Human Resource Policies

1
(No Transcript)
2
Managing for Success Effective Human Resource
Management in Microfinance Institutions
7th Annual Conference for Microfinance
Institutions Warsaw, Poland 27 29 May 2004
Kim Pityn VP of International Operations Human
Resource Director Jennifer Helmuth Assistant
Manager for Human Resources
3
Isnt Human Resources just being nice to
staff? Why do we need systems to do this?
4
We dont have time for Human Resource Management
trying to reach self-sufficiency is much more
important.
5
Human Resource Management

• Workshop Objectives
• Understand the importance of effective Human
  Resource Management (HRM).
• Recognize the primary HRM functions.
• Become familiar with key HRM tools and systems.

6
Human Resource Management?

• Human Resource Management (HRM) provides an
  effective work force in order to meet the goals
  of the Microfinance Institution.

7
Human Resource Management Important?

• It is one of two major resources capital and
  people.
• Finance is essential, but it is only a tool in
  the hands of our people.
• Staffing is the major share of a MFIs operating
  budget.

8
Microfinance Institutions top managers are
beginning to recognize that success depends upon
careful attention to human resources not simply
finances!
9
CAPA a successful Romanian MFI
10
a successful organization?

• An interdependent network of individuals, each
  contributing to the success of the mission.
• The success of an organization is significantly
  dependent upon the success of its individuals

11
To be successful, staff need

• To know their organizations mission
• To know their role
• To know what is specifically expected of them
• To have the capacity, resources, and environment
  which makes success possible
• To receive encouragement, constructive feedback,
  and opportunities to develop and improve

12
At a planning meeting, CAPAs long term strategy
was illustrated by showing each branch as a sun
on the projection screen. Every employee was
given a pair of sunglasses and told The future
is so bright, we can only look at it with
sunglasses. No one laughed. Staff have owned
this vision and have worked hard to make it
happen. CAPA Final Report, February 2004
CAPA Owning the Vision
13
Model of Human Resource Management
14
Model of Human Resource Management
Human Resource Management Model
MFIs Culture Mission and Vision, Informal
Procedures
MFIs Strategies and Structure Goals,
Organizational chart
Current Context (other MFIs, govt laws, economy,
political climate, etc.)
Human Resource Functions
Plan for Future Human Resource Needs
Recruitment and Selection
Policies
Training and Development
Salary, Benefits, Bonus System
Performance Management
Review Evaluation of Human Resource Activities
15
HRM Stakeholders
Model of Human Resource Management

• Society
• Organization/Owners
• Employee

16
HRM and Society
Model of Human Resource Management

• Respond to societys needs and challenges
• Consider and manage social priorities
• Understand and adhere to laws

17
CAPA Responding to NeedsWe were 14 people in
the beginning. The market was a mess, and the
economy was declining. There was no reason for us
to pursue this venture, other than to follow our
dreams to support small entrepreneurs in
Romanias transition to a market economy.
CAPA Final Report, February 2004
18
HRM and the MFI
Model of Human Resource Management

• Increase organizational effectiveness
• Support achievement of organizational goals
• Appropriate to organizational size and needs

19
CAPA Supporting the GoalWhen we developed
the methodologies and operations, we were always
planning for when we would have a great deal of
activity with many clients. We were building for
that one day we would become a bank. CAPA
Final Report, February 2004
20
HRM and the Employee
Model of Human Resource Management

• Support the employees contribution to the
  organization

21
CAPA Environment for GrowthAt CAPA, people
are the most important asset. An example of
this is an administrator hired in 1999. He came
from a manual labour background, and now he is
working toward a degree in economics. I never
dreamed that I can do so many things. And without
CAPA this could not happen.CAPA Final Report,
February 2004
22
Model of Human Resource Management
Important These three stakeholders are beacons
that help guide the strategies and day-to-day
activities of the HR department. Not every HR
decision affects the three stakeholders every
time or in the same degree Trade-offs occur!
23
Key Activities of Human Resources
Model of Human Resource Management

• Human Resource Planning
• Human Resource Policies
• Salary and Benefit Administration
• Human Rights and Labour Laws
• Recruitment, Selection and Orientation
• Performance Management
• Training and Staff Development
• Communications and Counselling

24
Human Resource ManagementStructure
25
Human Resource Management
Human Resource Management Structure

• The responsibility for human resource management
  activities rest with each MANAGER.
• If a MANAGER does not accept this responsibility
  then HR activities will only partially get done.
• HR department provides strategies, systems, tools
  and support to Managers to ensure effective staff
  management!

