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Case: Company X, is there need for HRM?

Johanna Tuomisto-Orellana

2021 Laurea

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Laurea-ammattikorkeakoulu

Case: Company X, is there need for HRM?

Johanna Tuomisto-Orellana Bachelor`s Degree of Business Management and Administration Thesis

05, 2021

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Laurea University of Applied Sciences Abstract Laurea Leppävaara

Degree Programme of Business Management

Johanna Tuomisto-Orellana

Case: Company X, is there need for HRM?

Year 2021 Pages 40

The purpose of the thesis is to provide information about the human resources management in a medium size finance company. Especifically on how the human resources functions are completed and how this affects the employees. The case company decided to keep their name private, but it is a Finnish finance accounting innovative company. The company could benefit by understanding better its employees feelings and opinions towards the needs of human resources.

The thesis is based on the HR functions described and categorized by HR professionals as well as small- and medium sized company professionals. The methods used are interviews and questionnaires.

The limitations of the thesis are that it evaluates the opinions of the CEO and the employees, but does not consider economic or financial viability of the implementation of HR

department.

The thesis finds which functions of human resources are covered and which would need more development, according to the opinion of the employees.

Keywords: Human resources, SME, functions, HRM, employee satisfaction

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SYMBOLS AND ABBREVATIONS

HR - HUMAN RESOURCES

HRM – HUMAN RESOURCES MANAGEMENT SME – SMALL AND MEDIUM SIZE ENTERPRISE CEO – CHIEF EXECUTIVE OFFICER

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Table of Contents

1 Introduction ... 7

1.1 Background of the thesis ... 7

1.2 Objectives of the thesis ... 7

1.3 Case company ... 7

2 Human Resources Management ... 8

2.1 Objectives of HRM ... 8

2.2 HR Management in SME`s ... 9

3 HR Management functions ... 9

3.1 Work, Organization, and job design ... 9

3.1.1 Organizational chart ... 10

3.1.2 Job descriptions ... 10

3.2 People resourcing ... 10

3.2.1 Workforce planning ... 10

3.2.2 Recruitment ... 11

3.2.3 Employee wellbeing ... 11

3.2.4 Health and safety ... 12

3.2.5 Employment law ... 13

3.2.6 E-HRM, HR information system ... 13

3.3 Learning and development ... 13

3.3.1 Training ... 13

3.3.2 Engagement ... 14

3.4 Reward management ... 14

3.4.1 Market Pricing ... 14

3.4.2 Job evaluations ... 15

3.4.3 Base Pay ... 15

3.4.4 Merit Pay ... 15

3.4.5 Employee benefits ... 15

3.5 Employee relations... 16

3.5.1 Employment relationship ... 16

3.5.2 Communication ... 16

4 Research Methodology ... 17

4.1 Interview ... 17

4.2 Questionnaire ... 21

5 Results ... 24

5.1 CEO Interview ... 24

5.2 Questionnaire results ... 26

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6 Conclusion and Recommendation ... 38 References ... 39

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1 Introduction

What is HRM and what are their functions? How can a SME benefit from HRM? The case

company is highly growing SME, and they do not have HR department. How do they manage to handle all the functions by themselves and who is in charge of doing them? In last, I will go through the satisfaction of the employees and after the evaluation there will be a conclusion created to see if there is need for HRM or can they still manage without it.

1.1 Background of the thesis

As a business management student with plans to become human resources manager in the future and with entry-level experience in several companies, I observed the big difference between big companies with established human resources functions and smaller start-ups with no human resources. Specially in SME`s the human resources functions were in some cases fulfilled and, in some cases, neglected. This brought me to the necessity of

understanding better how an SME`s function without human resources. My current workplace seemed to be perfect opportunity to understand the topic better.

1.2 Objectives of the thesis

The objectives of this thesis are to provide insight and specific data on the human resources in an SME. Initially, I describe and organize the human resources functions using recognized literature. From there, I continue with an interview and a questionnaire with the CEO of the case company to build a better understanding of how the functions are fulfilled. Lastly, with a questionnaire among all the employees, I ask specific questions to draw conclusions on the current situation.

1.3 Case company

The case company wishes to stay anonymous, so I will name the company as X. Company X is a fast growing, small sized company in financial technology area. Their innovation facilitates accounting solutions for private traders. The company was created in 2018 as a start-up and ever since has been growing towards a SME, with 18 employees at the moment. The company is located in Helsinki.

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2 Human Resources Management

Human Resources plays a big role in the success of the business and it refers to different practices and policies. With human resources management, the organization can achieve success through people and that way gain a competitive advantage in the markets.

The aim is to support and add value for the organization by acquiring, training, appraising and compensating employees, and of attending to their labor relations, health and safety, and fairness concerns. (Dessler G. 2020. p. 39)

HR or HRM comes necessary usually in big companies, where is over 100 employees, but is also very important part in small and medium sized companies. In SME`s, the resources are limited and the responsibilities of HRM are still a little unclear. Mostly, the CEO and other managers tries to handle these functions by him- or herself or even some of the employees, although, with the help of HR, the small and medium sized companies can stand out from the crowd and help them to achieve better competition advantage. (Business Finland, 2017) HR Management is important for other managers of the organization too, so they can avoid many personnel mistakes such as:

- Employees not performing at peak capacity.

