Table of Contents

Question 1: Management of Human Resource environment at Dell...............................2

Four SHRM functions in place at Dell....................................................................................2
Designing satisfactory work and maximizing customer service............................................4
Question 2: Acquisition and preparation of employees at Dell .......................................5
Question3: Assessment, development and management of employees at Dell................9
Measuring employee’s performance.....................................................................................10
Preparing employees for future work roles.........................................................................11
Question 4: Compensation system...................................................................................13
Bibliography.....................................................................................................................16

Question 1: Management of Human Resource environment at Dell

Strategic Human Resource Management (SHRM) is the pattern of planned HR

deployments and activities intended to enable an organisation to achieve is goals.(Noe,
Hollenbeck, Gerhart&Wright,2008:69). It is the management of an organisation most
valuable asset, PEOPLE, based on the business strategy. SHRM is therefore shaped by
the overall business strategy.

Four SHRM functions in place at Dell

1. Acquisition: consists of HR planning, recruitment, selection of new members (talent)

for an organisation. The SHRM strategy of Dell is to recruit top performers to sustain the

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competitive edge of having a highly skilled and motivated workforce. The BEE strategy
at Dell is a genial plan that allows the organisation to attract top performers into its
business.

2. Development: consists of putting in place various trainings (on a short or medium-

term) and development plans (long term) for employees. Before puting in place or
revising training programs and development plans for employees, they need to be
assessed through a performance management system.
Being part of the technology industry, Dell relies on skilled workforce to achieve its
objective of being one of the leading PC vendors in the world. To ensure continuous skill
upgrading (for example, sales skills, technical skills), Dell has an individual development
plan for each of its permanent employee. Employee development plan at Dell also helps
the organisation to achieve its objective of high quality direct customer relationship. This
is of utmost importance since Dell uses the direct sales business model which results in
substantial cost-savings.

3. Motivation: performance management information at Dell also help determine pay

raise, promotion, recognition. The “motivation function” of SHRM determines which
compensation structure is provided to employees so that they feel motivated in doing
their job. Employees at Dell are motivated through high rewards for good performance.

4. Maintenance: the “maintenance” function of SHRM consists of implementing

employee benefits and services which commensurate with the expectation of employees
and at the same time motivate them to make the necessary efforts to achieve an
organisation objectives. This function also consists of the management of employee/
employer relations and career management.
The SHRM strategy at Dell is to offer big-company benefits to employees, spouses and
children. Top performers are given a sound career path and opportunities to develop their
skills.

‘Employee relations’ is a common title for the industrial relations function within
personnel management and is also sometimes used as an alternative label for the
academic field of industrial relations. The term underlines the fact that industrial
relations is not confined to the study of trade unions but embraces the broad pattern of
employee management, including systems of direct communication and employee
involvement that target the individual worker.” (Heery & Noon, 2001)

Employee/employer relations are managed through open communication channels.

Climate surveys are done twice a year at Dell as a tool whereby employees can express
themselves, monthly newsletters are sent to employees and the managing director meets
with groups of employees each month to hear their views. Therefore, at Dell
communication with employees is constant and information gathered from them, whether
from surveys or meetings, is used to increase productivity.

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One legal factor which affects Dell HR environment is the employment equity act which
requires South African organisations to develop employment equity plans. The
employment equity plans serve to provide a mechanism to introduce individuals from
previously disadvantaged groups into organisations (RSA,1998a). This act which can be
an issue has been adopted in a positive and innovative way at Dell through its BEE
strategy.

Designing satisfactory work and maximizing customer service

Job design is the process of defining how work will be performed and the tasks that will
be required in a given job (Noe et al, 2008:166). In my opinion, Dell uses the
motivational approach to job design. The motivational approach focuses on job
characteristics that affect psychological meaning and motivational potential and it views
attitudinal variables as the most important outcome of job design.

Being in a very competitive industry, Dell recognizes the fact that job design needs to
satisfy the employee and affects the latter’s performance. An appropriate job design
positively impacts the output of an employee and hence, contributes to help Dell achieve
its objective of being one of the leading PC vendors. Since Dell has a direct sales model,
it is of utmost importance to maintain a high level of motivation among its employees as
this impacts the direct one-to-one relationship with customers that Dell commits to.

