Describe the HR Strategies of Two Organisations of Your Choice. Critically Discuss Whether and How They Contribute to the Competitiveness of These Organisations
This Essay is focused on Human Resources strategy of two organisations- Alten SA and Aon Plc. This Essay is divided into two parts with the story of two companies and the description of two their HR strategies. In this Essay we consider two main HR strategies of the two companies with analysis in depth what they are, their features, abilities, advantages, etc. We consider that the company A (Alten SA) uses Recruitment HR strategy, using those methods as a few phase interview, psychological tests, emotional intelligence tests, communication tests. The first part of this work is focused on this organization A and its HR strategy. We consider Literature Review, Findings and Discussion on the company A strategy in one section- section 2.2 of this Essay.
In this part of the work we define and conceptualise the key terms of research and showed evidence, findings, conclusions, and show the discussing theory in light of the presented findings. Whole Part one of the work is concentrated on the recruitment and selection strategy, describing recruitment methods and how they contribute into competitiveness of the recruitment. In depth, the Part one of this work describes that the recruitment brings into competitiveness that the company compete by personnel, by quality of personnel, they employ the best people, the better people for work. Recruitment allows to improve image of the company, image in international arena. Recruitment contributes into competitiveness of the company productivity and effectivity of the company, effectiveness of the work in the company. Recruitment allows to compete among the multinational companies.
We consider a few recruitment methods, from a few phase (serial) interview to psychological interviews, emotional intelligence tests and tests on communication. Most of these recruitment methods bring a lot into competitiveness of the company. In depth, most of these recruitment methods show that company has better communication between departments, better collaboration between people, and better operations. Moreover, emotional intellect tests improve agility, flexibility of the company in comparison with others. The personnel recruited by those methods can do more, can achieve more in the work, can reach better goals and benefits for the company. Therefore, personnel and human resources improve competitiveness of the company.
We write that the company employs right people, best people, well-educated and experienced people, psychologically strong, emotionally intelligent people. The company creates competition with other companies by their employees. The main idea of all lenses, described in the first part of the Essay, is that the Human Resources are the competitive advantage of the company, improving its competitiveness. The Part two of this Essay is focused on the organization B- Aon plc., and its HR strategy. The company B uses Training and Development HR strategy. We consider the Literature Review, Findings and Discussion in one section- section 3.2. of this Essay.
We demonstrate the findings, research and main terms of debate. In the Part two (Section 3) of this Essay we consider training and development in depth, describe it, make an analysis of its value to the competitiveness of the company. We note that training and development contribute a lot, they improve knowledge and skills of the workers bringing them to the company. Training and development develop human capital of the company.
This develops effectiveness of the company, its productivity and performance. Analysis show the training and development improve human capital of the company, being a competitive advantage of the company. Therefore, human resources are a competitive advantage of the company. 2. Alten SA
2.1. Executive summary
The company A is a great multinational company. Alten SA (further- `Alten`) was founded in 1988 (Wikipedia). Alten is a French multinational company with a field of technology consulting and engineering having offices in 24 countries (Wikipedia). Alten is known as a European leader in those fields as an engineering and technology consulting, offering support for their clients’ development strategies in those areas as the innovation, R&D and IT systems. (Alten).
Alten carries out activities in 20 countries, providing a wide range of services, `… from technology consulting to full-blown project outsourcing` (Alten). Alten operates in `…France, North America, Germany, Scandinavia, Spain, the United Kingdom, Italy, Belgium, the Netherlands…`, and the Asia-Pacific region (Bloomberg). Alten headquarters are located in Boulogne Billancourt, Paris commune (Bloomberg). Therefore, Alten is a well-known worldwide corporation.
Alten realizes a wide range of services. The 24,700 top engineers realize studies and `… projects for the technical and information systems divisions of large corporate clients in the industrial, telecommunications and services sectors.` (Alten). Alten supports every project when technology is a key issue and offers a support within all business sectors in the areas of innovation, R&D and IT systems (Alten). Alten works in those sectors as aeronautics and space, defence and security, automotive, rail and naval, medias, telecom, energy, etc. (Alten). The company positions itself as a responsible employer (Alten).
The company is characterized by high level of recruitment (Alten). Under the current data Alten has a high number of engineering positions in recruitment (Altenjobs). `…the international recruitment team analyses the fit between the profile and the needs described in the job offer.` (Altenjobs). After the first interview candidatures follow `…more technical and specific interviews` (Altenjobs). Alten Chairman and CEO is Simon Azoulay, Executive Director is Stéphane Ougier, Chief Operational Officer is Gerald Attia (International zone 2), and Deputy of CEO is Olivier Granger (international zone 1) (Alten). In 2017 the workforce grew to 28 thousands people, turnover increased to 1,975.4 millions euro, operational result is 194.2 millions euro (Alten).
The business showed in the end of September, 2018 plus 13.5 % (p. 1, Alten 2018). Financial data for the 3d quarter of 2018 showed the total revenue is 1,656.3 millions euro in total, and 752.0 thousand euro in France (p. 1, Alten 2018). Under the Reuters web-site one share of Alten costs 75.10 Euro (Reuters, 2019). Therefore, Alten is a responsible employer showing increase in financial results. Recruitment is a main HR strategy of the company A. We will consider its description and how it contributes into competitiveness further, in Section 2.2.