- Hiring the wrong person for the jobs.

- Experience high turnover.

- Employees not doing their best.

- Company taken to court because of discriminatory action.

- Allow a lack of training to undermine the departments effectiveness.

- Commit any unfair labor practices.

(Dessler, G. 2012. p. 16) 2.1 Objectives of HRM

Objectives are goals what individuals or group activities are trying to achieve in the

organization. The goal of human resources is to attract the right employees for their service, commit them and motivate them to achieve the best working results, reward their

accomplishments and develop their skills and maintain the working capacity of the

employees, so they can achieve good results now and in the future. (Kauhanen, J. 2003. p.

14)

One of the objectives is to maintain a good work environment, where the employees and employers feel comfortable that the organization can achieve the best results possible.

Creating a good environment is part of the HR department tasks and they should create an

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environment, where the employees can and want to give their best for the organization.

(Armstrong, M. 2006. 9, 54) 2.2 HR Management in SME`s

SME`s and growing companies need flexibility to scale up or down and be able to pivot, therefore, they usually do not have structured HR practices. On the downside, this could generate confusion, negative working environment, and negatively affect the human capital.

Developing the HR functions in SME`s, would have many positive outcomes, among them showing the employees you care of them and in general support the purpose of HR, which is acquiring and retaining the employees that help to achieve the company goals. (Alzalabani, A. 2019)

Some of the things that SME`s do better when they develop their HR functions are as follow:

- Have better job descriptions.

- Eliminate biases when hiring.

- Understand and protect the business from legal problems.

- Strategize their reward system.

(Alzalabani, A. 2019)

The main differences when managing human resources in SME`s is the size, priorities, informality, and the nature of the entrepreneur.

3 HR Management functions

Human Resources functions are recruiting, training, rewarding, staff developing, health and safety, and legal procedures. To better understand the human resources tasks, they can be classified in many ways. In their book of human resource management practice, Armstrong and Taylor organizes them in a following way.

3.1 Work, Organization, and job design

In every organization, the work system should be organized to meet the needs of the business while making possible to deliver what ever the customers pay for. Organizing all roles and jobs into an organizational structure or system. With a correct work system and

organizational design, jobs and role descriptions, the company will run smoothly to deliver it results. (Armstrong, M. Taylor, S. 2017. p. 162)

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3.1.1 Organizational chart

In his book of human resource management, Gary Dessler describes organizational chart as “a chart that shows the organization-wide distribution of work, with titles of each position and interconnecting lines that show who reports to and communicate with whom.” (Dessler. G.

2020. p. 137) The purpose of the chart is to illustrate the reporting relationships and chains of command inside the organization.

3.1.2 Job descriptions

The meaning of job description is to understand better what are the duties and responsibilities of the employees, how these general tasks are done and under what

conditions the job should be performed. This information is used to write a job specification where is listed the knowledge, skills and abilities that are needed for the job to be performed well. (Dessler, G. 2020. p. 147)

3.2 People resourcing

People resourcing describes the employment activities such as workforce planning and recruiting, activities, that ensure the company has the right people to achieve their goals. It is important activity since it shows how the companies depends on people. (Armstrong, M.

Taylor, S. 2017. p.229) 3.2.1 Workforce planning

Workforce planning is a core process of human resources management and it is about deciding what positions the firm needs to fill and how they fill them. It is about analyzing, forecasting, and planning workforce supply and demand. Workforce planning process usually starts from reviewing the business plan, then identifying and forecasting the positions that needs to be filled and third, developing a workforce strategic plan. (Dessler, G. 2020. p. 168)

Workforce planning can come tricky, because it is hard to put into practice even though the concept is clear. That is why, it is recommended that workforce planning should be done by HR in the simplest way of possible and put the focus on the essential data that is needed for the task. HR should be able to identify the problems of the business and start working backwards from there towards the planning. (Armstrong, M. Taylor, S. 2017. p. 243)

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3.2.2 Recruitment

Recruiting is about finding the right applicants for the open positions.With effective recruitment the company have better chances to hire the best candidate for the job. The more effective the recruitment is, the better applicants will apply, and the employer can use more interviews and tests to screen out all but the best out of the options. Also, without an effective recruitment, a business could struggle to succeed in the long run. (Dessler, G. 2020.

p. 175)

Recruiting can be done either internally or externally. Internal means hiring inside of the company and externally means hiring outside. Both have their advantages and disadvantages.

Recruiting inside can save time and money, since the candidate would need less orientation and training, also the employer already knows the strengths and weaknesses of the candidate.

Recruiting outside again can bring new, fresh perspective for the company, like bringing new ideas and energy, and even have experience or expertise that the current team does not have. (Dessler, G. 2017. p. 90)

Recruiting selection methods helps to find out how well the applicants fill the requirements of the selection criteria. The most common used selection methods are the application reviews, interviews, psychological tests, language skill tests, work simulators, statement of assurance and health inspection. The methods depend on the company and the position itself.

