The first step of developing a sound and effective HRM policy is to identify the strategic goals and vision of the company. The company chosen for study here is Amazon. The strategic goals and vision of Amazon is to be the ‘earth’s most customer centric company’. Therefore, this vision has to be kept in mind when formulating the HRM policy.
After identification of the long term strategy, the important and probable HR issues that may arise from each department is identified. This has to be addressed by developing HRM programmes that help plug these gaps. It has to be ensured that these issues do not arise and hence the HRM programmes need to be effective and robust. This will help institutionalize HRM policies in an efficient manner.
The important HRM programmes that have been identified for Amazon are:
- Training and development
- Career Progression
- Employee grievance
- Safety concerns
Specific set of objectives are aimed to be achieved through each of these HRM programmes and a list of actions have also been specified. Implementation and institutionalization of these programmes will help create a strong productive and efficient workforce at Amazon.
The scope of this report is to understand Amazon’s strategic goals and align the HRM programmes according to that. HRM programmes outlined in this report are in-line with Amazon’s long term strategy of being the earth’s most customer centric company. The key goals to be focused on before developing the HRM programmes would be to identify the key potential issues that may arising in each department while trying to fulfill the company vision. This will help in knowing what the probable gaps are and help plug those with directed HRM policies. Only after this is done HRM policies will have to be laid down and implementation of those has to be completely ensured.
Company Vision and Strategy
The vision of Amazon is “Our vision is to be earth's most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.” (www.amazon.com)
Amazon’s strategy has always been to be as close to the customer as possible. They want to provide good quality service. Their strategies including Human Resource strategy in aligned to this philosophy of Amazon to create it into a top customer centric company. Jeff Bezos had always made this as the central pillar of the company when he started the company 18 years ago. Amazon can be referred to as the most successful e-commerce firm primarily because of their obsession with customer centricity.
The corporate strategy of Amazon can be put majorly into 5 pillars. Amazon is not only obsessed with these but also work hard and has inculcated a culture to execute them in a daily manner.
- Customer obsession: Amazon believes to work in an opposite to. To start with the consumer and end it with the central core of the company.
- Innovation: Innovation is at the central core of Amazon’s ideals. Its people are motivated and inspired to innovate and rewarded for critical innovations. This is a drive that keeps the employees on their toes and keeps the company always young with new challenging ideas.
- Bias for action: Amazon wants it employees to be action oriented and put things into motion. It urges its employees to do whatever they have planned, even if they fail. They ask employees to try out new things.
- Cost Leadership: Amazon wants to deliver high value to the customer and wants to achieve this by reducing the cost of delivery and hence bringing customer delight.
- Core competencies: It urges its employees to leverage Amazon’s core competencies in all ways possible and help deliver value to the customers.
Key Strategic HR issues
The key strategic issues pertaining to the various departments of Amazon are:
- Dearth of competent people: The various departments of Amazon require different set of competencies. Therefore, overall there is a requirement of people possessing a wide range of competencies and skill sets. Failure to include them in the company can lead to deviation for the strategic goals and vision/mission of the company. Moreover, as Amazon goes global there requirements in terms of skills and competencies become far more complex and critical. People with different cultural and historical backgrounds have to be dealt with different HR policies. Therefore, the requirement of a country specific HR plans and policies to tackle issues arises.
- Tracking Performance: There might be issues of unfair treatment and discontent arising out of the appraisal process. Also, there might be a discontentment among junior employees by the way senior level employees are appraised. Senior employees tend to receive more bonus and rewards than juniors which can create a rift between the two where in junior level employees think that they too work equally hard for the company.
- Upgrading underperformers: Performance of any company follows a normal curve where there would be outliers who would not be performing average. There will be a huge issue in creating policies to deal with them. There is a need to upgrade their performance to improve work output per employee but also by maintaining employee confidence and not being brut to them which in turn would de-motivate them.
- Preparation for the future: The industry dynamics in the e-commerce industry are very fast. Things move and change at the brisk rate. The issue that may arise over here is to train the employees to meet up the challenges of the future. Up-gradation of skills is required which may include dynamic changes in HR policy making. There will be requirement of workshops and training organized by the HR in line with upcoming changes and the company’s strategic policies. This becomes very critical and HR has to address this issue to make the workforce relevant for the future.
- Acquisition and Retention: The key challenges for Amazon’s HR would be to bring in the exactly appropriate talent, nurture them and retain them. If the right caliber does not come into the company, the value addition that they would provide would not be high and would impact the company’s mission. This would require the HR to create policies to ensure proper recruitment, targeting the required colleges and ensuring bringing them to Amazon. The next step is to ensure this right caliber does not leave Amazon. Retention is essential as new recruitment costs the company more. There has to employee satisfaction which leads to their staying in the company.
