In the current economic climate we need to improve our performance as individuals, organisations and as a country. Whoever we are, we need to take stock and assess how and what we could do to improve our performance. As individuals we have to be realistic and see what actions we need to develop in order to better ourselves. This might bring us in unchartered waters and test our comfort zones but life as we know it has changed so radically that we can no longer sit back.
Also as organisations we need to re-evaluate ourselves and assess what we can do better. Human Resources management when properly implemented and executed can add value to our organisation. Your employees are an essential part of your organisation and provide you with the workforce to execute your work and services.
Studies claim that Human Resource Management impacts on your company’s performance. The effects of high performance management practices are real, economically significant and general – and thus should be adopted by your organisation (Pfeffer, 1998). In the UK, several reports have argued that an economic and business case for good people management has now been proven: for example, CIPD (2004) notes that more than 30 studies carried out in the UK and US since the early 1990s leave no room to doubt that the relationship is positive and that it is cumulative. There is a growing consensus that high performance is linked with high quality in practice in such areas as recruitment, skill development and training, remuneration, job design and organisational culture (Marchington, 2005).
Taking this all in what should you do as an Irish SME organisation to use Human Resource Management for your benefit?
- Recruitment – hiring the right employees is essential for any company. Ensure that you are trained in conducting interviews and that you know what skill set and competencies you are looking for. Too often managers have no training or skills in selecting the right candidates and are just hoping they are doing the right thing. With the cost associated with a misplaced recruitment, you can’t afford to take recruitment that casual anymore.
- Skill Development and Training – you need to find out what training is necessary and need to be creative on how you train staff members in the necessary skills either through on the job training by co-workers or through short seminars by more experienced staff members. Internal coaching of your high potentials by experienced managers is a cost effective way of ensuring development in difficult times. Try to keep even a small training budget because it will show that your company believes it has a future. The most important message is that the organisation is willing to keep investing in people as employees are the biggest asset a company has. Furthermore, due to your investment in training and development you will be able to respond faster when the economy recovers.
- Remuneration – We live in very insecure times, there are many economic factors which can change very quickly leaving companies exposed who overstretched their salary budgets. For most companies there needs to be a salary freeze for the coming period. Looking at the competitive position of Irish salaries there is a need for a re-alignment in the coming years. We can’t afford higher salaries than our main export markets even with the reduction of our minimum wage our salaries are still higher than our competitors. However with the exposure, especially of young people, to high levels of debt, the re-alignment needs to be handled very carefully. For SME companies a salary freeze would be very much on the cards with if possible only discretionary bonus payments given when possible.
- Job Design – In the coming years jobs in the SME sector will be determined by Flexibility and Performance. The SME sector is the main driver of employment and with our high levels of unemployment it is imperative to get as many people working again as possible. As companies need to respond quickly to changing markets and changing circumstances we need to be flexible. Furthermore, we need to be focussed on performance not only on organisational performance but also on a personal level. We all need to increase our own personal performance in order to really increase the performance of our companies and economy. It is difficult but necessary to get employees to honestly look at their own performance and make improvements on this.
- Organisational Culture – Organisational Culture are the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization. This is where Ireland in the last number of years really fell foul. We need to assess what values and norms will assist your company to grow and develop themselves and get all your employees to understand this and keep adhering to this during good, difficult and bad times.
We have great potential in our country, organisations and ourselves which are still undiscovered. We need to reach out to this potential and get it working for us.