With: Senyo M. Adjabeng
The Workplace Coach.
HOW TO TAKE ACCURATE HUMAN RESOURCE DECISIONS
Human Resources Management and Development has come a long way in the area of business management. HR has become one of the most important factors in the business management today and represents about 60% of the productive factors that lead to the success of an organization. It is no doubt that several successful CEOs will quickly confirm that their people or employees are their most valuable asset. It is also interesting that even though there are limited HR positions in industry, most business management students are opting for the HR option.
The Role of Human Resources Managers in business decision making
In Ghana, Human Resources practitioners continue to play critical roles in the success of the organizations they work for. Human Resources Management covers the engagement, retention and development of workers in a job at profit. The processes undertaken to engage an employee in a job determines the success of that specific job in the entire business structure. The success of performing that job effectively affects operational efficiency and hence profits. The failure of the worker in that job also affects other workers and jobs that rely on the worker within other job clusters. Hence, Human Resources aim at engaging the right people with the right attitude and frame of mind to contribute to service delivery in specific capacities and teams.
Workers engaged must be retained in their jobs. This ensures continuity in the quality and efficiency of service delivery. Because employees are an investment, it is always a relative loss to an organization when they leave. From recruitment, induction, probation and other training and development activities undertaken by the organization for an employee, costs are incurred on the employee. Hence, when the employee leaves before such investments are recouped it becomes a loss to the organization.
Human Resources also ensure that employees grow with the organization. That, as the company grows and develops the employee also grows in knowledge, experience and excellence to support the organizational growth. Companies that develop their employees almost always realise substantial growth in their business operations. This is because through training and development, employees learn to perform their job tasks in better and more efficient ways with better and newer technology which enhance productivity.
Decision making is perhaps one of the most frequent tasks HR professionals face each day. They have to decide for themselves as well as advise their superiors on specific HR issues on a constant basis. For example, each year, an annual HR plan should show how much employees should be or can be paid, what welfare issues need to undergo strategic changes in accordance with changing industry or business trends as well as developmental issues such as continuous education, career advancement training etc.
Another very important area of decision making for organizational leaders is the specific decision to terminate employees’ contracts of employment. This in recent times has become one of the most important decisions making processes in employee relations since an error in such termination carries liabilities to include financial, a bruised ego and tainted brand.
The role of information in the HR decision making process
In taking decisions on HR issues accurately, it is important to have relevant and credible information based on which effective decisions can be taken. The information normally comes from Investigations, Audits and Return on HR investment analysis.
- HR Investigations:
Investigations involve the questioning of all relevant persons who may be connected directly or indirectly with issues under investigation. It is essentially the gathering of relevant information which may be pieced together like a puzzle to get a clear picture of the sequence of occurrences leading to uncovering specific issues under investigations. HR investigations cover issues involving employees in the workplace. However, the collection the information is not as challenging as making meaning of the tons of information an investigator will have to deal with in a matter. To a large extent, most of the information will be unnecessary and not helpful to uncovering the facts of the matter. But ultimately, the right information is able to lead to conclusive decision making that is close to very accurate.
In the absence of information, management decisions are ineffective because the lack of information does not ensure objectivity. Where HR decisions are based on anything other than the facts of a matter such as feelings, familiarity, nepotism, bias and the like, such decisions are bound to be ineffective. After HR information has been collected and appropriately analyzed, it may provide an opportunity to take effective HR decisions.
- HR Audits
In contemporary practice, HR acts as the pillar and partner to any business. One very simple way of keeping track of this all important role of HR would be through the constant revision of expected HR outcomes. Outcomes such as skill sets available for producing goods and services, level of employee motivation and productivity, team working, employee development etc.
Secondly, HR must surely be accountable to somebody and the business leader may not be fluent enough in HR process supervision and management to be able to play such supervisory role. So, periodic HR audits ensure that the function is accountable to the business through professional and planned assessments. The business leader (CEO or MD) after receiving audit information can confidently take HR management decisions for the benefit and growth of the business.
