Challenges to HR Managers at British Gas
1.0 Q 1 . Business Environment is changing everyday and bringing new challenges to the HR Managers. What are the challenges forces by HR Managers at British Gas in the UK?
With the increase in business competition locally and globally, organizations must become customer-focused to succeed. Therefore HR professional has to work out to become a strategic partner and a change mentor within the organization. In order to succeed, Human Resource must be a business driven function with a thorough understanding of the organization’s big picture and be able to influence key decision and policies. In general the focus of today’s HR Manager is on strategic personnel retention and talents development. And they will also promote and fight for values, ethics, norms and beliefs within the organization.
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In a 2004 Deloitte Research Study, Athey (2004. p1) noted that, organizations in recent days have to deal with many external forces which influences the way they do business and how they develop and implement a business plan. Some of the external influences that impact an organization’s business planning are: government, natural disasters, terrorist threats, local and community, vendor, competitors, transportation etc. Therefore it is important for British Gas to have their business continuity plan. If British Gas able to do so then they can reduce their small and large unknown affect in their daily operations. That is why HR Manager of British Gas should evolve with the change in competitive market environment and realize that they must play a more strategic role in the success of an organization.
So, in this global business environment crisis what kinds of challenges are faced by the British Gas’s HR managers? In UK’s market the companies like: EDF energy, EON energy, N power, Scottish Hydrogen are consistently competing with British Gas. If these companies reduce their prices to attract more customers then it will be a challenging issue for British Gas. If this happens then, British Gas can reduce their prices at the same time manage their customers with quality services and make them happy with offering some bonus facilities. For doing this British Gas has to hire skilled employee and place them in a challenging position, Otherwise they might face the retention challenges.
Secondly, looking at some political challenges like: regulation of counter policies country tax; Since the whole world economy is unstable and to make some positive changes in UK’s economy govt. might impose some extra taxes to the big companies like British Gas. And if this is happen then British Gas management might think about to reduce their workers salary or layoff some workers. Thus how to plan the HR competency towards British Gas employee then? Then again some social factors like: attitude of workers towards the management is a problem. Example: workers are not giving their best effort, may be they are emotional or not satisfied with their job. Sometimes the workers bring their family problem in work. So how the HR manager will handle these issues? Then again, when British Gas hire employee from different culture sometimes the hired people don’t know the English very well but they have the competency of holding the offered position. So it’s a kind of challenge for HR manager that which trainings are given to the employee and how that employee will be fitted to the specific position. A part of that, every single day new technologies are coming up. So how the British Gas HR will fit the workers with their new technologies, which training they can provide to the workers then? Then the late age’s workers are not that skilled of using the technical staffs but they are well efficient towards their manual works. Thus how HR will fix this problem.
According to Cox, (1993) suggests that a HR Manager needs to change from an ethnocentric view (“our way is the best way”) to a culturally relative perspective (“let’s take the best of a variety of ways”). This shift in philosophy has to be ingrained in the managerial framework of the HR Manager in his/her planning, organizing, leading and controlling of organizational resources.
Now we should look forward to how globalization changes the HR policies and a part of that, what kind of challenges are facing by the HR Managers. So globalization can be defined based on ongoing political, economical, social and technological issues and with the help of these issues business environments have been greatly changing from last few decades. Thus organizations are required to respond in a strategic manner to the changes in order to survive and progress in this competitive world. And for surviving well into the market the HR manager should be integrated with the strategy and strategic need of the firm. Then HR policies should adjust, accepted and used by line managers and employee as part of their daily work. According to the above statement, the British Gas has already focused on macro based oriented, productive, and long term goals. Nowadays Human Resource function faces many challenges during the globalization process, including creating global mind-set within the HR group, creating practices that will be consistently applied in different locations while also maintaining the various local cultures and practices and communicating consistent corporate culture across the entire organization. In this circumstance British Gas Managers should meet these challenges and the whole organization should consider the HR personnel not as just the administrative service but as a strategic business.