For example, for a pilot it would be very important to do some psychological and health tests, and then again for a food store employee an interview would be enough. (Kauhanen, J. p. 82) 3.2.3 Employee wellbeing

Every workplace should aim to provide well-being for their employees. Employees well-being requires right balance between work and recovery. This is achieved by the quality of working life which is provided by their employers. This includes happiness and satisfaction from the work itself and the working environment. Some basic factors that affect employee wellbeing are wages, hours and working conditions, and what the job itself is. (Armstrong, M. Taylor, S.

2017. p. 511)

According to Michael Armstrong and Stephanie Taylor in their book of human resource

management practice, some of the human resources tasks regarding employee well-being are the following:

The work environment, which is the whole system of work, how the work is designed and how employees treat each other. In other words what, where, how and with who the work is done.

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Work-life balance is how employees manage to fulfill the needs of the home and work life.

There are many so called “family friendly” policies that enhance the work-life balance.

Among these flexible schedule, vacation time and homework.

Managing stress, companies should be concerned about stress since stress can cause illness, not being able to do the job and lower the employee effectiveness which again lowers the performance of the organization.

Sexual harassment and bullying are two reasons that could ruin the working environment for the employee. It is the task of the human resources to prevent and act on them.

Services for individuals are supposed to help employees to deal with their personal problems. These can be sickness, bereavement, domestic problems, and retirement.

Group employee services contribute to the working environment and they could be for example. subsidized restaurants, coffee and breakfast areas, sports and social clubs, and childcare facilities.

(Armstrong, M. Taylor, S. 2017. p. 512-515) 3.2.4 Health and safety

Health and safety policies are there to protect the employees and other people who might be affected by what the company does. It is important to provide a safe working environment so the organizations can minimize the work-related accidents and illnesses, which also can be very expensive for the employers. In Finland, the employer must familiarize the new employees for the workplace, its safety instructions, and the correct work methods. When the workplace has more than ten people working, it is crucial to have one safety officer, who is familiar with the work safety issues, participates in the safety inspections of the workplace and is in charge of informing the employees of any matters of work safety and health. (Info Finland, health and safety at work.)

In Finland, the employers have a duty of providing healthcare for their employees. The occupational healthcare usually includes the services of nurses, doctors, and psychologists, some provide even services of physiotherapists. The employer is in charge of providing information of what services are included for the package. Many companies for example, do not provide specialists like orthopedists, neurologists, etc. The occupational health care comes from the law of Occupational Health Care Act. (Info Finland, Occupational health care.)

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3.2.5 Employment law

There are many rules in Finnish working life that employees and employers need to follow.

The legislation and collective agreements are there to determine the rights of the employees such as minimum wages, working hours, holidays, sick pay, and the terms of dismissal. (Info Finland, employee`s rights and obligations)

In SME`s, with the absence of the human resources manager, the company decision makers such as CEO and managers have to be aware of how to comply with the law.

3.2.6 E-HRM, HR information system

“An HR information system (HRIS) is a computer-based information system for managing the administration of HR processes and procedures” (Armstrong, M. Taylor, S. 2017. p. 572) In growing companies it is advisable to have better and more connected HRIS, that covers all of the HR functions. This could track for example applicants, trainings, performance,

benefits, employee records and employee surveys. (Dessler, G. 2020. p. 643) 3.3 Learning and development

“The process of ensuring that the organization has the knowledgeable skills and engaged workforce… and employees have the opportunity to develop their abilities and maximize their potential.” (Armstrong, M. Taylor, S. 2017. p. 320)

In SME`s and start-ups, readiness for change is especially important. It has been observed the difference between companies that use L&D in how ready they are for changes. Some of the organizations have specific training to be ready for change. Basically, having all employees ready to overcome challenges that might come. (Zamir, R. 2020.)

3.3.1 Training

It can be a very cultural shock to move from one job to another or start your first job.

Training is a way for the new employee to get to know the rules and ways of performing at the new job in the best way possible. Training is also important for the current employees to learn new skills that are needed in their jobs. Training needs usually should flow from the employers strategic plan.

Orienting and training for the new employees is not only to make them understand their new job and what it requires to be accomplished, but it also helps them understand the broad sense of the organization like past, present, culture and vision of the future, policies and procedures, work, and behavior and most importantly to make them feel welcomed. Training

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is usually done by the manager, but also the team or department, where the new employee is settling, can do it. It is important to complete the training as fast as possible, so this way mistakes, financial accidents or even work accidents can be avoided. (Kauhanen, J. 2003. p.

87)

“As one trainer says, we don’t concentrate on the traditional training objectives anymore…

We sit down with management and help them identify strategic goals and objectives and the skills and knowledge needed to achieve them. Then we work together to identify whether our staff has the skills and knowledge, and if they do not, that’s when we discuss training needs”

(Dessler, G. 2011. p. 157) 3.3.2 Engagement

All the employers on these days should think how they are going to have the employees engaged, how to minimize voluntary departures and how to maximize effort of the employees. (Dessler, G. 2020. p. 355)

With good engagement, the employees are more committed to their work and that way the organization is in a better place to achieve their high levels of performance. It is not always about the salary or recognition, but more about the work itself that motivates and engage people. Michael Armstrong and Stephen Taylor in their book of human resource management practice quoted Truss et al (2006) “Put simply, engagement means feeling positive about your job.” (Armstrong, M. Taylor, S. 2017. p. 216)