Literature review, Findings and Discussion
2.2. Recruitment strategy
Recruitment is a main HR strategy of the company Alten. This contributes a lot into the competitiveness of the company. Recruitment strategy was widely considered within the literature. A lot of authors considered recruitment strategy (Boxall and Purcell, 2016, Boselie, 2013, Bryson, James and Keep, 2013). Differentiation allows company to reach the competitive advantage (Porter (1985)). Having strategy improves well-being of the company, its survival, its environment as well as external image. Having strategy means have a competitiveness between firms, means have a better image among companies. This means have a better HR. Have a better HR is important for people. People (employees) choose this company for work rather than other company. `A key concern of strategic management, beyond viability, is competitive advantage` (Lecture 2, p. 2.2., Professor Krausert A., 2018). Recruitment and selection are mentioned by Boxall and Purcell (2016) as a strategy of manufacturing and service firms, as well as consulting (p. 179, p. 185, p. 221, Boxall and Purcell, 2016). Therefore, recruitment is a HR strategy.
Recruitment allows to employ the best people for work. Boselie (2013) determined recruitment as a `getting the right people` (p. 27, Boselie, 2013). Recruitment allows to hire the best, the better people for work. Recruitment allows to hire honestly, under the open basis. Recruitment allows to create a competition among candidatures. Recruitment encourages to hire multinationally. Recruitment allows to realize labour rights as a primary right of people.
Recruitment creates huge competitive advantage, e.g. it encourages to improve productivity and effectivity of the company, effectiveness of the work in the company, its business cycle, resultiveness of the company, level of workers, intellectual level of workers and the company, image of the company overall and in depth. Recruitment and selection allow company to compete in international arena, among the multinational companies, in the international context. Therefore, recruitment contributes a lot into the competitiveness of the company.
Recruitment allows to collaborate with candidature. `Recruitment is the process of defining a role to be filled the type of person to fill it` (p. 126, Bryson, James and Keep, 2013). Recruitment process encourages to make a selection within the numbers of candidatures (p. 126, Bryson, James and Keep, 2013). Recruitment gives a work for a number of people, giving an opportunity to realize themselves and to show their abilities, attitude, skills, knowledge, experience. Author wrote that recruiters often use communication with candidature (p. 127, Bryson, James and Keep, 2013).
This measure encourages to know candidature more, to see him directly, to ask what you need, and, first of all, who the candidature is. This contributes into the competitiveness of the company, showing, the workers are better than others, they are honest, truthful, open-minded candidatures, educated, experienced employees, who were selected and were chosen under the open and transparent basis (often published and reported by HR). Therefore, recruitment allows to know the candidature more. Recruitment uses different methods and ways of selection.
Recruitment uses a various selection methods (Guion 1998, Wood and Payne, 1998 cited in p. 126, Bryson, James and Keep, 2013). Recruitment uses those methods as task analysis (p. 126, Bryson, James and Keep, 2013). This method shows how people think, how and in what extent he is able to think, his ability to think, his ability to solve direct issue, to solve a question, to find a decision. This attracts thinking people, analytics, who like to think, like to solve the issue, like to consult and help the client.
Thinking people consist a competitive advantage of the company encouraging to consider the company greater and better. Thinking people work better. This gives a positive impression of the company. Therefore, recruitment attracts thinking people brining to the competitiveness of the company. Productivity might be used as a method of selection. The productive worker is a good worker. Test on productivity is very necessary for the company, it shows abilities to hard work, to apply knowledge and skills. Author wrote – you can use 20 % of your work time to focus on responsibilities what are really matter (p. 3, Harvard Business Review Press, 2017). Author recommended to eliminate unimportant tasks and to do value-added ones (p. 3, Harvard Business Review Press, 2017). `Prioritizers prefer logical, analytical, fact-based, critical, and realistic thinking.` (p. 28, Harvard Business Review Press, 2017). Therefore, productivity is an also method of selection. Recruitment knows a few well-known methods of selection of candidatures showing the competitive advantage of the firm.
A first one is a few phase interview. A few phase interview (serial interview). Interviewers do analysis who are hired, who joint the company. The measure is opened by consulting multinational companies and technology firms (McKinsey, Lombardo, 2017, Google). McKinsey checks problem solving skills and entrepreneurial drive (McKinsey). The interview includes experience interview and problem solving interview (case study) (McKinsey).
A few phase interviews are usually used by most technological giants such as Google. (Lombardo, 2017). General cognitive ability, Leadership, Role-related knowledge, Googleyness (Google). Google interviewer like to ask about products (Kosoff, 2018). Google uses phone screening with the questions and further invites into the formal job interview. (The Hire Team, 2018). We can see that `the number of interview rounds based on department.` (Hoffman, 2017). Therefore, wide range of companies use serial interviews.
A lot of authors considered serial interviews. Serial interviews are also considered by the Cook (2009). Cook (2009) wrote that `Dose (2003) suggested that serial interviews may not work that well because interviewers fail to exchange information` (Dose (2003) cited in p. 70, Cook, 2009). `Different interviews seek to assess different attributes of candidates.` (p. 70, Cook, 2009). Author considered a prescheduled series of interview when applicant is investigated before the employer make a decision on hiring (p. 72, Kennedy, 2012). Author named serial interviews as a sequential (p. 444, Catano, Wiesner, Hackett, Methot, 2005). We can see that serial interview `…reduce the impact of biases held by an individual interview…` (p. 444, Catano, Wiesner, Hackett, Methot, 2005). Therefore, serial interviews represent a sequence of questions allowing to avoid deviation in information.