As an expanding business of British Gas, HR managers will face some problems like: Health & Safety policies, EU regulations, huge demand for quality service to the customers. Therefore British Gas can developing health & safety policies by conducting risk assessments which indentify hazards, carrying out health & safety audits and inspections, implementing occupational health programs, managing stress, preventing accidents, communicating with employee about the health & safety practices etc. And for fulfilling the customer demand, those who are working for British Gas needed more technical training, people skills training. And the HRD of British Gas also can come up with some global training programs like: Cross cultural technology transfer, international protocol and presentation, Language training etc. If British Gas trains their employee with a global perspective then the trained employee shall be improving job satisfaction and retention of overseas staff and enabling a newly assigned employee to communicate with colleagues abroad. These kinds of training will not only help them to develop their skills and knowledge but also work as motivational and building block to organizational success.
Q2. Comment on how HR activities contribute to the success of British Gas. Use any 2 HRM Models to explain your answer.
Nowadays effective and efficient HRM is a big challenge to all HR professionals. And the sole purpose of HR is to help humans via mediator between employees and employer. Thus British Gas has to determine what benefits they are willing to offer to their employees and what portions the company is willing to pay for those benefits vs. what they may mandate their employees to share costs in those same benefits. Since HR professionals are playing a very vital role for British Gas therefore it’s important to know that how the HR strategies align with British Gas business strategies. Since British Gas is a huge company and lots of technical workers are working with them thus in this company there is a need to attract, retain and motivate employee because it is heavily dependent on the knowledge base and expertise of the employee and such there is a need for building a kind of high performance culture based on a strategic mission.
HR activities contribute to the success of British Gas in the following way:
Recruiting both skilled and unskilled employee which have to go through the training and development called traineeship, which provides a way the new employee/recruit learns about the gas industry, gain relevant skills and qualification to ensure that organization objective to meet consumer’s high demand for quality services and competitive price for products and services.
HR train their engineers throughout that career which ensure that its employees are kept up to date with new information and technology to enable them provide the best possible service.
HR has strategy of retaining its people by offering a mix of financial and nonfinancial benefits. This is in line with the organization strategy. As well as the good pay and pension scheme also providing each employee the opportunity of buying shares in Centrica.
From the analysis above, it is clear that we can say British Gas adopts two models, namely: Fit model & Holistic/dialogue model.
Fit Model: represent recognition of the importance of the people in the achievement of organizational strategy. Employees are seen as key in the implementation of organizational and HR strategy is designed to fit the requirements of the organizational strategy.
British Gas uses this method to align their HR strategy with organization strategy also it aligns the interest of the workers (pension scheme, investment opportunity, development and training, salary interest)with the interest of the organization’s (to maintain the competitive position the company has within the energy market, ensure returns on investment by making profit by share holders) end goal.
Harvard Framework for HRM:
Harvard model (Beer et al) of HRM developed by Michel Beer, Richard Walton, Quinn Mills, they argues that human resource policies are to be influenced by two significant consideration, first, situational factors, second, shareholders interest. And Harvard framework also explains the significance of the HR policies in the organization which recognize external environment and refers that if it’s properly used would lead to organizational effectiveness. It also can be used a good fit between organization environment and HR policies and it would lead to various element like employee commitment, cost effectiveness in product and services and congruence which are all covered by the Harvard model and the British Gas holds firmly these elements in dealing with its employee as one of its organizational; objectives. The following elements will give us the idea that how the HR in British Gas apply this to the organization.
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Competence: The HRM of British Gas has a policy that reflects to the organisational objective in selection of their workforce. HR department not only concern about recruiting skilled engineers but also give attention to go through its assessment centre before appointing an employee for his/her job, which can determine the core competence and life skill of that employee. Personal skills that are created an impact on the customers experience when someone is to work on the field.
Core competencies involves team working, leadership skills, listening skills, problem solving skills, interpersonal skills(such as properly dealing with customers), motivation skills, innovation skills and responding to changes. These are crucial skills that can affect the way an individual fits in and works within an organisation and also important because these skills can determine the company’s lose or gain more customers. And if British Gas loses then the customers will be shifted to their rivals.
Commitment: according to Bratton, John and Gold, Jeffrey (Beer et al: Human resource management Theory and Practice second edition: page 19). Refers, one way HR of British Gas can contributes to the company is that the employee are made to invest high interest to their work within the organization, which will give up two aspects: First, it will enhance self respect and value, at British gas the HRM has a policy that counter on employees, for those offered a job, With Human resource strategy British Gas provides the job benefits including a market competitive starting salary and van from outset. And with British Gas development offers technical comprehensive training for all its engineers throughout their career by their training academy. And the training ensures that employees are kept up to date with new information and technologies and provide best services possible.