3.4 Reward management

Reward management manages the compensation, which is all payments made to employees in exchange for their work. These payments could be separated into direct financial payments and indirect payments, which include insurances and vacations. It is the task of the Human Resources management and leadership in general to create a reward strategy that helps achieve the company goals. (Dessler, G. 2020. p. 386)

3.4.1 Market Pricing

This is the process of making decisions on pay structures and individual rates of pay, with the aim of ensuring that the rates are competitive in the job market. HR managers have to take in consideration that there is no such thing as a definitive market rate for a job, because all organizations are different, timing, jobs variations, etc. The specific tasks include identifying the jobs, identify sources of information, collect data, present the data and create a policy and strategy. (Armstrong, M. Taylor, S. 2017. p. 433)

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3.4.2 Job evaluations

There are two different basic approaches for setting the pay rates: market-based approaches and job evaluation methods. Job evaluation methods is formal and systematic way of

comparing the worth of the job to another relative job. Job evaluation being a judgmental process, it requires close cooperation in committees between supervisors, HR specialists, and employees and union representatives.

Combining job evaluation and salary survey, the organization can create a market-

competitive pay plan, where the pay rates are equal internally and compared how much other employers are paying. (Dessler, G. 2020. p. 395)

3.4.3 Base Pay

Base pay is the basic, or in other words, guaranteed salary that the employees receive for the job they are doing. It works as a basis when calculating other allowances and benefits.

(Stone, R.J. 2014. p. 493) 3.4.4 Merit Pay

” Merit pay is a raise that the company awards to an individual employee based on individual performance, it is different than the bonus because it becomes part of the employees base salary, where bonuses are generally one-time payments” (Dessler, G. 2020. p. 430).

3.4.5 Employee benefits

Employee benefits are usually the first things the applicants would like to know before accepting any job. Benefits are used to attract, recognize, and retain workers, and these are part of just everyone`s compensation. They can be life insurance, pensions, health benefits, paid time off, vision benefits, flexible hours, vacation times and chance to work from home.

(Dessler, G. 2020. p. 457)

Benefits can impact the employee engagement, satisfaction, and productivity. One very important way to treat the employees is to treat them like they are customers of the

company. Customers needs to feel valued and engaged to the products or services, and todays workforce should operate in the same way. The benefits are a great way to strengthen the company`s culture and show the employees that they are important and the company cares about their well-being at work and also in their personal lives. (Vaswani, N. 2021)

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3.5 Employee relations

Employee relations is the relationship between employers and employees. A positive and trust-based relationship is very important since it can increase the employees involvement, commitment, and engagement, which again will improve the outcomes of the company as well as the employees well-being. (Suff. R. 2020)

3.5.1 Employment relationship

The employment relationship is about how the employers and the employees work together.

The aim is to reach a positive relationship, where both benefits from it and there is a mutual trust. The basic start of this is for the employee provide skills and efforts towards the organization, and in return the employer provides salary or a wage. There is also certain implied legal rights and obligations that are mandatory to contain such as the duty of paying the salary, providing a safe work environment and act in a good faith towards the employee.

The employee again has to correspond for the obligations of the job with a loyal and honest attitude. (Armstrong, M. Taylor, S. 2017. p. 480)

The purpose of a good and positive employee-employer relationship is to bring satisfaction, productivity, motivation, morale, and discipline, and maintain a positive, productive, and cohesive work environment. It is necessary to have the employees on the employer side, whether it comes for recruiting new employees, managing organization campaigns, asking for overtime work or many other tasks. Managing employee relations is usually the task of HR department.

Employers can build and maintain a positive employee relation by training, fair appraisals, and competitive pay and benefits. Some employers even institute special employee relations programs, which can include employee fair treatment programs, improving employee

relations through improved communication, developing employee recognition/relations program, and having fair and predictable disciplinary procedures. (Dessler, G. 2020. p. 491) 3.5.2 Communication

Employee communication is an interaction between the employer and employee, where employer can inform employees about matters that concern them, and in the other way, the employee gets a voice to speak to the management. Employee communication is important since it can increase commitment and generate trust. (Armstrong, M. Taylor, S. 2017. p. 505) Communication should be clear, easily understood, and concise. It should be as relevant, local, and timely as possible, and it is preferred to be done on a regular basis. There are many different ways of communicating such as face-to-face, intranet, social media, team

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briefing, consultative committees, notice boards, magazines and newsletter and bulleting.

(Armstrong, M. Taylor, S. 2017. p. 506)

4 Research Methodology

Research is around us in our everyday life. We hear TV, radio, and news almost every day and it is very common to hear a word research. For example, politicians usually make their decisions based on research. Research has a purpose of finding out things which are stated clearly. The data is always collected systematically and interpreted systematically. When doing research, it needs to involve the method or methods that are used to collect data, argue that the results are meaningful and explain if there were any limitations that would affect them. (Saunders, M. Lewis, P. Thornhill, A. 2019)

In the thesis I am using qualitative and quantitative research data. Qualitative data is non- numerical data derived from spoken words, questionnaires, and observations. On the other part, quantitative data is recorded as numbers and analyzed quantitatively. (Saunders, M.