26
Evolution of HRM
Human Resource Management Structure

• Start-up or 1- 20 staff
• HR functions are spread among employees
• Administration/Finance Department manages salary
  and benefits, payroll, and maintains employee
  files
• Executive Director is involved in all HR
  functions (recruiting, firing, salary etc)

27
Evolution of HRM
Human Resource Management Structure

• B. 20 50 staff
• As an organization grows the complexity and
  importance of HR increases
• Designated HR Administrator for HR administrative
  functions
• Reports to Manager of Finance and Administration
  or other senior level manager

28
Evolution of HRM
Human Resource Management Structure

• C. More than 50 staff
• HR department with specialized functions and
  departments
• HR Manager reports to Executive Director may
  participate in Senior Management Team
• Average 50 100 employees per one human resource
  staff

29
CAPA Managed GrowthCAPA has grown from one
branch of 14 employees to a complex institution
of 4 branches, multiple satellite offices and 48
employees. The foundation for this capacity was
built with external management assistance, but in
the last two years Romanian management has growth
with achieved quality and efficiency. CAPA
Final Report, February 2004
30
Organization of Human Resource Management
Structure
Always remember Buy-in from Senior Management,
key stakeholders and the Board is essential for
the success of Human Resources.
31
Human Resource Management Systems and Tools

• Human Resource Policies
• Recruitment and Selection
• Salary and Incentive Systems
• Staff Performance Management

32
Human Resource Policies
33
Human Resource Policies?
Human Resource Policies

• HR policies are rules and procedures designed to
  provide a clear structure for Human Resource
  Management.

34
HR Policies Important?
Human Resource Policies

• Consistency
• Fairness
• Efficiency
• Establishes rights/responsibilities of both
  employees and the employer
• Documents these rights/responsibilities
• Legal compliance

35
HR Policy Challenges
Human Resource Policies

• Time/money to create and administer
• Impersonal, regimented
• Focus on rights/entitlements
• Cant cover every situation

36
CAPA Little by Little
Even if only a draft version is available
since the first moment, the institution should
have at least a skeleton of a procedures manual
and HR manual. Little by little, the team can
build up these manuals based on experience and
learnings from other institutions. CAPA Final
Report, February 2004
37
What to Include in HR Policies
Human Resource Policies

• Mission statement and organizational background
• Purpose of the policy
• Scope of policy
• Effective date of policy
• Definitions
• Administration and policy updates

38
Table of Contents Sample HR Policy
Human Resource Policies
39
CAPA Success is Staff The first, and
foremost reason for CAPAs success is staff. All
the best procedures, policies, and methodologies
will not be hugely successful if the staff are
not involved in owning the mission of the
institution. CAPA Final Report, February
2004
40
Always remember
Human Resource Policies

• There are exceptions to every rule.

41
Recruitment and Selection
42
Recruitment and Selection?
Recruitment and Selection

• The search for qualified applicants
• The evaluation and decision of which candidate is
  the best match with the job and organization
• The job offer to the final candidate

43
the Recruitment and Selection Process?
Recruitment and Selection

• Establish Search Committee
• Define Needs Task and Person
• Source Candidates
• Review Resumes
• Interview
• Test
• Check References
• Make A Decision

44
a Recruitment and Selection Process important?
Recruitment and Selection

• Clearly defines the requirements necessary to
  fill the job vacancy
• Provides tools to compare candidates effectively
• Reduces subjective judgments
• Ensures compliance with legal requirements
• Minimizes tendency to hire friends/family
• Avoids the cost of making a bad hiring decision

45
Table of Contents Sample Recruitment Manual
Recruitment and Selection
46
CAPA Importance of Fit It is natural that
any organization that hires people, fires people,
too. People need to be honest and competent. If
a person working for CAPA does not respect the
rules or does not fit in, it is better to let
that person go. CAPA Final Report, February
2004
47
Salary and Incentive Systems
48
Salary and Incentive Systems?
Salary and Incentive Systems

• Internal structures to help management provide a
  fair compensation package that motivates staff.