Serial interviews allow to know candidature more and how he was changed. Serial interviews check the information which was given in previous interviews (p. 5, Read, 2018). The serial interviews have a purpose to understand did the candidature change (p. 4, Read, 2018). We can see how `… different circumstances bring to light different aspects of their experiences or perceptions` (p. 4, Read, 2018). Serial interviews create deeper and more trusting relations between interviewer and the candidature (p. 3, Read, 2018). Authors wrote implications suitable for the few phase interview (182, Blackman, 2017, p. 194, Blackman, 2017). Numerous tools and processes help the company to choose the candidates for the job and to choose the most qualified and well suited for the job (p. 182, Blackman, 2017). `Rouline, Bangerter and Yerly (2011) tested how an applicant providing a unique answer…` is assessed in comparison to other candidatures who provide non‐unique answers (p. 194, Blackham, 2017). Therefore, serial interviews help to choose right candidature. Serial interviews allow to employ right people and talented people.
Few phase interviews allow to know candidature more, to know in depth what they know, what they want, what they search. It allows to evaluate knowledge (hard skills) and soft managerial skills of the candidature. A few phase interviews are popular in the world and between interviewers. McKinsey are well-known as a company joining the talent and hiring the best people (Keller and Meaney, 2017), `…The organization really creates value and how top talent contributes` (Barriere, Owens, Pobereskin, 2018). This method of recruitment encourages to hire the right people, best people, knowledgeable people, skillfull people. This method of recruitment contributes huge value to the company, it contributes into the competitiveness of the company. The company would compete with their personnel. (Porter, 1985). In some industries human resources consist a key competitive advantage (Porter, 1985). `Porter (1985) explicitly acknowledged that human resource management was an essential support activity that…, is necessary for a firm to achieve and sustain competitive advantage`.(Porter (1985) cited in p. 44, Buller, P. F., & McEvoy, G. M. (2012). Therefore, serial interviews contribute a lot into competitiveness of the company.
This method of recruitment contributes huge value to the company. The company works better if employees work better, if employees are right people, well-educated and experienced. The company created competition with other companies by their employees, creating differentiation idea of Porter with their personnel (the company proves that their personnel is the best among competitors) (based on ideas of differentiation of Michael Porter (1985), Peter Drucker (1954). (Porter, 1985, Drucker, 1954). Porter supported these views on his further works (p. 1-3, 11, 14, Porter, 1985, Porter, 1979, Porter, 2008, p. 30, Porter, 1980). Therefore, most authors see that serial interviews bring a lot into competitiveness.
Human resources are a huge competitive advantage of the company. Most authors highlighted the human resource as a competitive advantage (Bamberger and Meshoulam, 2000, Druckman, Singer, and VanCott, 1997 cited p. 14, Burke, 2006). The topic was also developed by Wright, Dunford and Snell (2001), and further authors (Wright, Dunford and Snell (2001), cited in p. 14, Burke, 2006). Effective recruiting and selection practices can successfully provide the firm with highly qualified applicants (p. 15, Burke, 2006). The major competitive advantage is the organization, its employees, and how they work (p. 15, Burke, 2006). HRM practices improve the company`s performance (p. 16, Burke, 2006). The company can reach the greater productivity (p. 16, Burke, 2006). Therefore, employees consist a huge competitive advantage of the company.
Psychological tests A lot of authors considered psychological tests. Authors wrote about psychological tests (Miner, 1969, van Diepen, 2006). Author specified the psychological testing as an evaluation of personnel (p. 159, Miner, 1969). They use those tests as an Adult Intelligence Scale, Otis Self-Administering Test of Mental Ability, Adaptability Test, Miller Analogies Test, Westman Personnel Classification Test, Concept mastery Test (p. 160, Miner, 1969). Tests uses comprehension and other openminded questions, and arithmetic questions, test on similarities which help people (p. 160, Miner, 1969). Some tests evaluate people on high intellectual levels, mentioning high intelligence (p. 161, Miner, 1969). Other tests are focused on special intellectual abilities, including verbal reasoning, numerical ability, abstract reasoning, mechanical reasoning (p. 162-163, Miner, 1969). They use also psychomechanical ability, with motor testing showing (p. 165, Miner, 1969). `The most typical measure,… in the coordination area, is the pursuit rotor, which establish aiming skill or motor coordination` (p. 165, Miner, 1969). Other test applies numeracy, verbal and vocabulary skills (p. 166, Miner, 1969). Other test examines effectiveness on job, ability to work, to work hard (p. 167, Miner, 1969). Therefore, psychological tests are important.
Different tests investigate personality. Other tests are focused on personality- measure individual, rationally measure candidatures, estimate personality patterns (p. 168, Miner, 1969). Another author focused on personality tests (p. 89, van Diepen et al, 2006). Other test- Edwards Personnel Preference Schedule, measures different motives, `…desire for achievement, deference, order, exhibition, autonomy, affiliation, …dominance, abasement, nurturance, change, endurance, …aggression` (p. 170, Miner, 1969). Therefore, psychological tests are focused on personality.
