A STUDY ON IMPACT OF HR STRATEGIES ON EMPLOYEE … · Abu Dhabi Distribution Company (ADDC) is a...

International Journal of Social Science & Interdisciplinary Research__________________________________ ISSN 2277- 3630 IJSSIR, Vol.2 (1), January (2013) Online available at indianresearchjournals.com

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A STUDY ON IMPACT OF HR STRATEGIES ON EMPLOYEE

PERFORMANCE IN ABU DHABI DISTRIBUTION COMPANY

ANURADHA REDDY

Research Scholar (Kakatiya University),Freelance Report Writer,

Professor, Cornerstone International School for Business Management,

Sharjah, Al Ain, UAE,

ABSTRACT

In any organization HRM has to object on ensuring and achieving “return on investments” and

this can be maximized by effective utilization of skilled and un-skilled manpower. Here it is also

important to consider the financial risks that should be kept at minimum levels (Coyle-Shapiro

Shore, 2007). It is stated that (Wilkinson and Ackers, 2001) commitment of employees and their

attitude towards the work changes from time to time in the organization. So it is the HRM who

has to look forward for planning and implementing effective HR strategies so as to increase

employee performance. Thus aim of the research is to study the employee perceptions on HR

strategies of ADDC. Objectives of the study include identifying the various HR strategies

implemented by the organization, identifying the organization‟s human resources systems,

policies and practices, study the impact of these policies and practices on employees and finally

put forward few recommendations based on the analysis of the results. Research results show

that most employees are not been rewarded for their performance and most employees are

unaware of the performance appraisal system, there is a need to revise and focus on promotion

and reward policies and as most employees are not happy with their benefits like compensation.

Thus it is recommended that the more the appraisals and rewards the more will be the employee

commitment. In other words it can be said that ADDC can further boost their employee

performance through revising the current salaries, giving rewards for better performance,

promoting employees who perform their job well.

INTRODUCTION

“When people feel great about the place where they work…they provide better customer

service.” When the employees of the organization feel great about the place where they are

working their perception towards the organization brings positive aspect and able to achieve the

organizational goals effectively. This research tries to find the best practices in the management

of human resources are the ones which optimize a workforce so that it can not only get work

done, but also ensure a greater level of efficiency, timeliness and quality as it accomplishes

increases productivity overall. The scope of the study is limited to employee‟s perception

towards HR practices and main emphasis is on various HR practices which the company is

following within the organization such as

Employees‟ clarity on HR policies

Employees‟ clarity on roles, responsibilities and expectations


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Competitiveness of compensation structure relative to industry benchmark

Usefulness and accuracy of compensation

Training and Developmental practices

Employees‟ assessment of promotion criteria and process (clarity, fairness)

Significance of the Study

This current study on “Employee perceptions towards HR Practices in ADDC” tries to bring

awareness in the readers as well as the chosen organization to learn about

Understanding the employees perceptions towards the HR strategies and practices in the

organization

Identify the positive and negative attitudes and their outcomes

Learn to identify attitudes and overcome them with the help of organization

Identifying the reasons for these perceptions

Learn that employee perceptions are vital for organizational development.

Organization of the Study

Abu Dhabi Distribution Company (ADDC) is a public joint stock company which is a wholly

owned subsidiary of Abu Dhabi Water and Electricity Authority (ADWEA). ADDC is

responsible for distributing high quality water and electricity services to all customers in the

emirate of Abu Dhabi, excluding the Al Ain region. The company's core business is the

planning, design, construction, and operation of the Abu Dhabi water and electricity distribution

network. The company is developing maintaining and operating the cost effective water and

electricity distribution systems by offering and providing the best services to consumers through

customer service orientation and utilization of best billing payment alternatives. Abu Dhabi is

positioning itself as a leader in the field of structural reforms and the development of

organizational practices in the water and electricity sectors in the Middle East. In the last few

years we have witnessed significant changes in the organizational methods and supervision of

this sector. Prior to the year 1995, the Department of Water & Electricity was responsible for all

matters related to the sector, including power generation, water desalination, transmission,

distribution and supply operations. The organization was based on a conventional hierarchical

system descending from top to bottom like any other government department composed of

different interrelated sections.

