########################################
#Written by David Tam, 1997. #
#davidkftam@netscape.net Copyright 1999#
########################################
University of Toronto
Faculty of Applied Science and Engineering
HUMAN RESOURCES REPORT
TERM PROJECT
-- APS 313S --
Small Business Fundamentals
Tuesday, April 8, 1997
By: David Tam
=================================================================
Executive Summary
=================
This report provides details on how SHL Systemhouse Inc.
performs its human resources function. Its hiring procedures,
policies, and practices are presented. The company's benefits
plan, and procedures involving the departure of an employee are
presented as well. Michael Palmer, who is in SHL's Global
Delivery Services, provided the necessary information. SHL has a
fairly small human resources department that consists of 140
staff when compared against its 8500 employees around the world.
The Human Resources Function
============================
SHL has 60 recruiters around the world, which includes 10 in
Canada. These recruiters are delegated divisional and regional
responsibilities in fulfilling positions. To aid these
recruiters, the Resumix electronic resume database is used to
keep track of current employees as well as to find potential new
ones. The Resumix database service also allows SHL to post
positions and receive replies on the internet as well. An
additional web site based in the U.S., called Monsterboard, is
also used to post positions on the internet. The SHL web site at
www.shl.com contains a careers section as well.
In searching for someone to fill a position, the typical
hiring procedure first involves looking internally for a suitable
candidate. With the help of Resumix, the recruiters attempt to
find a current employee who can be promoted to the new position.
If no current employee can fulfill the role, the recruiters
search in Resumix's external database, which contains entries
from the internet as well as other electronic databases. If this
is not successful alternate sources are used. Advertising
electronically, via the SHL web site, is used along with
traditional newspaper advertisements. If the position remains
unfilled employment agencies are used, though this rarely occurs.
Perhaps only one in twenty hirings are completed through
agencies.
In the external advertisement realm, newspaper
advertisements, career fairs, and recruiting from universities,
colleges, and trade schools are used. These external mediums are
effective in finding technical and entry level positions. Many
entry level positions are filled using graduates from the
educational institutes. However, for senior positions head-
hunting usually provides better results.
From the pool of candidates for a particular position,
usually half can be quickly eliminated. This is due to the fact
that the minimum levels of education and experience are not met
by the candidates. Five or more years of experience is required.
From the remaining pool, between four and six candidates are
usually picked by the recruiter for the first round of the
interview process. This selection is made based on the amount
and types of educational and past work experiences a candidate
has had. The top four to six candidates who meet these criteria
the closest are selected for an interview.
At the first interview with the recruiter a behavioral test
is conducted, along with the traditional first-interview
questions being asked. This test has a grading system and is
based on the reaction of the candidate to different scenarios
found at work. These reactions are supposedly based on the
candidate's previous knowledge and experiences, and how they have
reacted in the past to a similar situation. This test also
ensures that the candidate possesses the attitudes and
philosophies found in SHL's corporate culture. For the
recruiting of technical candidates a computer-based technical
test, called TechCheck, is given as well.
Typically, two candidates proceed to the second level
interview. During this interview a more rigorous, technical test
is given by an in-house technical person. Upon passing the test,
both normally proceed to the third and final interview stage. In
this stage, an interview is conducted by the manager of the
department with the vacant position.
A grading scheme is used by all three interviewers: the
recruiter, the in-house technical person, and the manager. The
three interviewers would have a discussion using mainly
subjective evaluations and personal intuition. Once all three
evaluators decide on the candidate, a letter of offer is usually
prepared by the manager. The human resources department formally
offers the position to the chosen candidate after completing
reference checks and the necessary paperwork.
With about 20 to 30 candidates hired every month, a fairly
quick but generic orientation process has been developed. A
three hour orientation is given in a presentation room at the
downtown office, which is centered around a multimedia
presentation. Human resources based information is presented to
the new employees, along with the history of the company, its
philosophies, goals and direction. Mentors are assigned if the
employees are hired for consulting positions.
The employee benefits plan includes extended health care, a
dental plan, basic life insurance, dependent life insurance,
basic accidental death and dismemberment insurance, an RRSP
matching plan, and a stock-option purchase plan. The details of
these benefits can be found in the accompanying SHL benefits
guide. The health and insurance plans cover the employee, his or
her spouse, and children under the age of 21 (or under the age of
25 if the child is a full-time student).
Here is a more detailed description of the benefits plan
described in the SHL booklet. Hospital expense coverage is at
$120 per day. Drug coverage is at 100% for generics and 80% for
others. A $2 per prescription deductible is applied. Eye-wear
coverage is at $150 every two years. For the family dental plan,
a $50 per year deductible is made. Coverage is at 100% for exams
and x-rays, 80% for basic services, 50% for major services, and
50% for orthodontic services with a maximum lifetime limit of
$1500. Life insurance of two times the annual base salary, to a
maximum of $1,000,000, is provided. The same coverage applies
for basic accidental death and dismemberment insurance. Under
the life insurance plan, the spouse is insured $5000 and each
child is insured $2000. Additional benefits may be purchased as
well. Other restrictions and limitations can be found in the
accompanying booklet. In the RRSP matching plan, 50 % of an
annual contribution is made by the company and 50 % is made by
the employee. The stock option purchase plan allows employees to
purchase MCI shares at a 15 % discount (SHL is a wholly-owned
subsidiary of MCI).
