Psychology Powered HRM Practice: Meteor Cargo Limited

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Introduction

Meteor Cargo Limited is a Texas-based logistics company that has been in operation for two years. Despite being a relatively new entrant into the logistics industry, the company has recorded steady growth since it was launched, attracting the need for a larger workforce. At the time of this writing, the company had 187 employees. This rapid growth has underscored the need to update human resource management for effective coordination of the firm’s labor force to help the business realize its full potential. As requested by the CEO, this paper aims to discuss the types of management systems that befit the company, the organizational justice the HRM should be aware of, and practical ways to minimize the perception of inequality. Additionally, a proposal for employee training that is rooted in cognition theories, strategies to encourage positive ethical conduct, and a reflection on the whole exercise are included.

Performance Management Systems

Two performance management systems will be implemented: one for organizational management, and the other for the firm’s personnel. Since Meteor Ltd. is a startup that has only been in business for two years, a suitable organizational performance management system would be the Balanced Scorecard (BSC). The BSC framework is famous for using a firm’s objectives or strategy as the starting point for exploring performance management and for having explicit fixed logic and models (Zheng et al., 2019, p. 5). As Zheng et al. (2019, p. 2) explain, BSC is superior because it combines four perspectives – learning and growth, customer, internal process, and financial – to help concerned parties in understanding and eventually achieve objectives. The BSC framework is comprehensive, specific, and organization-oriented, making it suitable as an organizational performance management system.

The Balanced Scorecard further wins preference because its components afford an organization many options that can be implemented without necessarily upsetting the young firm’s financial limits. First, BSC requires that a firm set high-level goals, also known as objectives. Goal-setting entails stating what the organization aims to accomplish strategically, and how it fits into the previously listed four perspectives. Secondly, it is vital to define the initiatives, also known as projects; these refer to the means the firm will use to reach desired accomplishments. Finally, there are measures – key performance indicators (KPI) to serve as landmarks as the firm navigates towards its ultimate destination/goal. Another key advantage is that the four perspectives facilitate interdepartmental and inter-divisional alignment. Finally, it would compel the young organization to build a structured reporting system and inculcate the culture of regularly reviewing its strategy for timely response and reconciliation of competing interests.

It will be crucial to implement some HR performance management systems. Objectives and Key Results (OKR) is a suitable complementary system that can run alongside the BSC framework. The OKR offers the advantage of simplifying the process of setting, tracking, and measuring progress regularly or as preferred. How this system works is best understood from Hao and Yu-Ling’s (2018, p. 320) perspective. In our organization’s case, OKR would have each employee assigned a few objectives and key results that link back to the organizational objectives defined through the BSC. Interestingly, OKRs must be set first from the individual employee’s level, then adjusted as one moves up the organizational hierarchy. This approach is vital because it would ensure that the firm’s management remains practical and in touch with the individual employee’s reality within the workplace while setting objectives.

OKR, like BSC, hinges on regular reporting and would allow the startup to get quarterly or weekly results. Smooth and regular reporting is essential in the wake of the Russian-Ukraine war and the COVID-19 pandemic that continues to ravage many economies. To streamline the organization’s reporting, OKRs will be ranked on a scale of 0– 100% and completed, first, every quarter, or as emerging events dictate. Another vital OKR feature is that it allows the weighting of results for an individual and rolling it up to the manager. It would also allow the startup to deviate from the bureaucratic norm of centralizing reviews, which would attract the added cost of establishing a strategy office, a luxury for the firm given the present financial constraints. Reviews will be done more flatly, explored later in this paper under the section on minimizing the perception of bias. Taken together, the OKR system is preferred because of its simplicity and many features, such as explicit responsibilities, that rhyme with the proposed organizational performance management system.

Measures for Maximizing Personnel Motivation

One crucial measure for maximizing personnel motivation is performance appraisal. In “Motivating Employees through Performance Appraisal,” the University of Minnesota educates that tying performance appraisal to reward decisions and employee termination decisions elevates performance appraisal from the level of a mere formality exercise to an effective tool for motivating high achievement. This claim is deeply rooted in the reinforcement theory of motivation, which hypothesizes that rewarding a behavior encourages the actor to repeat it, whereas punishment discourages the behavior preceding it. Impliedly, when rewards follow performance appraisal, employees will develop the idea that performance is rewarded.

