Human Resource Management Practices at HSBC: A Case Study

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ICON College of Technology and Management
Faculty of Business and Management Studies
BTEC HND in Business
Human Resource Management
Tutor: Dr Reza Aboutalebi
Submitted by:
Full Name: …………
ID No: …………
Session: April 2019
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Table of Contents
Introduction...................................................................................................................... 3
LO1.................................................................................................................................. 4
Introduction...................................................................................................................4
P1 Explain the purpose and the functions of HRM, applicable to workforce planning
and resourcing an organisation....................................................................................4
P2 Explain the strengths and weaknesses of different approaches to recruitment and
selection....................................................................................................................... 5
Conclusion....................................................................................................................6
LO2.................................................................................................................................. 8
Introduction...................................................................................................................8
P3 Explain the benefits of different HRM practices within an organisation for both the
employer and employee...............................................................................................8
P4 Evaluate the effectiveness of different HRM practices in terms of raising
organisational profit and productivity............................................................................8
Conclusion....................................................................................................................9
LO3................................................................................................................................ 10
Introduction.................................................................................................................10
P5 Analyse the importance of employee relations in respect to influencing HRM
decision- making.........................................................................................................10
P6 Identify the key elements of employment legislation and the impact it has upon
HRM decision- making............................................................................................... 10
Conclusion..................................................................................................................11
LO4................................................................................................................................ 12
Introduction.................................................................................................................12
P7 Illustrate the application of HRM practices in a work related context, using specific
examples.................................................................................................................... 12
Conclusion..................................................................................................................15
Conclusion..................................................................................................................... 16
Reference List................................................................................................................ 17
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Introduction
Management of human resource is the tactical approach for effectively managing the
individuals involved with an organisation that aids the business to gain a competitive
edge over the other organisations in the same industry. The aspects of HRM are
dedicated towards maximising the performance of the employees in service of the
strategic objectives of the employees and the overall organisation. This particular report
will focus on explaining the functions of management of human resource along with
their purposes that is majorly applicable to resourcing an organisation and workforce
planning. It will discuss the limitations and advantages of a number of approaches for
selection and recruitment after determining the most suitable human resources policies
and practices for the chosen organisation. In addition, it will discuss the benefits of the
various practices of HRM within the chosen organisation for all the individuals of the
organisation. An assessment of the effectiveness of various practices for raising
organisational productivity and profits will be conducted. The essentiality of employee
relations will be analysed with respect to the influence it has on the decision making
process for HRM. Moreover, it will determine the major constituents of employee
legislation and its influence on the decision making process for HRM.
Background of the organisation
HSBC is a international financial services holding and banking organisation. As of 2018,
it is the seventh largest organisation that offers financial services along with banking
services across the world and the largest across the European countries. The total
assets of HSBC amount up to $2.558 trillion. They own 3,900 offices across 67
territories and countries that include Asia, Europe, Africa, South America, Oceania, and
North America with approximately 38 million customers. HSBC is structured within four
groups of business that include Global Markets, Global Banking, Commercial Banking,
Global Private Banking, and Wealth Management and Retail Banking
(About.hsbc.co.uk, 2019).
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LO1
Introduction
This section will discuss the functions and purposes of implementing HRM that is
applicable to resourcing an organisation and workforce planning. It will determine the
best practices and approaches to human resource management. Moreover, it will
discuss the weaknesses and strengths of the number of approaches to recruitment and
selection.
P1 Explain the purpose and the functions of HRM, applicable to workforce
planning and resourcing an organisation.
Human resource management is the exercise of hiring, deploying, recruiting, and
managing the employees of a particular organisation. They are responsible for
developing, supervising, and implementing policies effectively that govern employees
along with the relationship between the employees and the organisation. The major
purpose of human resource management is associated with maintaining the vital assets
of the organisation that are the employees working within the organisation (Bamberger
et al., 2014). Moreover, they help the employees realise the goals of the organisation
along with their personal goals that helps in improving their performance. The vital
objectives of a business are associated with enhanced sale, survival, growth, and
enhanced profit. The functions of human resource management help in acquiring
appropriate talent for achieving the major goals of the organisation. For instance, they
help in achieving the objectives of enhanced sale and survival by appropriate
techniques of compensation, training, and recruitment. There are several purposes of
human resource management like job design, recruitment, health and safety, and
compensation. These are directed towards aspects such as workforce planning,
selection and recruitment, and labour market.
Workforce planning
The workforce planning process is constant where the personnel of human resources
determine the amount of workforce needed by the organisation and achieve the goals of
acquiring the set limit of workforce through a number of methods.
Selection and recruitment
The selection and recruitment process is carried out by the personnel of human
resources for gathering appropriate talent and people for achieving the overall
objectives and goals of the organisation (Campion et al., 2011).
Labour market
The term labour market is associated with the supply and demand of unskilled and
skilled labours across the concerned market. The supply within the market is based on
the requirement provided by the organisation.
