1. Introduction

1.1Company Profile

Sahasra Entrepreneurial Resources Limited is a professional service based organization which was incorporated in 2012. They themselves introduce them as most professional and Buddhist Company which practices Buddhist ideologies. Sahasra is the parent company and the associate companies of SahasraEntreprenial Resources can be stated as follows,

  • Colombo Consultants
  • Colombo Investment Platform (private) Limited
  • Ceylon Venture Capital (Private) Limited
  • Samudra Business Holdings (Private) Limited
  • Ceylon Corporate Secretaries (Private) Limited

The head office is situated in 70/2/3A, 2nd Floor, YMBA Building, Colombo – 08. In addition they have about thirteen braches all over the island and in abroad. The customers or the people who are interested about this organization can contact the organization through their official phone numbers and email addresses given in the website or by leaving a message to the company through their website.

They are proud to say that they possess most competent and confident employees in their organization. Although they have about thirteen branches all over the island they have only about forty employees in their organization. We can introduce this company as a small scale organization by taking the number of employees as the base.

1.2 Vision, Mission and Corporate values

1.2.1 Vision

“Making unconceived vision into a reality” is the vision of the Sahasra firm.

1.2.2 Corporate values

  • Always retrospect’s its behavior
  • Focused on continuously improving towards its Vision

1.2.3 Primary objectives

Managing of entrepreneurial resources, promoting of business alliance, investing on business ventures, formation of capital investments, portfolio management, management and business consultation, advancement of systems and procedures, acquiring of business ventures, business outsourcing process, corporate consultation are the primary objectives of Sahasra.

1.3 Services they provide (product portfolio)

This organization provides different types of services including,

  • Managing and accelerating of entrepreneurial resources
  • Promoting of business alliance
  • Investing on permitted sources and portfolio management
  • Capital formation
  • Business outsourcing process and corporate consultation.

1.4 Corporate Objectives

Their corporate strategy is to expand their business gradually. So their first objective is to expand their business island wide by achieving a good reputation in Sri Lanka. Next objective is to open up many other branches international wise by achieving a good reputation internationally.

1.5 Market share/Leadership Information

Their organizational hierarchy is consist of three layers as follows,

  1. Business associated level
  2. Corporate associated level
  3. Management associated level

Since this organization is a member of group of other companies, it is govern by the chairman of the whole group who is Mr. Shamen Kumar. Furthermore they have four departments including finance, HR, marketing, and customer care department. Each department is headed by an appointed director. They say they always try to maintain the hierarchy in the organization. But the most important feature that can be seen in this organization is that nobody is discriminated by the organization regardless of their position, race, gender etc. Equality is so prominent in this organization. Therefore even new recruiters can express their views on how to improve business processes of the organization.

2. Environmental scanning

2.1 SWOT analysis

Conducting SWOT analysis is very important because organization can understand about internal environment and the external environment of the organization.

StrengthsWeaknesses
Committed and loyal employeesNo focus on succession planning
Confident and competent employeesGiving priority only for Buddhist ideologies
Well experienced and committed leaders
Increasing profits over the years
Good reputation locally as well as internationally
OpportunitiesThreats
New marketsNew strategies of competitors
Expanding the business for new geographical areas.Economic conditions like inflation, recession, tax rates etc.
Technological advancements.Decreasing market demand
New partners.Customer dissatisfaction
Rising living standards of peopleLoss of key employees to competitors
New legal obligations

Table -SWOT Analysis

Organization can understand about the strengths of the organization and use those strengths to overcome threats facing by the organization. One threat that Sahara group is facing is new strategies of the competitors of them. But one strength of this organization is the reputation towards the organization locally as well as internationally. Though competitors introduce new strategies in order to attract customers toward them, customers who have experienced the service of this organization will not shift to another organization. So this organization can use the strength of them in order to overcome the threat facing from competitors. Customer dissatisfaction towards the organization is another threat of the organization. This organization is having competent and confident employees as well as well experienced and skilled staff so they can use these employees by improving them more to provide a quality service to the customers. Then they will not get dissatisfied with the organization.