49
Salary and Incentive Systems important?
Salary and Incentive Systems

• Internal equity
• External competitiveness
• Attract, retain and motivate employees
• Communication and transparency

50
Incentive Systems Advantages
Salary and Incentive Systems

• Improve Productivity
• Encourage and reward specific performance areas
• Increase remuneration opportunity for staff
• Offset financial risk (fixed costs) to
  institution
• Increase competitiveness of MFI

51
Successful Incentive Systems
Salary and Incentive Systems

• Incorporate and reflect the goals of the MFI
• Must be fair
• Include all staff members
• Are transparent and simple
• Are not less than 20 and not more than 70 of
  total remuneration
• Are continually reviewed and updated
• Balance between the individual and team

52
CAPA Part of the Whole CAPAs progress to
date is due to capacity building, core values,
and a strong incentive program combined with a
performance appraisal program. CAPA
Quarterly Report, April 2002
53
Non-Financial Incentives
Salary and Incentive Systems

• MFIs mission
• Training opportunities
• Promotional opportunities
• Benefits (health, sabbatical)
• Achievement awards and recognition
• Good working environment
• Share options

54
Salary and Incentive Systems
Always remember

• Financial compensation is only
• part of the reward employee
• receive from the work
• experience.

55
Staff Performance Management
56
Staff Performance Management?
Staff Performance Management

• Process for managers to communicate job
  expectations and specific goals to employees
• System to monitor and evaluate the employees
  performance in reaching those goals.

57
the Staff Performance Management Process?
Staff Performance Management
1. Set individual performance objectives at the
beginning of the year
3. Annual review year end
2. Ongoing coaching and feedback throughout the
year
An organization can only reach its maximum
potential if each employee develops and achieves
goals that support personal and organizational
success.
58
the Staff Performance Management Process?
Staff Performance Management

• Consistently and systematically supervising staff
• Promoting and supporting successful performance,
  not just reprimanding and correcting poor
  performance
• Building trust through one-on-one communication
• Including staff in planning and monitoring their
  own work

59
Staff Performance Management Important?
Staff Performance Management

• Aligns individual goals with the MFIs goals

60
Staff Performance Management Important?
Staff Performance Management

• Communicates general standards of performance
  valued knowledge, qualities and skills
• Helps employees reach higher levels of
  performance increases productivity

61
Staff Performance Management Important?
Staff Performance Management

• Provides a tool to address performance problems
• Facilitates staff development and training plans
  at both the individual and organizational level

62
Table of Contents Sample Performance Management
Process
Staff Performance Management
63
Staff Performance Management

• A 100 retention rate may not necessarily reflect
  
• good HR practices.

64
CAPA Continuous ImprovementThe performance
management process (PMP) that was implemented two
years ago had mixed reviews. With the assistance
of a consultant, CAPA staff modified the process
to fit their needs. HR Consultancy Report,
January 2003
65
Staff Performance Management
Always remember

• One of your most important
• tasks is helping your staff
• to be successful.

66
Human Resource Management is an ongoing process.
67
CAPA HRM as Strategy CAPA management
continues to update policy procedures, internal
controls and make plans for Human Resource
development. These indicate a strategic view
from management seeing ahead and addressing
potential areas in a manner to prevent crisis,
rather than wait and adjust. CAPA Quarterly
Report, September 2002
68
A final word

• Perhaps the best
• Return On Investment
• an organization will realize
• is the investment in their
• staff.

69
(No Transcript)