Dell has a relatively flat structure, therefore communication is quite rapid. Employees can
make decisions quickly and also have a certain degree of freedom in their action. This in
turn empowers them and gives them a high level of internal work motivation. Motivation
in turn contributes to high productivity, high quality of customer service and output
which are free from errors and significant variations.
As per the managing director, Stewart Van Graan, Dell has made changes in how they
listen and interact with their customers. This implies that Dell recognizes the fact that to
have a faithful customer base, high quality customer service is of utmost importance.

Through the different social projects of the Dell foundation, Dell volunteers can see the
importance of their day-to-day job; for example, when they donate computers to poor
communities, they can experience the meaningfulness of what they do daily. This in turn
motivates them to perform and as mentioned in the case study, Dell employees are
rewarded for good performance.

The motivational approach focuses on increasing the meaningfulness of jobs through

such interventions as job enlargement, job enrichment and the construction of jobs
around the sociotechnical systems (Noe et al, 2008:170). Dell also implements this by
identifying top performers each year and embarks them on an accelerated development
plan to develop future leaders. Moreover all employees have an individual development
plan.

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 I will suggest that Dell also uses the biological approach to job design in addition to the
motivational approach.
To sustain the workforce, it has become important to ensure a hazard-free and safe
environment, and it has been embraced by managers that a safe working environment
can result in greater efficiency and productivity. Jobs must be designed in such a manner
that musculoskeletal disorders do not happen. Tools and equipment must be designed
with the worker in mind and for the job being performed (Garg& Rastogi, 2006:579).

Dell being in the technology industry should be having a considerable number of

employees working as IT technicians. These technicians assemble computers and servers.
They are on their feet almost the whole day and can suffer from physical strains, fatigue
and health problems. Tea breaks and redesigning equipments (for example, use of
ergonomic keyboards and chairs) for a more worker friendly environment will increase
productivity at Dell.

Question 2: Acquisition and preparation of employees at Dell

The acquisition and preparation of potential employees at Dell is a process of utmost

importance as Dell relies highly on a pool of skilled and motivated employees to achieve
its objectives of expanding in emerging markets, growing in the corporate and small-
medium enterprise markets and ensuring the continuity of its one-to-one relationship
philosophy. Dell’s motivated workforce is its competitive edge. In order to sustain this
competitive advantage that allows the organisation to expand in the global marketplace,
Dell needs to recruit top performers into its business.

HR planning ensures that there is enough labor with the right skills doing the right job at
the right time to achieve an organisation’s goals.

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 Forecasts of labor demand Forecasts of labor supply

Forecasts of labor surplus or

shortage

Goal setting and strategic

planning

Programme implementation and

evaluation

Figure 1: the Human Resources Planning Process (Noe et al, 2008:186)

In the first phase of HR planning, forecasting determines labor demand and supply. At
Dell, The employees’ bi annual performance review helps to; forecast the labor demand
of the organisation, identify critical roles, identify exportable talents and business key
talents. In the second phase programmes and strategies are then devised based on the
forecast results. At Dell, succession planning and leadership programmes are developed
and forms an important part of Dell’s HR strategy. In the third phase, the programmes
and plans are implemented and evaluated.
One factor which affects HR planning at Dell is The employment equity act which
requires south African organisations to develop employment equity plans ,ranging
between one and five years. Organisations (RSA,1998a). This is implemented through
the employment equity strategy at Dell.

Recruitment is the process whereby an organisation attracts potential employees with the
aim of fulfilling existing or future vacancies.
Recruitment activities should be carried out in such a way that it attracts people who are
qualified for the job and who will most probably accept the job if offered.

From the case study, it can be seen that Dell recruitment policy includes both internal and
external recruiting and through SHRM, is in line with Dell’s organisational policy of
employment equity and diversity. Dell can also attract many potential employees because
they are seduced by Dell’s corporate philosophy, culture, and commitment to the
community and not only because of the “big-company” benefits offered to its employees.
Since Dell SHRM strategy aims to recruit top performers, job advertisements should be
devised in such a way to attract top caliber people in the business.

