Maslow and Motivation Hierarchy Method (Sample Solution)

Question: Discuss about the Maslow and Motivation Hierarchy Method. Answer: Introduction Strategic Human Resource Management (Gobind 2014)is about sourcing, inducting, training and development, rewarding, and retention of employees for the benefit of the organization. It is a process of management of the complete lifecycle of the employee in the organization for the mutual benefit of both. The focus of this approach is human resources in the organization in context of the goals and strategies of the firm and the challenging nature of work due to fast paced changes in the environment. It also involves the alignment of other HR strategies (Bagga and Srivastava 2014) such as reward and recognition or performance management and determines how they can be integrated into the overall business strategy. It begins with the process of clearly defining the goals and objectives of the organization and then aligning the HR strategy with it. It ensures that the entire workforce of the organization integrates into strategic planning and that HR policies (Bagga and Srivastava 2014) are consistent across the work levels and departments and the same are universally accepted by all the employees and used by line managers in conduct of their daily duties. When HR becomes a partner in the business strategy rather than responsible only for legal compliance, payroll and compensation management it leads to organization success. Strategic Human Resource Management enhances organizational performance in both good and bad economic times. The evolution (Beer 2015) of Human Resource Management has been very interesting. In pre industrial revolution era the economy society was largely agrarian with very limited production and human capabilities, and the number of specialized crafts was limited within the village or community and exchange was through barter. The learning of the specialized crafts was passed down generations within the family and the communication channels (Deadrick and Stone 2014) also were under developed. Then came the period of Industrial Revolution (Beer 2015) (1750 to 1850) which transformed the economy from agrarian to industrial. This was the beginning of machine age and no of factories were set up in which large no of workers were employed. A personnel department was set up in the factory to look into the wages of the workers, maintenance of their records, and much very less importance was given to the welfare of the workers. The workers working in the industries or factories were usually exploited and ill- treated, made to work long hours, and provided fewer wages. The labor was always seen as a cost meant to be reduced while ensuring that the production was increased. There was a big communication gap between the management and the workers, and this led to a growing unrest in the labor community. The workers started to protest and form groups and notable fallout of these events was the growth of labor Unions (1790).This led to conflicts between the labor and management leading to strikes, lockouts, slowdown of work leading to loss of productivity etc. To deal with these issues the management and the personnel department had to be political and diplomatic and any agreement with the union was seen as a win only if it was in favor of the management. There was hardly any concept of employee satisfaction or motivation. This was therefore a loselose situation for both the employees as well as the organizations. Post the Industrial Revolution (Beer 2015) in 1850 the term Human Resource Management saw a major change and numerous experiments and studies were conducted during this period which changed the entire perspective of HRM. Frederick W. Taylor propounded the theory of scientific human resource management (Deadrick and Stone 2014) (1857 to 1911) and the focus of the same was primarily on training of the workers, maintaining parity of wages and improving the productivity of the workers. In a similar manner Hawthorne experiments conducted by Elton Mayo and Fritz Roethlisberger (1927 to 1940) spoke about better work satisfaction leading to better efficiency of the workers. Later, Douglas McGregor (1960) developed the Theory X and Y (Deadrick and Stone 2014) of motivation in which Theory X stressed on inherent dislike of work and to professed a system of reward and penalties coupled with strict supervision whereas Theory Y on the other hand spoke of internal motivation to work. At the same t ime Maslow spoke of Hierarchy of needs (Taormina and Gao 2013) (1954) and tried to explain the different needs of different types of people and considered employees as a valuable resource in variance to the earlier negative and passive approach to human capital management. As a result, human resource function gained importance and was considered a line function closely associated with core business operations, and most of the activities (J. Phillips and P. Phillips 2014) namely sourcing and recruitment, employee rewards and benefits, training and development, salaries linked to performance and performance appraisals played an important role in improving the performance of the organizations. Strategic Human Resource Management has evolved post-1990 and is assuming a major role in running of the organizations today. The focus of this approach is in the alignment of individuals goals and priorities with that of the corporate (Bagga and Srivastava 2014) and the importance of differentiation with respect to competition which results in a long term impact on the success (Arora 2016) of the corporate. Strategic Human Resource Management is, therefore, all about doing a SWOT (strengths, weaknesses, opportunities and threats) of the corporate. It analyses the opportunities and threats (Gobind 2014) that exist in the external environment of the corporate and looks internally to get a good understanding of the organizations strengths and weaknesses which forms the basis of formulating the strategic direction followed by implementation of the