)
contributing to the success of any organization.
  It is not impossible but there’s a probability of failure to implement all those practices
together in a company.
 Prefer himself argued in the paper that the mentality of the employee is very important as
an employee who is concerned for the reward only but lacks commitment or team spirit
can never result in good growth.
 These practices do not guarantee success depending on the industry and nature of the
work.
 Some of the 13 practices may be more important than others.

Seven common misconceptions about human

resource practices: Research findings versus
practitioner beliefs
Seven common misconceptions:

1) Faithfulness is a better predictor of performance than intelligence because intelligent

people somehow come as rude, antisocial or nerds, so they don’t tend to perform in teams
rather individually.
2) Organizations that screen job applicants for values have higher performance than those
that screen for intelligence.
3) Integrity tests don’t work well in practice because so many people lie on them.
4) Integrity tests have adverse impact on racial minorities.
5) Empowering employee participation is more effective for improving organizational
performance than setting performance goals.
6) Most mistakes in performance appraisal can be eliminated by providing training to
managers on how to avoid them.
7) If workers are asked how important pay is to them, they are likely to overestimate its true
importance.

Corrections for these misconceptions:

 Select new employees on both intelligence and conscientiousness as intelligence alone

isn’t a good enough predictor of how well someone’s going to perform.
 Define the values that are important and assess them through carefully developed, valid
procedures.
 Use integrity tests with ability tests for high predictability.
 Employees like to be a part of goal making rather than being handed over a goal to
follow,
  Allow participation and develop compelling goals; enlist participation and support it
through rewards.
 Performance management strategies that incorporate both objective targets and supra-
individual goals (e.g., project milestones) would appear to provide a better chance of
producing coordinated, effective participation.
 Feedback & training are important on performance appraisals, also attaching substantial
penalties to managers for failure to give genuine ratings on PAs would improve this bias.
 Upper managers should serve as role models in quality of performance reviews.
 Bonuses is important, but employees should focus on the softer aspects of motivation as
well.
 Keen knowledge acquisition is not enough, it must be paired with effective
implementation.

Southwest airlines:

Southwest has long been regarded as a benchmark in its industry for operational excellence.
Southwest Airlines is a fine example of a company that is committed to its core competencies –
efficient operations to drive its low cost structure, outstanding delivery of customer service and
innovative HR management practices. We hope this paper provided a good insight into
Southwest operations, as part of its overall strategy, to achieve success and gain competitive
advantage.
It can be said that the “Positively Outrageous Service” that is unique to southwest “is not the
result of a department, or a program, or a mandate from management. It is not secondary to the
product; it is the product.” This approach creates the conditions where Employees are more
likely to treat customers in ways that distinguish the company from others. There are numerous
accounts of passengers who have received exceptional treatment from Southwest employees.
The question that needs to be answered is how Southwest’s customer service is different and
why? Is it common for customers of other airlines to rave about their special service? The answer
is that it is not. While southwest does not have a monopoly on people who are kind and who are
willing to go above and beyond to satisfy a customer, such behavior is nurtured at Southwest to a
much greater extent.
It can then be concluded that the customer service that is inherent to Southwest is a part of its
culture. This culture is supported through employee encouragement to do the extra to satisfy the
customer. This approach inspires people who would ordinarily only on occasion go out of their
way to help someone, to become consistent performers that offer exceptional service all the time.
Southwest employees are what differentiate its customer service from the other airlines.