The company should take attention to the psychological part of work. Psychological tests (recruitment) allows to develop emotional intellect of the company, develop intelligence people, and intelligence in the rows of employees of the company. These tests develop the emotional side of work. They show how stressful people (candidatures), how they react on critics within work, how they interact between themselves. It allows to understand does the candidature suitable or not for the company, does it be an integral part of the team, does it work in comfort from psychological and managerial side of view. Psychological tests encourage to know candidature more, to know his level of loyalty to the firm, loyalty to the people within the company, loyalty and flexibility within culture. Therefore, psychological tests allow to see the candidate in depth.
These tests allow to see the personal approach of the candidature, and bring a lot into competitiveness of the company. These tests show ability to think, ability to solve question, speed of thinking, speed of problem solution, ability to count and calculate, ability to write and to elaborate a question. Psychological tests show human being as it is, it shows human attitude, approach on work and life, what the person is, who is he, what to await from this person. These tests allow to understand person and his personality, attitude, approach, stressfulness, adaptability, employment ability. The company having these tests will always has a competitive advantage. These tests and this method of recruitment brings a lot into competitiveness of the company. This means the company has strong personnel, emotionally intelligent employees, suitable workers, flexible workers, emotionally stressful workers, who are able to work and to obey to the CEO. This means that workers are able to submit the culture of the company and they are emotionally comfortable for the other workers and the company. This means their employees are checked, chosen in open basis, and well-developed. This means that the company hired the best staff, that the workers are educated, skillful, able to count, to write and to think, to speak. This means they are able to work. Therefore, psychological tests are great competitive advantage of the company A and bring huge competitive advantage to the firm. Tests bring human capital to the company.
The above recruitment method contributes benefit to the company and its competitiveness, providing the company with excellent image between competitors, excellent feature as a honest company employing the best staff and personnel, excellent workers and employees, exciting human capital. Right people chosen for the company are everything for the company. Drucker (1954 (2012) developed the ideas of human capital (p. 11, p. 13, Drucker, 1954). Author considered people as a resource (p. 13, Drucker, 1954) Therefore, psychological tests contribute a lot into competitiveness of the company.
2.3. Emotional intellect tests
Emotions and its control are quite important. Goleman (1996) considered emotions as a continent for scientific psychologies (p. xi, Goleman (1996). Author included self-control, persistence and motivational ability emotional intelligence (p. xii, Goleman (1996). Author wrote we need to shape our decisions and our actions (p. 4, Goleman (1996). Author wrote that person has thoughts and feelings and he needs to rationalize them (David and Congleton, 2013). The author named development of emotional agility as a mindful and productive way. (David and Congleton, 2013). `Emotional agility can help people alleviate stress, reduce errors, become more innovative, and improve job performance.` (David and Congleton, 2013). Goleman and Nevarez (2018) determined four aspects of `self-awareness, self-management, social awareness, and relationship management` (Goleman and Nevarez (2018). Wiens (2017) confirmed this (Wiens (2017). Author wrote about ability to participate or use someone`s internal experience in more conscious way (David, 2013). Author told about crackdown of negative thoughts and stigmatization of thoughts and emotions (David, 2013, David and Congleton, 2013). Therefore, emotional intellect is important for the team and the company.
Authors considered the commitment of intellectual capital and how the employee create relations with others and with the company. Author wrote to take attention to unaddressed scars and voids which are hided under the coverage of the internal emotional landscape (Carucci, 2018). Author determined that if person acts honestly and carefully, he will `…maintain credibility and strong relationships with others.` (Carucci, 2018). Another author considered the intellectual capital as a `…commitment and competence of workers…` (Ulrich, 1998). He wrote that the intellectual capital is consist `…in how each employee thinks about and does work and in how an organization creates policies…` (Ulrich, 1998).
Tests on emotional intellect is a quite important for the company. This is very important for the company does he loyal for the company, does he understand its needs, does he flexible and agile within and for the company. Therefore, confidence with others and relation to the company are quite important in this aspect.
Emotional intelligence tests contribute a lot into competitiveness of the company making the company greater again. The company becomes intelligent, agile, flexible. The company recruits better people talented people. Author wrote that the agility is a key to success (Saltzman, 2018). Agility means `stability and the ability to change quickly in a rapidly changing world — a formula for success` (Fouts, 2018). `Agility is the ability of an organization to renew itself, adapt, change quickly, and succeed in a rapidly changing, ambiguous, turbulent environment` (McKinsey, 2015).
Emotional intelligence means better operations. `However you don’t want your surgeon crying so hard about your tumor that they can’t perform the operation` (Barker 2018). Author wrote that empathy does not lead to success (Barker 2018). Author determined clarity as a fact when leader can be clear in his role and position (Fouts, 2018). Therefore, the company becomes clearer in operations and more adaptable and succeed in change what is a competitive advantage of the company.
The emotional intelligence brings a lot info competitiveness of the company. The company becomes a more competitive with the emotionally intelligent people. Having employees with emotional intellect shows the company is more agile, more flexible in comparison with others. The company personnel can do more, can achieve more in the work, can reach better goals and benefits for the company. Emotional intelligence creates human capital for the company, making company attractive target for acquisition (Hof, 2013, Needleman, 2012, Locke, Singh, Chung, Ferguson, 2016). Emotional intelligence gives the company the better people and huge competitiveness. The company recruits more, recruits better people. Therefore, emotional intelligence test brings a lot into competitiveness of the firm.
