Introduction

The current report analyzes people management practices at Pound-Co Finance. The report covers a brief background of the company, including its history, locations, how the business is carried out, the nature of the business the company deals in, and its target market. Secondly, it captures the company’s HRM model, including its limitations and strengths. Next, the report evaluates the recruitment process, performance management system, and learning process implemented in the company and their strengths and weaknesses. Lastly, the report recommends how the company can address these weaknesses to achieve its objectives.

Background Information

Pound-Co Finance was launched in 2006, after a merger between two small companies. The company is headquartered in Huddersfield, with approximately eighty employees. Pound-Co Finance has branches in Yorkshire, and Lancashire hubs. These Hubs act as field offices for the local branches (Ceil, 2018).

The business operates in a non-standard market; it may charge higher rates and undertake greater risks to its customers. The company targets risky customers facing court cases, customers whose assets may be frozen; those declared bankrupt, or who have a poor credit history. Pound-Co Finance deals in small-scale loans ranging from £500 to £5,000. The company hosts a website that generates customers’ interest rates. However, a customer must call their local branch to discuss the loans and arrange to sign all the necessary documents. Whether the customer is given the money in cash or transferred to their bank account depends on the size of the loan. The mode of loan repayment is for the customer to decide. The customer is given two repayment options: either to set up a monthly direct debit or take a repayment book from the branch and pay off the loan directly to the branch on a weekly, fortnight, or monthly basis (Ceil, 2018).

The company’s mission is “to be the leading specialist lender in our chosen markets, acting responsibly in all our relationships, and playing a positive role in the communities we serve.” To achieve this mission, the company adheres to the following values: Fairness, Responsibility; environmental consciousness, and dedication to the provision of excellent service.

Pound-Co Finance is run by a board of directors comprising the CEO, Finance Director, Director of Field Operations, and Marketing and Sales Director. By 2016, the company has approximately 1.6 million reporting a £17 million profit in the same year. The board of directors celebrated this success; however, they stated that a lot needed to be done to ensure the company kept going in this direction. The board decided to concentrate on the market and products they already knew to sustain the success. Additionally, they decided to explore new technology and recruit competent personnel since many of their employees had become stuck in their old ways.

HRM as a Strategic Force at Pound-Co Finance

Each Hub has one HR officer responsible for handling conventional HR duties like disciplinary, health, and absenteeism issues, among other employee grievances. In addition, the HR officer in each Hub was responsible for training all branch managers on new management systems launched six months before. In the head office, an HR team was responsible for evaluating the personal development plan (PDP), which is part of the performance management program conducted every financial year. Annual appraisals were conducted for the whole organization in the PDP. From the functions assigned to the HR team and officers, the company employs Ulrich’s HR model in which the HR team carries out various roles.

Pound-Co Finance’s current organizational goal is to “have two million customers and to realize a £20 million profit in the next five years” .In order to have such a large number of customers, it is paramount to have practical and dynamic management practices. For any organization, the HR department is responsible for implementing people management practices. However, the company’s practices have remained consistently stagnant since the two companies merged. Inclusive in people management is how the company deals with customers, employees, and candidates applying for jobs.

When it comes to employees, the annual appraisals evaluated by the Human Resource Head Office Team dictate that the line manager rate each employee against the organization’s core values on a scale of one to five (where one is excellent while five is very poor). This rating has not proven an effective way of evaluation; most line managers gave an average rating for all employees to avoid upsetting the workforce and prevent them from quitting their jobs. Additionally, this process created tension between managers and employees since the employees felt that the rating exercise did not capture certain skills they may have. Moreover, some managers did not possess sufficient knowledge to coach and train employees to achieve the organization’s development goals.

The situation was no better during recruitment. Branch managers could not operate the candidate management system efficiently despite training by the Human resource officers. Therefore, the managers did not conduct interviews since they felt uncomfortable using a system whose operation was foreign to them. Many applicants contacted the head office without clear communication after passing the initial screening interview. The company’s brand image suffered greatly because many potential employees worked for the company’s competitors.

From the above analysis, the Company’s Human Resource Management model did not contribute effectively to the achievement of its organizational objectives. The Human Resources department had general roles that contribute to the achievement of the company’s goals. However, implementing the Ulrich model would specify roles in the HR department. Specific organizational roles require certain employee behaviors facilitated and reinforced by the Human Resource managers (Boon et al., 2018). Consequently, the HR department should fully and effectively employ Ulrich’s HRM model. A working HRM model contributes highly toward the success of an organization and should be considered an integral part of the company’s strategy (Boon et al., 2018).

Ulrich’s HRM model suggests that the Human resource department of a large organization should be organized into four key roles to help the organization achieve its goals and objectives. These roles are HR Business Partner, Change Agent, Administration Expert, and Employee Advocate. HR Business Partner communicates with internal clients (stakeholders, employees, creditors, and shareholders). The HR Business Partner here acts as the point of contact between these individuals and the organization (Ulrich, 2005). Business HR managers are responsible for sharing the company’s goal with internal clients and ensuring the harmonious working of all the components to achieve the company’s objectives (Pay, 2015). The human resource department in Pound-Co tried to do this; however, it lacked effectiveness in carrying out this role since employees complained that their grievances were not being addressed.