After establishment, ADWEA dissolved and restructured the vertical & horizontal organizational

system of the old WED and implemented a new structure for the water and electricity sector on

the first of January 1999. Projects Directorate manages the execution of highly valued projects

on behalf of Abu Dhabi Distribution Company (ADDC) & Al Ain Distribution Company

(AADC). It also plays an important function in consolidation and of common issues including

standard specifications for water & electricity projects. The Projects Directorate is also revising

the annual balance for the new projects drafted by ADDC & AADC and passing the estimates for

approval. The Directorate supervises the execution of the special and strategic projects for

storage of water for emergencies (www.adwea.ae).

http://www.adwea.ae/


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Organization Vision & Mission

In view of operations and achievements, ADDC and its subsidiaries anticipate possessing a

leading position in the Gulf competing with pioneers involved in the water, electricity and

sewerage sector worldwide. The company and its subsidiaries clearly indicates that it wants to be

the most successful in all the operations it is carrying by providing quality of demanded services

and products to its beneficiaries.

ADDC produces, transmits and distributes potable water, electricity and sewerage services

reliably, securely, safely and cost-effectively throughout the Emirate of Abu Dhabi

(www.adwea.ae). From the mission statement it is clear that the company is contributing and

enhancing the services through their strategic objectives for the overall organizational levels in

Abu Dhabi.

LITERATURE REVIEW

HR Strategies & Effectiveness

There is a significant change in the role of the Human Resource (HR) department over the past

few years. Development of various strategic approaches has been adopted increasingly as an

integral part of the organization. There is a link developed between HR strategy and business

strategy which helps organization‟s to achieve their set objectives thus building people

capabilities. Continuous growth in HRM (Human Resources Management) past many years

aimed to recognize knowledge and skill of the employees and technology as well. Business

strategy of any organization needs to focus on HR strategy and this in turn needs to be carefully

linked to the Vision, Mission and overall business strategy of the organization. For any

organization HR values take up major priority as its leads to the success of the business.

According to Boeker.W, (1997) good HR values of the organization creates positive perception

to employees towards the organization and according to Locke K (2001) HR values of the

company includes concern for people, integrity, customer orientation, team work, continuous

improvement and execution excellence. This shows the importance of employee concerns for

which organization‟s HR has to strive focus on business performance as well as organization

performance.

Thus it can be said that the formulation of new policies and changes to the existing policies are

done in line with the business plan, business model, market trends, best practices of

benchmarked companies, suggestions, employee feedback through communication meetings and

through Employee Satisfaction Surveys (Ladika, 2006)

All these factors will help the employee perception towards the HR practices of the

Organization. It is true that the incorporation of HR policies and strategies with the

organization‟s strategy not only improves organizational performance but also employee

performance. In every organization employees should know their goals, feel respected and

valued, understand their role, and know how to succeed. When such conditions are created by

employees it leads to organizational success and improves productivity thus reducing the risk

involved. In the process of creating effective HR practices and strategies organization face

challenges but creating such effective strategies enhances the organizational effectiveness and

helps in resolving issues and problems within the organization (Yoon and Theye, 2002).

According to Huseild (1995) there are two types of HR strategies, hard and soft. Soft strategies

include reward and recognition, employee relations, learning and talent development, employee

http://www.adwea.ae/


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relations etc., and hard HR strategies include organizational design, organizational development,

resourcing and talent planning and performance management. For any organizations success it

is very important to implement and plan for these strategies. While integration of both HR and

business strategy includes techniques of performance management such as performance appraisal

system, controlling the set work targets and bringing flexibility in organization. The process of

integration is said to be vital and helpful as well for the organization and further helps in

employees in organizational change and development. Organisational commitment depends on

employee satisfaction. When there is low employee commitment towards organization it is

important for the organization to understand and identify the need to develop employee

commitment which is only possible through effective formulation of HR strategies. It is found

that HR practices of the organization show impact on organization turnover, productivity and

corporate financial performance.