2.4. Communication tests.
It is recommended to communication tests among the candidatures. We take attention to the communicative ability of candidatures, are they able to communicate with each other and with the other workers, with personnel. Author considered this in pp. 258- 275 of the book (pp. 258- 275, Miner, 1969). `Spoken language or words enable people to communicate with each other and this structures the way we perceive the world.` (Studymode, 2011). It is necessary to find a common language with people you work. Author took attention that `…personnel people can use to influence communications within the firm` (p. 259, Miner, 1969). Ability to communicate shows how people work, how people conversate, how he is able to work, how he is flexible, how is agile for work. `Dealing with people is probably the biggest problem you face, especially… in business.` (p. 5, Carnegi, 1936). The desire to be great is one of the motive of the human being (Sigmund Freud cited in p. 32, Carnegi, 1936). Carnegi (1936) investigated the communication, opened an issue of communication and answered the question how to deal with people (p. 5, 6, 10, 12, 32, Carnegi, 1936). Therefore, ability to communicate is a quite necessary for the firm.
Test on communication brings a lot into competitiveness. Workers` ability to understand each other is a quite important for the company and its image. Collaborative company has a better appearance and better image as a good team, thinking in one way. `Harmony and cooperation in an organization are totally dependent on good communication` (p. 61, Boyd, 1968). Ability to communicate is a key issue for a harmony of the organization. The lousy communication obliges employee to search a new job (p. 42, Boyd, 1968). This means the workers are able to communicate each other, within the team, within the company, with a boss. Author determined those discipline as a business communications operations management (Parker, 2014, Nojitter.com web-site, Rouse, 2008). This means better operations within the company (Richards, 2018). Therefore, test on communication brings a lot into competitiveness of the company.
3. Aon plc.
3.1. Executive Summary
The company B is a great company rendering a wide range of services. Aon plc. (further- `Aon`) is a British global company carrying out professional services and having headquarters in London (Wikipedia). Aon has approximately 500 offices throughout the world, it serves 120 countries, it has 50,000 employees. (Aon). Aon carries out commercial risk solutions, reinsurance solutions, retirement solutions, health solutions (Aon). They `… offer risk advisory, risk transfer and structured solutions that help better identify, quantify and manage risk exposure` (Aon). They `…provide risk transfer, claims advocacy and capital management solutions…` to decrease volatility and create more resilient organizations, governments and communities (Aon). The company provides `…consulting, global benefits and exchange solutions that help clients mitigate rising health care costs and improve employee health and wellbeing.` (Aon). Therefore, Aon offer a lot to the client.
Aon is based on strong principles and improved its financial results in 2018. CEO of the company is Greg Case, CFO is Christa Davis, Co-President is Michael O`Connor, Co-President is Eric Andersen (slide 2, Aon, 2018). The company acts based on principles of leadership, single brand, innovation, client value (slide 6, Aon, 2018). Operating margin consisted 18.5 % in the third quarter of 2018, while earnings per share grew to 34 % (slide 11, Aon, 2018). Reported revenue growth increased in the third quarter of 2018, in depth, Commercial Risk Solutions and Reinsurance Solutions, Health Solutions grew to 8 %, Retirement Solutions grew to 6 %, Data and Analytic Services grew to 5 % (slide 12, Aon, 2018). Cash under the Balance sheet under the date of 30 September, 2018 is 484 millions dollars (slide 23, Aon, 2018). Therefore, Aon grew in financial results.
Aon showed growth in 2017. The total revenue was 9, 998 millions USD in 2017 in comparison to 9, 409 millions USD in 2016 (p. 29, Aon, 2018). `Total revenue increased by 6%` (p. 29, Aon, 2018). Under the Executive Summary of 2017 Financial Results …unite the firm with… one operating model to deliver additional insight, connectivity, and efficiency` (p. 27, Aon, 2018). Activity in second quarter of 2017 showed `…reinforces our focus to provide advice and solutions, and further aligns our portfolio around our clients’ highest priorities` (p. 27, Aon, 2018).
Report showed the results from continuing operations, in depth, revenue grew to 6%, or $589 million, to $10.0 billion in 2017 compared to 2016, capturing 4% organic revenue growth and a 2% increase with regard to acquisitions, net of divestitures (p. 27, Aon, 2018). Operating expenses grew to $1.2 billion, or 16%, to $9.0 billion in 2017 in comparison to 2016 having a 497 million USD of restructuring costs (p. 27, Aon, 2018). It was a fall of operating margin which dropped to 9.8% in 2017 from 17.4% in 2016 (p. 27, Aon, 2018). The income from continuing operations consisted $435 million in 2017, a drop of $818 million, or 65%, from 2016 (p. 27, Aon, 2018). Cash flow from operating activities consisted $669 million in 2017, had a decline in $1.2 billion, or 63%, from $1.8 billion in 2016 (p. 27, Aon, 2018). Therefore, Aon showed great results in 2017.
