Linking HRM Practices to SME Performance

     It is more than evident the greatest challenge of small- medium-sized enterprises (SMEs) is human resource management (HRM) and how to effectively manage their workforce. Essential to achieving organizational growth is the ability to link HRM strategies with business strategies. HR practices tend to be fairly ad hoc. But remember the old adage – no one plans to fail; only fail to plan.  You understand my point. 

      No longer is it effective to throw caution to the wind and hope for the best. Strategy is key to managing an effective workforce.  Some researchers that conduct empirical studies do so for an understanding of how HRM practices connect, promote and ensure organizational performance. Attempts to explore the link are numerous and still growing. 

     Variables that mediate the link between HRM practices and firm performance are absenteeism (employees’ behavior), commitment or satisfaction (employees’ attitudes) and quality or productivity (employee’s performance). Researchers conduct empirical studies to discover the link between SME HR practices and the above variables: employee behavior, employee attitude or employee performance. While HR practices do not influence firm performance directly, a causal chain of effects in the application of effective HR practices is a win-win concept for your organization. The challenge is identifying measures of financial performance that sufficiently reflect survival chances in terms of SME health and long-term success.

    Key performance indicators (KPIs), i.e. (training, and development) influence the performance measures. Performance measures are the end results of KPIs.

Example: Your Company is a distributor of medical instruments to private doctor offices.  Problem:  [Clients are receiving orders after the expected return dates. Other client complaints include: incorrect volumes of instrument, incorrect instruments, etc. Currently, the company is utilizing order forms that are over 10 years old and have not been updated. Sales persons are in some instances submitting handwritten orders, and forms that (are not only out-of-date) but not properly or completely filled out before submitting to the product department.

Result: Dissatisfied clients, loss of clients, loss of revenue.

Solution: Company reorganizes the sales force and product department, implementing up-to-date order forms and invoices. Further the company implements a new training and development programs for new and current employees training all employees on NEW procedures for full and completely filling out order forms making order forms mandatory.                                                                                                                                                

The bottom line is when SME link HRM practices with firm performance, it is reflected in the attitude of the employees, customers and finances. The above represents a plan utilizing KPIs (training and development) and performance measures (improved client relationships, employee morale, and increased revenue).

Until Next Time!

All-4-HR & Business Solutions

April D. Halliburton, President

Capella University Organization and Management PhD Candidate

Boosting the SME Grade with KPIs

Boosting the SME Grade with KPIs

In SMEs, there is a constant tug of war regarding effectiveness, accountability, human capital growth financial growth. As with large organizations, it is important for SMEs to gauge, benchmark, gauge again and benchmark again. How many SME human resource professionals or SME owners utilize business scorecards? How about HR scorecards? The key to achieving organizational growth is utilizing the numbers to make informed decisions. I have talked about the numbers, HR metrics and now KPIs and scorecards as they remove the guess work from assessing your organization’s current and future position.

As and SME owner, do you wonder what do these tools mean for my SME? Are these effective tools for my SME? You are never too small to grow! Strategic growth entails utilizing tools to make calculated decisions regarding all aspects of business. This also involves utilizing HR tools to make informed calculated business decisions and HR decisions. Successfully growing your SME will require aligning your business scorecard (BSC) with your human resource business scorecard (HRBSC).

Utilizing these tools will set the stage for building an impressive financial wherewithal in your SME. Key performance indicators (KPIs) are numbers that when applied to a HR scorecard, it reveals the current stance of your employee performances. They are key to assessing the current performance management system, if one is in place, as well as gauging needed changes, if necessary. KPIs are also key to assessing if your current employee performances are effectively facilitating your SMEs’ growth.  

Key Performance Indicators (KPIs) are quantifiable measurements, agreed to beforehand, that reflect the critical success factors of an organization. They will differ depending on the organization.

*  SMEs can identify a KPI as the percentage of its accounts receivables derived from return customers.

*  Student graduation rates can act as a KPI for a school.

 *  A KPIs of an organization’s overall customer service 

         department can involve the percentage of customer calls 

                                    answered within the first minute.

                                       * A KPI of a social service organization may be the 

                                             number of clients serviced during a year.

Developing (KPIs) is an essential way to assess your SMEs current HR position, as well as gauge how and when changes should be made to the company’s HR system. Setting KPIs must be relevant, readily available, holistic, clear, simple and understandable, and will work. More importantly, KPIs must be aligned with an organization’s goals.

The numbers derived from a KPIs are one of many strategic tools that will ensure as a SME, you will assess your company’s current position and gauge your HR department’s course of action.

Look for All-4-HR & Business Solutions online seminar: Boosting the SME Grade With KPIs on Wednesday, October 30, 2013.

Until Next Time!