Furthermore this organization is said to be Increasing profits over the years. Because of this strength, they can go take advantages of opportunities like new markets, Expansion of business by making investments with their profits. It is also said that they have a good reputation locally as well as internationally. So because of this strength they will be able to reach opportunity of making new partners easily.

2.2 PESTEL analysis

Political:

  • Rules and regulations of the country

Political changes and rules and regulations are one of main factors which affect the organization. When a business is started and registered they should conduct the business according to the rules and regulations of the country. For example: Labor laws, different Acts related to the industry etc.

  • Changes of government

If any organization go beyond the rules of the country, actions are taking against them. When governments are changing time to time, the government policies are changed over the time. So the organizations have to adjust according to those changes.

Economical:

  • Taxes

Economic factors are another thing which is affecting for the business. According to the standards of the government organizations should pay taxes to the government. As Sahara enterprise is a multinational company currency changes are affecting for the business.

  • Inflation
  • Currency changes
  • Recession

Social:

  • Customer attitudes and Opinions
  • Demographics

When a business organization is started they should consider about social factors which are affecting for their business. They should consider about demographic factors such as age, gender, income levels and other things.

  • Ethnical/religious factors

And also business organizations have to deal with different kind of customers from different religions, nationalities and also with different attitudes and opinions. Organization should respect to all these things when they are dealing with customers.

  • Increment in living standards

And also living standards of people are changing from time to time. So organization should consider about these all social factors when running a business. Because if the living standards are high that favorable for the organization like Sahasra.

Technological:

  • New technological inventions
  • Changes in information technology

As we are in the global village, Technology is changing day by day. To successfully compete with other competitors, having new technological improvements within the organization is a must. So organization should identify about new technological inventions and adjust according to them.

  • Communication

Also today communication is becoming more and more easy with new advancements as this organization is operating internationally they should develop their communication. Sahara enterprise has developed a good communication system among their branches.

Environmental

  • Environmental hazards
  • Rules and regulations related to environment pollution
  • Geographical locations of branches

Environmental factors are another thing affecting for the business. When a business is running they should consider about their geographical locations and branches. Because location is an influential factor in making profits. They should have a well spread branches for the success of the organization.

  • CSR activities

Also they should consider about protecting the environment by decreasing harmful effects on nature. Since this organization is a service based organization they have lesser impact on nature. Involvement of CSR activities in a must for organizations in order to remain in the business world.

Legal

  • Court system
  • Legal requirements

When a business organization is running their business in a country they should consider about the legal requirements of the country. They should follow court system of the country. Also they should fulfill legal requirements which are applicable for the country that they are operating. ]]]

3. SHCM IN PRACTICE AND HR’S ROLE

3.1Life Cycle Analysis

At present this organization is in the growth stage as now the business is expanding locally and internationally. So they have passed the introduction stage. When they are changing those directions their practices also changed.

3.1.2 Introduction

The company was introduced in the year of 2009 with the name of SK associates. At the beginning, present Chairman Mr Sharmenworked in several companies such as Helix, Sanken etc. But later he started his own audit firm called SK associates. At the beginning there were only five employees in the organization. Most of them were the students who completed A/L s. He recruited one of his previous colleagues in his firm as he needed good experience and knowledge to run the audit firm.

At the introduction stage there was no separate HR department. They didn’t practice proper HR practices. Administration activities such as financial planning, record keeping and personal and physical distributions were done by the founder. He also involved in recruiting and managing employees .As there were high employee turnover in the organization due to various reasons such as poor retention strategies, he had to spend more time for recruitment activities. At this stage he didn’t seek for high qualified people as he has to invest money for the development of business other than investing on people. Most of the time he recruited students who follows different courses. Salaries ware paid according to the daily tasks they did. On the job trainings were provided to employees by the founder. He selected this method after considering about the budgets that he have to spend if he implement proper training programs in the organization.

