Tag: #HR #HRJargons #HumanResources

#HR#Word:#Acqui-#Sourcing &#Acqui-#Hiring

Acqui-sourcing meaning (acquisition + sourcing) translates to sourcing for acquisition; is a newly coined term, word or phrase, that is in the process of entering common use.

 Acquisourcing is a solution for companies that are interested in acqui-hiring ( Refer Wiki Link).  There is a school of thought that as demand increases  for talent (especially technical talent) it becomes harder and harder to recruit (acquire) that talent.

 Some companies are turning to a technique called [acquihiring] wherein they acquire whole workforces by purchasing a company just to acquire that company’s workforce. Many times product lines and market verticals are discarded in this process – the (only) objective being to acquire a talented workforce. acqui-hiring (acquisition + hiring) translates to hiring by acquisition. 

Acquisourcing is the function of searching out (sourcing) those companies to be purchased (specifically for their workforces) by identifying and speaking with their owners about their willingness to be acquired by another company. It is new terminology in the recruiting, market development, competitive intelligence and mergers & acquisitions (M&A) space.

One feature that is driving acquihiring and the need for acquisourcing is the desire to acquire whole teams inside companies because there is recognition emerging that development efforts are many times enhanced by a team that already works well together. 

Acquisourcing is a process that identifies a potential acquisition candidate followed by a live approach to the owner(s) with an inquiry as to their interest in being acquired by (or partnering with) another company.

Source : Wiki

#HR#Word: #Host#Country #Effect

Host country effect is the change that a company has to adopt in terms of hr practices, legal bindings, business policies etc when it sets up its business in another country or the host country.


Host country is the country where a multinational company establishes its subsidiaries to grow its business.

Every country has its own culture and legal bindings which shapes the business operations in that country.

 A company formulates its strategy based on the origin country. If a company expands its business in other countries, it has basically 3 strategic choices to adopt: Ethnocentric, Polycentric and Geocentric

Human resource management system is largely influenced by the host country culture, practices and legal bindings.


The 3 strategic choices are explained below in terms of human resource management:

Ethnocentric: Here the company does not changes its workforce as well as keep its practices and culture same as parent country. Here the employees are of the parent country origin and are called as expatriates in the host country. In this strategic approach, it becomes easy for the company to maintain integration of operations to the headquarters in the parent country.

Polycentric: In this strategic choice, the company in host country hires employees of the same country. It saves them cost that they spend on expatriates. This approach helps better to understand the culture of host country. There could be some officers in the top management in host country which could be expatriates but majorly the workforce is of host country.

Geocentric: This strategic choice is used by multinational companies when they do not care about the origin country of the employees while hiring them. The employees are hired based upon their skills, talent and suitability to the role. 

Maintaining the integration among the businesses may be difficult but it leads to high productivity and creating a global culture.

  • Some of the countries adopt hybrid structure and human resource practices. The host country generally have different legal influence and culture effecting the MNCs. For management of human resources of the host country, MNCs have to infuse the local practices

#HR #Word:P-O #Fit (#Person-#Organization #Fit)

Using Person-Organization Fit In Selection

Imagine a situation in which an individual has found an occupation that suits his needs, works for a pleasant supervisor, and receives a competitive wage and benefits. 

While this may sound like a storybook tale, if we further consider that the same individual enjoys working in teams, is excited by working to meet challenging goals, and cherishes the opportunity to make important decisions without asking for approval, all of which his organization does not foster, suddenly our storybook tale has taken a turn for the dark side: now our protagonist is unhappy, underperforming, and surfing the internet for a new place to work.

What is Person-Organization Fit?

Person-Organization fit (P-O fit) is a concept that goes back many years, and is generally defined as compatibility between employees and their organizations. Compatibility can result from one party supplying a need of the other party, similar values across parties, or both. Researchers have found meaningful relationships with P-O fit as a predictor of work attitudes, job performance, and turnover.

Why is P-O Fit Important?