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One recruitment source at Dell is internal recruitment. All job opportunities are
advertised internally. Internal recruitment presents Dell with advantages such as the
applicant’s character and performance is known, the adaptation period will be shorter and
hence he or she can start working faster. This will in turn prove to be cheaper to Dell.
The disadvantages of internal recruiting are that negative attitude are cultivated in a
homogenous workforce who may not be eager to innovate, and a strong development
programme is required. The latter disadvantage is taken care of at Dell by having a
development plan for each employee and those identified as top performers follow an
accelerated development plan.
Another recruitment source at Dell is external recruitment whereby recruitment agencies,
search specialists, postings on website are the means used. External recruitment is
important when entry-level or specialized level positions need to be filled in. external
recruits provide the advantage of bringing new ideas and increasing diversity. The
disadvantage of external recruiting is that the new employee needs time to adjust to the
organisation. Dell addresses this problem by giving an opportunity to new entrants on the
job market to gain a year of hands-on experience. In addition to increasing his
professional capabilities, the new entrant also has time to adapt to the culture of Dell.

Dell also practices e-recruitment where potential employees can easily search for
different job categories in different parts of the world through the company’s website. Job
applications can be made securely since every potential employee needs to create his own
login and add jobs to his cart, just like the very popular shopping cart nowadays. E-
recruitment has several advantages such as job adverts can be reached anytime, anywhere
by anyone, advertising costs are reduced, there is no word limit to the length of the advert
and it can be customized in any fancy format.

Selection is the activity through which an organisation evaluates and finally chooses the
best applicant to fill a vacancy from a pool of applicants.

The selection process consists of 3 phases as depicted in Figure 2 below:

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 Preliminary screening
Provisional selection
Interview
Application form

Selection methods
Testing
Interview
Reference checking
Medical examination

APPOINTMENT

Preliminary screening can be as simple as analyzing the application form itself.

A selection method needs to be reliable, valid and legal. One of the most common
selection tools is the “interview”, which is a face to face contact during which
information is exchanged between the interviewer and the interviewee.
Appointment is the phase during which the right applicant is chosen to fill the vacancy.

As says jack Welch, former CEO at general electric says: “what could possibly be more
important than who gets hired. Business is a game, and as with all games, the team that
puts the best people on the field and gets them playing together wins. It’s that simple.”
(Noe et al, 2008:226)

Dell recognizes the fact that its workforce is its competitive edge and choosing the right
candidate is vital as it affects Dell’s effectiveness to compete in the global market place.
While applying any selection method, Dell should be able to test whether the candidate
meets the typical profile of a Dell employee, i.e, whether he or she can work under
pressure, is meticulous, independent, creative and passionate about his or her job.
However, while using any method, Dell’s SHRM strategy also needs to take into
consideration clause 8 of the Employment equity act of 1998 which states that
“Psychological and other testing of job applicants is prohibited unless it can be proven
that the test being used is scientifically valid and reliable, can be applied fairly to all
employees, and is not biased against any employee or group (RSA,1998a).

Recruitment and selection at Dell is in line with employment equity which is an element
of Dell Black Economic Empowerment (BEE) strategy. BEE, which is codified in the
soul of Dell, “focus is about sustainable development and economic transformation in
South Africa. Our bias is toward long term commitments to projects and initiatives that
deliver real value and real benefits.” (The Soul of Dell,2004:3)

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Dell is committed in implementing BEE in the form of employment equity in all
employment categories. This is an important factor which should be taken into
consideration during the recruitment and selection process at Dell.

When a candidate, who is new to the job market, is appointed at Dell, he follows an
induction programme. Induction is the process whereby an employee adjusts to his or her
work and working environment.
He or she benefits from opportunities provided by the Dell academy.
For those entering the workplace, the programme offers the opportunity to obtain at least
one year’s work experience within an IT environment, learning business skills, computer
skills and life skills. The 10+ persons employed per annum, are free and assisted in
pursuing employment outside the company after their tenure. (Soul of Dell, 2004:7)

As depicted in the above statement the new entrant does not follow a simple induction
programme but gets a tailor made training which not only increases his or her knowledge
and enhances professional skills but also life skills. Communication skills, self
management, decision making skills are important for the personal and professional
development of an employee. Dell recognizes the importance of these life skills in order
for an individual to have a successful career.