- Culture alignment with mission and vision: The work culture of Amazon, which will be determined by the HR policies need to be aligned to long term strategic goals. If the HR policies are different from what the company goals are, then achieving long term goals would become difficult for Amazon. This is because; the employees will work for a different set of ideas and goals that what is intended for the company.
- Misalignments in policies and work: There might be many types of misalignment that might arise in Amazon. The misalignment arising might be between expectation and performance, objective and undertakings, competency and task given to perform etc. This sort of misalignment will create gaps in the overall company performance and lead to a lower efficiency both among employees and the company. Another set of challenge would be for the Human resource department to plug in those gaps. A stringent and reform oriented HR framework would be needed to ensure that these misalignments do not take place.
12 month HRM Plan
- Training and development
- Career Progression
- Employee grievance
- Safety concerns
Training and Development
Background: This is one of the key HRM programmes needed to meet Amazon’s long term strategic goals. It has been included in the HRM plan to broadly achieve the higher levels of ‘employee retention and satisfaction’. Correct policies of training and development would also ensure that the competencies of the workforce are up to date and prepared to take challenges of the future.
Objectives: To hone competencies of employees and improve retention ratio.
- It should ensure that every employee is given several options of training programs to choose from. This would help to get trained where ever they want.
- Every employee should be motivated to attend at least 2 training programs per year to hone their skills.
- Post training, employees should be given a chance to change the work stream they are in to reduce monotony of work and improve employee satisfaction.
Background: This HRM programme needs to be implemented in Amazon to ensure that employees have a good, fair and high growth rate within the company as compared to what other firms would provide. Any employee stays in an organization which gives him or her good career progression. This is one of the key requirements as per HR surveys around the world.
Objectives: Improve promotion rates, enhance employee morale/satisfaction and retention ratio.
- Strict HR norms to be put in place for each department and each role to objectify the requirements for promotions
- Amazon would work better in a non-flat structure with high levels in hierarchy. This will help the HR to hand out promotions at the faster rate and thereby increasing responsibilities of an individual at the steady pace.
- Employees should have a 360 degree rating scale based on which promotions will be given. This will help remove biases and bring more stakeholders into the decision making area.
Background: This is an important HRM policy to bring in the right caliber into Amazon. This should bring in people with the right competencies who would drive the goals and objectives of the company in line with their career growth and progression.
Objectives: It will bring in the right people with the right skills sets so that they can be easily aligned to the company strategic goals.
- For fresh recruits, Amazon would need to target the institutes it would want to visit and the roles and compensation it would offer. Only top graded institutes should be targeted to ensure that the quality people with the right drive come into the company as fresh hires.
- Amazon also has to have an aggressive poaching policy for lateral hires. It needs to identify companies which have employees of the same skills sets and competencies and try to bring them into Amazon by offering a better role/compensation/fast track growth.
Background: This HRM programme is important as this would outline that drive that the employees would have to work toward achieving the strategic goals of Amazon.
Objective: To ensure a sustainable positive approach of employees towards work and achieve high levels of employee satisfaction.
- There should not be any lay off policy until and unless it is a must situation. The laying off of any candidate should be decided by a meeting of different stakeholders. This will ensure that there is no bias and the employee feels secure to carry on with his tasks.
- The appraisal process should be 360 degree one. It should take into account every one’s reviews.
- There should be periodical awards given to best performing employees of every department. This will help boost motivation and hard work.
- The variable part of the compensation should be high in order to bring in the monetary drive to work hard.
Background: This HRM programme will be beneficial to address any employee grievance and solve the issues before it escalates. Grievance, when not addressed and escalated leads to employee de-motivation, poor productivity and lower retention rates.
Objectives: Enhance employee motivation, improve workforce productivity and improve retention rates.
- Create an HR-employee grievance cell. It will be a full time dedicated department within the HR that would look after employee grievances.
- A stipulated timeframe within which every grievance of an Amazon employee has to be addressed.
- A meeting with all stakeholders to ensure all sides of the story is heard before addressing an grievance.
Background: HR programmes that ensure safety of the employees always help improve employee satisfaction and morale. They make the employees believe that the company takes care of them.
Objectives: To create a sense of employee safety and boost morale.
- Safety guidelines should be issued by every department regarding the kind of work the employees have to perform in that department in Amazon.
- A strong medical and life insurance coverage for each and every employee and their family member will boost the safety morale of the employees.
Thus, the following HRM programmes would help ensure that employee performance in Amazon remain excellent. As we know, human resource is a key factor for success of Amazon, therefore it becomes imperative to implement the above HRM programmes to ensure human resource as a factor does not lag behind. These policies should not just be on paper but implemented at the ground root level. These employee friendly policies will help the employees to adjust to the changing needs and dynamics of the competitive corporate world, especially in e-commerce which has been changing at such a brisk rate.
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