Deloitte HRM
Deloitte HRM
Deloitte HRM
1.0 INTRODUCTION
Every organization has their own resources to create capabilities which act as the source
of generating core competencies. There are two types of resources, which are tangible and
intangible resources. Tangible resources are the firms assets that can be quantified and are
able to be detected, such as annual reports, manufacturing plants, trademarks and more.
However, intangible resources are assets that are embedded strongly in the organizations
history and are difficult to imitate, which are human, innovation and reputational (Hitt, Ireland
& Hoskisson, 2007). Through effective utilization of both tangible and intangible resources,
an organization could achieve their goals with sustainable competitive advantages and above-
average return.
Dessler (2012) describes the function of human resource management as extracted from
the management process planning, organizing, staffing, leading and controlling. Hence,
human resource management has a crucial role to support an organization in their recruiting,
training, appraising and compensating employees process. According to Beer et al. (1984), the
objective of human resource management is to ensure the integration of organizational,
commitment between employees, flexibility and quality of work. Besides that, human resource
management is the best approach for managers to consider the employees as a key resource in
maximizing organizational performance, while also providing guidelines for managers in
implementation of suitable practice in managing people (McKenna & Beech 2008).
Besides that, managers have the responsibility to provide training for their employees.
The employee's performance can be enhanced with the support and coaching of managers or
senior level subordination. The need of training exists when there is a gap between the present
and preferred performance of a group of employees. As mentioned by Latham and Dello (2008),
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training is designed with planned efforts, to improve employees relevant knowledge, skills
and attitudes.
Moreover, the appraisal and performance management are the focus on decisions which
are related to salary, promotion, compensation and benefits. Gilmore and Williams (2009)
claimed that an appraisal is a process which the review of performance is facilitated with agreed
objectives between manager and employee. Thus, Akhtar and Khattak (2013) concluded the
employees acceptance and commitment towards the organization can be determine through
the performance appraisal activities. Employees are motivated when they have a sense of
belonging to the organization if the salary or compensation are valued to them.
A study by Armstrong and Baron (2004) found that performance management has
significantly contributed to high levels of organizational performance by managing human
resource. In performance management, managers and employees are continuing to work
together, with planning, monitoring and evaluating employees performance. This can ensure
the synchronization between job orientation of employees and the organizations strategic
direction. Therefore, an integrated cycle of performance management system should be
emphasized and conducted in three phrases (Schneier et al., 1987).
In the beginning (Phase 1), managers are responsible to develop and plan the desired
results from employees. Hence, the development plan should be outlined with objectives and
getting commitment within the organization. The communication between managers and
employees may be two-way communication by exchanging ideas to set an agreed target for the
performance plan. Next is managing and reviewing employees performance. This involves the
activities of maintaining and revising the objectives set from previous phase. Managers may
assess whether employees performance are deviating from, or in accordance with, the
objectives, provide feedback, or discuss problems and coaching. Besides that, employees
should be rewarded in the Phase 3 according their performance. Personnel development can be
carried out when any employee shows opportunity to grow, and managers may offer
encouragement to them, such as promotion or training programs. Lastly, a new performance
management cycle begins.
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Deloitte Touche Tohmatsu Limited, also known as Deloitte, originated from United
Kingdom. Founded by William Welch Deloitte, the company offers professional services
including risk management, audit, tax, financial consultation, and other related services.
Deloitte is currently headed by Punit Renjen, and the company is one of the Big Four
accounting firms, recording up to US$38.8 billion of revenue in 2017 (Marriage, 2017).
Deloitte caters to various geographic locations and is considered to have the largest number of
clients in 2017. The company also commands the highest market share in India, with up to 263,
000 employees as their human resources. Additionally, Deloitte was ranked as one of the best
employers in 2016 that allowed employees to grow exponentially upon entering the firm.
Deloitte is made up of 5 different subsidiaries which specialize in their own field: audit,
consulting, financial advisory, risk advisory and taxations. Each subsidiary is legally
categorized as an individual entity and is detached from any obligations besides the task at
hand for their customers. The biggest subsidiary is their consultation firm, which helps their
customers in the IT sector, strategy implementation, human capital, and serves as an
outsourcing guide. They are able to help clients to initiate strategy formation in implementation
and monitoring to ensure success in public and private business environments.
Deloitte would not have been as successful as it today had the firm not merged with
other firms such as Haskin & Sells in 1952, Touche Ross in 1989 and Tohmatsu in 1993
(Deloitte, n.d.). Then, the merged firm was renamed Deloitte Touche Tohmatsu to set up a
consultation subsidiary in 1995, which is known as Deloitte Consulting today. The firm
continued to expand steadily through organic growth, where focus is placed on developing new
products, hiring of talented workers and effective marketing. At that stage, Deloitte strategies
to divide the firms subsidiaries to maximize resources in increasing the firms efficiency to
cater to clients around the world. Where Deloitte Consulting provides services to international
businesses, Management Solutions accommodates for medium-to-large companies, and
Emerging Markets Group serves small-to-average firms and also governments in growing
economies. This approach has enabled the firm to boost their revenues by 22% and gradually
become the Deloitte as we know today.