As change agents, the human resource department should be responsible for communicating organizational changes internally (Ulrich, 2005). Effective communication of changes informs about the changes in organizational goals and priorities. Human resource officers should organize training for employees to acquire new skills useful in helping the company achieve its altered goals (Pay, 2015). Pound-Co Finance started implementing this role by having the human resource officers train employees in the new candidate management system. However, they did not comprehensively train their employees to align with new changes. In future, human resource should organize better training sessions and sustain the training until all employees are fully trained.  Administrative experts are responsible for handling duties like safety rules, health issues, absenteeism, and general grievances (Ulrich, 2005). Notably, administrative issues are the primary roles of the human resource department. In Pound-Co Finance was successful in the administrative HR department.

HR departments acting as employee advocates are responsible for employees’ grievances and protection (Ulrich, 2005). This role comes with the responsibility of analyzing employee morale and level of satisfaction and using this information to create a conducive atmosphere where people will always want to work (Pay, 2015). David Ulrich dubbed this role as the “employee champion.” Pound-Co Finance’s HR department collected information but did nothing substantial with it, leading to dissatisfaction. Experts argued that |Company shifted from helping customers gain good credit to a profit-oriented organization; the customer became a means to an end. Consequently, employees became frustrated. Some lowered their productivity while others left their jobs.

Pound-Co Finance loosely applied Ulrich’s HRM model. However, the company’s loose application of the model led to poor HR management practices, affecting employees’ productivity. The HR department should apply the four HR concepts to achieve its current objectives.

Talent Management Practices

Recruitment Process

Pound-Co Finance uses Word of Mouth and advertisements in local newspapers, job centers, and regular supermarket notice boards to broadcast vacancies. However, this has proven to be a major hindrance to the company’s expansion and growth since these methods only seem to reach the same kind of applicants who possess professionalism but lack the skills needed to move the company towards its five years projected target. The company shifted its selection and recruitment process recently and adopted central coordination of the process by implementing a new candidate management process. Since this technology was new and unknown to the company’s high-level employees, the HR officer in each hub underwent training on the system, and in turn, they trained all branch managers on how to use the system.

The candidate management system does not involve branch managers alone; it also includes the Head Office Staff who conducted the initial interviews. The interviews were conducted over the phone. Once an applicant passed it, their name was forwarded to the respective branch managers geographically close to the applicant for a follow-up interview. Branch managers’ tasks were to communicate with the applicant, arrange a time and venue for the interview and conduct it themselves. From the interview, they were supposed to choose a suitable candidate for the position and incorporate them into the company.

Human resource officers from the various hubs reported that the training of branch managers had been successful since everyone was in attendance for the entire training course. However, recent candidate complaints proved that the branch managers could not conduct follow-up interviews due to the inability to operate the new candidate management system. A recent meeting of senior managers reported that the central recruitment manager raised concern over many applicants contacting the head office about the state of their employment since the company had not contacted them. Branch managers revealed that they were uncomfortable conducting interviews using a system they did not understand well. Applicants with the necessary skills ended up securing jobs with the company’s competitors; this blew the company’s image.

The company’s recruitment and selection process were flawed from the analysis above. However, these flaws lie not in the new system itself but in the employees using it. Two fundamental questions arise; didn’t’ the branch managers understand the training, or did the HR officers deliver the training well? Either way, the failure in the recruitment process hindered the achievement of the company’s objectives; the recruitment process contradicts the company’s strategic objectives.

A successful recruitment process comprehensively maps out the strategy for attracting and hiring the best-qualified candidates (University of California, 2015). In today’s world, the most effective way to reach a diverse number of applicants is through the internet especially on social media sites like Facebook, Twitter, and LinkedIn. Online avenues would ensure that Pound-Co Finance attracts a diversified group of candidates who have the necessary skills required to move the company forward. Alternatively, the company can use Diversity Recruitment Agencies which assist disadvantaged groups in finding jobs (University of California, 2015). These agencies have access to different types of people who possess diverse skills that can be useful in helping the company move towards achieving its goals.

The interview process is another vital aspect of recruitment that Pound-Co Finance got wrong. After completing phone interviews, hiring managers should conduct face-to-face interviews to interact with the applicants in person. Scheduling and conducting interviews helps the managers select candidates amongst shortlisted applicants. Pound-Co.’s branch managers undervalued this important part making them lose good employees. The company needs to make its branch managers take this process seriously to help the organization achieve its five-year targets.

Performance Management

Pound-Co Finance has a performance management program in place. It exists in the form of annual appraisals conducted by the end of July of every year. A financial year for the company runs from 1^st of August and ends on 31^st of July the subsequent year. During the appraisals in the course of a financial year, line managers observe employee behavior, and rate their performance. After completion of these appraisals, a personal development plan (PDP) is prepared and submitted to the HR team at the head office for evaluation.