Lewis, P. Thornhill, A. 2019. p. 564 & 638)

For the qualitative part, two interviews were conducted: the first one was an interview with the CEO to talk about the thesis, its limitations, expectations and what the company wanted.

The second one was a series of questions asked trough email and answered by the CEO again, with these questions I looked to obtain information about the current situation of HR in the company and in each one of the specific functions. This information serves as the base for building the questionnaire and better understanding of the company.

For quantitative part, I used a questionnaire that was sent to all the employees of the case company. That questionnaire answers generated quantitative data that would be analyzed in the following sections.

4.1 Interview

The second interviews objective with the CEO was to understand better the current situation of the company. In the interview it was asked how the human resources functions are fulfilled in the company at the moment, who does what and how. The interview was conducted through email, the Interview questions and answers are as follow:

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Organization Does the company have job descriptions? Yes, we do.

Does the company have an organizational chart?

Yes.

Would you find these useful for the employees and managers?

Personally, I find organizational chart useful to describe the organization structure, but it has also it is disadvantages as it is usually seen as a hierarchy map.

Job descriptions in a low hierarchy company are not necessary, but descriptions become important once the company starts growing fast – it helps both employees and managers to control the growth and avoid

miscommunication etc.

People resourcing Who follows the need for new

employees? Managers do the decision about hiring a new

employee but usually the need for a new employee comes from the “bottom” of the company. Also, we forecast the need of new employees based on the company growth.

Does the company measure the

productivity standards? (Indicators) We do a lot. We have a lot of common SaaS indicators and our own industry based KPI’s.

Who is responsible of recruiting the new employees?

Department Manager and Head of People &

Culture together. Manager is responsible for the recruitment, but Head of People & Culture is responsible for the recruitment process itself.

Do you see any opportunities for improvement?

For the recruitment process itself I don’t see any opportunities for improvement, but the recruitment itself should be a lot faster for example when recruiting development staff.

Also, a lot of improvement should be made in

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the field of employer branding so that the organization itself is relevant and interesting for new employees, especially for developers.

How does the company measure the wellbeing of the employees?

We measure wellbeing with an app that is integrated to Slack. It measures wellbeing once a week with relevant questions.

What can you say about what kind of programs you have for employee well- being? (work environment, work-life balance, sexual harassment, flexible working times)

Currently we do not have any specific programs except we provide employees culture &

exercise benefit. Flexible working hours are pretty obvious for start-up / scale-up companies that we do not see as a benefit anymore – it’s how it should be. Also, what comes to sexual harassment, we have zero tolerance.

Does the company provide health care for the employees?

Yes, we do have occupational health care.

Can you say anything about health and safety procedures? Even though this is not a company with great risks.

We have health and safety representative in our organization.

Does the company have or outsources anyone, who would know and assists the Finnish working law?

Nowadays we have our own General Counsel, but 6 months ago we had outsourced lawyer who helped us a lot with the working law.

Does not having HRM affects company employee law consultancy costs?

A lot. Also, it takes a lot of time from supervisors to take care every HR aspect by themselves.

Does the company have software's to manage employee information or files?

We do, with Kellokortti we track employees working hours and with Dropbox we handle all the personal material regarding our employees.

Learning & Development In a growing company like Company X,

how or who identifies the needs of

Direct manager is responsible of the onboarding process of the new employees but also current employees. We have a fixed budget per year

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training for the new employees? What about the current employees?

for employee training and we are trying to provide relevant training for our employees twice a year.

Who is responsible of training the new employees? Does the company have induction program?

Direct manager is responsible. We do not have any specific induction program, but we do have some sort of format regarding onboarding.

Does the company have policies and procedures to help the employees to understand better the company rules and culture?

We are trying to make the new employee onboarding process so personal that these things come up in the face-to-face discussion with new employees. We also take care that we go through the company’s rules that are part of the new employee onboarding process. What comes to culture, we are trying to find proper fits to our company before we make the decision of the recruitment.

What are the methods to

engage/motivate the employees?

Of course money is the easiest thing, but we have a very interesting field where we work and the change, we are trying to make to the industry is very motivating. Our organization is very low hierarchical which makes it possible for every employee to step up and take responsibility of the task that they like. We also make a lot of investments to community spirit by providing free snack, drinks, social events, and trips to our employees.

Reward Management What can you tell me the company`s

salary strategy? (Competitive, bonuses, reward prices, performance related pay)

Usually, we have fixed base salary for

everyone, but we also have yearly bonuses for teams that are based on the success of the whole company.

What kind of employee benefits does the company provide?

Culture & Sports benefit, Lunch benefit, Gym, Drinks & snacks at the office, social events Who decides what kind of employee

benefits the company use?

Executive team.

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Employee relations What can you tell about the employment

relations between employees, managers, and employee representatives?

(conflicts, rewards, job itself)

As we have low hierarchical organization, we usually are very aware what is happening around and if we face any problems, we solve them right away. In a small company like us, everyone is more like a friend with everyone rather than a manager-employee or etc.

Do you have any communication programs?

We have executive meetings, daily, weekly, and monthly meetings, and one-on-one meetings. Also, we have weekly/monthly meetings with different teams also.