April D. Halliburton, President

All-4-HR & Business Solutions

Organization and Management PhD Candidate

References

Garengo, P., & Biazzo, S. (2012). Unveiling strategy in SMEs through balanced scorecard implementation: A circular methodology. Total Quality Management & Business Excellence, 23(1), 79-102. doi:10.1080/14783363.2011.637800

Manville, G. (2007). Implementing a balanced scorecard framework in a not for profit SME. International Journal of Productivity and Performance Management, 56(2), 162-169. doi:http://dx.doi.org/10.1108/17410400710722653

SMEs: WHAT IS THE NUMBERS SAYING?

All-4-HR & Business Solutions

SMEs: WHAT IS THE NUMBERS SAYING?

How important are HRM Analytics to growing your Company? HRM Analytics is not statistics! Analytics is a mental framework, a logical progression first and set of statistical tools second. The concept of ALL-4-HR & Business Solutions is Small Business is BIG BUSINESS! Growing your company means gauging your workforce for organizational growth.  What is the numbers saying? Are you calculating your workforce?

Five ways of measuring anything in business are cost, time, quantity, quality and human reaction. Assessing an organization’s success entails assessing the company’s current position and where the workforce anticipates it next steps. Measuring time-to-hire is an HRM analytic which assesses the costs associated with filling a position. Turnover assess the costs associated with filling a position, including training and development and benefits. Some analytic processes are on-boarding, performance management, competencies, leadership development, selection 360 assessments and work-life balance initiatives.

HRM analytics is the process of scanning, planning, producing and predicting; utilizing the decision-making process as an art and not a guessing game. The numbers provides any business with a top competitive advantage; something that is critical to growing your workforce.  The strategic objective to guiding HR analytics is to irrefutably show your business influence within the organization. Conducting HR analytics examines and benchmarks the cause and effects of HR processes. Steps to conducting HR analytics:

 Determine critical outcomes

 Create cross-functional data team

 Assess outcome measures

 Analyze data

 Build program and execute

 Measure and adjust

It is necessity to gauge the cost effectiveness or lack thereof customer service functionality as customers are not receiving orders in a timely manner. Performance management systems assess whether a job description is effectively guiding the tasks and duties of the legal secretary meeting the needs of the practice group that she/he works.

Properly implementing HR analytics is a key initiative to making HR a calculated function of the organization. 

Keep an eye out for All-4-HR & Business Solutions HRM analytics webinar coming very soon. For questions regarding SME HR Analytics, contact April D. Halliburton at all4hrbiz@gmail.com

April D. Halliburton, MBA, BA, President

All-4-HR & Business Solutions

Capella University Organization and Management PhD Candidate

Are Small-Medium-Sized (SMEs) Reaping the Benefits of Work-Life Balance (WLB)?

“A 'good job' can be both practically attractive while still not good enough to devote your entire life to.” 
― Alain de Botton

Work-life balance (WLB) enables employees to better manage their (un)paid work and non-work activities. Organizations promote WLB culture with flexible work hours WLB along with family friendly policies. WLB is a trend that HR practitioners suggest SME businesses does not integrate a comprehensive approach.  Challenges in firm size and implementation strategies confront SME managers, thus causing apprehension in implementing WLB policies.

Large organizations adopt WLB policies and procedures in greater numbers. The reason larger organizations are more apt to adopt WLB policies is they have greater resources and manpower. Inadequate resources, staffing and retaining concerns and sickness and absenteeism costs make it difficult for SMEs to balance daily management of workforces with complex economically driving business pressures. Despite the difficulties, literature findings suggest greater workplace flexibility powers accountabilities to employers with increased awareness in terms of their social, moral and ethical obligations towards the employees. Promoting a holistic work environment increases employee morale and organization’s well-being as a whole.

Implementing effective WLB policies in SMES will progress employment relations, customer services, business performance and organizational culture. Developing and communicating WLB policies ensures a healthy WLB culture. While there is apprehension in SMEs caused by uncertainty in firm size and applied flexibility, it is important to note SMEs should not adopt a one-size fits all model.  It is essential to adopt WLB policies to address the individual firm’s organizational cultural needs. Many SMEs adopt WLB policies and utilize discretion on a case-by-case basis.

Affirming a healthy WLB culture is encouraged by communicating WLB policies in employee handbooks, employment contracts, notice boards, intranet, staff induction and training sessions along with informal discussions with management. Once WLB policies are implemented, it is important to monitor and update these policies, as with all HR policies. Adopting WLB policies in SMEs is a sure way to improve employee and organizational.

Has your SME adopted WLB policies in your organization? Why or why not?

For more information on implementing WLB practices in your SME, contact all4hrbiz@gmail.com.

