HR's Contribution to Organizational Performance: Business Planning

This report, prepared for a Leadership Development Forum, explores HR's contribution to organizational performance. It evaluates business performance using traditional and modern indicators, illustrating HR's role in business planning and change management with specific examples. The report also explains how different sources of business and contextual data, including HR metrics and industry information, can be assessed and utilized for planning purposes. It further reflects on the application of newly acquired knowledge and skills to working practices and includes relevant references to support its findings, highlighting the importance of HR as a strategic partner in achieving organizational success.

 Assignment – 5CHR - Part B
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Part B (A.C. 3.1 & 3.2) (2,000 words)
As an experienced HR Manager, you have been asked to produce a discussion paper to be
delivered in support of a seminar at a Leadership Development Forum. The seminar is entitled
‘HR’s contribution to organisational performance.’ In order to facilitate discussion in the right
direction, your paper should cover the following 2 key areas:
1. BUSINESS PERFORMANCE (3.1)
 How business performance can be evaluated using ‘traditional’ and ‘modern’ indicators.
 Examples of how HR contributes to business planning and change management with some
examples to illustrate HR’s key role.
2. BUSINESS DATA (3.2)
 An explanation of how different sources of business and contextual data can be assessed
and used for planning purposes e.g. internal information within the organisation including
HR metrics and industry information such as trends in HR, competitive information and
government information.
 Please also comment on how you will transfer the new knowledge and skills gained during
this assignment into working practices. You may also use this reflection for your CPD.
 You should also include 3-5 references from up to date and relevant sources in order to
support your findings. This assignment must be submitted through Online Services.
NAME: Mohammed Alhaddi COHORT:
COMPANY: Sharjah National Oil Corporation WORD COUNT
1. BUSINESS PERFORMANCE
Evaluating Business Performance using traditional and modern indicators (approx. 500 words)
Business performance is the indicators of business success over the time,
within the context of organizational strategy and business goals, and can be
measured by long and short term through different indicators.
Measuring the business performance can provide indicators over the
organization success and measure achieving the action plans and to have clear
vision on future plans as well as strategies, it also a tool to achieve the
following:
To monitor and control.
To drive improvement.
To maximize the effectiveness of the improvement effort.
To achieve alignment with organizational goals and objectives.
To reward and to discipline
To ensure profitability
According to Northhous (2016), the balancing act entails creating a balance
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 Assignment – 5CHR - Part B
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between the company needs and the employee needs. Not all problems faced
in an organization can be solved by only following employee needs. There must
be a consideration for the company needs. This balance helps to create a
conducive and productive environment between the employees and the
company. For example, when the company wants to implement new changes
in its management system it should involve the employees. This will not only
aid in successful implementation of the program but also give insights on some
aspects which can be changed for increased productivity. the employees would
not be straining to work with the new changes. Therefore, there would be
increased productivity and a good organisational image due to their concern
for the employees in addition to the low levels of employee turnover and
increased job satisfaction. The HR must maintain an appropriate balance
between company's needs and those of the employees so as to ensure its
success in the long-run (Kaplan, 2009).
There are number of traditional and modern indicators have been used to
evaluate business performance, below are some examples of them:
Traditional:
Financial statement, profits.
Customer Satisfaction.
How many new customers organization get.
Retention
None Traditional/ Modern
Organization image on media.
Customer Loyalty.
Good governance
Employee’s engagement.
Employees development
Both traditional and modern indicators are essential in analyzing the progress
of a business. The HR department aids in this analysis by formulating various
policies which may be used in improving these indicators. Progress of an
organization can be sustained through proper planning.
Organizations need to consider factors that are affecting their long-term
performance, minimizing the blockers and maximizing the enablers. Sustaining
high levels of performance in the long term can be achieved through
empowering people at all levels of the organization to innovate, embrace
change and identify with the organization’s purpose (Sustainable organization
Performance, Aug 2016, CIPD). Therefore, the process of implementing
managerial change programs would be quick and effective. This can be
achieved by creating an enabling environment for the employees to grow their
skills, encouraging high levels of employee participation and provision of
quality services. According to Robins (2017), high levels of employee
empowerment and participation will motivate them to be productive. This in
turn will lead to provision of high quality services which would ensure the
company is very competitive with a considerable proportion of the market
share. A high market share will result in increased revenues of the organization
thus its success.
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 Assignment – 5CHR - Part B
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HR’s Contribution to business planning and change management (approx. 500 words)
HR has a significant role to business planning and change management. HR
professional should deeply understands the business and become a business
savvy to make sure that his contribution will create maximum added value. He
does this by making the human capital more productive and competent in
achieving organisational goals and long-term objectives.
The organizational change becomes very common practice during the last
period specially when economy has shifted and becomes uncertain. Many
things cause organizational change. These include:
challenges of growth, especially global markets
economic downturns and tougher trading conditions
changes in strategy
technological changes
competitive pressures, including mergers and acquisitions
customer pressure, particularly shifting markets
learning new organization behaviors and skills
Government legislation/initiatives (Change Management, Oct 2017, CIPD).