To conclude, Dell invests a lot in its main asset, PEOPLE. For the recruitment process, I
would also suggest that Dell advertises for vacancies in targeted journals and periodicals
and television cable. The top performers who read these specialized journals can be
attracted to job adverts at Dell even if they are not looking for a new job.

Question3: Assessment, development and management of employees at

Dell

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Measuring employee’s performance

Performance management is the process through which managers ensure that employee
activities and outputs are congruent with the organisation’s goals. (Noe et al, 2008:343)

At Dell, performance management strategy is aligned with the organisation’s strategy of

having a highly skilled and motivated workforce as its competitive edge. Dell rewards
those who show talent and competence for accomplished work. Therefore the
performance management system at Dell is closely linked to the notions of meritocracy.

There are several approaches to performance management. While it is not mentioned in

the case study which approach is implemented at Dell, we can say that performance
management at Dell is definitely not modeled by the comparative approach and the
attribute approach since both are little or not at all linked to an organisation’s strategy.

A suggested performance model that would be in line with Dell’s strategies is depicted in
figure 3 (Noe et al, 2008:345) below

Organisational strategy
Long and short term
goals and values

Individual attributes
Individual
(e.g., skills and Objective results
behaviours
abilities)

Situational constraints
Organisational culture
Economic conditions

In this model an employee’s personal attributes are transformed into behavior (example:
teamwork, integrity) which helps to attain objective results. The model also takes into
consideration that situational constraints will impact the employee’s ability to achieve
results. This model also shows that the organisational strategy drives the whole flow.

Dell may use the results approach to performance management. This approach is in line
with the strategy of Dell. It bases itself on the fact that results are the best indicator of
employee’s contribution to organisational success. Being in an aggressive business
whereby Dell should strive to preserve its market share, results would be one of the best
ways to measure performance. It is indeed mentioned in the case study that pressure and

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rewards are both high at Dell , meaning that performance is rewarded at Dell and the
employees may be working in a highly competitive environment, both internal and
external.

A performance management system at Dell serves three purposes:

1. Strategic purpose: it ensures that the employees output is aligned to Dell’s goals
and are meeting their performance goals. Increased employee performance allows
Dell to accomplish its goal of being one of the leading PC vendors in the world.

2. Administrative purpose: it is mentioned in the case study that the company

rewards top performers with bonuses (which is a variable pay given over and
above an employee’s basic salary). Performance management enables the
company to identify those top performers among all employees.

3. Developmental purpose: personal and career development for each permanent

Dell employee is linked to the results of performance appraisal. To allow
employees to perform in their current jobs, they are trained using different
training methodologies such as presentation methods (ex: classroom training) and
hands on methods (ex: on the job training, international training and work
experience opportunities). Another form of informal training in place at Dell is
mentoring. Mentoring is a process for the informal transmission of knowledge,
social capital, and the psychosocial support perceived by the recipient as relevant
to work, career, or professional development; mentoring entails informal
communication, usually face-to-face and during a sustained period of time,
between a person who is perceived to have greater relevant knowledge, wisdom,
or experience (the mentor) and a person who is perceived to have less (the
protege)" (Bozeman & Feeney, 2007).

Preparing employees for future work roles

It is vital for Dell to control change if it wants maintain or enhance value in its business
and to face the global labor shortage One way of controlling change is to develop a
succession planning strategy to fill in projected vacant positions. The future performance
of Dell relies on today’s careful succession planning.

In addition to its contribution in setting a personal and career development plan for each
employee, the performance management system at Dell also helps identify high-potential
employees who will take up these future vacant positions, be it a lateral move or an
upward move. Put simply, succession planning at Dell ensures that the right person is in
the right job at the right time,i.e, it ensures sustainability.
Upon identification of future positions, across all levels at Dell, that need to be filled, a
pool of employees who can take the responsibilities associated with the positions are
identified. Usually those employees would have displayed excellent performance and/or
have an excellent academic background. They are then placed on a development plan

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and leadership programme after a skills and competencies gap analysis. A development
plan consists of job assignments, education, executive mentoring and coaching. A
Leadership programme enables the employee to set a direction and guide others to follow
that direction. Both will help the employee to close the gaps identified in the gap analysis
process.
It is mentioned in the case study that employees are reviewed bi-annually, implying that
those top performers are assessed periodically. The ones who have demonstrated good
performance in their development experience will be retained to occupy the
organisation’s critical positions. This is a way of retaining existing key talents in the
organisation since their career requirements are met and they are exposed to new
perspectives of the business.