The demand for the organization increased because of the good performance of the organization. But in the meantime, the firm had to experience complaints for poor performance of employees as well as turnover issues. Management thought establishing a proper HR department is the way to overcome current issues and to remain in the competitive industry. First of all he recruited a HR manager. Then they started to hire more employees to the organization. Other than considering about the cost, organization had to invest money to recruit and develop employees with good qualifications. They focused about hiring employees those who are hardworking and professionally skilled. Also they had to have proper way to retain those employees inside the organization as a result of that proper salary plans and retention strategies were introduced. In addition the organization thought about training and developing the employees. They started conducting training programs formally to employees. They encouraged employees to follow professional courses such as degree, diploma and CIMA.

So this is how Sahara enterprise did their HR practices in the stage of introduction.

3.1.2 Growth.

Gradually SK associates started grow continuously. So their HR practices which they followed in previous stage also changed with the time.

Later several organizations like Colombo Consultants, Colombo Investment Platform (private) Limited, Ceylon Venture Capital (Private) Limited, Samudra Business Holdings (Private) Limited and Ceylon Corporate Secretaries (Private) Limited join SK associate. So they changed their name as Sahara Entrepreneurial Resources Limited in 2012 by incorporating into a company. Sahara became the parent company. At present there are 13 branches of Sahara enterprise around Sri Lanka and other countries. The business is still growing they have plans to open more branches and improves the business .So we assume that now they are in the growth stage. With this changes HR practices of the organization changed and improved a lot. Now they are also providing HR services for other organizations as well. They started to recruiting people with high competence and confidence. They started establishing attracting salary schemes. According to the current salary scheme they are paying about 30,000 rupees per employees during the probation period. [1]

Furthermore they established separate department for each functions such as HR department, finance department and so on. They gave a priority for the development of employees. Therefore they started to conduct off the job trainings as well by an external parties locally as well internationally. According to their details it is obvious that still their growing with the time while adjusting the HR practices accordingly.

3.2Corporate Strategy / Business and Functional Strategies

  • Corporate strategy: To expand their business gradually by locally as well as internationally.
  • Business Strategy: Focused on differentiation to make a difference by providing quality services on time to the customers.
  • Functional strategy: To maintain the smooth functioning of functions of the department without interrupting the functions of other departments.

3.3 SHCM approaches (Models)

According to the details we found, our opinion is that they are following contingency approach. In contingency approach they are changing practices according to the situation. When it comes to Sahasra HR practices are changing according to the branches. For example; in Jaffna branch they recruited only Tamil employees who can speak Sinhala as well. When they send employees to branches in other countries, they are paying high compensations compared to local branches’ employees and providing extra allowances such as accommodation as well. Normally in contingency approach there are three main areas. They are life cycle model, competitive strategy based and strategic configuration.

In life cycle model at present they are in the growth stage. They changed the practices that they followed in introduction stage when they develop in to the growth stage.

PracticeIntroductionGrowth
Recruitment
  • Consider about cost in recruitment
  • Recruited less qualified people
  • Recruited high qualified people other than considering about cost
Training and development
  • Provide on the job training by the founder
  • Didn’t spend much time and cost for training programs
  • Provide opportunity for employees to develop(encourage them to do higher education)
  • Providing off the job training by external party
  • Training programs are conducting without considering about time and cost
  • Encourage further learning for employees
Performance management
  • No proper performance management programs.
  • Conducting performance management programs twice a year
Salary scale
  • Payments are done according to the day today works they do
  • Establish a formal salary scheme.

Table -HR Practices and Growth

So from this we can understand that they changed their practices according to the life cycle. Other area of contingency approach is competitive strategy. It means strategic flexibility of the organization to respond for various demands. In this they followed high performance management model. When they are recruiting they recruited high confident and competent employees. They paid high salaries in order to retain them within the organization. Also if they successfully completed a big project some amount of money is sharing among the people who involved in that project. Also they gave employees the freedom to think their own and complete the task. Management is there to guide them but not to force them.