Do you think it could be better managed

by HR? Yes.

4.2 Questionnaire

In order to obtain quantitative information about human resources functions in the company and employee opinions about the subject, a questionnaire was utilized. With the

questionnaire its intended to obtain factual data and opinions about the functions of human resources.

The questionnaire has four different question types:

• Category questions, where the respondents answers can fit into only one category, these are also called multiple choice questions. These kinds of questions are easy to analyze and provides an easy survey-taking experience.

• Scale questions, these are mostly used to analyze satisfaction or opinions on services, features, etc. It allows the respondents to provide a numeric response for a question or a statement.

• Semantic differentia rating question, where the respondents were asked to rate an object or idea on bipolar rating scales. Having at the end of each pole opposite adjectives that would describe the idea or object.

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• Open-ended questions, this allow the respondents to write their own answer for a question or statement. These are not usually used in quantitative research, because it does not provide numerical data.

(Saunders, M. Lewis, P. Thornhill, A. 2019. p.520-526)

I also categorized the type of data collected into three categories:

• Factual or demographic, is data that is available to the respondent. They include for example age, gender, education, etc.

• Attitudes and opinions, this contains data that the respondents need to think about before responding. They record how the respondents feel about something.

• Behaviors and events, these ones contain data about things that the respondent did or thinks that happen.

(Saunders, M. Lewis, P. Thornhill, A. 2019. p.514)

Here is listed all the questions of the questionnaire and what kind of answer types and data types they have.

Q. # Question Answer type Data Type

1 Do you know the meaning of HR/HRM? Category / Multiple choice

Factual / Demographic.

2 How aware are you of the organizational structure?

Semantic

differential rating

Opinion / Attitude.

3 Were you given a clear description of your job when you started working?

Category / Multiple choice

Event variable / Behavior.

4 How useful would you find having an organizational chart?

Semantic

differential rating

Opinion / Attitude.

5 How clear and effective are your productivity standards and workload?

Semantic

differential rating

Opinion / Attitude.

6 Do you feel you department needs more employees?

Category / Multiple choice

Opinion / Attitude.

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7 How easy and clear were your recruitment process?

Semantic

differential rating

Opinion / Attitude.

8 Do you enjoy the culture of the company? Category / Multiple choice

Opinion / Attitude.

9 How happy are you at work? Semantic

differential rating

Opinion / Attitude.

10 How satisfied are you with the current healthcare?

Semantic

differential rating

Opinion / Attitude.

11 How satisfied were you with the training you received when you started working?

Semantic

differential rating

Opinion / Attitude.

12 Do you think there should be more trainings? Category / Multiple choice

Opinion / Attitude.

13 Do you feel engaged in your job? Category / Multiple choice

Opinion / Attitude.

14 How satisfied are you with the methods of engaging?

Semantic

differential rating

Opinion / Attitude.

15 Do you think your salary is competitive? Category / Multiple choice

Opinion / Attitude.

16 How effective you think is the bonus program? Semantic

differential rating

Opinion / Attitude.

17 How satisfied are you with the benefits of the company?

Semantic

differential rating

Opinion / Attitude.

18 How satisfied are you with the relationship between your manager / employee?

Semantic

differential rating

Opinion / Attitude.

19 How efficient you think the management – employee communication is at work?

Semantic

differential rating

Opinion / Attitude.

20 If you do any HR related functions at work, do you like doing it?

Category / Multiple choice

Factual / Demographic.

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21 If you do any HR related functions at work, how it affects your time?

Category / Multiple choice

Event variable / Behavior.

22 How beneficial would be, in your opinion, having an HRM?

Rating Opinion /

Attitude.

23 Do you have any opinions on the need or the current HR situation in the company?

Open-ended. Opinion / Attitude.

The questionnaire was e-mailed as a link to all the 16 employees of the case company. The link redirected the employees to a google forms tool, where they received the following message:

This message was designed like this so the employees would not feel compromised when answering these questions, they would know the objective of their information and they would feel appreciated.

5 Results

After conducting the interview and questionnaire with the employees of the company X, some conclusions can be drawn. The first includes mostly information provided by the CEO and sheds light into his management and personal opinion. In the second part, the employees opinions are analyzed and put together as a whole to provide data about the organizational opinion about the human resources functions.

5.1 CEO Interview

About the organization, the CEO communicated that they have created an organizational chart and job descriptions but finds that they could create hierarchy map. He would find the job descriptions more useful as the company grows fast. This shows how small companies, like

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company X, try to separate from hierarchy, which is very typical, especially in the Finnish organizational culture.

When it comes to people resourcing, the department manager handles the recruitment needs, but the head of people and manager is in charge of the recruitment process. The CEO

mentions that he don`t necessarily see improvement opportunities for the recruitment, but the recruitment process should be faster and also the employer branding should be more interesting to be able to attract better developers for the company. The company does not have a structured system to map the need for the new employees.

The well-being of the employees is measured weekly by an app called Slack, with this the company is measuring the corporate climate in real time, which can be useful to determine their wellbeing. To motivate and engage, he mentions that they provide culture and exercise benefits, flexible working hours, snacks, drinks and social events. As a start-up / scale-up company, they have done a good covering the wellbeing of the employees, although it is not a program.