Allen and Meyer (1990) investigated the link between the three attitudinal commitments and HR

strategies which are said as affective commitment, continuance commitment, and normative

commitment. Affective commitment discusses about employee's attitude and attachment towards

the organization and also identifies employee performance. Continuance commitment discusses

about the association of employees whoa are leaving the organization. Normative commitment

discusses the employee feeling of obligation on the employee remaining with the organization.

Further all these components are negative indicator for turnover which clearly indicates the

attitude of employees.

HR Strategies for Modern Organizations

Role of HR and strategies formulated by them are vital for modern organizations. According to

Bratton and Gold (2007) major focus of HR while creating HR strategies should be on

Create a culture at corporate level to improve the individual performance

Rewarding employees will increase employee commitment towards organization and this

will directly help in reaching organizational goals and objectives

Developing skills and positive attitudes in employees will help the employees to perform

their job more efficiently

Making available all the necessary resources to the employees to perform their job well

In any organization HR value propositions are vital for consideration. According to Dave Ulrich

(2005) there are four major categories of HR Value proposition

Flow of people – It includes promotions, transfers, outplacements, training and

development.

Flow of performance Management – This includes measuring job performance,

appraisals, rewards and regular follow ups.

Flow of information – Organizations should keep in touch with the important external

realities, manage internal communication and perfectly and/ or properly design

information technology infrastructure.

Flow of work – This includes organization structure, work process design and other

physical arrangements. Thus, it can be said that it is conceptual work force which drives

the responsibilities of HR effectively


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Training & Development

HR strategies and practice play an important role in developing good organizational structure

which therefore results in better organizational and employee performance. Organizations must

plan and implement effective training goals and should look for the final achievements. It is

important for human resource management to find the most effective ways to train and employ

their employees. HR practices such as training, mentoring, coaching and designing and

developing people should be effectively planned before implementing them and prior to

implementation HRM needs to focus on the effectiveness of training in all means and forecast

the challenges that could rise during training. The overall goals of training should focus on

Restructuring organization and work

Enable learning in employees

Improving decision making skills in employees

Improve employee behavioral and attitude towards work and organization

Improve employee job satisfaction and commitment towards organization

Facilitating employee personal development (Bratton and Gold, 2007).

Bratton and Gold (2007), state that training employees includes certain aspects such as attitude

and behavior, ethics and morality, leadership and determination finally skills and knowledge that

are essential aspects to be considered while implementing HR strategies. Considering attitudes it

is related to personal or individual thinking and emotional maturity, belief, self confidence etc.

are some of the challenging issues faced by the management during training and development.

Retention, Delivery, Cost, Measurement, Performance are some of the challenges faced by HR

during training that needs to be handled by HR professionals. According to Davenport (2006),

there are many internet supported software‟s and it is an easy task to implement such strategies.

Employee Perceptions on Work Situations

HR practices such as training, developmental practices, reward system, promotions, pay etc

shows a major impact on the employee attitudes in an organization. Designing effective

structures of compensations, rewards, appraisal systems, performance identification etc. helps the

HR to identify and judge the employee commitment on the organization (Saari and Judge, 2004).

Therefore designing and implementing effective HR strategies and practices will help the

management to improve its performance and also changes employee attitudes towards

organizational HR strategies (Gomez-Mejia, Balkin and Cardy, 2007)

Next organizational culture plays a vital role on changing employee attitudes at work. According

to Saari and Judge (2004) employees with different cultural backgrounds work in an organization

and in such case the culture plays a vital role in employee attitudes. One of the reasons were

found to be globalization and the different challenges the HR is facing currently. Considering

Hosfetde cultural dimensions such as masculinity - femininity, individualism – collectivism,

uncertainty avoidance and power distance, each nation has varying impact of these dimensions

that needs to be considered while designing HR practices especially there is a need to focus on

improving and maintaining positive organizational culture. Understanding these dimensions

helps the organization to clearly understand the employee attitudes towards organization (Saari

and Judge, 2004). Further the researcher in their study reported that country and culture plays as

a strong predator in identifying employee perceptions towards the job they are handling.