The other part of this is strategic configuration. When organization is taking decision they are considering about the resources and capabilities of employees they are matching them with external opportunities. From this organization is trying to keep strategic fit inside the organization. They are trying to keep internal fit which means linking each and every HR practices. When they are going to implement new or change current HR practices of the organization they are trying to match them with the other current HR practices of the organization which means horizontal fit. Vertical fit means match between HR practices of the organization and objectives of the firm. So every time the directors of each department get together and discuss whenever a new or any change is done in HR practices. It is because they do not want to deviate from their ultimate objectives.

3.4Strategic Review

3.4.1 Analysis:

They are following differentiation strategy as they always try to provide quality services to customers on time. They always look forward to do creative innovations. According to our opinion, all these objectives are significantly important for the firm. Because these objectives can have a major impact on their profits. In order to achieve these objectives they need to possess loyal and highly competent employees. Because when the employees are happy with the organization, they will try their best to make customers happy by proving a good service. When it comes to the current situation, they said turnover rate of permanent carder is only in between 10- 8 percentage over the last years. This suggest that employees are highly satisfied and loyal to the company.

3.4.2 Diagnosis:

The main reason for this achievement is the usage of effective HR practices. They have been able to win the hearts of employees as well as to achieve employee engagement through the effective HR practices.

3.4.3 Conclusions and recommendations:

In order to further improvements it is better if they can ideologies common to all religions. It is because at present giving priority for only Buddhist ideologies. This may lead to dissatisfaction among the employees from other religions. The other thing is following only Buddhist ideologies has no connection with their ultimate objectives. Therefore it is better if they can change this practice. Furthermore they have not focus on giving attention to succession planning. This is a serious matter to be concerned. Because at one day they will experience lack of skilled personnel to recruit to the key positions of the organization.

3.4.4 Action planning:

When it comes to succession planning, since they have not concerned about it so far, they need to make a database with the required details to their key positions. First of all they need to identify the key positions of the organization. They have to concern about the qualifications and skills possessed by the employees those who hold those positions. Next they have to find whether there are employees who are eligible for those positions with necessary skills and qualifications. If there are less eligible people, they need develop their employees up to the required standards.

3.5 Identify the HR Strategies

3.5.1Recruitment

This is the one of major HCM practices in this organization. First of all they do a market screening by considering about the retention, remuneration etc. Since they are a service based organization, whenever they want to recruit someone they go for two options as hiring an employee and outsourcing the work. But most of the time they try to hire employees as they are so concern about quality and professionalism of their work. Since they are dealing with confidential information, rarely they publish paper advertisements. Most of the time they try to find new recruiters through personal contacts.

After gathering CVs, a committee (which is consist of one employee from marketing, finance, HR and operation departments) short list the CVs and find the suitable CVs for the vacancy. They also have to submit all rejected CVs to the chairman and other superiors. So that the head people can find if any qualified people have been missed or purposely missed by the committee members. Then selected applicants have to face at least three interviews. The first interview is conduct in divisional wise and participation of well experience HR employee in essential for the interview. The interview board should be ready to give reasons for selecting candidates and rejecting candidates. Then the second interview is conduct by HR directors and the Directors of respective division of the vacancy. Irrespective of lower or higher position the third or the final interview is done by the chairman with the selected candidate in order to welcome the employee to the organization.

The selected candidate needs to handover all originals of his education and personal certificates except the national ID. That is done as a proactive measure in order to certify professionalism and confidentiality of the company. If by any chance employee commit any misconduct against the organization or resign without prior notice, the company will not handover their original certificates unless they pay a compensation for them faulty behavior.

Then the new recruiters would be appointed for the probation period which is considered to be so tough. The ultimate objective of the organization is to retain the most confident and competent employees. Therefore during the probation period new recruiters have to undergo a difficult time with heavy workload. So the organization says most of the time 90% of employees leave during the probation period and still they do not mind it as they know the 10% who retain in the organization are the most confident and competent people out of all employees. They say that 10% of employees are more than enough to achieve their targets.

So considering all these information, we can say the recruitment practices practiced by this organization is effective. That is because this company has taken steps to make recruitment fair and transparent as well as the information implies that they are always recruiting the most suitable people to suitable positions.