In health and safety part, occupational healthcare and health and safety representative is provided in the organization. Also, few months ago they hired their own General Counsel to assist with the matters of law. All the employees personal files are handled in Dropbox. There is no specific software handling the human resources information, which could lead to loss of information, security breaches and disorganization for example, there is no disciplinary actions and medical and legal information might not be stored in a safe and organized way.

The CEO mentions that not having an HRM affects the law consultancy cost and takes a lot of time from the supervisors to take take care of the HR aspects by themselves.

The trainings of the employees are handled by the direct manager and they have a fixed budget per year. By not having policies and procedures for the employees, they try to make the onboarding process very personal. Having policies and procedures, would help the new employees adapt to the company faster. The company budget for training, although they does not have a training program, which as the company grows, could save money in preparing the employees to perform their tasks.

Not so much information was provided about the pay strategy, more than they provide bonuses depending on the success of the company. Seems like the pay survey or research of the job market has been done, but probably not documented.

Employee relations and manager-employee relations are not managed through specific person, but mostly done in an informal way. This kind of relationship brings more positive

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and trustworthy relationships between managers and employees, but the downside is that complex and conflictive situations might not be solved in the best way possible.

Being a small company, the communication are handled in a very good way, especially with the use of remote conference technologies such Microsoft meetings. The CEO mentions that the company have meetings daily, weekly and monthly.

The whole CEO interview sheds light on how the professionals work in the company had manage to fulfill all the human resources functions and keeping it small, has been beneficial in some aspects. On the other side, the CEO recognizes that there are expenses, time used and missed improvement opportunities for example, in the following areas:

• Recruitment process.

• Training of the employees.

• Policies and procedures.

• Safety of the personal files of the employees.

• Wellbeing program.

5.2 Questionnaire results

The questionnaire provided valuable information on the employee`s and their opinions related to human resources functions in the company. SPSS tool were used for semantic differential rating questions to calculate the average answers and their standard deviations.

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All the employees answered the questions in automated form in a period of two days after sending the questionnaire. The answers are as follow:

Question 1:

The objective of the first question was to find out that how many of the employees are aware what human resources is. As we can see from the results that 93,8%, which is 15 employees, answered yes and one person was not sure. That is a good base to ask the following questions because if the employees are aware of the meaning of human resources. They can understand better the questions.

Question 2 (organization & training):

In question two the employees were asked to rate how aware they are of the organizational structure of the company. The answers in average were 4.12, with a standard deviation of

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0.71. This shows that they feel they know the organization, which means that the company has been able to create and communicate an organizational structure.

Question 3 (organization & training):

The results of this question show that only 62,5% feel like they got a clear description of their job. In total 37,5% of the employees feel like they have not received or maybe they did not receive a clear job description. This clearly shows an opportunity for human resources

manager or the team to be able to create and communicate job description to that 37,5€ that felt unsecure.

Question 4 (organization):

In this case, the average answer was 3.75, with a standard deviation of 1.06. The answers are not concentrated in one single value but spread among all of them. This correlates with the opinion of the CEO as he mentions that “Personally, I find organizational chart useful to describe the organization structure, but it has also it is disadvantages as it is usually seen as a

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hierarchy map.” Showing how in SME`s like company X, the employees have attitudes against strong organizational charts and the hierarchy they impose.

Question 5 (workforce planning):

The average answer in this case is 3.56 with a low standard deviation of 0.62. This might be affected by the diversity of positions in the company and different productivity standards.

Being a technology company there might be positions that have tasks or projects that are not measurable, but other positions might be very clear. This is why the results are unconclusive.

Question 6 (Workforce planning):

As much as 68,8% of the employees feel like there should more employees in their department. A human resources manager could improve the planning, measurement and implementation of the work. At the same time, research the reason why the employees feel this way.

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Question 7 (recruitment):

The recruitment process seemed to be clear for the employees. The average answer is 4.56 with a standard deviation of 0.62. This could be to the fact as the CEO stated the company has head of people and culture in responsible of the recruitment process.

Question 8 (organization):

With this question we can see that 100% of the employees are satisfied with the culture of the company. Being an SME, the company has been able to transmit their culture into their employees and they are satisfied with it.

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Question 9 (employee wellbeing):

This question received an average answer of 4.06 with a standard deviation of 0.77. The results shows high level of happiness at work, which could be related to the culture of the company and wellbeing initiatives mentioned by the CEO.

Question 10 (health and safety):

An average of 3.56 with 0.89 standard deviation, we can see that the current healthcare for the employees is more to the satisfied side but has a little percentage of employees who are not satisfied with the current health care. Usually in Finland this satisfaction is related to the service provider.

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Question 11 (training):

This section the average is 3.25 and 0.93 of standard deviation. This shows the dissatisfaction the employees feel with the initial training. Having a human resources manager, dedicated specifically to the task, could improve the satisfaction of the training. Making the employees know the basics of the company, identifying the training needs and creating programs that prepare the employee for the job.

Question 12 (Training):

81,3% of the employees feel there should be more trainings to be able to perform in the job better. As mentioned in the earlier question, a dedicated human resources manager would have the ability to identify the training needs for the current employees and create programs that would help the employees to perform better in their jobs.