Aon was chosen as a best insurer and made a few acquisitions. Aon won a broker award a few times in 2018 and 2017 year (Aon, Aon). Aon won the Insurance Times Awards in 2012 (An award-winning night for Aon at the Insurance Times Awards, 2012). In 2011 Aon pushed back `New York-based Marsh & McLennan Cos. Inc. to the No. 2 spot for the first time since the ranking` in insurance brokerage starting from 1972 (Business Insurance ranks world’s largest insurance brokers, 2011). Aon sponsored Manchester United to `…promote youth development and healthier communities` (Aon Kicks off Four-Year Manchester United Shirt Sponsorship With Global Charity Initiatives, 2009).
Aon acquired assets to increase their practice in the past: the broker Benfield for approximately 2 billion dollars in 2008, Hewitt Associates Inc. in 2010 (Aon to Acquire Broker Benfield for $1.75 Billion, 2008, “Aon completes acquisition of Hewitt”, 2010, Aon Buys Hewitt in Move to Expand Its Consulting Arm, 2010). Aon moved its headquarters from London to Chicago in 2012 (Aon Shifts Headquarters to London, 2013). Therefore, the company made a great policy within years.
Aon was adopted as a best hiring team and named as a high performance team. The company is included into the list of best employers for new graduates in 2018 (Forbes, 2018). Aon is a high performance organization (Aon). The company creates the atmosphere `…where people and ideas come together…` in the purpose of development a cutting-edge business solutions (Aon). Therefore, Aon reached a lot as a company.
Main strategy in HR of Aon is training and development. We consider its description and how it contributes into competitiveness of the company further, in Section 3.2. 3.2. Training and development strategy. Literature review, Findings, Discussion Training and development are a main HR strategy of Aon. A lot of authors considered training and development (Boxall and Purcell, 2016, Boyd, 1968, Boselie, 2013, Beausaert, Segers, and Grohnert, 2015, Attwood, Baybutt, Delvin, Fluharty, Isaacson, Joyner, Lee, Lorenzo, Morrison, Ormsby, 2007, Tarnacki and Banchoff, 2010, Grudilis, 2013).
Training and development are mentioned as a strategy in Boxall and Purcell (2016) (p. 210, Boxall and Purcell, 2016). `With proper training, this eagerness can be cultivated and maintained` (p. 18, Boyd, 1968). Author wrote about development of skills, knowledge and abilities (p. 27, Boselie, 2013). Training and development allows to improve reflection, to demonstrate `…the continuing acquisition of skills, knowledge, attitudes, understanding and achievements` (p. 338, Beausaert, Segers, and Grohnert, 2015). `Training provides skills and/or knowledge for the current job`. (p. 77, Attwood, Baybutt, Delvin, Fluharty, Isaacson, Joyner, Lee, Lorenzo, Morrison, Ormsby, 2007). Training requires a huge skills, from technical skills to managerial skills and it requires an awareness (p. 77 Attwood, Baybutt, Delvin, Fluharty, Isaacson, Joyner, Lee, Lorenzo, Morrison, Ormsby, 2007). The analysis of training needs help to determine which training is needed (McConnell, 2003 cited in p. 81, Attwood, Baybutt, Delvin, Fluharty, Isaacson, Joyner, Lee, Lorenzo, Morrison, Ormsby, 2007). Therefore, training and development provide knowledge and skills.
Training is carried out in various purposes. This is why companies develop training based on competences suitable for the organization (p. 59, Tarnacki and Banchoff, 2010). Modern leaders want from HR to make operations in the higher level and promote `…a new language around the expectations and the demands of the business` (p. 60, Tarnacki and Banchoff, 2010). Training is often focused on specific department (p. 64, Tarnacki and Banchoff, 2010). Training and development have to be implemented through the performance management cycle (p. 217, Cuthbert and Basset, 2008). Author also wrote about reflection (p. 228, Cuthbert and Basset, 2008). Most authors include personal development plan into the training and development management (p. 221, Cuthbert and Basset, 2008, pp. 336-337, Beausaert, Segers, and Grohnert, 2015). Personal development plan includes understanding of learning needs and priorities and a lot of other things (p. 221, Cuthbert and Basset, 2008). Therefore, training is used in different purposes.
Training makes a progress to worker. Training is popular (p. 178, Grudilis, 2013). Training and development develop skills. `Skills… is the accumulation of education, experience and expertise that each individual worker brings to their task..` (p. 179, Grudilis, 2013). In NHS authors linked training with a career progression (p. 182, Grudilis, 2013). Training often depends on the industry regulation (p. 185, Grudilis, 2013). In France there is vocational training, while in Germany recruitment sees that people are appropriately qualified (p. 185, Grudilis, 2013). Van Diepen et al (2006) developed the same ideas (pp. 84-85, van Diepen et al, 2006). Courses consist the informational workshops, most employees benefit on them (p. 185, Grudilis, 2013). Training and development are a `…official attempts to foster a national knowledge economy with more knowledge-based jobs and competition fueled by innovation` (p. 185, Grudilis, 2013). `…high-skill production seems to overturn the normal expectations of economic competition` (p. 188, Grudilis, 2013). Training and development enable worker to develop their skills (p. 188, Grudilis, 2013). Soft skills named by author as an integral part of the workplace activity (p. 189, Grudilis, 2013). Therefore, training and development are important for the workers and the company.