3.5.2 Training and Development Management

Excellent and massive training is given to new recruiters as well as the current employees. Most of the time those trainings are conducted by the outsiders. Furthermore they told us that most of the time they find positive relationship among training and development programs and the annual performances of the employees.

3.5.3 Career and succession planning

The chairman says that they are recruiting future directors in the interviews. The most required qualifications to promote their employees to higher positions is confidence, competency and hard work. All employees know, to what positions they can go in future, which means they have a good understanding about career planning.

3.5.4 Performance Management

The organization conduct performance reviews twice a year and employees are given marks for their performance. The appraisal evaluation criteria is said to be address about thirty five aspects of the job and the employee. They introduce those reviews as two way communication as it helps to evaluate the performance of the employee and it let the employee the opportunity to express his views and ideas. Then the immediate bosses communicate the results to the employees and the employees are appreciated accordingly.

Sometimes they say that they reward those who do not perform well as those people are the reason for others to perform well.

The above details proves that the practices taken towards performance management are effective. It is because performances of all employees are evaluated and appreciated accordingly.

3.5.5 Rewards Management.

Based on the performance appraisal marks, the organization provides rewards to their employees once a year. Rewards include salary increments, foreign tours, bonuses, promotions etc. The employees who have performed badly or done any misconducts would be given punishments like not giving promotion and increments etc. The punishments are given without considering the position of the employees. Even the chairman has to resign if he found be engaged in any sort of misconduct or irresponsible work. Therefore all employees from higher level to lower level have to be responsible for what they do.

Discipline plays a major role in this organization. Therefore they have very strict and tough rules and policies. Anyone who would try to work against the company will be fired by the company. Employees are not permitted to accept any sort of gifts from the clients, even though the client is willing to give. But the good work of employees is always appreciated internally by the organization.

These details shows that practices taken towards reward management is effective in this company as all employees would be motivated by such kind of fair and transparent practices.

3.6 Link between HR Strategies to the Business and Corporate Strategy

Through each and every HR practices, they have been able to develop a good set of employees who are competent, confident are loyal to the organization. They have a strong relationship with the employees. That is why their employees are willing to work more hours after working twelve hours continuously. When it comes to their business strategy, they are focused on differentiation strategy. Which is to make a difference through providing quality services on time to their customers. In order to do this, they need to have highly skilled and satisfied set of employees. So when considering the HR strategies and Business strategy of this firm, we can see a clear link. It is because through HR strategies they are preparing a set of loyal and skilled employees who are need to achieve their business strategy.

When it comes to corporate strategy, they intent to expand their business more and more locally as well as internationally. They will never be able to grow their business unless they achieve high profits and good reputation among the customers. In order to achieve high profits and good reputation, they need to provide a quality service to their customers on time. So here we can see there’s a clear link between the corporate strategy and business strategy of the business. Since the firm achieve their business strategy through their HR strategies, we can say there’s a link between HR strategies and corporate strategy as well.

3.7 Impact of SHCM on organizational performance

AchievementsPractices contributed
Employees are confident and competent: Do not seek job security from the organizationSelective hiring conducted by the organization helps the organization to choose competent employees who are suitable for the organization.

During probation period, they let the employees work under huge pressure under tough rules and regulations. Therefore only the most confident and competent employees will retain in the organization.

The standard trainings provided by the organization help further to tarnish the competencies of employees.

Some of current Directors of the organization are the ones who have gradually promoted from smaller positions.The standard trainings provided by the organization help employees to improve their skills, knowledge etc.

Effective and transparent performance management practices help managers to easily identify the employees who are eligible for the promotions.

Career development practices of the organization help employees to reach higher positions.

Employees have become professionally fluent in handling English.Massive training programs that are conducted by locally and internationally have resulted to improve English communication skills of employees.
Maintains 85% of retention rate of Permanent employees.International training programs conducted in abroad cause employees to increase their motivation and satisfaction. That will indirectly let them to retain in the organization.

Career developments practices has caused to increase employee satisfaction as it motivate employees to perform well in order to achieve promotions. So since they know they grow in their career, they will retain in the organization.