There are two approaches to succession planning strategy; buy talent in OR build it from
within. A succession strategy will inevitably be a mix of buying and building (Hills,
2009:3)
At Dell, in addition of building talent from within the organisation, succession planning
identifies top performers within the same line of business, attract and retain them by
offering a sound career path and skill development opportunities. Talent is brought from
outside when key skills and competencies are not available within the organisation.

Both buying and building talent have their advantages and disadvantages (as per table
below (Hills, 2009:3-4)

Buying Building
Advantages Keep pace with changing market Develop people to your
demands ‘‘spec’’.
Acquire specialized skills. Save money – lots of it!
Bring in new ideas and fresh perspectives Enhance career mobility &
engagement within existing
workforce.

Disadvantages Expensive. You know what you’re

getting into.
The talent you buy is unproven in your Less opportunity for
organisation injecting new
knowledge/energy

During the bi-annual employee reviews at Dell, exportable talents are also identified.
Employees who have a consistently good performance and are ready to be relocated are
an important asset to Dell which has worldwide presence. Dell needs to export talent to
Countries or states where local talents for specific jobs are not available. Such employees
may need special coaching, an insight of country’s culture, have a good morale and given
necessary incentives before relocation. It would be advisable for Dell to have a
development plan for these employees.

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From the above it can be concluded that Dell has elaborated and well-thought plans,
objectives and expectations from its employees. However, no mention has been made in
the case study about how Dell helps the employees to cope with the high pressure in their
work life. For example, events can be organized during weekends for each department so
that they meet their colleagues outside the office environment and get to know each other
better. Another suggestion would be that in addition to presentation methods and hands
on methods, training can also be carried out using group building methods such as
Adventure learning (outdoor activities), team training (activities where information need
to be coordinated so as to succeed) and action learning( problem solving in group).

Question 4: Compensation system

A compensation system provides rewards to the employee in exchange of the work that
the latter is performing in the organisation. The rewards can be both extrinsic and
intrinsic. Examples of extrinsic rewards are salary, job security and employee benefit.

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Benefits are an indirect form of compensation. Examples of intrinsic rewards are goal
achievements, job satisfaction, reputation and esteem.

A strategic compensation strategy should be in line with the organisation’s overall

strategy. For example, at Dell, the SHRM strategy is to recruit top performers in its
business. Therefore, the compensation strategy should be attractive enough to encourage
such labor to leave their current employer and join Dell.

There are several factors influencing a compensation system:

External environment factors:

1. Labor market – supply and demand of labor will definitely impact on the
compensation system. If demand is greater than supply, a very attractive
compensation system has to be put in place
2. Economic conditions – if there is a high degree of competitiveness within the
industry, the organisation may not be able to pay high salary.
3. Government influences – legislations in many countries impose a minimum salary
for different job categories.
4. Union influences – worker’s unions have their say and influence compensations
through negotiation with compensation decision makers

Internal environment factors:

1. Organisational strategy and goals – in order to be effective, the compensation
strategy should support the organisation’s strategy.
2. Labor budget – it is the amount of money that the organisation is ready to inject
into the compensation system.
3. Compensation decision makers – usually these will be members of the
management team and may consist of other employees in order to ensure
objective decisions are taken.

The development of an effective compensation system requires the following:

Job structure development - it is the comparison among jobs within the organisation
and helps to determine the value of a job. Job evaluation is the process that measure job
worthiness and identifies compensable factors. These characteristics may include job
complexity, working conditions, required education, required experience, and
responsibility (Noe et al, 2008:192).