159

Therefore culture also plays a vital role in changing attitudes employee attitudes towards HR

strategies.

RESEARCH DESIGN AND METHODOLOGY

Research design and methodology discusses research methods used for the analysis and

interpretation that helps to understand the various aspects of study related to the HR issues like

training and development, promotion policy, performance appraisal system, selection process

working atmosphere, safety measures, promotion policy, welfare measures, retirement benefits

etc., implement ting in ADDC Company.

Reasons for Research

Research on employees perception towards new technology in the work place are more strongly

affected by organizational rather than technical factors as common thought, labour unions,

contrary to popular belief, view technological change positively, and can be a contributing factor

to the facilitation of change within the firm.

Relationship is a basic need in any organization especially there should be a good understanding

between employees and management, because it is the place where both the parties understand

each other. Thus the overall purpose of this study is to understand and identify perception of

employees towards human resource strategies. ADDC being a large company needs to plan and

implement effective human resource strategies so as to empower its employees for more

productive work outcomes.

Sampling

With respect to data collection this research has developed a sample survey questionnaire that

consists 20 questions of which 5 questions are related to personal information of the employees

in the company and 15 questions are related to HR strategies. The first part of the questionnaire

is related to personal information such as gender, nationality, age group, education and monthly

salary and second part contains 15 questions focusing on employee perception towards the HR

strategies. Five level options are given in the questionnaire for giving the information to indicate

(i) Strongly agree, (ii) Agree, (iii) Neutral, (iv) Dis-agree and (v) Strongly disagree. A sample

group of 42 employees have been selected from various designations, genders, races, and

experiences. Based on the above mentioned criterion, questionnaire has been circulated to all the

staff of ADDC employees.

Data Collection

The data required for the study was collected through both primary and secondary sources.

Primary data was collected through a questionnaire with a sample size of 50, of which 42

respondents responded to the survey. These respondents were selected on random basis and

questionnaire was distributed in the organization. Secondary data was collected through published

sources such as books, periodicals, industry association reports; past literature was reviewed, in


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view of the raised aims and objectives. This gave a clear understanding on the employee attitudes

towards human resource strategies, and the various issues related to this percentage method is used

to analyze the responses. Based on percentage of responses to different options interpretation is

done.

Analysis & Interpretation of Data

Analysis and interpretation of data was based on the results of the survey questionnaire.

Questionnaires filled by the employees were collected and the results were analyzed based on the

rating priorities (1-5). Survey responses were entered into SPSS program and frequency of

response and cumulative percentages were drawn out based on which analysis of the results was

written. The information which has been given by the respondents is clearly shown below.

As shown in the table, Most of employees are male. The main reason of high percentage for male

compare it with percentage of Female is the survey questionnaire was distributed in Baniyas

branch (Al Ain). In this branch, most of employees are male because this branch is responsible to

carry out most of field work for ADDC in Baniyas Area while there is a small section for

customer service where there are few female working.

Most of employees are from UAE and Asians countries. As ADDC is one of Abu Dhabi

Emirates Company which Abu Dhabi government is most important shareholder, so it is working

to hire as much as possible of qualified Emirati people. However, because ADDC has changed

from Water and Electricity Directorate to be a company in 1999, so it is also looking to gain high

revenue by the end of each year so it hires Asians because of their high quality of work with low

salary


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Most of employees aged between 21 to 30 & from 41 to 50. Most of Emirati employee age's are

between 21 to 30 because most of them are fresh graduated and post graduated employees.

However, the other group are aged between 41 to 50 because ADDC hires experience people for

effective performance.

Most ADDC employee are post graduates because the main work of ADDC is technical work

"Engineering". However, there are some employees with lower education level because they are

assisting the engineers, such us technicians, electricians and drivers.