HR audit processes churn out a lot of verifiable information for business process improvement. With such abundant information, decisions regarding employees and the role they should play in growing the business are specific. Decisions on employees can be made with all the confidence it requires knowing that it is based on assessment information that is reliable and accurate. In the end, organizations should seek to ensure that there are periodic and enough audit assessments undertaken on all HR activities, processes and systems so as to provide enough information all the time for accurate HR decision making. The solution lies in Human Resources Audit systems such as the Employment Governance Audit (egA) system.
- Return on HR Investment (Productivity)
Essentially, productivity is a measure of how well an organization or employees convert input resources (labour, material, machines) into goods and services. Work inputs may also include service, energy, passion, skills etc. And work outputs in goods and services may be characterized by products, money or cash, brand quality, prestige, job satisfaction etc.
Productivity rides on two major factors. Efficiency; how fast you can achieve an output and Effectiveness; the quality outcome you can achieve. These factors are the driving forces that drive productive outcomes. So for efficiency, a workplace policy could be to “get it right the first time and every time” This means that for every work, there cannot be room for mistakes. For effectiveness, a policy on quality (minimized defects) can be upheld for all employees.
Information on a return on HR investment generally is a measure of the margin of recovery achieved from investments related to employee spending. It is important to talk about return on HR investment because that is what it is. HR expenditure especially in employee engagement, training and development, Performance management and similar HR activities must be treated as an investment. Where employees fail to produce, the organization suffers. And such information is necessary to decide whether to continue investing money in areas of HR operations that are not yielding the necessary results. Here again, HR decision making becomes critical to business operations.
Steps in HR Decision Making
Quality decision making does not come automatically. As mentioned above, it takes training and experience to be able to take effective and accurate HR decisions that make a difference in an organization. However, a few tips will go a long way to set HR professionals, General Managers and CEOs on the right path.
The first step is to gather relevant information. Because of the importance of relevant information in decision making processes and HR decision making for that matter a major part of this article has been used to discuss it. In gathering information, get more education. Participate in HR training programmes, seminars and workshops. Meet people, network and have a feel of what is happening in the industry.
Also collect relevant information by consulting industry experts and consultants. Though advice does not come cheap, it is better to seek appropriate advice on an issue that may cost you more in the future when wrong decisions have been taken and mistakes have been made. Sometimes, HR mistakes end up being too costly for a business to survive.
Then ensure that you conduct HR Audits periodically. An HR services and administration Audit twice a year as well as an HR Compliance and Best Practice Audit once a year should provide enough information for accurate HR decision making in an organization.
The second step is to master HR policies and Laws. It is becoming very obvious that most HR practitioners run away from the employment relations aspect of HR. Instead of mastering the practical applications and implementation of the Labour Laws and regulations, most practitioners would rather leave it to Lawyers who in many cases do not have adequate employment relations experience to be able to effectively and practically deal with issues at stake. Employment relations, the labour laws and regulations, HR policies and other workplace regulations are part and parcel of HR management practice. Running away from them and failing to master them is like running away from your own shadow. Fortunately or unfortunately, a greater portion of HR problems come from this area of HR practice. So wherever you turn in HR practice, you will meet the Employment Relations aspect.
Finally, when you decide on HR issues, do so by consensus. The concept of employee involvement has been a theoretical subject matter that business owners and HR practitioners continue to pay lip service to. However, where employee involvement policies and practices have been inculcated into organizational decision making, it has had tremendous and productive results. Writers on motivation highly recommended employee involvement in decision making on employee related or HR issues as a major boost to motivation in the workplace.
Consensus decision making is not about informing employees what has been decided but ensuring that their views are sought and factored into final decisions, especially on HR issues that directly affect them. Decisions taken by consensus are neither taken by a simple majority vote, nor by imposition. Rather, consensus decision making involves the dynamic persuasion of dissenting persons with the aim of winning them over objectively.
When HR decisions are made by consensus, they are effective because all stakeholders end up owning the decision and committing to it. HR decisions cannot be ineffective. And they should not be inaccurate. Because truth is, it can cost an organization its very existence.