Appraisal meetings evaluate all the PDP results. The output of these meetings was observed in the PDPs that all employees scored averagely. As aforementioned, the line managers avoid blames on employees’ dismissal based on their grading. The company conducted an employee survey to identify the employees’ view of the appraisals. Contrary to expectations, employees did not favor the appraisal; the appraisals ended up as paper exercises incapable of capturing their true performance. In addition, employees stated that none of their development suggestions had come to pass, exemplifying their reasoning that these appraisals were mere formalities with no contribution to the general growth of the company. Managers on the other hand stated that none of their needs were addressed or acted upon. They complained of the uneasiness in a process requiring them to rate their employees. However, the company did nothing to address this issue which has increased their dissatisfaction with the entire process.

A performance management system should encourage collaboration, teamwork, and communication (Oberoi & Rajgarhia, 2013). Additionally, a management system is only as effective as the managers who implement it (Oberoi & Rajgarhia, 2013). If employees feel that the company’s performance management is not effective, they become de-motivated, angry, and frustrated, negatively affecting their performances. In Pound-Co Finance managers and employees were highly dissatisfied with the company’s performance management system since it does not address any of their development issues. The system left employees feeling frustrated when the company did not listen to their grievances. Other than reducing their productivity, the rigid system increased their tendency to leave the organization. The higher rates of turnover prompted branch managers to give the remaining employees glowing reviews to discourage them from leaving. Major companies like Adobe have proven that addressing employee feedback is important in ensuring the proper running of the business (Duggan, 2015).

Managers have a great effect on any performance management system. Managers drive these systems personally by encouraging development, empowerment, support, and employee communication (Oberoi & Rajgarhia, 2013). Based on the employees’ survey, managers in Pound-Co with regard to this issue feel that they have neither the knowledge nor the skills necessary to coach and support employees at a local level. The system cannot be effective if managers cannot perform their duties regarding the performance management system. The performance management system of Pound-Co Finance was not effective and did not represent a true evaluation of the employees. The process was biased and skewed to please a section of the workforce.

Learning and Development

The learning needs of the employees and managers are identified through the performance management system as well as employee surveys carried out across the whole organization. If employees are in need of learning, managers communicate to their superiors preferably in the head office, and in turn, they are provided with the information they need to train employees. It is the work of managers to coach their employees at a local level. However, on the managerial level, it is the duty of the human resource officer to conduct these learning processes.

In order for learning and training to take place, there has to be a schedule and a target completion date. This information is based on the training that the HR officers in each branch were tasked with delivering to branch managers regarding the newly installed candidate management system. From this system, we learn that training is evaluated based on the attendance of employees. Attendance proved ineffective for evaluating the training; as mentioned before, some branch managers did not acquire the skills taught despite attending all the training sessions; despite the training, they were unable to operate the system which ended up hurting the company’s brand image. The training of employees should be evaluated after this practical training implementation. If this had been done after implementation, stakeholders would understand the shortcomings of the managers’ training in time.

Conclusions

Although Pound-Co Finance reports that it has experienced success since its inception, the company was undergoing a crisis that, if not checked, could develop into a full-blown disaster with huge financial losses. Some of these major issues include the inefficiency of the selection and recruitment process; branch managers were unaware of how to operate the new candidate management system and, therefore, unable to conduct the final stages of the interview and other recruitment processes. Without this stage, the company could not recruit new employees to achieve its organizational goals. One way the company hoped to attain its five-year target objective was to recruit employees with diversified skills and new ideas to replace a section of its employees stuck in their old ways.

Another major issue was the inefficiency of the performance management system, which resulted in employee turnover. From the data analysis, the system the employees rather than the system were at fault. The people tasked with the system’s implementation were incompetent. The line managers did not provide objective appraisals, the head office failed to address the employees’ concerns, and the head top management changed the priorities away from customer-oriented approaches. As a result of increased pressure on finance advisers to hit target sales, the organization’s focus became less on customers friendly. The nexus among the stated factors prevented the organization from achieving its five-year goals.

Recommendations

Losing many employees in one period is a red flag. The Company needs to address its employees’ grievances and keep them satisfied to guarantee productivity, increased profit, and overall success. The Company should summarize all its needs as expressed in the annual appraisals and form strategies based on the reports from the appraisals. Implementation of specific proposals costs some capital. However, if employees are satisfied and more productive, the Company will make more money to compensate for the costs incurred in addressing the proposals.

The performance management system needs to be re-evaluated. Line managers need to be provided with sufficient information about the company development initiatives to correctly communicate these to their employees. Additionally, they should undergo a rigorous training session that will teach them how to motivate, support, and communicate with their employees. These eliminate the flaws in line managers and allow them to transmit the correct skills to their juniors.

The company should make changes in its recruitment process. The company should re-train branch managers on how to use the candidate management system. HR officers should oversee the practical implementation of the system as an assessment of the success of the training. Alternatively, the HR officers can sit in with the branch managers in the first few interviews to ensure that the managers are using the system correctly.

Finally, the company should diversify its job advertisement strategies. Specifically, they should recruit employees using social media sites to reach a larger population. A mode of communication with higher penetration will enable the company to reach employees with diverse skills.

Closing Remarks

Pound-Co Finance had the potential and ability to achieve its five-year targeted objectives. In the future, the company should ensure they have the right HR plans to address every aspect of their organization.