A tuition plan reimburses every employee for any training or
educational courses taken, up to a maximum of $2500 annually. As
well, this program is augmented by SHL's internal training group,
where certain relevant courses are available within the company,
such Novell Netware Certification and Microsoft Network
Certification.
None monetary-related benefits include a standard three
weeks of vacation annually for all employees. In addition to the
nine statutory holidays in Ontario, four floating holidays are
allowed annually. These floating holidays may be taken at any
time, such as a Monday after a long weekend, giving an employee a
four-day weekend. A flexible benefits program is not implemented
because it would require too much administration.
Moderately flexible work schedules are offered where
employees are expected to work eight hour days. During the core
business hours of 9am to 4pm, employees should be available.
They are free to choose hours outside of this period to fulfill
the eight hour requirement. Depending on the nature of certain
positions, work hours may be quite rigid, such as for technical
support and inside sales desk.
The tasks of motivating employees and maintaining high
morale are delegated to department managers. They are budgeted a
certain amount for team development purposes. There are company
wide programs as well. A recognition program and a customer
excellence program is in place. For instance, last year under
the recognition program, SHL sent 400 employees for a 2 week
vacation in Hawaii. As mentioned previously, the stock-option
purchase plan also provides employees with motivation.
In addition, training motivates employees by keeping them up
to date. Approximately 4% of SHL's revenue is budgeted for
employee training. This portion of revenue is necessary for the
ISO-9002 certification that SHL is attempting to achieve. The
impact of this certification is that it will verify SHL's
reputation for high competency and quality of service.
Unfortunately, employee evaluations are done only once a
year and they are fairly generic. Only the supervisor of the
employee performs the evaluation. Salary increases are made
every year, with standard increases across the board. For a
particular position, there is a uniform increase given every
year. The short-coming of this method is that it is not merit
based. The human resources department is currently working on
improvements to the evaluation system, such as including a peer
evaluation component. However, performance bonuses are given
starting at the J5 level. This level is consists of the project
managers. Although no team-based bonuses are given, team
recognition is implemented as mentioned previously. Also, no
company wide bonus based on performance is given. SHL believes
this short-coming is covered by the stock-option purchase plan,
which motivates employees.
Very few employee conflicts and problems occur because
expectations are very clear among managers and employees.
Conflicts and problems are encouraged to be resolved locally and
informally. If this can not be done, the issue is resolved by
the human resources department. For major conflicts, the issue
goes to the divisional manager for resolution.
To deal with marginal performers, managers are given
training to address this problem. Performance is discussed
between the manager and the employee and the employee is given
opportunities to improve. In the Toronto location, only three to
four employees are fired every year due to performance problems.
When an employee is fired, there is usually a consensus amongst
fellow employees that he or she was a problem. This is because
the termination is done fairly late into the problem. The
problematic employee is not made to leave immediately.
A severance package is only offered to employees who are
laid off. The policy for this type of termination is that they
will receive one month of compensation for each year of service.
Otherwise, no compensation is given. Lawsuits for wrongful
dismissal are avoided because the reasons for firing are well-
documented. A history of an employee's performance is kept.
Managers are given training on how to conduct the termination
process. To ensure the proper procedure, they must go through a
predefined checklist when firing an employee. A human resources
person is usually present in the final meeting between the
manager and employee.
SHL has very little problem in retaining employees even
though this problem is prevalent in the high technology industry.
Perhaps it is due to the size of the company, its international
coverage, and the fact that it has offices in the United States.
The current "brain drain" problem is not noticeable at SHL.
Incentives such as heavy investment in training, relatively high
salaries, and career growth and advancement are offered. If a
highly valuable employee is resigning, SHL may try to persuade
him or her to stay by improving their compensation. When an
employee does resign, the hiring process is initiated once again
and the recruiters at SHL have an additional position to fill.
In conclusion, SHL has a well-established hiring procedure
that often selects the right candidate. Its benefits plan is
fairly comprehensive, with a standard level set for all
employees. Although it does not implement a flex benefits plan,
it does give the employee options to increase coverage in certain
areas. Employee termination is conducted smoothly because
managers are given training and as well as a set of procedures to
follow. Proper documentation supporting the action is
accumulated beforehand to avoid lawsuits. Termination does not
happen very often nor does it have a dramatic negative effect on
the workforce. This is due, perhaps, to the nature of the
bustling working environment. Employees are occupied with other
concerns and tasks such as reaching performance targets.
(
geocities.com/siliconvalley/campus/9640/2ndYear) (
geocities.com/siliconvalley/campus/9640) (
geocities.com/siliconvalley/campus) (
geocities.com/siliconvalley)