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There are soft and Hard models of human resource management that are discussed
and differentiated in the section below:
Soft Model Hard Model
 It views the employees of the
organisation as valuable asset to the
organisation
 The policies developed within the
organisation are based on the
requirements of the organisation and
employees
 Process of communication flows
freely within the organisation
 The structure of the organisation is
flat
 It views the employees of the
organisation as the source of their
business
 The policies of the organisation
depend on the amount of workforce
required by the organisation and can
flatly employ and dismiss the
employees
 The process of communication is
rigid and tough
 The structure of the organisation is
tall
Table 1: Hard and Soft models of human resource management
(Source: Created by the learner)
P2 Explain the strengths and weaknesses of different approaches to recruitment
and selection.
The different approaches to selection and recruitment are discussed briefly in the
section below:
‘Best Fit’ Approach:
This particular approach or model is based on developing strategies and policies for the
concerned business in accordance with the structure and rules of the organisation. It
majorly focuses on the strategies developed by HRM department and ensures the
employees of the organisation follow them strictly (Armstrong and Taylor, 2014). The
strength of this particular approach is it can ensure a fast paced process of achieving
the goals and objectives of the concerned organisation. The main weakness of this
approach is associated with the employees where they may not be comfortable with the
strict environment within the workplace of the organisation.
‘Best Practice’ Approach:
According to the approach, the human resources department ensures that the
objectives and goals of the organisation are met by motivating the employees to work
accordingly for the organisation. Moreover, it focuses on ensuring good employee
relations with the individuals working within the organisation. It establishes a flexible
process of communication. The main strengths of this approach are associated with
receiving lower rates of employee absenteeism with high performance (Cascio, 2015).
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The performance is improved by providing them with opportunities of gaining knowledge
and learning new skills. The main weakness of this approach is the lack of strictness
within the organisation that can lead to delays in the process of acquiring the
determined objectives and goals of the organisation.
Internal Recruitment:
This process of recruitment is based on improving the position of the organisation with
the existing employees. The existing employees are promoted to new posts and given
new responsibilities that they can carry out with effectiveness and efficiency due to their
experience with the way of working within the organisation. The expense of training can
also be excluded since they are familiar with the organisational aspects. It is conducted
in three ways that include lateral, downward, and upward. The main strengths of this
process are it saves time, cost effective and economic in nature, indulges in retaining
and motivating employees, and focuses on improving employee relations while gaining
their trust (Bratton and Gold, 2017). The main weaknesses of this process are lack of
new talent that can facilitate the changing needs and requirements of the organisation
and the concerned market, restrictions on innovation, and lack of exploring different
kinds of talent in the concerned market.
External Recruitment:
This process of recruitment is based on acquiring new talent and employees from the
external environment of the organisation. In simpler words, the individuals of human
resources recruit new candidates with updated knowledge regarding the concerned
business area. It is done by evaluating curriculum vitae and a screening process, which
is followed by a face to face interview (Stewart and Brown, 2019). The main strengths
are the scope of this process is wide, develops large opportunities for job in the
concerned market, has the option to select from a large range of talent, and it helps in
hiring the most appropriate person for the concerned job. The major weaknesses of this
process are it consumes high amount of time, it is an expensive process since there are
costs of publishing advertisements, screening processes, and training processes, and
risks exist with the new employees regarding being unfit for the proposed position within
the organisation.
Advantages and Disadvantages of the approaches for HSBC:
As for HSBC, they have implemented a mix of all the practices and approaches
discussed above and attempted to gain the advantages of each of the practice. For
example through the ‘Best Fit’ approach they tried to establish a systematic method of
working with discipline whereas with ‘Best Practice’ approach they requested the
employees to work for acquiring the performance based rewards that enhance the
process of achieving the objectives and goals of the organisation. For the employees
that belong to the higher side of the hierarchy within the organisation, internal
recruitment is conducted and deserving people are promoted accordingly. In order to fill
the positions left vacant by the employees promoted, external recruitment is
implemented that helps them gain new talent for the organisation.
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Conclusion
Here, the functions and purposes of management of human resource have been
discussed briefly that are suitable for resourcing an organisation and workforce
planning. It identified the best practices and approaches such as the Best Fit and Best
Practice the approach. The weaknesses and strengths of these approaches along with
the approaches to selection and recruitment have been discussed briefly.
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LO2
Introduction
This section will focus on explaining the benefits of various practices of HRM both for
the employees and the employers while determining the efficiency of the practices with
respect to organisational productivity and profit.
P3 Explain the benefits of different HRM practices within an organisation for both
the employer and employee.
Some of the major HRM practices utilised by organisations such as HSBC include
performance management, training and development, job design, and flexible working.
Several job design methods include job enrichment, job enlargement, job simplification,
and job rotation. Two of these have been implemented within the organisation of HSBC
such as job enrichment and job enlargement. Job enlargement is associated with
increasing the responsibilities and opportunities of a particular job that enhances the
scope for that job. Job enrichment, on the other hand, includes a specific design for a
job in a way that it provides the employees greater autonomy for controlling and
planning their own performance (DeCenzo et al., 2016). For instance, HSBC provided
work time flexibility for the employees that helped them plan and control their
performance at their own convenience.