Second, it will accelerate the employee loyalty and performance towards their work. When British Gas offers employee to invest in the company with having to their own shares in its Parent company (Centrica), also offering good pension scheme after retirement which increase the commitment of the job and good sense of responsibilities. And it’s the plus point of promotion to management level, which is a strategy of the HR in retaining its suitable people for promotion to higher role, because it needs managers to plan, organise and co-ordinate the teams of engineers.
Congruence: here it states that there must be agreement between and amongst various HRM policies and practises in operation. At British Gas HR need to keep in mind the fact that having a company policies of recruiting people from different background and sex as is seen in the case, the company in trying to meet with a recruitment process that is all embarrassing (being recognised by operation now, wining the prestigious award for inspiring the work force of the future, an award for women into science and engineering etc) must consider not just overall employee numbers but ensuring that it attracts and retain the skills that will be required within the business. British Gas managers articulate a programme of forecasting to assume how much the UK market for domestic gas service will grow and this helps the company to decide how many additional engineer they will require in the near future.
Cost effectiveness: At the same time HR policies must be evaluated in terms of wages, benefits, turnover etc. In this segment British Gas HR implements its strategy that confront to the organisational strategy in developing and recruiting their employees to become capable and competent employees. And future managers can ensure the organisation turnover remains increasingly high and implement in their salary policy that is highly competitive. Thus, HRM knows it is much more cost effective to retain trained staff than recruit and train up new people therefore this strategy which is in line with the organisations strategy of minimising cost and maximising quality staff retain ship through offering a mix of both financial and non financial benefits helps the organisation achieve its goals.
Lastly, looking at long term scenario, the organisation tries to differentiate between three levels: social, organizational and individual. In organisational level increased effectiveness and ensure the survival of the organisation. By providing top-class service at lower price to its customers and ensuring for a well define working environment, and also developing job training and a good pension scheme for it employee at the British Gas. At individual employee level the long term output comprises the reward receive by the workers for their efforts. In the societal level some of British Gas societal goals (employment and growth) are attained, offering exciting career paths for people of all backgrounds. This is how HRM at British Gas can achieve the success.
Q3. Describe Recruitment & Selection Strategies that have been taking by British Gas to enhance organization performance?
For British Gas workforce planning is essential because it analyze an organization’s future needs for people in terms of numbers, skills and locations. It allows the organization to plan how those needs can be met through recruitment, selection and give them proper training. It is vital for British Gas to plan ahead because the company wants to satisfy their diversity customers by recruiting socially inclusive workforce. It seems that their HR personnel are little too much busy with the recruitment and selection process to meet its future demands for staff. It allows a business time to train existing staff to take on new responsibilities and to recruit new staff to fill vacancies or to meet skill shortages. But due to the recession, many organizations including British Gas not willing to expect so much on recruitment. Thus is this circumstance what are the strategies they are following in their recruitment and selection process.
Recruitment strategies: British Gas recruitment involves attracting the right of applicant to apply for vacancies. They follow some ways of recruiting people. They first looks at its internal talent plan to fill a vacancy. This is a process that lists current employees looking for a move within the same level or gets a promotion to the next level. Since they need to make happy diversify customers thus they need to search people from the different region’s peoples. So they can help their customers by offering different language, cultural value, norms & ethics. They also emphasis on recruiting female engineers so that they can handle the female customers. This is just because sometime some female customers do feel comfortable to talk to the male one. And for some other external recruitment, British Gas advertises vacancies (like: apprenticeship) via their specialist Sky channels like parliamentary project TV, radio, newspapers, DVD for schools and British gas website.
Selection Strategies: involves choosing the most suitable people from those that apply for a vacancy, while keeping to employment laws and regulation. For British Gas screening candidates is a very important part of the selection process. This ensures that those selected for interview have the best fit with the job requirements.
The Challenges of Human Resource Management..:The Challenges of Human Resource Management. 25th November, 2009
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