Most employee are getting more than 8000 Dhs as ADDC hires experienced employees and also

to encourage them, the company pays them high salary.


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Most employees "agree" that ADDC is following effective recruitment policies. Company

follows several tests in the process of recruitment such as Personality test, Performance test,

Intelligence test and projective test, to make sure that the company hires only the best people

from the market.

Most employees agree that company provides appropriate training and it is a fact that ADDC is

providing several training courses to its employees during the year. Some of these trainings are

in house training. Some of the trainings are organized by special consultants coming from other

countries around the world. From some departments, ADDC is sending selected employees to

have training aborad such as in Germany, England and USA.

As per ADDC HR, each employee should have training as per his job title and job responsibility

to make sure that the training programs are conducted as needed. In addition, ADWEA Academy

is supporting ADDC in organizing the training courses for ADDC employees.


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ADDC has HSEQ “Health, Safety, Environment and Quality” department which is focusing on

distributed Healthy, Safety and high quality of work with care about Environment. In addition, in

case of any accident, the department investigates and reports incidences and analyzes about the

accident to learn more on the reasons of the accident and shares it with all employees to make

sure that such accidents does not occur again.

It is effective because as per study the number of accidents is decreasing. However, the company

has started a project for connecting all electricity and water pumping stations to connect them

with control center in order to minimize number of operations which includes most dangerous

work.


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Most employees agree. It is identified that after investigation and analysis report, HSEQ

department gives compensation for effected employees and punish the employee who were the

cause of accident especially if the accident takes place because of employee carelessness. In case

of any emergency work, company gives over time as compensation.

Most of employees are happy with their supervisors because most of ADDC supervisors are

caring and helpful with their employee because ADDC HR has an open door policy. Employees

have right to complain against his supervisor in case of any problem between them. At the same

time if the employee complains several times against his supervisor, the HR will transfer both of

them to committee to finalize the issue.

Most of them agreed, because ADDC provides all facilities and tools to help employee to carry

out their work such as new cars (every 4 years the company change old cars and buy new cars),

new offices (every 4 years the company changes the furniture and PC's) and keep update the PC

latest software and solve PC problems by INZAJAT company (an out sourcing company for

ADDC).


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Most of them agreed, because there are several ways for communication with direct supervisor

via email, mobile and directly "face to face". However, in ADDC portal, the ADDC top

management has displayed their office telephone numbers and their email to let any employee

communicate directly to them.

In each department and section the supervisors are working to keep their staff to work as a team

because there are annual meeting among top management with lower levels of management to

share the annual plan of the company so the supervisors will work to reach the goal for these

plans and they have to work in teams so as to reach goals.


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In order to provide Electricity and Water service all department should work as a team because

without team work the company will never be able to provide its service effectively. However,

the HR department keeps announcing the Mission and Vision of the company so everyone in the

company knows what they have to do to reach the mission and vision.

Most respondents were neural, because this survey mostly covered UAE employees (local). Most

of them are getting their promotion but not on time because in order to get a promotion in

ADDC, it has to get approved from their direct supervisor department manager division

manager director of their directorate HR manager. Sometimes HR manager reject

promotion!. However, some people disagreed because since long time they didn‟t get their

promotion because HR manager is always rejecting because they already been paid high salary!

Most respondents agreed because ADDC is following Graphic Rating Scale method which

shows employee strengths and weak points based on their performance. However, some don‟t

agree with this type because they want to move to newest form of appraisal.


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Most respondents disagreed because the salary for retired employees is based on their basic

salary when they were on duty, so they are not satisfied with retirement policy because ADDC

employees basic salary is very low compared with other company, for example some local

engineers are paid 40,000 Dhs per month.

Most respondents were neural while some agreed. respondents were " Neural" because of

promotion, some people ,who join the company before 1999, are qualified with very good

experience but still in low grades while new employee , who join asfter 1998 they are getting

grades as per their experience.

OBSERVATIONS, CONCLUSIONS AND RECOMMENDATIONS

This chapter includes various observations from the analysis part and based on the observations

conclusions have been given for the overall study related to employee‟s perception towards the

HR practices in ADDC. Based on the analysis of results certain recommendations and

suggestions are put forward here.