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Question 13 (learning and development):

87,5% of the employees feel engaged in their job. This a very high rate and shows that the engaging methods are currently working. Perhaps the efforts mentioned by the CEO to keep the company with low hierarchy and giving employees the chance to step up and take responsibility of the task that they like, have helped to keep the employees engaged.

Question 14 (learning and development):

Average of 3.75 of the employees are satisfied with the methods of engaging. Like mentioned in the earlier question, the CEO has good methods to keep the employees engaged.

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Question 15 (reward management):

In this question we get very interesting results, because 50% of the employees think that their salary is not competitive. Although this is only their opinion, having a dedicated person researching the job market and keeping record of the salaries, could assure the company offers or not offer competitive salaries.

Question 16 (reward management):

Average of this answer is 3.75 with standard deviation of 0.68, seems that most of the employees finds the bonus program effective. The CEO mentioned the company is using fixed base salary and yearly bonuses based on the success of the company. Perhaps this bonus program would be even more effective with the knowledge of human resources.

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Question 17 (benefits):

This question has an average answer of 3.50 with standard deviation of 0.73. The low score of this answer shows that there is a little area of improvement in the benefits.

Question 18 (employee relations):

The average answer to this question is 4.12 with standard deviation of 0.71. This shows the employees has a very good relationship between their managers, probably reflected from what the CEO mentioned in an interview about being a small company more with a

“friendship” kind of management, although this could create problems when a conflict arises.

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Question 19 (employee relations):

The average answer is 3.87 with standard deviation of 0.71. This shows how the

communication between managers and employees is efficient. The CEO mentioned in the interview how the company has meetings daily, weekly and monthly, so this could be affecting the communication being efficient and the relationship style being more friendly.

Question 20:

Half of the employees who has HR related functions in their tasks, finds them likeable and the other half do not like doing them. This could be improved by having a human resource

professional.

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Question 21:

18,8% of the employees, who does HR related functions at work, do not find time for

accomplishing these tasks. Like mentioned in the earlier question, this could be improved by having an HR professional.

Question 22:

In overall, 68,8% of the employees would find having a human resources manager beneficial.

18,8% would not find difference and 12,5% think it would not be beneficial. With this high rate of finding it beneficial, it shows how some of the human resources functions could be improved by HR professional.

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Question 23:

The last question was an open-ended question, and it was left as a volunteer answer. Only two employees wrote something and in their opinion the workload would decrease, especially if the company keep growing in the expected way.

6 Conclusion and Recommendation

After analyzing the answers of the interview and questionnaire, we can create a conclusion of having or not having an HRM in the company. From the interview part we can see how many HR functions are completed by the CEO and supervisors. Although, some of the functions would need some improvement and that could be completed by having HRM.

From the questionnaire part we can also make a conclusion of how some functions of the HR are bringing more satisfaction and in the other part some of the functions need improvement.

Engaging methods, communication, employee relations and culture of the company bring most of the satisfaction. On the other hand, improvement would be needed in the functions of workforce planning, training, developing and reward management.

Having HRM would raise the employee satisfaction, save time and costs and with the help of HRM, the employer brand could be improved and that way more employees would be attracted for the company.

Although, this thesis does not evaluate the economic viability of hiring HR, the

recommendation would be to do so. That way the company could prepare to embrace growth with more solid programs that cover all the areas of human resources.

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References Printed Books

Kauhanen, J. Henkilöstövoimavarojen johtaminen. 10th edition. Helsinki: WSOYpro Oy. 2010.

Saunders, M., Lewis. P. and Thornhil, A. Research methods for business students. 8th edition.

Harlow: Pearson education limited. 2019.

Dessler, G. A framework for human resource management. 6th edition. New Jersey: Pearson.

2011.

Armstrong, M. and Taylor, S. Armstrong`s handbook of human resource management practice.

14th edition. New York: Kogan page limited. 2017.

Dessler, G. Human resource management, 16th edition. Harlow: Pearson education limited.

2020.

Stone, R.J. Human resource management, 8th edition. Australia: Wiley. 2014.

Electronic sources

Alzalabani, A. 2019. Why startup companies need structured HR. entrepreneur.com. Accessed 1 May 2021. Here’s Why Structured HR is Important for Your Startup (entrepreneur.com) Zamir, R. 2020. Shining a spotlight on corporate readiness through the lens of learning and development. Forbes. Accessed 15 April 2021. Shining A Spotlight On Corporate Readiness Through The Lens Of Learning And Development (forbes.com)

Vaswani, N. 2021. How benefits can boost engagement and build employee-employer

relationships. Forbes. Accessed 15 April 2021. How Benefits Can Boost Engagement And Build Employee-Employer Relationships (forbes.com)

Suff, R. 2020. Employee relations: an introduction. CIPD. Accessed 25 April 2021. Employee Relations | Factsheets | CIPD

Info Finland, Occupational Health Care. Accessed 20 April 2021. Occupational health care - InfoFinland

Info Finland, Health and safety at work. Accessed 20 April 2021. Health and safety at work - InfoFinland

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Info Finland, Employee`s rights and obligations. Accessed 20 April 2021. Employee’s rights and obligations - InfoFinland

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