CHAPTER TWO
REVIEW OF RELATED LITERATURE
2.1. The concept of resource management
Effective resource management is a priority for all professional services executives looking to optimize profit margins, improve billable utilization, retain top talent and increase client satisfaction.
Resource management is the efficient and effective deployment and allocation of an organization’s resources when and where they are needed. Such resources may include financial resources, inventory, human skills, production resources, or information technology. Resource management includes planning, allocating and scheduling of resources to tasks, which typically include manpower, machines, money and materials. Resource management has an impact on schedules and budgets as well as resource leveling and smoothing.
In order to effectively manage resources, organizations must have data on resource demands forecasted by time period into the future, the resource configurations that will be required to meet those demands and the supply of resources, again forecasted into the future. Forecasts should be as far out as is reasonable. Resource leveling, as it relates to inventory, is a resource management technique aimed at keeping the stock of resources on hand level, reducing both excess inventories and shortages. In project management, resource leveling is scheduling decisions, which are driven by resource management concerns, such as limited resource availability. As opposed to leveling, resource smoothing may not delay the project completion date, only particular activities within their float.
Many organizations use professional services automation software tools to make resource management tasks more efficient and effective. The automated tools may include timesheet software and employee time tracking software, which calculate skill sets, experience and workload in selecting the most skilled employee in an organization to handle any specific project. This enables the organization to forecast future staffing requirements prior to project implementation.
In businesses where revenues are not dependent on product sales, such as legal, consulting, and engineering, organizations strive for minimal bench time. In these organizations, time and expenses are carefully tracked and billed to clients. In order to be sustainable, resources must be maximally utilized on billable time and activities. Effective resource management will optimize organization efficiency, minimize bench time and improve the bottom line.
Effective, proactive resource management delivers the utmost level of optimization and efficiency by enabling proactive allocation of resources based on business policies. At this level, implementation of business-policy oriented resource provisioning ensures that resources are provisioned in advance of business needs and in alignment with overall business priorities and objectives. This drives the highest possible resource utilization rates, while simultaneously minimizing business service and availability risk.
2.2. Importance of resource management to business organization
The importance of effective and efficient resource management to business organizations cannot be overemphasized. For any organization that wants to grow and expand its productivity base, then resource management should be practiced to its fullness(Ande 2008).
STRATEGIC RESOURCE MANAGEMENT AND PERFORMANCE
Research between strategic resource management and business performance has dominated the academic and practitioner debate for more than two decades. However, most studies and publications in the field of resource management have defined the concept in terms of individual practices. According to Noe et al. (2007), refers resource management practices and policies that influence behaviors, attitudes and performance of employees. They are focused on several important practices which, in turn, can positively impact organizational performance, such as human resource planning, recruitment, selection, training and development, compensation, performance management and employee relations. Prefer reshapes these practices into seven resource management practices; these practices are expected to enhance organizational performance and enable the organization to gain a competitive advantage (1998). Such practices are detailed as follows (Boxall, Purcell and Wright, 2007):
- Ø Employment security.
- Ø Selective hiring of new personnel.
- Ø Self-managed teams and decentralization of decision-making as the basic principles of organizational design.
Comparatively high compensation contingent on organizational performance.
- Ø Extensive training.
- Ø Reduce status distinctions and barriers, including dress, language, office arrangements, and wage differences across levels.
- Ø Extensive sharing of financial and performance information throughout the organization.
According to Michael Armstrong (2006), in the center of this model is the performance as a function of the Ability + Motivation + Opportunity (AMO). Development of managing resources strategy comes after is crafted business strategy. But before the drafting and formulation of business strategy should have analyzed competences of the staff, the way how they motivate, the types of skills and knowledge employees. It is precisely this workforce that will achieve the performance indicators. So, the realization of business strategy comes through integration of workforce opportunities, their expectations and other factors that influence inside and outside the organization. So, it is easier tracking of a resourcesmanagement and adaptation strategies with previous practice and practice to be followed for the implementation of performance. The performance will be implemented successfully to achieve organizational performance satisfaction from reaching employees, their motivation, effective management of reources by production high quality products.
In resource management performance research, the performance outcomes of resource management can be viewed in different ways. Research management researchers have mostly referred to Dyer and Reeves’ (1995) classification of performance outcomes as follows:
- Ø Human resource-related outcomes, such as turnover, absenteeism, job satisfaction, commitment.
- Ø Organizational outcomes, such as productivity, quality, service, efficiencies, customer satisfaction.
- Ø Financial accounting outcomes, such as profits, sales, return on assets, return on investment.
- Ø Capital market outcomes, such as market share, stock price, growth (Boxall, Purcell and Wright, 2007).
Strategy
Resource management improves the company's bottom line with its knowledge of how resources affects organizational success. Leaders with expertise in resource strategic management participate in corporate decision-making that underlies current staffing assessments and projections for future workforce needs based on business demand.