same and also evaluation of the progress so that the objective is met. It, therefore, believes in prioritization of resources (Wang and Shyu 2008) and all major decisions are taken in alignment with the objectives. It also optimizes resources and time taken correcting ad-hoc or wrong decisions and tries to harmonize individual behaviors into a total team effort. It creates a collaborative and cooperative team effort to innovate and tackle business opportunities and threats and brings in a degree of formality to the management of human capital and business (Jones and Martain 2013) and enables the organizations to deal travails of business in a far more disciplines and systematic fashion. During economic prosperity or when the business is expanding (Paauwe, Guest and Wright 2013) the SHRM approach gives an ability and flexibility to adapt quickly to the change of direction and align resources to participate in the growth. During the time of growth (Gerhards and Heinz 2017) when the business is expanding the organization must attract the right talent who are either from the same industry or a different industry with the relevant skill sets, therefore can be quickly trained and deployed to become productive. It could involve making changes in the compensation and benefits and offering a work environment that is better than the competition to ensure that business has resources to grow or grab market share from the competition. Companies must invest in training and development (Kramar 2013) of all employees during times of prosperity so that the employees stay relevant to the business now and in future and they also perceive a value addition to their skills. Assessing whe re the knowledge gap (Nolan 2010) is should be a key focus in a learning environment. The performance evaluation system (Arora 2016) helps assess the performance and potential of employees and also gaps in development which can then be used to fine tune learning and development programs and prepare them for the future (Sung and Choi 2013). This approach makes sure that the employees continue to receive training and development inputs (Kramar 2013) when the times are good which will result in more nimble and relevant workforce enabling them to change according to the changing economic climate. One has seen enumerable examples of this happening in Telecom sector across nations when an existing operator expands into a new market and tries to make a dent in the business of the incumbent operators in that market ex when Airtel entered the Africa market they were competing with existing players such as Globacom etc. While they deployed lot of trained resources from the parent to set up th e business but at the same time they either acquired local operators along with their workforce or recruited local talent to help understand the local markets. Therefore for the incumbents engaging and retaining these employees who are now trained and productive becomes a focus area whereas the new operator is looking for trained manpower. Similarly during the sudden changes in the business strategy or a downturn (Cook, MacKenzie and Forde 2016) SHRM again plays an important role in managing the change which could mean redeployment of excess manpower, out-placement of resources (Thomas 2009) or managing the attrition in a manner that it does not hurt the business in the short term. Making sure employees have been properly selected (Thomas 2009) for a reduction in force will reduce the risk of monetary loss to the business and manage the transition of employees into different responsibilities or other temporary roles. By making sure people are trained, the cost of unemployment (Sung and Choi 2013) will be less if they are ready to be employed elsewhere. Keeping HR involved in the conversations and abreast of changes in business strategy (Bagga and Srivastava 2014) will lower the risk of mismanaging downsizing. In fact, the role of SHRM is a far more critical in an economic downturn especially when the company is downsiz ing as retaining the good talent (Pardey 2007) becomes a bigger challenge. The HR team should be strong enough to have the experience and knowledge to manage the most expensive asset (J. Phillips and P. Phillips 2014) businesses have, its employees. Having the HR team involved (Gerhards and Heinz 2017) managing change during business downturns is critical to making sure employees are ready to face changes the future brings. The recent consolidation of telecom sector in India where in the last few years the number of players in each of the Telecom circles have come down from more than ten players to four or five operators. This has resulted in mergers and acquisitions, downsizing of operations, and loss of jobs in a highly competitive industry. It may be appropriate to conclude that the Human Resource Management as a function has progressively evolved through the years. While the personnel management was involved with rules and regulations of the employee welfare todays strategic human resource management considers employees as assets and extremely critical to bring profits to business. On the contrary organizations are far more open to recognize this change and willing to engage (J. Phillips and P. Phillips 2014) with employees to be part of these profits and also work actively in improving their skill sets as per the requirements of the current role or future needs of the organization. Those days are gone when training (Clifford and Thorpe 2007) used to be considered a cost as now it is considered as an investment which business cannot ignore. It has been rightly said that Organizations would rather spend on training and have trained employees who leave rather than having untrained employees who stay. So whether the econo mic conditions are good or adverse Strategic Human Resource Management is very critical for enhancing the performance or smooth functioning (Bagga and Srivastava 2014) of the business. The future growth in the area of human resource will be in harnessing the power of rapidly evolving technology (Deadrick and Stone 2014) for every aspect of workforce management, instead of limiting it to just maintaining payrolls, etc. In future the digitization of organizations (Zhang 2014) and the amount of data available to process and draw meaning from will bring a whole new meaning to this strategic approach to management of the human capital. The business world is changing very fast and the organizations are increasingly recognizing the fact that the employees are an asset rather than a cost (Hennessy and McCartney 2008); therefore, more and more companies are increasingly focusing on integration of the entire workforce with the business strategy along with the process of setting up a vision, mission, goals, and objectives of the Organization. The Strategic Human Resource Management (Bagga and Srivastava 2014) is a process of transformation of the entire human capital of the organization by aligning it with the stated business strategy of the firm with the intent of improving the performance. The Best Fit and Best Practice are the two types of approaches (Gobind 2014) to Strategic Human Resource Management. The Best Fit approach believes in the fact that the HR strategy is far more effective and efficient if it is synchronized to business environment (Hennessy and McCartney 2008) prevailing in the organization. Therefore it tries to ensure that the HR policies and practices are vertically integrated (Gilbert, De Winne and Sels 2015) into the business strategy. It also makes sure that the HR strategy is in line with the different lifecycle stage of the organization and ensures that the processes and culture (Patil and Kant 2012) of the organization are integrated with the same. This approach is more appealing to the HR practitioners as it increases their involvement in decision making (Phillips 2011) as the rejection of one size fits all approach (Hong 2009) gives them far more options to experiment with and bring in their individual flavor to the decision making process. There are three models (Boxall and Purcell 2016) namely the Lifecycle Model, Best fit and Competitive strategy model and Strategic Configuration model. The lifecycle model consists of four stages (Hennessy and McCartney 2008) very similar to product lifecycle namely Start-up, Growth, Maturity, and Decline and therefore the HR strategies for each of the stages are quite different. In the Start-up phase, the human resource management is more informal, and everyones involvement is expected to do everything to get the business started though some functional expertise is also required. In the growth phase the new employees are inducted, and the organization structure gets streamlined and becomes more formal and specialized. In this phase the focus is to hire functional experts, and people with can-do attitude as the organization is into a building phase and requires a lot of hard work, energy, and innovation. During this time policies and work practices are set up paving the way for culture building (Patil and Kant 2012) in the organization. In the maturity phase, the focus is on retention of employees, building their capabilities so tha t these resources give them the edge against the competition. The decline is the most difficult phase, as the company goes through a downturn, the profitability has to be maintained by cutting costs and the HR team is called upon to rationalize or downsize. In thebest fit and competitive model, the competitive strategy of the organization is defined say with the help of Porters five competitive strategies and also the best fit HR practices and policies and the expected employee behavior that goes well with them. In the case of say low- cost competitive scenario the job descriptions are clear and narrowly defined that encourage specialization and expertise. The appraisals are short term and result oriented, and there is a minimal focus on training and development with a close focus on market parity of salary levels for the same kind of jobs. The behavior expected from employees is repetitive and predictable with average concern for quality but a greater emphasis on volume, and usually, the activities performed are independent of the individual and more dependent on the machines. This kind of scenario prevails in job work and low-quality manufacturing set ups. The Strategic Configuration model (Hennessy and McCartney 2008) proposed by Delery and Doty (1996) talks of market type system or internal type system and tries to match it with the type of organizations proposed by Miles and Snow (1978) based on the rate at which they changed their products or markets namely Prospectors, Defenders, Analyzers, and Reactors. Similarly, Mintzberg (1979) classified organizations as Simple Structure, Machine Bureaucracy, Professional Bureaucracy, Divisionalized form, and Adhocracy. In the market type system, there is hardly any use of internal ladders or formal training or appraisals and tends to use external hiring. There is no job security and the roles are also not clearly defined whereas in the Internal type system there is greater emphasis on internal talent progression, formal training, and clear role definitions. In this approach, if there is alignment between the HR practices and organization strategy it would be highly beneficial. 