The general idea behind the importance of P-O fit is based on the attraction-selection-attrition (A-S-A) theory. 

According to the A-S-A theory, individuals are attracted to organizations with similar values and organizations tend to hire such individuals during the selection process. Finally, attrition becomes important as the employee sees first-hand the extent to which he or she is actually congruent with the organization, leading to a choice to either continue working for or leave the company.

What does P-O Fit Predict?

As mentioned previously, P-O fit has demonstrated relationships with three very important outcomes:

  • Work attitudes
  • Turnover
  • Job Performance

While each of the three aforementioned outcomes is related to P-O fit, these relationships vary in magnitude; the strongest relationships are listed first.

  • Work attitudes – The link between P-O fit and work attitudes is the strongest and most robust: the more an individual fits with the organization, the more likely he or she is to display higher levels of job satisfaction and organizational commitment.
  • Turnover – Considering the high cost of turnover, this relationship is very important to the bottom line. It seems obvious, but individuals do not enjoy working for companies that do not align well with their personal values and often leave as a result.
  • Job Performance – When individuals do not feel they fit well with the organization, it often has negative effects on the effort they put forth at work, leading to lower levels of job performance. Researchers have found P-O Fit to relate to both task performance (performance on tasks required of the job) and contextual performance (performance on tasks outside of those required by the job, like Organizational Citizenship Behaviors).

Implications for Practice

With the relationship between P-O fit and important work outcomes firmly established, the question becomes, how can organizations leverage this knowledge?

Unfortunately, as it is currently conceptualized, P-O fit cannot be taught. The values and interests individuals have when they join an organization are longstanding, and will likely not change much as a result of employment.

The alternative option is to look for applicants who match the company and bring them aboard to increase overall fit. This option is gaining in popularity in the last few years and will likely continue on that trend.

To bring people aboard who match the organization, a P-O fit test, interview, or other form of selection tool will likely need to be implemented

Several consulting firms are available to aide in this type of selection.

Going back to our initial example, let’s say our fictions organization implemented a screening tool to help choose the right people for the organization. As a result, the organization hires a different employee, one who prefers to work individually, is partial to working towards less optimistic goals, and would rather fall back on management when making important decisions. Now the organization and employee fit very well and stay together for a long time, perhaps living happily ever after

David Daly  DeGarmo ( Pristinely

This was a summary of the research and practice implications from: Arthur Jr., W., Bell, S. T., Villado, A. J., & Doverspike, D. (2006). The use of person-organization fit in employment decision making: An assessment of its criterion-related validity. Journal of Applied Psychology, 91, 786-801.

#HR #Word:#Golden #Parachute

golden parachute is an agreement between a company and an employee (usually a high level executive) that provides significant financial benefits to the employee upon termination.

. Golden parachutes are usually reserved by the enterprise for the top level management executive of the organization.

The benefits package mostly consists of a list of specific terms that tells us what the terminated employee will get. 

Golden parachute works in way when an employee is offered a top level executive position in the firm, the contract will usually include a golden parachute clause. The clause clearly states the amount of the severance pay, cash bonuses and stock options that he would get. It is also mentioned the condition under which a golden parachute is applicable. 

The term golden parachute might seem like more towards in employee’s favor like termination is good news. While golden parachutes have benefited the individuals and organizations, but they have also created various controversies.

Following are few advantages of golden parachute:-

1. Reward the Risk takers- Executives are nervous about the fact that any wrong decision might result in losing their current jobs, so it provides cover for such issues. Management needs leaders who are bold enough to take risks and succeed.

2. Reduces probability of takeovers- Golden parachutes reduces the probability of hostile takeovers as the other companies find hostile takeovers less appealing as they would be responsible for the expensive termination packages.

3. Finding executives become easy- The golden parachute is one of the unique selling points in attracting applicants for high level job vacancies. Executives need some kind of security if they are looking to work in an enterprise which has high probability of being acquired by some other firm.