Pay structure development – in order to develop an effective compensation system,

both external and internal information must be used while determining a pay structure.
External information will be in the form of “what is the competition proposing?” Internal
information will be the result of the job evaluation process. Usually, organisations will
have different pay structures for different job grades.

In my opinion, a compensation system is rated as effective by an employee if the equity

theory equation is in favor of the employee.

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An interesting analogy to the equity theory is the following recent study.

Brown monkeys refused to play along when they saw another monkey get better payoff
for performing the same work. The monkeys were trained to trade a granite token for a
piece of cucumber. When the reward was the same for both monkeys, they took the
cucumber ninety five percent of the time. But it was a different story when one monkey
was given something better – namely a grape. Then, the other monkey often pitched a fit
– either throwing the token, refusing the cucumber or giving it to the other monkey
(Associated press, 2003).

The equity theory suggests the following: a person (P) compares her own ratio of
perceived outcomes O (pay, benefits, working conditions) to perceived inputs I (effort,
ability, experience) to the ratio of a comparison other(o) (Noe et al, 2008:487).

Op/Ip <, > or = Oo/Io

if P’s ratio is greater or equal to O’s ratio, equity is perceived and employee’s behavior
remains unchanged. However, if P’s ratio is smaller than O’s ratio, inequity is perceived.
The employee will restore the equity by exhibiting behaviors which negatively affect the
organisation. Examples of these behaviors are

1. diminishing their input ( less enthusiasm ,loyalty, effort and commitment)

2. maximizing their outcome(committing theft, involve in fraud)
3. leaving the inequity environment (resigning from work)

However, each employee has a different personality and will not perceive the inputs or
outcomes the same way, implying that the result of this equation depends entirely on the
employee, and hence the results may not be objective at all times.

An effective compensation system should also benefit the employer by

1. Attracting talents to the employer
2. Retaining talent, for example, at Dell the compensation system is linked to the
performance system such that employees are rewarded for high performance.
3. Being at a reasonable cost so that the organisation does not face a situation where
compensation cost is growing more rapidly than profit.

There are different incentive compensation systems which are put in place to reward
employees. Those include merit pay, individual incentives, profit sharing and ownership
and gain sharing. All of these systems have their own advantages and disadvantages. For
a compensation system to be effective it is recommended that organisations design a mix
of compensation programmes (a balanced scoreboard) so that a larger number of
employees are satisfied. An employer shall bear in mind that each incentive is not
perceived the same way by every employee.

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The success of a compensation system also depends on the degree of participation and
communication with employees. When compensation systems are changed or new ones
implemented, there should be participation from those affected by the new/changed
policies. Participation from employees can take the form of surveys about what they
desire as compensation and propositions to implement a new policy or change an existing
one. The human resource officer or line manager acting as the change agent
communicates results of surveys and how any acceptable proposition can be
implemented. Line managers, who have day-to-day interactions with their employees, are
those responsible for making policies work and they should provide the employees with
enough information about the compensation policies. Lack of communication can even
make very advantageous compensation policies be perceived as dissatisfactory to the
employees.

To conclude, employees now have access to lots of information about salary surveys
within seconds especially from the internet. This increases the need of effective
communication so that the employee does not perceive inequity. From the above
discussion, we see that the perception of inequity has a negative impact on both the
employee and employer.

Bibliography

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• Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M. (2008) Human
Resource Management: Gaining a Competitive Advantage. 6th Edition. McGraw-
Hill

• Heery, E. & Noon, M. (2001). A dictionary of human relations. Oxford: Oxford

University Press.

• RSA (1998) Employment Equity Act, No. 55 of 1998. Government Gazette No.
19370. Pretoria. Government Printer

• Garg, P. and Rastogi, R. (2006) New model of job design: motivating employees’
performance. Journal of Management Development, 25(6), pp. 572-587.

• The soul of Dell in South Africa [online], Dell, Available from:

www.Dell.com/downloads/emea/general/za/Soul_of_Dell.pdf/ [Accessed 16th
March 2010]

• Bozeman, B. & Feeney, M.K. (2007) mentor matching: A goodness of fit model.
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• Hills, A.(2009) succession planning –or smart talent management?. industrial and
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• Monkeys Demand Equal Pay [online] Available from :

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