Interclean

Introduction

InterClean, Inc. is a company at a crossroads. The David Spencer, CEO of InterClean, Inc., has a new vision for the future of his company: an expanded, global company specializing in cleaning and sanitation. To this end, he seeks to steer InterClean, Inc.’s management into a business model the exploits new solutions and sales models, merges with the recently acquired EnviroTech, Inc., and increases revenue by 40% annually. The way that InterClean, Inc. functions, how management targets tasks and develops strategies to complete them, its corporate culture, the way it trains its staff and the structure of the company itself will require substantial change.

Analysis

The framework of strategic human resource management (HRM) provides guidance into both descriptive and prescriptive lines of questioning. The literatures in strategic management and organization theory have long argued that the fit between business strategies and organizational characteristics is a key determinant of organizational performance (Chandler, 1962; Lorsch and Allen, 1973; Galbraith and Nathanson, 1978). While these strategies have had problems in defining exactly what constitutes “fit” (Van de Ven and Drazin, 1985; Venkatraman, 1989), the general proposition that fit is important with some empirical support and has motivated the emergence of what has become known as strategic HRM. Strategic HRM holds that the sets of policies and practices used to manage a firm’s labor force should be considered in the context of organizational strategy. Further, strategic HRM argues that a key criterion for evaluating the effectiveness of personnel practices should be the extents to which those practices help the organization meet its goals. Most existing research in human resource management considers the effects of HRM practices on individuals and their performance; that is, it has taken a “micro” perspective on effectiveness. As Butler, Ferris and Napier (1991) observe, strategic HRM requires a shift toward a more “macro” perspective in which attention to effects of practices at the level of the organization is more important.

In a discussion group, Nancy Rothbard (2005) discussed when people are asked to rate, the quality of different functions within their company, information technology (IT) and human resource (HR) are repeatedly rated the lowest. On a more positive view of HR, is the works that directly affect senior management, providing crucial input into major business transactions such as mergers and acquisitions and restructurings. In the synopses of companies listed, HR departments have moved away from the traditional role of administrators, with many of those responsibilities outsourced, to a more creative focus on their prime role, which includes recruiting talent, promoting mobility and career development, and improving organizational effectiveness. What is the role of HR now? From the 1920s, HR was seen as a way to advocate for, and protect employees. Employee orientation became quite explicit in the 1950s and beyond as part of an effort by management to prevent unionization. More recently and especially over the past decade, the threat of unionization is much less widespread even as technological advances have made employees more expendable. The social contract between employee and employer, in which companies provided lifetime employment to its workers in return for loyalty and commitment to company goals, might be ending. These days, employees are afraid to resign from their position because of the tight labor market and reluctant to complain about increased workloads for fear of being laid off. Companies are pushing more work onto employees, and HR departments are becoming the mechanism for doing that. As a result, the idea that HR people are there to represent workers or at least deal objectively with their concerns is gone. In addition, with companies continuing to cutback employee benefits such as healthcare and pensions, HR departments have found themselves increasingly the bearer of bad news to employees (Sirota, 2005).

Judging from the way HR has developed over the past suggests that HR has become a servant to management and more concerned with carrying out directives from above than supporting the needs of employees. Managements reporting relationship may either be dual, to the head of the line operating office and to the head of HR. Nevertheless, at the end of the day, the power dynamic seems to favor HR's relationship to their senior line executive. One of the many advantages is distribution function of HR but one of the downsides is a decrease in the view of HR as playing an ombudsperson role in the organization. The daily contract between employees and management of keeping each other informed was relegated to either voicemail or email as opposed to conversations. Employees believe that the social contract between the company and its workforce no longer exists and that employees are on their own. What companies must do is offer a compelling case to the individual as to why he or she would want to work there. HR must emphasize their cases on skills training, workplace flexibility options that includes work-from-home and a commitment to diversity, focus on performance differentiation, leading-edge technology and leadership development must be shown to employees when opportunities exist (Sirota, 2005).

Given the recent controversies over huge compensation packages at public companies, pay-for-performance continues to be a hot-button issue for everyone from CEOs down to lower level employees. The leading-edge thinking now is much more on segmenting work across the company and segmenting the workforce in ways that let differences be defined and valued. This allows HR to move away from a system of everyone is treated the same to one where people can be treated differently according to business needs, individual preferences and performance. HR employees are not interested in an open-minded approach when it comes to making exceptions to company policies, including pay schedules. Instead, they pursue consistency and regularity in the face of a workforce that is different and multifaceted. Bureaucrats everywhere despise exceptions and not just because they open up the company to charges of bias but because they require more than rote solutions. Rather than sending the message that the company values high-performing employees and is focused on rewarding and retaining them, HR departments benchmark salaries, function by function and job by job, against industry standards, keeping pay within a narrow band determined by competitors. HR, in other words, forfeits long-term value for short-term cost efficiency. If the company’s vice president of human

...