April D. Halliburton, MBA

All-4-HR & Business Solutions

Capella University Organization and Management PhD Candidate

www.all4hrbiz.net

all4hrbiz@gmail.com

Small Business Management - Managing Benefits

Benefits are one of the challenges facing human resource (HR) Professionals.  Benefit regulations is and ever-changing industry concerns. HR professionals should stay well-informed of government and state regulation changes and be sure to keep employees up-to-date through newsletter communication, etc. HR Professionals should review packages offered by other companies in the industry. 

There are no laws mandating health insurance, life insurance, vacation, or holidays except for the Service Contacts Act of 1965, which governs federal contractors. There are, federal laws regulating health benefits, retirement income, pension plans, and other benefits when they are provided.

As an employer, it is effective to adopt the approach of keeping healthcare cost under control in a number of ways. The approach includes increasing the share of premiums that employees pay, increasing deductibles and co-pays, and implement various  managed care strategies. 

Periodically review your current plan and establish whether the plan your company has in place is the best choice for your employees. Indemnity and managed care plans are:

·         Indemnity Plan

·         HMOs (Health Maintenance Organizations)

·         PPO (Preferred Provider Organization)

·         POS (Point-of-Service Plans)

·         Consumer Directed Plans

SBA has a great new small business healthcare assessment tool located at     http://www.sba.gov/healthcare.

Click here Healthcare Checklist Request to receive any of the below small business healthcare insurance Checklist to assess your current health care position. 

• Healthcare Benefits Chechklist
• Health Insurance Carrier Checklist
• Health Insurance Cost Containment Checklist
• COBRA Checklists
• Worker's Compensation Insurance Checklist

Email or call with any HR or Business related questions. All4hrbiz@gmail.com   

Stay tuned for HR Lunch Café coming very soon. Name a Topic You would like us to research! All4hrbiz.gmail.com

April D. Halliburton, President

All-4-HR & Business Solutions, LLC

Evidence-Based Management (EBMgt) in SMEs

     

     Evidence-based management (EBMgt) establishes the difference between research and practice. It is imperative human resource partners create, change and implement organizational changes based on evidence; not speculation and experience. Many HR practitioners have consistently held the importance of reviewing past and present HR metrics of policies, procedures and practices in the workplace to determine the effectiveness of a particular organizational change. What are your thoughts and views on evidence-based management?

    Evidence-based management is the systematic use of the best available evidence to improve management practices. Under the Evidence-based theory, management science must arm the manager’s imagination and supply them with the vision needed to make rational decisions in respect to the business enterprise.  Management should not serve as a substitute for decision and judgment but should supply methods for making possible decisions that are more effective and with more informed judgment.

      As a small- medium- sized enterprise (SME) owner, a great start is the utilization of human resource metrics in your organization. The fundamental decision every enterprise must make, no matter what stage of maturation, is the allocation of its capital and resources. When analyzing choices of strategy, expansion, acquisition and new products, the decision should be evidenced by detailed financial metrics that show the high returns. More often than not, only those ventures that demonstrate the highest return are selected. The calculation is return on investment (ROI). As a SME owner-founder-manager, how are you setting, benchmarking and achieving your company’s growth?  In 5 years, where will your Company be?

All-4-HR & Business Solutions is committed to helping your organization reach its long-terms goals through effective (HRM) strategies, practices and procedures.

April D. Halliburton

All-4-HR & Business Solutions, LLC

Developing Human Capital Management in SMEs

Small- medium-sized Enterprises (SMEs) have important strategic factors that must be present to gain and retain a competitive edge. The most important factor is specialized people with the skills to develop innovative solutions that provide competitive advantages and increase the organization’s survival rate.  SMEs account for 4.3% of the total land and generate 29.4% of employment (Rivas, Cano & Mendoza, 2010).  These figures represent not only high productivity and the backbone of national activity, being the main providers of large companies.

What is the commonality among these SMEs? The commonality is human capital. More specifically, organizational growth of SMEs, in large part is attributed to investing in human capital through utilization of HR analytics/metrics, training and development, performance management, etc. SMEs realize factors, i.e., training and development, recruitment and retention systems, performance management systems, progressive discipline systems are essential to achieving organizational growth.

Padilla and Juarez (2006) suggest human capital consists of primarily knowledge and skills acquired through formal and informal education in the education system and in the home. Human capital also is inclusive of training, experience and mobility of the labor force. Developing human capital is inclusive of all organization levels. Training and development all employees are essential to achieving organization growth. Managers must be knowledgeable and experienced in HR practices and procedures while managing employees and building human capital. Some tools that are essential to effectively growing human capital are:

*      Effective human resource management (HRM) policies and procedures

*      HR analytic/metrics

*      Effective job descriptions

*      Progressive discipline systems

*      Performance management systems

Are you utilizing these tools to increase your organization’s human capital? 

April D. Halliburton, President

All-4-HR & Business Solutions

website - http://www.all4hrbiz.net
email - aprilh@all4hrbiz.net