It is beneficial for the employees since they have a sense of comfortable working
environment and the employers are able to retain the highly abled employees for longer
periods within the organisation. The other practices include training and development
that the organisations achieve through coaching, simulation, and role playing (Aguinis
and Kraiger, 2010). HSBC utilises coaching and role playing as part of their training and
development session and it is beneficial for the employers since they are able to train
the employees according to the method of working in their financial services. The
employees receive experience like knowledge through role playing sessions that
provide them with a better idea regarding the working style of the organisation.
P4 Evaluate the effectiveness of different HRM practices in terms of raising
organisational profit and productivity.
The evaluation of the effectiveness of two of the practices of HRM regarding enhancing
organisational productivity and profit has been conducted in the section below:
Flexible working:
In order to maintain an environment of flexible working, HSBC has developed schemes
of job sharing and work from home options that acts as motivators for the employees
working within the organisation. The job sharing schemes enables the organisation to
develop a particular job between two people that not only ensures faster delivery of the
outcome but less pressure for the employees as well. As for the work from home, some
people are not able to work according to the formal office timings due to personal issues
or are suffering from some kind of illness that requires them to stay more at home than
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any other place. For such cases, the work from home allows the organisation to not lose
valuable employees while boosting their confidence and motivation to work towards
achieving the particular goals and objectives of the organisation (Alfes et al., 2013).
Performance management:
Performance management is one of the most influential practices implemented by the
personnel of HRM that ensures higher performance of the employees along with long
term retention and loyalty towards the organisation. HSBC has organised performance
based rewards for the employees as one of the schemes for performance management.
Employees receive rewards annually based on their performance scores recorded every
month (Albrecht et al., 2015). The average of the scores of all the months determines
the employee that has performed the best throughout the year.
Conclusion
The HRM practices are highly essential for the employers and the employees since it
helps the employers understand the needs and requirements of the organisation as well
as the employees. Moreover, the effectiveness of these practices can lead to improved
performances of the employees that reflect on the organisational productivity and profit.
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LO3
Introduction
This section will determine and assess the essentiality of employee’s relations along
with the vital constituents of the employee legislation and its respective influences on
the procedure of decision making of the HRM department of the organisation.
P5 Analyse the importance of employee relations in respect to influencing HRM
decision- making.
Employee relations are the efforts of the organisation towards managing relations
amongst the employees and employers of the organisation. If an organisation has
programs of good employee relations, it ensures that each of the employees receive
consistent and fair treatment that in turn can ensure their commitment and loyalty
towards the organisation. The trade union roles influence the balance of employee
relations within an organisation (Kehoe and Wright, 2013). For instance, two of their
major roles are negotiation working condition terms and wages with the employer and
regulating relations amongst the employer and the employees. The trade union ensures
that the major aspects within the employer and employee are stable that can ensure
proper treatment for the employees along with their loyalty towards the organisation.
Major decision making areas for HRM for HSBC are recruitment decisions, performance
management decisions, and job designs decisions (Laursen and Foss, 2014). If the
working conditions are stable within the organisation, it can be considered as an effect
on the job designs decision for HSBC. In addition, their policies of employment security
affect the decisions of recruitment decision for HSBC.
P6 Identify the key elements of employment legislation and the impact it has upon
HRM decision- making.
Three major constituents of employment legislation will be discussed in the section
below along with their influence on the decision making process for HRM of HSBC:
Discrimination law:
‘Equality Act 2010’ is one of the discrimination laws under which none of the employees
working within the organisation can be differentiated based on religion, belief, gender,
marital status, sexual orientation, and such other factors (Conley, 2014). The
implementation of this law in HSBC has enables the employees to feel a sense of
security against discrimination within the organisation. Moreover, if affects the decision
making processes for the employers since the criteria for their decision is majorly the
talent and hardworking personality of the employee.
Health and safety law:
‘Health and safety at work Act 1974’ ensures that any organisation working under the
jurisdiction of the UK follows the basic health and safety protocol for the employees
working within the organisation (Banker et al., 2013). Considering the requirements of
this law, HSBC has developed compensation schemes and medical benefits that ensure
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the loyalty of the employees towards acquiring the objectives and goals of the
organisation. Moreover, they take responsibility for any accidents that may occur in the
workplace and manage the finances for the individual in that particular instance.
Equal Pay Act:
The ‘Equal Pay Act 1970’ ensures that favourable treatment amongst men and women
are not carried out within the organisations regarding conditions and pay scales of
employment. Every working employee must be paid equally according to their job role
and status within the organisation (Millán et al., 2013). HSBC has included this law in
their policy and any HRM personnel found violating the law can be dismissed from the
organisation immediately.
Conclusion
Employee relations are highly essential for the wellbeing of an organisation since
employees are one of the most useful assets of an organisation. Moreover, a number of
employment legislation have been identified and discussed briefly that helps in
protecting the rights of an individual working within the organisation.
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