Companies resort to various tactics to improve organizational structure and business culture. For example, Best Buy uses a new ROWE (Results Only Work Environment) approach to evaluate employees based only on their results. This report analyses the external factors that can affect a company’s performance according to the PESTLE analysis. In addition, there is a study of personnel selection methods and how employees are rewarded.
Circle of Organizational Stakeholders
Stakeholders are individuals who observe and evaluate a company’s activities and appeal to them. For Best Buy, customers will be the main stakeholders because the company has to try to make its product as relevant as possible in the eyes of consumers (O’Riordan, 2017). Employees are a part of it because their work will be the foundation of the company’s success: in a changing climate, employees want to be confident in their workplace. Finally, the sponsors and the environmental companies are interested in Best Buy because they should understand how ROWE will meet their expectations and the overall market opportunity.
Environmental factors influence business conducts from the outside and may not depend on the company’s behavior in the market. Various tools are used to determine the magnitude of the impact on companies. PEST (political, economic, social, and technological factors) and SWOT (solid and weak factors, opportunities, and threats) are the most commonly used. This report will use an extended version of the PEST analysis – PESTLE, which includes environmental and legislative factors (Matovic, 2018). The factors that could affect Best Buy the most are social, environmental, and economical.
Social factors describe the behavior of employees in the company. Particularly for Best Buy, it is recommended to consider the media influence factor. The media is both a favorable and a harmful component because it is a dynamic information exchange process (O’Riordan, 2017). A lack of a strategy for dealing with information channels can lead to changes in public attitudes toward the company’s products. Any change in a company’s strategic plan results in increased attention from competitors. If the media covers it ambiguously, it will lead to a drop in sales and potential customers leaving. The role of the media becomes evident when companies move to culture changes, like Best Buy.
For Best Buy, the media can be an ally: the company’s transition to a new organizational structure and business culture can be positive. For example, statements about the work schedule may be newsworthy to customers because they will know the staff is respectful. At the same time, the media may point out that employees are perceived as “unemployed” (Robbins, & Coulter, 2012). Then customers will begin to be suspicious of the products because they will not be sure of their quality. The media will put pressure (intentional or accidental) on the customer audience and affect how products are perceived in the future.
Economic factors combine the dynamic processes associated with currency, inflation, communication costs, and many others. This category is essential due to the problem of rising commodity prices and the difficulty of organizing supplies and contacting distributors (Matovic, 2018). For companies like Best Buy, which primarily sells technology products, it is vital to be able to organize pricing that affects the number of products sold. In addition, a change in employee attitudes has increased sales, but it may be due to a good year in which inflation was low. Consequently, a big problem for Best Buy could be the decline in consumer power.
Consumption power shows how much an average consumer can buy for a certain amount of money in goods and services at the current price level. Price levels for Best Buy products likely remained stable throughout the year due to concerns about the effects of the price change. However, the price will increase because employees will be even more efficient and productive due to the new flexible schedule (Nankervis et al., 2019). Consequently, pay will increase, and consumption power may decrease due to the inability to purchase products at a higher price. As a result, products may become luxury items, and the company may not be able to maintain the same number of customers as before.
Ecology factors are the totality of all phenomena that affect a company’s environmental performance. They determine the potential damage the company can do to the environment. For Best Buy, the new business culture is about being able to embark on a new path to sustainability by reducing energy and raw material consumption onsite. Because the company has proposed a shift to telecommuting and flexible work schedules, employees are spending less time in the office. As a result, the amount of plastic, waste, and energy will decrease, and the company will become more advantageous among other companies of this type. The ROWE approach is an opportunity for the company to maintain an advantage as the employees will not spend more than necessary to get the job done (Robbins, & Coulter, 2012). Electronic reporting and getting rid of paper notices is an additional tool to gain favor from the environmentally-minded community. With the advent of ROWE, employees are directing their activities only to the work process, changing their perception to a more energy-efficient one. Consequently, the environmental factor can act as the most favorable for the company because it will act from the inside on the appearance of Best Buy.