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Observations

First considering the personal characteristics of the respondents it is observed that

From the analysis it is observed that majority of the employees belong to the age group of

31-40 years.

Majority of the employees belong to UAE. It is observed that more number of

respondents have completed post graduation, and majority of the employees earned their

monthly salary of more than 8000 pm.

Next considering the employee perception towards various HR strategies it is observed that:

Company is following effective recruitment policies by conducting several tests to make

sure that it is hiring capable employees fit as per the job profile.

Company is providing several training courses which include in-house training and

training from consultants coming from different countries and it is observed that the

company is sending its employees to other places for training. It is seen that majority of

the employees are satisfied with their company‟s training sessions.

Majority of the employees are neutral with their company‟s promotion policy. Some of

the employees disagree with the policy and they feel that efficient employees are not

getting benefited with the promotion policy.

Most employees expressed a neutral opinion on the salary they are been paid. Most

employees were accepting the pay which is paid for them. They are neither satisfied nor

dissatisfied with their pay structure.

Most employees expressed that they are happy with their supervisor and their relations

are good in the organization.

Most employees are happy with the communication systems they had with the

management and the supervisors. So it can be said that communication systems in the

company good and effective.

Most employees expressed that organization is implementing effective safety measures

and policies. Organization is taking effective measures to prevent hazard to their

employees.

Most employees were satisfied with the performance appraisal system.

Employees were happy and satisfied with the organizational culture and environment.

Retirement plans and benefits are found to be satisfied. Further some employees felt that

the organization could offer better benefits than currently used

Conclusion

Thus in conclusion it can be said that ADDC is effective in identifying the training needs through

performance appraisal system and further fresh recruitments are done based on the job needs.

Appraisal system is found to be qualitative and but ADDC has to initiate discussion with the

employees to better identify the needs so that the training needs and other aspects could be more

specifically identified. Further identifying the right practices for performance appraisals is also

vital for organizations that foster the organizational success. The more the appraisals and rewards

the more will be the employee commitment. In other words it can be said that ADDC can further

boost their employee performance through revising the current salaries, giving rewards on better

performance, promoting employees who perform their job well etc.


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To conclude, this research has expanded the existing research development in several aspects.

Through the application of multilevel research design, it has enabled researcher to conduct

previous similar studies but in a more logical and comprehensive manner, i.e., the mechanism of

how high-commitment HRM practices influences employees affective commitment. Such result

can assist the practitioners within the organization to acknowledge that through the

implementation of high-commitment HRM practices, this will enhance positive perceptions on

the employees side which could further extended to their favorable attitudes and behaviors.

Therefore, this research provides deep insights of the various human resource strategies of

ADDC and its employee‟s perception towards these strategies.

Recommendations

Based on the analysis and interpretation of data and the observations drawn the following

recommendations and suggestions are put forward for ADDC so that the company can improve

their HR strategies and practices

Most employees are not been rewarded for their performance and most employees are

unaware of the performance appraisal system and for this ADDC has to conduct sessions

on improving performance and how employees could get rewards and promotions on

their better performance.

There is a need to revise and focus on promotion and reward policies

Even though most employees are been paid more than 8000 dhs per month, the pay scale

of the employees should also be revised as most employees are not satisfied with their

current salaries

As most employees are not happy with their benefits like compensation this aspect needs

to be revised and focused.

Further team work and its importance should be explained to employees and should be

encouraged for team work

Finally the retirement policies and benefits should be revised

LIMITATIONS OF THE STUDY

The research conducted has certain limitations. These arise due to the method of sampling used,

the method of data collation used and the source of the data apart from many other things.

Respondents are limited to 42 employees, few employees were not interested in answering all the

questions in the questionnaire, few were not interested in participating in the survey, some

employees took the view of others while answering the questions, so there could be a bias in the

results and finally the sample was very few so the results could change further when compared to

a large sample.


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