Training and development contribute to the competitiveness of the company, developing knowledge, skills, human capital of the company. This develops effectiveness of the company, its productivity and performance. We consider it in depth. Training and development improve effectiveness of the organization. Author considered training and development play a role in promoting an effective team working (p. 183, West et al, 2006). Author investigated training implications on team level (p. 183, West et al, 2006). Author saw the effectiveness of training and development (p. 184, West et al, 2006). Training and development help team members to `…develop the learning processes and methodologies that will serve to increase the efficiency of the whole system` (p. 184, West et al, 2006). Therefore, effectiveness brings a lot into competitiveness of the company.
Training and development increase organizational performance. Training and development have an impact on organizational performance (p. 199, Ghitulescu and Leana, 2006). This created firm specific knowledge that created a competitive advantage of the company (p. 199, Ghitulescu and Leana, 2006). This increases the competitiveness of the firm. Further author developed an idea that human capital is a competitive advantage of the firm (p. 200, Ghitulescu and Leana, 2006). Therefore, organizational performance increases competitiveness of the firm.
Training and development increase productivity of the company. Human development increases the productivity of the company (p. 311, Gold, 1994). Human capital contributes to the organizational performance (p. 6, Baron and Armstrong, 2007). Becker (2001) wrote on the HR impact to the performance (Becker (2001) cited in p. 33, Baron and Armstrong, 2007). It is prescribed that management and development of human resources are a quite important for the effectiveness of organization and its well-being (p. 1, Kraiger, Passmore, dos Santos, Malvezzi, 2015). The company has to learn and develop to be competitive (p. 1, Kraiger, Passmore, dos Santos, Malvezzi, 2015). Training and development encourage to be adapted, to be competitive, to be innovative, to be safe and to improve its services (p. 1, Kraiger, Passmore, dos Santos, Malvezzi, 2015). `…it is the extent to which organizations can locate, procure, train, develop, and retain human capital that best enables them to compete` (p. 2, Kraiger, Passmore, dos Santos, Malvezzi, 2015). Delaney and Huselid (1996) concluded that training and staffing are related to organizational performance (Delaney and Huselid (1996) cited in p. 2, Kraiger, Passmore, dos Santos, Malvezzi, 2015). Therefore, training and development bring a lot into competitiveness of the firm.
Human capital improves performance. Huselid (1995) determined high-performance work practices as integral parts and systems of performance management and training (Huselid (1995) cited in p. 2, Kraiger, Passmore, dos Santos, Malvezzi, 2015). Author found out that usage of those systems projects individual performance, long-term corporate financial performance (Huselid (1995) cited in p. 2, Kraiger, Passmore, dos Santos, Malvezzi, 2015). Crook and colleagues (2011) concluded that human capital of the organization predicts firm performance; and that `…human capital relates strongly to performance, especially when that human capital is not readily acquirable in the labor market` (Crook et al (2011) cited in p. 2, Kraiger, Passmore, dos Santos, Malvezzi, 2014). Aguinis and Kraiger (2009) made a conclusion that training policies impact on organizational effectiveness. (Aguinis and Kraiger (2009) cited in p. 2, Kraiger, Passmore, dos Santos, Malvezzi, 2015). Thus, the training and development bring into competitiveness of the company performance and effectiveness, which encourage to compete in the world.
The workers have better skills after training and development than before. `…individuals who received training show more knowledge and better skills than they did before training…` compared to those who did not have a training (see Salas et al., 2012, cited in p. 3, Kraiger, Passmore, dos Santos, Malvezzi, 2015). This means that the company has a better staff, better workers, better personnel, they work better, they qualified better, than employees in other companies. Therefore, the company compete by level of personnel, its qualification. High-qualified employees have a huge advantage in the company. Prolonged innovation requires long-term development of expertise and flexibility within changing facts (p. 336, Beausaert, Segers, and Grohnert, 2015). Investment in the human capital has a purpose to attract highqualified employees and is a crucial tool to create competitiveness in the innovative environment (p. 336, Beausaert, Segers, and Grohnert, 2015). Another author also considered the idea of the development as a competitive advantage (p. 307, Gold, 1994 cited in p. 307, Bratton and Gold, 1994). This strategy develops organizational intellectual capital (Edvinsson and Malone, 1997 cited in p. 307, Bratton and Gold, 1994). Author suggested that skills and development can be related to the global competition of the company (316, Gold, 1994, cited in p. 316, Bratton and Gold, 1994). Therefore, training and development bring a lot into competitiveness of the company.
Human capital is a huge competitive advantage of the firm. Training and development opportunities contribute to the increasing human capital (Bartel, 1994 cited in p. 15, Burke, 2006). The organization achieves a competitive advantage through the workforce (p. 15, Burke, 2006). Author wrote about development of highly-motivated and committed employees through employee involvement in decision-making and training in group problem solving (p. 16-17, Burke, 2006). Commitment approach effects of labour efficiency (p. 17, Burke, 2006). Therefore, human capital contributes a lot into competitiveness.