Effective, fair and transparent rewards management practices has become a major cause to increase employee satisfaction and to motivate them to perform well. So therefore they will retain in the organization happily.

Good results have shown by different sections of the company as follows,

Finance 95%

Programming 80%

Marketing 65%

Secretarial 50%

Administration 85%

The excellent and massive training programs have caused for these achievements.
Employees are even ready to work longer hours without any complaints.Due to effective motivational programs and rewards and recognition management, all most all the employees are working twelve hours continuously and they are even ready to work more longer hours without any complaints.

Table -HR practices and Achievements

HCM measurements

They uses two types of HCM metrics including Strategic HR metrics and Human resource metrics.

3.8.1 Strategic HR metrics

Under strategic HR metrics they calculate following rates including,

1. Monthly Turnover Rate. – (Number of separations during month / Average number of employees during month)

2. Revenue per Employee – (Total revenue / Total number of employees.)

3.8.2 Human resource metrics

Under Human resource metrics they calculate following metrics including,

1. Worker’s Compensation Cost per Employee. – (Total workers compensation cost for year / Average number of employees.)

2. Overtime per Individual Contributor Headcount. (Overtime Hours /Individual Contributor Headcount)

3. Employee Absence Rate. – (Number of days in month / (Average number of employees during month x Number of days)

4. Percentage of average performance employees

5. Percentage of high performance employees

6. Percentage of low performance employees

7. Training cost per employee – (Total training cost for the year/ Average number of employees)

8. Recruitment cost per employee – (Total recruitment cost for the year / Average number of employees)

9. LTO – (Number of turnovers per year/Average number of employees per year)

10. LTO during probation period – ((Number of turnovers during probation period /Average number of employees per year)

4. STRATEGIC OPTIONS AND HR DECISIONS FOR THE FUTURE

Strategic options are creative alternative action – oriented responses to the external situation that an organization faces. When it comes to this organization they have already started to make acquisitions with several other organizations in order to survive in the competitive industry. So their HR department has already started to play a critical role over these acquisitions through preparing effective ways of collaborating and deciding fair principles on handling redundancies. Furthermore they intend to outsource some of their activities in the future.

Aligning HR strategies towards corporate strategies is a big challenge in this uncertain economic conditions and competition. According to Aberdeen group, 2013, they have found several presaures which could drive the HCM practices of organizations.

Furthermore this group has found three most important areas that every organization should focused make improvements in order to face the above pressures successfully. Those are explained in the following figure,

Currently this organization is also giving more attention on these three areas. But our suggestion is that it is better if they can give much more attention to employee learning and development than they currently give.

5. Implications and recommendations

By going through all details of this particular company we can conclude that this company has been successful in their HCM practices. We found that although this organization has taken steps to ensure career planning, they have not given much attention for succession planning. According to the details we got it is obvious that they are not maintaining information regarding succession planning. This would result the organization unfavorably in future. So they need to take necessary steps to ensure succession planning. It is better if they can maintain a database on which employees should be developed in order to fill each of key positions in the company.

Another problem that is seen in this organization is their biasness for the Buddhist ideologies. Because of this issue, employees from other religions may get dissatisfied due to this issue. Therefore they should take steps to follow ideologies common for each religions.

When it comes to rewards management it is said that they are even rewarding employees those who do not perform well as they are the cause for other employees to perform well. This is a good practice to maintain performances of employees. But in such cases company need to take much care and provide explanations for that sort of rewards as employees those perform well might be discouraged due to this practice.

Limitations

As a business organization they are having limitations inside the organization when providing details of the organization to another party. Especially they were not ready to disclose information about the issues and problems that they are having inside the organization. As a result of that we were unable to gather negative details from this organization.

 

References

  1. Kochan, T. A. (2004). Restoring Trust in the Human Resource. Asia Pacific Journal of Human Resources.
  2. Mollie Lombardi, M. L. (n.d.). Human Capital Management Trends2013.
  1. But the probation period is very tough and stressful. It is because they need to retain the most confident and competent employees among the new probationers