Benefits
Benefits specialists can reduce the company’s costs associated with turnover, attrition and hiring replacement workers. They are important to the organization because they have the skills and expertise necessary to negotiate group benefit packages for employees, within the organization's budget and consistent with economic conditions. They also are familiar with employee benefits most likely to attract and retain workers. This can reduce the company’s costs associated with turnover, attrition and hiring replacement workers.
2.3 How resource management improved skills in business organizations
The social system approach to the management of resource has come to be accepted as the most appropriate. The open system that this social system connotes has led to diverse and increased challenges of human resource, management in organisations. Some of these challenges are x-rayed and evaluated here. Chan (2005:1) warns that “the future success of any organisation lies in the ability to manage the diverse body of talents that can bring innovative ideas, perspectives and views to their work. The challenge and problems faced of workplace diversity can be turned into a strategic organisational asset if an organisation is able to capitalize on this melting pot of diverse talents”. It is clear that the above statement not only accepts the enormity of the challenge of workplace diversity, it indicates the diversity can be turned into a gain for the organisation. Chan (2005: 1) quoting Thomas (1992) explains that the “dimensions of workplace diversity include but are not limited to: age, ethnicity, ancestry, gender, physical abilities/qualities, race, sexual orientation, educational background, geographic location, income, marital status, military experience, religious beliefs, parental status and work”. The dimensions of workplace diversity seem limitless and intractable. With the mixture of talents of diverse cultural backgrounds, genders, ages and lifestyles, the human resource manager no doubt has an uphill task of integrating the views and interests of organisation members. If and where integration is done, enormous time may have elapsed or much time must have been spent on training to enable members respond to business opportunities more rapidly and creatively (Brewster,2005:14). Given the global nature of today’s organisations, the international companies are constantly faced with workplace diversity. Challenges sometimes result from changes, which organisations constantly undergo. These changes may be within and without the firm. Flippo (1980: 10) asserts “that among the many major changes that are occurring, the following four will illustrate the nature of the personnel challenge: “changing mix of the work force, changing values of the work force, changing demands of employers changing demands of government”. The major changes in the mix of the work force are increasing level of formal education for the entire workforce, more female employees especially in service organisations, more married female employees, more working mothers and steadily increasing majority of white collar employees in place of the blue collar. The type of education (grammar type), which graduates receive even in universities of technology has made more white-collar job seekers than blue collar. The lack of interest in education by many males has left the bulk of graduates and job seekers as females. This has resulted in not only more female employees, but also increasing number of nursing mothers (Chukwuemeka, 2006:46). The consequences to productivity are obvious: loss of man-hours, absenteeism and outright increase in labour turnover and layoffs. Since white collar employees are less inclined toward labourorganisations and have greater expectations in terms of more individual treatment by management (Sims,2006:3), the design of personnel programme to capture this becomes another challenge. There is today, changing values of the work force. The work ethic, which sees work as having spiritual meaning, buttressed by such behavioural norms as punctuality, honesty, diligence and frugality is fast changing. Eze (2008:18-33) observes that one’s job is no longer seen as a central life interest that provides the dominant clue to interpersonal assessment. Prayer sessions in many organisations sampled hinged on making money and not doing the work. The argument is that job is in the village and money is in the town or city. Whoever wants to work should go to the village, while money and fun seekers should remain in the city. Quality of life is preferred to quantity, equity to efficiency, diversity to conformity and the individual to the organization (Kearms:2000:116). These changing values no doubt exert enormous pressure and challenge in human resource management in organisations. Changes also occur in internal environment of organisations in their attempt to respond to the external pressures of competition and technological changes. Two changes are apparent here. They are automation and ICT, and the growth of multinational corporations. These are no mean challenges. Chukwu (2009:14) in accepting the foregoing informs that theyhave swooping effects on personnel programmes, for example restructuring or redesign of jobs, upgrading of the workforce, structural unemployment, labour relations issues, adjustments in wage structures, human relations and selection and placement of key personnel in overseas plants. The information age that we are in today has kept everybody on his toes. Information has kept changing even on hourly basis. The challenge of installation of executive information system (EIS) has become imperative; there is the challenge of a good control system that would ensure the communication of the right information at the right time and relayed to the right people to take prompt decision. Information, it should be understood is the basis of decision-making in an organisation. Also expounding on the four challenges of human resource management by Flippo (1980), the changing demand of government is apparent. Government in Nigeria has doubled as the highest employer of labour and the highest regulator of paid employment (Udeze, 2000:16). The major challenge posed on organisations is in the means of legislation and fixing of wages; some wages are fixed through executive fiat. Government has laws on every aspect of the operative functions of human resource management. There are legislations on procurement of men and materials, training and development, compensation, integration and the separation of employees from the organisations. Imaga (2001:55) explains that the most critical aspect is the ever-changing law. The 1999 constitution has been reviewed and is further being reviewed. Acts and laws are churned out every day from both state and Federal legislatures.