Training and development help to develop people. This makes people well-developed. Some companies develop skills, such as technological giants, some companies develop knowledge, making courses available (in-house specialists in industrial companies). People become more skillful, more intelligent, more valuable for the company. Training and development created a capital for the company. Drucker (1954) developed the ideas of human capital (p. 11, p. 13, Drucker, 1954). Author considered people as a resource (p. 13, Drucker, 1954). Author wrote that human capital is created by people (p. 11, Drucker, 1954). `…human being himself determines what he contributes` (p.11, Drucker, 1954). A lot of authors wrote that human capital is a competitive advantage (Tarnacki and Banchoff, 2010, C. Brewster, L. Carey, P. Grobler, P. Holland, S. Warnish, 2009, Baron and Armstrong, 2007, Morris, Snell, Lepak, 2005, Reilly and Williams, 2006). Therefore, training and development contribute valuable things into the competitiveness of the company.
Most authors wrote that people and human capital are the competitive advantage of the company. `…the key to a truly sustainable competitive advantage is an engaged and talented workforce`. (p. 59, Tarnacki and Banchoff, 2010). ‘Employees are our most important asset` (p. 59, Tarnacki and Banchoff, 2010). Employee involvement and majority of the management practices have significant positive effects on organizational effectiveness. (p. 31, C. Brewster, L. Carey, P. Grobler, P. Holland, S. Warnish, 2009). Authors determined that certain practices such as training activities are related to company performance. (p. 37, C. Brewster, L. Carey, P. Grobler, P. Holland, S. Warnish, 2009). Human resources is one of the competitive advantage. (P. 31, C. Brewster, L. Carey, P. Grobler, P. Holland, S. Warnish, 2009). Burke (2006) considered human resources as a competitive advantage (p. 17-35, Burke, 2006). Moreover, `…companies can purchase or create resources held by a competing company…` (p. 32, C. Brewster, L. Carey, P. Grobler, P. Holland, S. Warnish, 2009). Therefore, human capital is important for the company and its competitors.
The idea of human capital helps the company in its achievements. Human capital management helps in achievement of strategic business goals of the company (p. 29, Baron and Armstrong, 2007). Human capital creates a competitive advantage for the company (p. 29, Baron and Armstrong, 2007). Human capital concerns the development of people (Baron and Armstrong, 2007). Author considered workers as assets (p. 10, Baron and Armstrong, 2007). Starting from Adam Smith, the idea of human capital is developed by Elliot (1991) (p. 9, Baron and Armstrong, 2007). He considered the suggestion to have skills as an investment decision which `… requires the outlay of resources now for returns in the future…` and underlines the main part of the human stock of economies creates a form of the human capital. (Elliot (1991) cited in p. 8, Baron and Armstrong, 2007). Authors continued that `skills and abilities of individuals create value` (p. 7, Baron and Armstrong, 2007). Therefore, skills and abilities create a competitive advantage.
Human resources represent an investment of the company. Training and development are considered by Jeff Gold (1994) (Jeff Gold, 1994 cited in p. 306, Bratton and Gold, 1994). Author considered human resource development as a `…an organization’s investment in the learning of its people…` (p. 307, Gold, 1994 cited in p. 307, Bratton and Gold, 1994). Author also considered this strategy as an investment (p. 307, Gold 1994 cited in p. 307, Bratton and Gold, 1994). Author suggested that development decreases the company`s dependence on external skills (p. 307, Gold, 1994 cited in p. 307, Bratton and Gold, 1994). Therefore, human resources are quite important for the company.
Knowledge consists a competitive advantage of the firm. Human capital is a unique intangible resource provides with strategic capability (Morris, Snell, Lepak, 2005). Knowledge creates a competitive advantage (p. 57, Morris, Snell, Lepak, 2005). Those knowledge helps firm though `…effective use, manipulation, and transformation of various organizational resources…` necessary to perform a task (p. 57, Morris, Snell, Lepak, 2005). Those knowledge `make the boundary between strategic management and human resource management almost indistinguishable` (p. 57, Morris, Snell, Lepak, 2005). Therefore, knowledge brings a lot into competitiveness of the firm.
Authors determined human resources as a measurable value. Another author also considered HR as a competitive advantage and wrote that human capital has an analogy from physical capital, having a measurable return (p. 63, Reilly and Williams, 2006). Author considered human capital in terms of value-added application of the workforce and the competencies through which the company reach a success (p. 64, Reilly and Williams, 2006). Therefore, human resource is a value which helps to reach a success.
In this Essay we consider two main HR strategies of the two companies with analysis in depth with their features, abilities, and advantages. The first HR strategy- Recruitment, helps the company to be the best on the market, to compete, to win the competition by their personnel and Human Resources. Best personnel allows the best for the company. The company is more agile, solves problems quicker and better, has a better business cycle, reaches better goals. The company can be the most productive and effective.
The second HR strategy- Training and Development- develops people and human capital of the company. The company becomes more effective and productive. The company shows high performance. The company shows the results. The company can do more. Therefore, two main HR strategies of the two companies show that the Human Capital is a great competitive advantage of the companies bringing a lot into its competitiveness. The company competes by Human Resources.
Human Capital gives the company ability to perform work in another level, in a higher level, and to be the best among the competitors. Human Capital develops level of the people and of the company. Human Capital increases operations and collaboration within the company. Human Capital shows the modern attitude to the business when people are developed and intelligent. Human Capital explores people more, and they show better results, better effectiveness of the work. Human Capital develops engagement and empowerment, and better comprehension of questions. The company can reach better results having Human Capital, the company can work quicker and better. Therefore, Human Capital brings a lot into the competitiveness of the companies.
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