Personnel Selection Methods
Personnel selection is a process of studying the psychological and professional qualities of the employee. It is needed to determine their suitability for performing duties at a particular workplace or position and select the most suitable from a set of applicants (Nankervis et al., 2019). Therefore, personnel selection must be distinguished from recruitment. In the selection process, there is a search for people for certain positions, considering the established requirements of the social institution and types of activities. During the selection – the search, identification of the requirements of various positions, activities under the known capabilities of a person, accumulated professional experience, seniority, and abilities are carried out.
The main selection criteria are education, experience, business qualities, professionalism, physical characteristics, personality type of the candidate, and his potential abilities. According to the degree of suitability, candidates can be divided into three groups: unsuitable, conditionally suitable, and relatively suitable for different activities (Nankervis et al., 2019). The degree of variation in critical qualities can be assessed as unfavorable, improving, and positive. An improved and positive characteristic is favorable for further employee promotion, but it is better to cut the candidate off in case of a negative assessment.
Method 1: Tests
One crucial selection method is cognitive tests, which allow one to determine if one has the ability and mindset to do the job. For Best Buy, this may be one of the first methods in the selection process for organizational change because it will roughly determine the general mood of the company. In order to meet the demands of a flexible work schedule, employees must understand their responsibilities and be able to manage their time (Abbas et al., 2021). A review of questionnaires, work experience, resumes, and biographies of employees will allow the HR manager to determine their skills for the transition to the new schedule. Essential selection criteria will include accuracy in job performance, stability, quick focus, and diligence. In addition, it is worth paying attention to maintaining professionalism and a work attitude in a non-work environment.
Best Buy indicates that they need the skills to control ROWE compliance. Accordingly, this requires staff selection and understanding of general corporate and social responsibility, which can be established through tests (Hassan et al., 2020). The advantage of this selection method is assessing the candidate’s present condition. The main disadvantage is associated with high costs and the fact that the tests weakly identify positive qualities of people compared to negative ones.
Method 2: Recommendations Checking
Another method of selecting employees is to check recommendations that managers and other senior people send in response to inquiries about the candidate. In order to work flexibly, Best Buy employees should have a particular set of qualities that allow them to organize their workspace. Managers make subjective evaluative judgments, which must be verified through a personal interview or a test assignment (Hedricks et al., 2019). Tests, as previously stated, are somewhat limited due to cost, so the personal interview is an excellent way to test how a candidate handles free-floating without being in the office.
Best Buy should remember that this method of personnel selection reveals strengths and weaknesses from a subjective perspective, but it also provides valuable information about an employee’s actual performance. For example, a candidate wants to move to a remote, flexible schedule using the ROWE method. However, the HR manager sees that despite the results, they were provided much later than the deadline and performed carelessly. Consequently, the conclusion is drawn that the candidate is less likely to be able to perform good quality long-term assignments on his or her own without outside supervision (Hedricks et al., 2019). The advantages of this method are the ability to personally verify how an employee performs by evaluating his or her subjective and objective results. The disadvantages are that supervisory managers can exaggerate subjective data, and then the candidate selection will not be as successful.
Method 3: Technology-based Interview
Best Buy cites flexible hours and freelance work as the main criteria for the ROWE method. Candidates’ validity is determined through their ability to organize the process remotely and handle technical tasks, which focuses on working independently with technology (Abbas et al., 2021). Using Skype or Microsoft Teams is an excellent way to test how the candidate navigates the technology used daily. Interviews in this format are an opportunity for face-to-face dialogue, checking out the workplace off-site (especially if it is an employee from another country or city), and determining technology potential. Employees in such an environment will be able to demonstrate their qualities directly and show one-on-one how they plan to organize independently.
Such interviews win over group and panel interviews because they allow one to get to know each candidate. However, they limit both the HR manager and the potential employee because it can be a rather uncomfortable environment for the latter (Hassan et al., 2020). Excitement can increase considerably, and technological breakdowns and costs can occur due to time differences. In addition, candidates may not have constant access to technology, which allows them to be immediately cut off from further selection. Nevertheless, there are also advantages, and they are significant: among them, the ability to test professional skills quickly, assess the style and quality of communication, and humiliate the cost of additional documentation.