'Best practice' approach, on the other hand, believes that certain 'best' human resource practices (Edmondson 2010) which are time tested and successfully proven would result in improvement in the organizational performance, improvement in employee attitude, lower attrition and absenteeism and better productivity. This model is also referred as high commitment model. The California Management Review listed Best Practices for competitive advantage (Edmondson 2010) namely selective hiring, pay for performance, employment security; self managed teams, extensive training, and sharing information. Another element of best-practice is horizontal integration of various policies and consistency between them. When we think of best practice, it implies approaches which are well researched and benchmarked. It assumes a one size fit all approach (Hong 2009) which is a tried and tested recipe for success and also an approach which is the better than the rest. The underlying objective of both the Best Fit and Best Practice approach is to achieve high performance; therefore, there is a lot of commonality between the two. Both focus on the organization strategy and what kinds of performance levels are expected from the employees (Ingham 2010) to achieve the same. Therefore both consider employees as assets and resources to achieve the objectives. Both have staffing and hiring strategies (Edmondson 2010) which include selective hiring, extensive training, and employment security, a structure that encourages employee participation and pay policies and rewards that are higher than other industry competitors. Above all both of them view HR as a link in supporting the organization strategy. On the other hand there are quite a few differences between the two approaches as well, and at a generic level, best fit is a contingency approach as it is based on the organizations objectives whereas best practice is a universal approach as it takes the standard best practices and applies the same universally. The Best Fit method is based on the fact that HR policies and practices should depend on the environment of the organization and its overall business strategy. The factors determining HR strategy (Edmondson 2010) is dependent on the organization size, geographic location, technology adopted, business strategy, industry type, labor market, management and economic conditions. Best practice is referred as a universal approach (Kuvaas and Dysvik 2010) as it documents the benefits of human resource management across all contexts. For the Best Fit approach, the organizational strategy is primary which is followed by the formulation of systems and practices achieve the goals however , in case of Best Practice a pre determined set of practices which are time tested and proven are set before the strategy is even decided. In the Best Practice model, the best practice is identified first, top level commitment is taken, then sold to internal stakeholders, implemented, measures for performance is fixed and then performance is rewarded. However, in 'Best Fit' model the external fit linked to the business strategy is identified and then linked to the HR strategy. To be more specific say for example in case of rewards and recognition (Ingham 2010) both approaches have a difference of opinion regarding the influence of pay in people of the employees. Best Fit system believes in pay as a motivator of human beings and works on the premise that employees perform better if they know that the effort will be rewarded. Therefore the Best Fit method believes in carrot and stick approach to motivation and financial aspect is a major consideration in rewards and recognition of emp loyees. The Best Practice approach on the other hand considers pay as a hygiene factor (Edmondson 2010) that prevents dissatisfaction and provides symbolic recognition that employees are valued. It believes that individual rewards destroys relationships and promotes a feeling of distrust amongst employees. Therefore this system promotes team incentives and recognition as a tool to motivate employees than pay for performance. In conclusion, the moot question is which one of the two approaches are better? It is clear from the arguments above that the every organizations need to define a unique strategy dependent on its operating market environment, resources, objectives, and the requirements of its stakeholders. It is therefore imperative for the organizations to manage its resources in a planned and coherent manner in line with its business strategy. On the other hand if we implement some of the best practices and focus our energy on benchmarking ourselves with our competitors within the industry then we are not really doing the best for our own organization neither we are using our energies properly. Benchmarking (Ingham 2010) does help determine what your accomplishments really are, and gives you a chance to exceed the best in the business. A great example from the Industry is of Motorola which was an early pioneer in benchmarking and one of its successes was to slash the time taken to close the books o f accounts from fourteen days to two day. On the other hand another great example of a potential downfall of benchmarking is when the leader tries to benchmark within the same industry illustrated by Southwest Airlines which tried to benchmark its refueling processes against other airlines and discovered it was already one of the leaders in the industry. They then benchmarked themselves with turnaround processes used during pit stops in Formula One racing and managed to reduce its refueling time to 12 minutes. So the question to ask is whether we should fit our organization to the Best Practice or should we consider a best fit approach that considers the unique organizations characteristics which can at the same time leverage the relevant aspects of Best Practice. The point to consider is whether we should compare our organization to others in the industry or we keep ahead of our competitors and strive for continuous improvement. The best thing for every organization to do would be design the HR programs as per its unique situation and this would involve evaluating the current programs or practices, fixing the desired future state, and considering the Best Practice that leads to the desired future state. Following the Best practices blindly may not be best option for the organization as each organization is unique however, drawing from the experience of the others in the industry and modifying it to suit ones situation may be the best alternative in the fast paced and changing times. Therefore follow a Best Fit approach while adapting the Best practices from the Industry as per the needs of the Organization. References Arora, Rajat. 2016. 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