Performance appraisal, though an effective tool for optimizing motivation, can just as easily veer in the opposite direction, especially if it is flawed. Accordingly, the motivation strategy must be cleansed of bias and made as effective as possible. As detailed in “Motivating Employees through Performance Appraisal,” a fair performance appraisal is characterized by adequate notice, fair hearing, and evidence-based judgment. To minimize the perception of inequality or unfairness in the organization, the HRM will need to maintain a nuanced understanding of three types of organizational justice, discussed as follows.

Distributive Justice

This outcome-oriented justice is achieved when judgments and distribution of resources are made with impartiality. To perceive distributive justice in the organization, employees need explicit evidence that outcomes are equitably applied. In Lambert et al.’s (2020) opinion, the positive impacts of this type of justice peak when workers perceive salient organizational outcomes, such as compensation and promotion, as fair (p. 2). For this perception of fairness to take root, the adequate notice criterion should be satisfied. Employees need to know and understand, preferably when they are being assigned responsibilities, the standards against which they will be appraised.

Procedural Justice

The second type of justice the HR managers at Meteor need to be aware of is procedural justice. Unlike distributive that uses is fixated on the outcome, procedural justice interrogates the means through which certain outcomes are reached. This type of justice seeks to ensure that equality is embedded in decision-making and procedures the firm follows to reach specific outcomes (Hadi, Tjahjono, & Palupi, 2020, p. 4725; Lambert et al., 2020, p. 2). Observably, procedural justice is directly tied to the second feature of an effective appraisal system: fair hearing. To meet the fair hearing condition, our firm will promote two-way communication during the appraisal process to allow employees to express their side of the story. Giving employees a voice is a great way to dilute any perception of the unfairness of management decisions regarding a specific employee.

Interactional Justice

Interactional justice fills the void that the first two types of justice create by focusing solely on people. It is centered on the belief that outcomes or procedures in an organization affect and depend on its personnel. Interactional justice is concerned with how individual employees are treated in the decision-making process. This focus hinges on the notion that an employee perceives fairness when employers explain their decisions and treat the staff in a dignified, sensitive, and respectful manner (Hadi et al., 2020, p. 4725). According to Hadi et al. (2020, p. 4725), interactional justice may be interpersonal or informational. The former emphasizes respectful and courteous treatment of employees, whereas the latter insist on timely, specific, and truthful provision of adequate explanations to employees. When these three types of organizational justice are provided, the firm will easily demonstrate the third characteristic of effective performance appraisal, thus ensuring that the practice is not ill-perceived by employees.

Proposed Employee Development/Training and the Relevance of Cognition Theories

A video-enabled training program is hereby proposed for Meteor Ltd. This approach is vital because of its unique ability to minimize the superfluous cognitive burden traditional instructional materials often impose. Moreover, the Cognitive Load Theory (CLT) will form a central part of the organization’s employee training program. The CLT is a method that suits our young firm because it is forthright and guarantees effective training resources for trainers. In praise of the CLT, Curum, and Khedo (2021, p. 115) wrote that it rids an individual’s content of unnecessary load, enabling trainees to optimize their relevant cognitive load potential, as determined by the course content’s intrinsic load. Read differently, the idea of CLT allows a training program to be developed with minimal barriers to learning, permitting employees to gain as much knowledge as the complexity of the course or topic dictates.

Cognitive load theory will also be suitable for the proposed video training program because it will allow trainers to customize the materials in response to specific problems Meteor Cargo experiences. The ability to directly target organizational problems eliminates the need to compensate for human biases in training (Cum & Khedo, 2020, p. 127). Additionally, CLT can be readily integrated with the capabilities of video as an instructional tool, which would further allow employees to remain in control of the learning process. For example, a video eliminates the interruptions associated with traditional instructional practices, and it eases the geographical restrictions of the training process. It is also more engaging than text alone (“Employee training,” 2019, par. 16). As remote work becomes increasingly popular, the need for CLT-informed employee training through video remains a necessity.