Strategic Reward Management
A company’s internal culture is one of the key factors that attracts and retains employees. How many times, reviewing the resumes of candidates for a job, one comes across the picture that the person left very quickly, almost 1-5 months after arriving (Francis et al., 2020). Interestingly, most often, this is not due to the bad qualities of the employee but to the inability to identify the type of corporate culture. The average life expectancy of an employee in a company directly depends on:
- what atmosphere is created in the organization – the climate in the team, the ethics of corporate relations;
- how effective the existing motivational system is;
- what loyalty and engagement programs the employer uses.
It is worth looking at the motivational system and the reward approach for employee retention. In general, reward refers to any tangible or intangible benefits the company offers in exchange for the employee’s work. The tangible aspect is often the most favorable: money (salary increase, vacation pay, payment of holidays and sick days). The non-material ones have increased self-esteem, referrals to internships, empowerment, and different working conditions (Francis et al., 2020). However, even the little things are sometimes necessary for employees to pay more attention. Thus, strategic rewards are a system of company policies and practices used to retain employees in the workplace.
External compensation is a set of benefits the company provides for the work directly performed by the employee. These include developmental, social, and financial rewards (Nankervis et al., 2019). Having external rewards is a practical approach in strategic management because it governs the employee and workplace relationship. Best Buy should pay special attention to developmental rewards because the ROWE approach is innovative for the employee. It provides development and growth within a new business culture that few companies have adopted. Best Buy’s challenge is to provide an environment for employees to learn new skills, such as how the company has trained employees to follow ROWE. Development rewards will motivate employees to stay in the new environment and promote overall performance.
Social rewards refer to those benefits that the company provides to all employees at the same time. These include rewards for a well-appointed office, productivity support, organizational structure, and business culture (Nankervis et al., 2019). Best Buy’s flexible hours, in particular, are a significant social benefit for employees because they are not available to many other companies. The company allows for a balance between work, personal life, and everything an employee may have to do. With the new culture and the ability to work remotely, employees will be more accepting of the new format and more likely to switch to it. Social rewards will motivate Best Buy employees to embrace the new culture by fully understanding the objective pros and cons of the new format. Moreover, as productivity will increase through improved psychological comfort in the workplace, the following type of reward will increase accordingly.
Financial rewards are one of the most critical rewards a company can provide. For Best Buy, these rewards will be directly dependent on the performance of the employees who participate in the ROWE approach. The company has stated that the results will influence the employee’s value and therefore determine all types of rewards (Robbins, & Coulter, 2012). While the company should probably keep everyone’s base salary at roughly the same levels, it has recommended changes in benefits and incentive compensation plans. The latter will be crucial in establishing an attachment to Best Buy’s new culture.
The intrinsic rewards describe the employee’s benefits because he works for the company. The valuable experience gained in the new environment is an opportunity to enter other market niches the employee would like to occupy. The development of the workplace, its contents, and the conditions in which tasks are performed are essential for maintaining favorable internal rewards (Galetic, 2020). They are shaped by critical human needs that can be met in the workplace. For Best Buy, this type of reward is work motivation, defined as a desire to work for the company because it satisfies their other desires. For example, the ROWE approach allows employees to spend more time with their families and freely manage the time they will spend on work-related tasks. Consequently, the motivation is to benefit by moving to a more employee-oriented culture than the standard approach.
The Employee Value Approach to the Company
A modern compensation approach outlines job skills that make employees more likely to be highly compensated. For Best Buy, those skills in transitioning to ROWE are the sharp focus, working for results, and the ability to transition to new environments. This approach allows an employee to be evaluated based on the aggregate manifestation of all the qualities he or she possesses at the review time (Nankervis et al., 2019). The value approach allows employees to understand which skills the company will need and which are of secondary importance. The incentive system may be weaker than monetary or social rewards. Nevertheless, it drives employees to learn new skills, which allows them to advance their careers and maneuver horizontally and vertically, even in a flexible work environment.
Thus, Best Buy’s analysis establishes that many factors can influence the future development of ROWE’s new approach. First, there are stakeholders in the form of consumers and employees themselves. Secondly, it is a combination of external factors: sociological, economic, and environmental factors are particularly influential. Third, the methods of selecting staff best suit the recommendation-checking and technology-based interview. Finally, there are employee retention tactics through the reward system – external reward and value-based reward approaches should be strengthened.
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