4. Facilitate more amicable severances- Usually when an employee is fired, some tend to retaliate by going against the employer by threatening them to sue or disclose sensitive information. Under this they would part ways without either party feeling anything bad against each other.

5. Removal of conflict- During a merger, an executive may willingly delay or sabotage the efforts as he might be afraid of losing his job. The golden parachute guarantees their compensation, so they may be objective about the evaluation of the merger.

#HR Word:#Golden #Handcuffs

Golden handcuffs, a phrase first recorded in 1976, refers to financial allurements and benefits that have the objective to encourage highly compensated employees to remain within a company or organization instead of moving from company to company (or organization to organization) 

Golden Handcuff is financial incentive & other benefits offered to key employee as measure to retain them in the organization.

 Golden Handcuff is a method of motivating the employee into staying in the job because of his/her expertise for the company.

Golden handcuff cab be offered in various ways

– Different contractual arrangements

Employer sign contract with individual employee which will give him certain special benefits. These contracts are tailored made for each employee.

-Employee Stock Option

These are long term stock option given to high performing employee which are exercised after certain predetermined period of employee service.

Golden Handcuff as the name suggest are similar to parrot in golden cage. Though financial benefits are lucrative, these are mostly deferred payments. These can be encashed if employee stays with the organization for sufficiently long period of time. In this way employer ensures employee stays with carrot of long term gain.

 

Penalty for early exist by employees

In case employee leave company after agreeing to contract of golden handcuff, there is penalty clause in these contracts. Penalty clause could be end of employment or leaving stock options offered.

Golden Handcuff on one hand offer big financial benefits such as stock options and on other side bind employee by non-compete clause ,non-disclosure agreement.

Also financial gains offered are available after sufficiently long period. Golden handcuff in this way offers no immediate lucrative financial gain but if employee retains for long period and performs well, he can gain from golden handcuff.

#HR #Word:#Intellectual #Capital

The term “Intellectual Capital” collectively refers to all resources that determine the value of an organization, and the competitiveness of an enterprise. 

Understandably, the term “intellectual capital” from a human resources perspective is not easily translatable into financial terms.  For all other assets of a company, there exist standard criteria for expressing their value. 

Perhapss, this term could more appropriately be called a “non-financial asset.”

  In an article written by Paolo Magrassi titled “Taxonomy of Intellectual Capital”, 2002, Mr. Magrassi defines human capital as “the knowledge and competencies residing with the company’s employees” and defines organizational intellectual capital as “the collective know-how, even beyond the capabilities of individual employees, that contributes to an organization.”

Although there has been an increasing interest in intellectual capital and an increasing interest in how it might be managed, there has been little written to succinctly describe and define the concept.  

Intellectual capital can include the skills and knowledge that a company has developed about how to make its goods and services.  It also includes insight about information pertaining to the company’s history; customers; vendors; processes; stakeholders; and all other information that might have value for a competitor that, perhaps, is not common knowledge.  

Intellectual capital is therefore, not only organizational knowledge, it is also industry knowledge.  It is the combination of both cognitive knowledge and intuitive/experience-related knowledge.

 

Elements of Intellectual Capital

In all definitions of Intellectual Capital, the following taxonomy can be recognized:

  • Relationship Capital: All business relationships a company entertains with external parties, such as suppliers, partners, clients, vendors, etc.
  • Human Capital: Knowledge and competencies residing with the company’s employees.
  • Organizational Capital: The collective know how, beyond the capabilities of individual employees.  E.g.  Information systems; policies and procedures; intellectual property. (Sullivan, 2000)

Preserving Intellectual Capital?

The problem today in many organizations is employee attrition through layoffs, resignations, retirements, and other forms of employee separation from the company.  We would like to ask employers the following question… Are you sure that when the economy sufficiently turns around, you are able to predict if your most valuable employees are about to walk out the door? Think and Act.

Refer below link on few tips on how to preserve intellectual capital

http://m.industryweek.com/emerging-technologies/protecting-intellectual-capital