Research Paper on "Elements of HR System"

Research Paper 12 pages (4126 words) Sources: 4

[EXCERPT] . . . .

HR System

One of the most important elements for any business is the human resources department (HR). This is because HR plays a vital role in ensuring that the various concerns of the employees are met, so that the business can be able to maximize its profits. Yet, beyond this obvious function HR plays a more important role. Where, during times of mergers and acquisition, it is essential in helping to ensure that the staff / management of both companies are: able to merge the different policies / procedures into one. In most situations, the HR department is able to effectively able to merge the two different cultures into one hybrid that will create the desired effect. However, there have been those times that merging two different companies can be very challenging. This is because the managers / staff of both companies have completely different views and attitudes surrounding the business. Once this occurs, the ability of the HR department to effectively merge the various policies / procedures into one becomes more difficult. At which point, the chances decrease that the merger will be successful, as these differences are too difficult to fix. A good example of this can be seen with the merger between Daimler and Chrysler. Where, the new company would be touted as a merger of equals. With Chrysler able to have a foothold in the European market, while Daimler Mercedes would benefit from access to the North American market. The problems with the merging the two companies became apparent, as Chrysler would have a more aggressive management strategy towards the automobile industry. This clashed with the traditional, conservative values that Daimler had become known for. The HR department was never able to mold, the two different attitudes about management style. At which point, the company would see a decline in sales and market share, as the two different views created conflict that would hurt the overall bottom line. This is significant, because it shows how implementing any kind of merger or acquisition requires: that the HR department is able to successfully merge the two cultures into one. (Mathis, 2008)

In the case of We Will Hang Onto it Savings, their merger with Lenders Are Us Bank could prove to be problematic, as two different atmospheres surrounding the practices of lending are merging together. Where, Hang Onto it Savings is purchasing Lenders Are Us to prevent the company from going into liquidation. This is because Lenders Are Us engaged in a number of questionable lending activities over the last several years. Once the economy began to slow, is when they fell into a precarious financial situation. To make the merger of the two different businesses work requires that the HR department implement a strategy; that will encompass the views of both companies. To achieve this objective, you must examine the possible challenges of: merging the two companies, identify the most effective elements of an HR strategy and make possible recommendations for successfully merging the two entities. Together, these different elements will provide the greatest insights, as to how an effective HR plan can increase the chances that the merger will be successful.

The Possible Challenges of Merging the Two Companies

The last three years show that management must be able to adapt to changes that are occurring in the economy. The merging of the two companies could prove to be problematic based upon: the overall culture of conducting business and the attitudes on lending, among the staff. The reason why is We Will Hang Onto it Savings has a consistent history of engaging in more responsible lending practices. As a result, during the housing boom they did not engage in risky lending activities. This is different from Lenders Are Us who engaged in a variety of loan practices that were considered to be more risky. When the economy was strong this caused their overall bottom line to increase. However, once the housing market imploded was when the total amounts of delinquent loans would rise sharply, forcing the company seek out this merger. There are several obvious challenges that will be faced with merging the two companies together to include: providing direction for employees, reducing costs, improving efficiency and ensuring a strong pool of talent to draw off of. When looking the first issue, providing direction to employees, it is clear that the new merger will create confusion where the employees of We Will Hang Onto it Savings, will have different practices / procedures, in comparison with employees of Lenders Are Us. This could involve everything from: the way that deposits are booked to how earnings are reported to shareholders.

When looking at the second issue, reducing costs, it is obvious that the merger should reduce costs dramatically. However, because there are a variety of departments and the overall way the two entities were structured, means that the practices of the various departments at Lenders Are Us, could be vastly different from We Will Hang Onto it Savings. During the early stages of the merger, this could lead to irresponsible lending practices by employees of Lenders Are Us, as they assume that the business model will compliment We Will Hang Onto it Savings.

When looking at the third issue, improving efficiency, this highlights how the employees and management of Lenders Are Us, are engage in lending practices that will damage the long-term stability of the financial institution. This could be problematic; because the staff / management could resistant to such changes, as they feel that the different ways to improve lending practices / productivity are punishment for the irresponsible activities of the past.

When looking at the fourth issue, ensuring a strong pool of talent to draw off of, shows how reaching out to those professionals that could complement the business, is essential from the very beginning. The recent negative publicity surrounding Lenders Are Us could prove to be problematic, as the different college graduates and financial professionals are reluctant to interview with the company. This could be out of fear that the merger could cause a sharp reduction in benefits or the view that the company is in financial distress. This is problematic, because with the larger talent pool to draw off of, due to the high unemployment rate would normally mean that the company would have a variety of talented employees to choose from. However, given the negative publicity surrounding Lenders Are Us and the headlines about why the merger is occurring. This could cause some applicants to think twice about applying.

The most effective Elements of an HR strategy

Because the merger of the two companies and their overall philosophies are different, means that before the merger occurs, the HR department must have an effective plan in place. To achieve this objective HR personal must: examine the current situation at both companies. This is accomplished by creating possible allies on both sides that could be useful in implementing: an effective plan, training / development, have an effective evaluation process and ensuring that the employee benefits go beyond the expectations of employees. When looking at the first element of examining the current situation at both companies; requires that HR personnel begin interviewing the staff / managers, about the overall culture and traditions within an organization. This would involve looking at the total compensation packages, disciplinary records, policies / procedures for the company and interviewing the staff about different issues in the workplace / what they would like to see implemented. Once extensive research has been conducted on both organizations, HR personnel would have a better idea as to how different or similar; the culture is within each organization. This is an important first step, in helping to identify what specific issues could be faced, when implementing one HR plan for the entire organization. It will also tell you what possible ways that the plan could be improved, to address those issues that are most important to the staff / management. This is significant, because if you know what issues are most important to both organizations, you can begin to implement both into the new HR plan. At which point, soliciting the cooperation of the staff to change the culture of the organization, can help create a plan that will work effectively. (Kroon, 1995)

The second element, of creating allies on both sides, is imperative to ensuring that the HR plan is successful. This is because the plan needs to have supporters within both organizations that can push for changes from within. Where, during the staff meetings and discussions with employees / managers, they can emphasize how important it is for everyone to embrace the new HR plan. Any kind of opposition to the plan, would allow these people to playing critical in helping to identify key issues that could stand in the way of ensuring compliance. This is important because it can help to make certain that the HR plan can be smoothly implemented in both organizations. Where, initial resistance to such changes, can… READ MORE

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