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Human capital and human resources plays an essential role for an organization to
accomplish its business future goals (George & Slabbert, 2014). Interviewers at Deloitte are
the front line of the companys performance planning process. When looking for new hires,
interviewers are the first to encounter them. As Deloitte wishes to hire the employees to fill in
vacant positions, interviewers are tasked with the responsibility of recruiting those people.
Recruiters performance is based on whether they have accepted someone who would fit in
well with the organizational culture at Deloitte. New employees who feel dissonant at Deloitte
may not perform well, resulting in lower individual performance levels.
Deloitte practices Management by Objectives (MBO), where specific goals are set by
the management and employees at the beginning of the year, whereby the goals are aligned
with the overall objectives of the organization. Moreover, the employee appraisals are routinely
conducted by managers after completion of projects (Buckingham & Goodall, 2015). As the
term Management by Objectives was initiated by Peter Drucker in 1954, this approach is still
widely used in many organization (Kravel, 2011). In this context, MBO can be explained as
identifying organizational objectives, planning for achieving identified goals and monitoring
the organization through the plan that has been set earlier. Supervisors regularly check in with
their subordinates to ensure that they are following the objectives set. These objectives will
serve as a benchmark to gauge employee performance across the company. Kravel (2011)
mentioned all the objectives that are set should be SMART (Specific, Measurable, Achievable,
Relevant and Time-determined). By implementing MBO approach in organization can boost
the overall performance in the organization, but it can be disadvantageous if the specific
objectives are contracting with the overall ones.
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Deloittes corporate executives have figured out that their current performance
management system was no longer functioning well. According to Figure 1 shown in the
appendix, the results reflect that their current performance management system does not
produce high performance engagement process and is a huge waste of time, while nearly half
of the survey identified the performance management system are weak in driving business
value, provide feedback or enhance development.
Based on above situation, the process can be very time consuming, wasting roughly
about 2 million hours per year. Leaders spend a lot time rating past performances and
commenting about their performances that happened in the past. This clearly shows that
managers and executives are more focused on evaluating performance rather than coaching
and developing people. As mentioned by Holloway (2012), the performance evaluated in the
past are not capable of change regardless of the success and failure of the employee.
The rating method can be lead to unreliable data measurement by evaluating someones
skills. A rater might evaluate performance based on his internal perception and judgement
towards the matter itself (London, 2001). This idiosyncratic rater effect creates a situation
where performance rating systems are more concerned about the opinion of the rater instead of
the rated individuals performance. The views of performance by every person has different
insights and are very subjectively measured throughout the rating performance measurement.
On the subject of above rating method, the leader evaluates each individual based on
opinion-based evaluation in which the quality and skill of the employee are more emphasized
in order to fulfil their expected rating score of their performance. They paid less consideration
towards employees qualitative scale and their rankings. Thus, employees might gradually
neglect the other contributions which could have contributed to the organization. In addition,
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leaders are too focused on employees self-assessment instead of group assessment. Due to
culture differences, employees are much more encouraged to complete work tasks individually
rather than through group discussion. Therefore, employees are discouraged to work in group
as they realize that working in a team does not contribute majorly to their job performance
evaluation.
Sometimes, the employee performance evaluation has pushed the average and below-
average performers to the bottom as they are over-rewarding the top performers. Due to the
halo effect, the top performers always seem to be good. If the employers found something good
from their employees, those employees are likely to be known as good and constantly being
rewarded throughout the time. On the other side, contrast causes the middle-level performers
failure to motivate themselves for further contribution to the organization because the
employers always compare the quality work done by the top performers with them. By
observing the reward system made by employer, it indicates that the system is not being
effectively used. Apart from that, the employees are only evaluated by their subordinates and
they are not orally authorized to act as part of the evaluators to access their managers
performance.
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Besides that, the company can opt for investing in a feedback platform, which is a
database system to keep all the employees performance feedback, and thus the employees are
able to access to their own feedback regularly. With this continuous feedback system,
employees will be able to identify their strengths and weaknesses, while simultaneously
improving themselves from time to time.
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informed of the strengths and talents of the employees, and they can then make use of these
information to make a better decision on an employees promotion and remuneration packages.
Besides that, the employee recruitment process of firms usually includes looking
through a group of candidates and selecting a potential recruit with the best qualification.
However, this process usually ends with hiring employees that are unable to contribute the
expected amount of input to the company. A more extensive and comprehensive recruitment
of potential employees involving skill and personality tests are able to match employees to the
applied jobs. For example, an IT expert with an outgoing personality applying for a desk job
would be a waste of talent, and they would most probably end up with job dissatisfaction. An
effective human resource planning is necessary to narrow down candidates qualification and
background to match each job vacancy.
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headquarters is located in New York City in the United States, and this gives Deloitte a
stereotypically Western corporate culture. Western cultures encourage individualistic
behaviors and thus individuals may be viewed as self-serving, which would usually lead to lack
of communication within a team. The new reward system can attune employees working style
into a more team-orientated one so that projects are more coordinated.
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6.0 CONCLUSION
After having stuck with the same mold of gauging employee performance for years,
Deloitte eventually realized the traditional system of performance management was using up
too much resources for too little returns. The expended time and manpower could have been
better used in training and coaching underperforming employees instead of judging them based
on arbitrary numbers, which itself is purely reflective of the person giving the score at that
point in time, and is absolutely not an objective way of judging performance.
To summarize, adopting the new performance management systems will help Deloitte
improve performance of employees across the board.
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