Strategies to Encourage Positive Ethical Conduct

Moral behavior hinges on the management’s understanding of how moral psychology interacts with behavioral ethics in the workplace setting. Moral psychology is concerned with how people form their moral identity and blend moral principles in the evolution process of their personality. This approach is vital because it ensures that decisions made in the business are ethical by compelling the decision-maker to question how they reach a verdict, not which choice they should make. To emphasize the importance of morality in the workplace, Villegas et al. (2019, p. 82) cautioned that a manager’s failure to be ethical during the recruitment process will fail to select the most qualified applicants and introduce bad apples in the workforce that will eventually infect peers. In other words, ethical conduct is first encouraged by ensuring that ethics inform the firm’s hiring policies.

Besides moral psychology, a nuanced understanding of behavioral ethics can help the management encourage positive ethical conduct. Behavioral ethics is the lens through which to examine how people behave when confronted with ethical dilemmas. Such situation-induced behavior is not judged by the matter at hand. Rather, it is gauged based on how the individual performed against generally accepted behavioral norms. Accordingly, behavioral ethics provides an impetus for developing an ethical framework to guide employees’ behavior in different situations. For example, a firm can have an explicit policy proscribing corruption, sexual violation, indolence, or misappropriation of company resources.

A Plan to Shape and Maintain Positive Ethical Behavior for ALL in the Organization

A fundamental strategy for encouraging positive ethical conduct is to model moral behavior. The three types of organizational justice – distributive, procedural, and interactional – described earlier are critical ways to maintain ethical behavior. Organizational justice promotes a culture of respect, dignity, and integrity, which arguably forms a robust foundation for ethical behavior. For example, procedural justice ensures that the processes for reaching a decision are fair and well understood by the employees the outcome affects. Interestingly, none of these ethical feats can be achieved or pursued with seriousness if the management has not taken a lead role in it. Hence, Alvernia University (2017) recommends that managers model the behavior they want and, while at it, be visible. Employees often look to their leaders to understand and emulate acceptable behavior. Accordingly, it is advisable for those in the senior management position to set the tone for ethics in the company.

Another important way to shape and maintain positive ethical behavior throughout the organization is to communicate ethical expectations. Ethical scholars share a consensus that culture plays a huge role in shaping an individual’s perception of what practices are ethical and which ones are not. Since culture is a significant determinant of an individual’s ethical ideology, our organization’s diverse workplace will likely continue to record varying morality standards. As Alvernia University (2017) recommends, an effective code of ethics should make the firm’s primary values explicit and detail the ethical rules by which all employees should abide. Moreover, ethics training will be made a compulsory part of employee training, and ethical behavior will be rewarded accordingly following performance appraisal.

Conclusion

Human resource management (HRM), as the name unambiguously suggests, is primarily about dealing with people. I have learned that the only way a professional can excel in managing others is by understanding how they think and influencing them to act in favor of specific organizational goals. This convoluted undertaking requires an individual to possess deep psychological knowledge. Psychology is crucial when recruiting employees, designing employee motivation strategies, taking disciplinary action, and resolving disputes.

References

6.4 Motivating Employees Through Performance Appraisals.

Alvernia University. (2019). Managing ethics in the workplace. Alvernia Online.

Curum, B., & Khedo, K. K. (2021). Cognitive load management in mobile learning systems: Principles and theories.Journal of Computers in Education, 8(1), 109-136.

Employee training that scales — and respects Cognitive Load Theory. (2019).

Hadi, S., Tjahjono, H. K., & Palupi, M. (2020). Study of organizational justice in SMEs and positive consequences: Systematic review. International Journal of Advanced Science and Technology, 29(1), 3-14.

Hao, Z. H. O. U., & Yu-Ling, H. E. (2018). Comparative Study of OKR and KPI. DEStech Transactions on Economics, Business and Management, (eced).

Lambert, E. G., Keena, L. D., Leone, M., May, D., & Haynes, S. H. (2020). The effects of distributive and procedural justice on job satisfaction and organizational commitment of correctional staff.The Social Science Journal, 57(4), 405-416.

Villegas, S., Lloyd, R. A., Tritt, A., & Vengrouskie, E. F. (2019). Human Resources as ethical gatekeepers: Hiring ethics and employee selection.Journal of Leadership, Accountability and Ethics, 16(2).

Zheng, Y., Wang, W., Liu, W., & Mingers, J. (2019). A performance management framework for the public sector: The balanced stakeholder model.Journal of the Operational Research Society, 70(4), 568-580.

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