A major challenge that as per the recent researches, 18% of the business
managers don’t understand the contribution of HR in the business strategy (HR
Magazine, How HR Can master Strategy, Joy Persaud, July 2013). They tend to
ignore the Human Resource Department which holds an essential element in
the achievement of organisational plans. Highly skilled and competent
personnel can aid in quick realisation of organisational objectives. The HR
department can help the organization overcome and accept changes more
quickly. According to Robins (2017), involvement of employees in the decision
making process enables the to quickly accept and respond positively to
decisions made. Their involvement raises their morale hence high productivity
as they feel that the organization values their opinions.
In recent years, much concern has been shown for the strategic involvement of
the Human Resource (HR) and its effect on firm’s performance (Lahteenmaki et
al, 1998). It has been even suggested that there is a link between a firms’
performance and the utilisation of its human resources (Lahteenmaki et al,
1998; Baird and Meshoulan, 1998). Many successful organizations have a
highly skilled and competent personnel. This reduces the supervision costs as
well as wastage. As a result, there is production of high quality goods and
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 Assignment – 5CHR - Part B
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provision of quality services. This results in increased market share thus high
revenues.
The literature on human resource development argues that there are two ways
in which HRD plays a central role in managing organisational change. First, by
responding to a succession of externally driven changes at an organisational
level, and to subsequent shifts in strategic direction, each of which has
significant effects on development-orientated practices in the workplace.
Second, HRD can have an influential role internally by developing and shaping
the appropriate competencies, practices and attitudes that will help the
organisation deliver its products and services. The key role of HRD is,
therefore, to link HRM systems and policies to the competitive capability of the
organisation (Taylor, 2011).
As per the researches, most management change fail due to poor involvement
of the human personnel in the change program(Taylor,2011). This leads to high
impact results, such as loss in market position, loss of credibility, etc.
2. BUSINESS DATA
How different sources of business and contextual data can be assessed and utilized for planning
purposes (approx. 1000 words)
The process of data analysis is the process of turning data into meaningful
information which can be used to make informed decisions. This process
involves collection of data, organization and analysis.
Many ways HR professionals can identify area of researches, Horn (2009)
highlights that these methods are:
 The burning desire strategy.
 The Replication Strategy.
 The practical problem strategy.
 The convenient access strategy. (Textbook, using information in
Human Resources, pg90).
There are many types of human resource data analytics. The most used five
include:
1. Churn rate
2. Absence rate
3. Training effectiveness and efficiency
4. Revenue
5. Employee engagement
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 Assignment – 5CHR - Part B
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1. The churn rate.
The churn rate measures the rate of employee turnover, the rate at
which employees are leaving the firm either due to termination and
retirement or resigning (Huselid, 2010). This data analytics helps an
organization to formulate policies of retaining employees into the
organization. This reduces the high costs of employing and training new
personnel. This can be done through employee incentive programs,
creating a conducive environment for growth and development as well as
an efficient recruitment program. This will ensure the right people are
chosen for the right job hence reduce employee's churn rate.
2. Absence rate.
The absence rate helps analyse the level of employees productivity and
how much they value their work at the organization. For example, when
it is noticed that there are high cases of abseentism of employees from
one supervisor, the HR manager can find the reason for abseentism from
the employees.
Analysis of the absence rate is essential for the business as it is very
costly. Many customers prefer being served by a particular employees.
This may cause the organization to incur high losses due to customers
(Wiley, 2013 and Holland, 2012).
3. Training effectiveness and efficiency.
This helps in analyzing how to improve the training programs in order to
improve employees productivity. Its analysis aids the business to adopt
effective training programs which will not only improve their productivity
but also their creativity and innovativeness. It can also aid in reduction of
training costs.
4. Revenue.
This helps to analyze the revenue per employee. This can be achieved
through analysis of the achievement of employees' goals, department
goals as well as organisational goals.
5. Employee engagement.
This measures the level at which the organization involves all its
employees in its daily operations. It is important as it helps in motivation
of employees as well as making of well-informed decisions (Robins,
2017).
The data analytics above can be used in planning in various ways.
According to Becker, Huselid and Ulrich (2011), the data analytics help in
better formulation of the organization's goals and policies. This helps in
creating employee involvement through involving them in formulation of
policies and decision making. No organisational goals can be achieved
without employees ( Robins, 2017). High levels of employee involvement
not only motivates employees but also reduces the uncertainty in
planning. This is due to the fact that employees will be more committed
to their work hence achievement of organisational goals at the planned
time.
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 Assignment – 5CHR - Part B
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Assessment of business and contextual data can also aid in planning for
turnover of employees. Human resource department can help identify
ways of retaining employees into the organization. This can be done
through monetary and non-monetary incentives. According to Fitz-Enz
and Davidson (2012), non-monetary incentives such as appreciation of
work done by employees enables them to work harder in order to
achieve more. This in turn leads to increased productivity. An
organization can create a conducive environment where employees can
grow their potential through engagement in designing of different
organisational products as well as delegation of authority (Cascio, 2009).
This not only improves their job satisfaction but also leads to increased
organisational commitment therefore reducing the rate of turnover
(Robins, 2017).
Human resource department can also aid in assessment of performance.
This can be achieved through analysis of the level of competitiveness of
the organization against its rivals, the level of customer satisfaction, the
public image of the organization as well as the total revenue of the firm
(Becker et al, 2011). A firm's performance can be analyzed through how
well it responds to rivalry in its industry. If the company is able to make
attain the industrial standards then it can be said to be performing
better. The human resource department helps in assisting the company
to maintain high levels of competitiveness through provision of high
quality goods and services. This helps to differentiate the company from
other similar companies hence it is able to counter competition.
The quality of services offered by the human personnel directly impacts
the level of customer satisfaction. According to Robins (2017), customers
will be more satisfied with the services offered if they are of high quality,
there is no delaying in offering the services, immediate feedback as well
as understanding and polite employees. High levels of customer
satisfaction lead to customer loyalty which is essential for the growth of
the organization. The HR department therefore helps maintain high levels
of customer satisfaction through hiring competent employees,
researching on methods of improving customer and employee
satisfaction, and improvement on methods of service provision. This aids
the company in its planning and provides important bases for policy
formulations.
Human resource analysis also aids in measuring the organization's
progress. According to Fitz-Enz and Davidson (2012), organisational
progress is measured through the market share, total revenue of the
company and the prices the company's shares fetch in the securities
exchange. The human resource department can aid in implementing
policies to attract nelow customers. The growth of the customer base
according to Becker, Huselid and Ulrich (2011), facilitates progress of the
company through ensuring expansion of the market size which will lead
to increased revenues. Higher revenues will make the company an
attractive investment thus its shares will fetch higher prices in the
securities exchange.
It is evident that the HR department can greatly aid in the planning
process of an organization. Therefore, organizations should invest in HR
department to ensure lower rates of employee turnover, increased
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 Assignment – 5CHR - Part B
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customer satisfaction as well as reduced level of uncertainty in the
planning process. This will greatly aid in realisation of both short-term
and long-term organisational goals thereby leading to its success.
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 Assignment – 5CHR - Part B
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3. REFERENCES
Include at least two references for each section. Ensure that each reference included in your list
is sign-posted in your report.
Becker, B. E., Huselid, M. A. & Ulrich, D. ( 2011). The HR scorecard: Linking
people, strategy and performance. Boston: Harvard Business School Press.
Cascio, W. D. (2009). Costing human resources:The financial impact of
behavior in organizations (7th Ed.). Boston: Kent.
Fitz-Enz, J. & Davidson, B. (2012). How to measure human resources
management. New York: McGraw-Hill.
Hideous, M. A. (2010). The impact of human resource management on high
turnover, productivity and corporate performance. Academy of Management
Journal, 38, 635-638.
Hollmann, R. W. (2012). Absenteeism: Analyzing employee movement out of
the organization. Alexandria: Society for Human Resource Management.
Kaplan, R. S. & Norton, D. P. (2009).The balanced card: Translating strategy
into action. Boston: Harvard Business School Press.
Northhous, P. G. (2016). Leadership: Theory and Practice (7th Ed.). Thousand
Oaks, CA: Sage Publications.
Robins, S. (2017). Organisational Behavior (8th Ed.). New York: Prentice Hall.
Taylor,F.(2011). The principles of management. London: Harper Brothers.
Wiley, C. (2013). Employee turnover: Analyzing absence. Alexandria: Society
for Human Resource Management.
4. CPD (approx.. 200 words)
CPD Record – what key things have you learned from undertaking this
assignment?
The assignment has enabled me to appreciate the importance of the human
resource department in planning and for effective achievement of
organisational goals. The human resource department has a very crucial
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 Assignment – 5CHR - Part B
This assignment must be submitted through Online Services
responsibility of maintaining a balance between the organisational needs and
the needs of the employees. The assignment has also enabled me to know
both traditional and modern indicators of business progress and the role of the
hr department in ensuring achievement of these indicators.
In addition, the human resource department provides a basis for making
important business decisions through analysis of human resource data such as
the churn rate, absence rate, training efficiency and effectiveness as well as
level of employee participation. These data analytics provide a basis for
planning and formulation of organisational goals. Research has shown that
managerial change is ineffective where there is little or no employee
involvement. To ensure successful implementation of managerial change
programs, human resource managers should ensure employees are involved in
formulation of the change programs as well as involve employees on changes
that are necessary for the success of the change programs. This will improve
the motivation of employees hence leading to higher productivity of the
employees as well as increased revenue and market share of the organization.
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