There is a substantial correlation between an organization's human resource management methods and its levels of performance. Organizations with high performance systems, according to Alfeze et al. (201), implement human resource management techniques aimed at boosting turnover, market value, and profitability. Since its beginning in 2009, Uber has been one of the fastest growing mobile transportation firms. Based on its human resource strategies, Uber is one of the most successful and contentious companies. At date, the company employs over 3000 employees in 58 countries and 311 cities worldwide (Uber, 2017). The current study seeks to undertake a critical analysis of Uber based on its human resource management practices. The Universalist versus contingency, Hackman and Oldham job characteristic model, and reward strategies models will be applied to analyze Uber's approach to HR.
Topics to Consider
The universalistic approach looks into how the practices of human resource management are directly related to the extents of organizational performance (Cooke, 2013). The advocates of this model propose that some HRM practices are well placed to enhance the levels of organizational performance than others. According to Renwick, Redman and Maguire (2013), the practices of the universalist model are based on three principles:
The principle of superiority and universality looks into the strategic practices of human resource management used by firms based on the competitive advantages they present to these organizations (Jackson, Schuler and Jiang, 2014). On the other hand, the principle of selectivity and superior financial reading identifies the human resource management practices adopted by a business venture which are capable of generating the best financial performance. The principle of additivity and independence postulates that the effects of human resource management practices adopted by an institution account for the overall effects of the individual practices even though a number of HRM practices may be used.
The universalistic model borrows the ideas of the human capital theory and the strategic resources theory (Purce, 2014). The strategic resources theory makes it a requirement that the HRM practices adopted by any organization should be subjected to certain provisions to realize the desired competitive advantage. In this case, the prerequisites of HRM are strategic in nature and offer organizations with rare competitive advantages which may not be imitated by any other aspect of production. On the other hand, the attributes of human capital theory adopted by the Universalist model look into the performance of a workforce based on its skills, ability, and knowledge as the key factors of creating value for the business (Cooke, 2013). According to Torrington et al. (2014)0, human capital is highly capable of contributing to value creation if well managed.
The contingency model of human resource management tries to establish a relationship of a number of organizational variables.
Cooke (2013) explains that the contingency approach to HRM goes a long way in allowing the management of an organization to come up with an analysis of situations to determine the effects of different variables in decision making process. Critical aspects like organizational structure, the management and technology and their effects on human resource management are critically analyzed by the contingency model (Purce, 2014). On the other hand, Alfez et al. (2013) explain that the contingency model evaluates how political, technological, economic and sociocultural forces affect the HRM practices adopted by an institution. According to Torrington et al. (2014), the contingency model looks into the outputs of a workforce based on the theories, policies, values and resources used.
Uber adopts both the principles of the Universalist and the contingency models in its practices. Uber adopts unique HRTM practices aimed at increasing its competitive advantage in the areas of operation. The organization recruits a greater portion of its employees based on contracts. While such a move offloads the organization of the financial burdens attributable to those of full-time employees, it goes a long way in increasing the levels of revenue generation of the firm; yielding better pecuniary positions (Bloomberg, 2017). On the other hand, the HRM practices used by Uber have increased its superiority as it only retains the best employees by selecting the drivers they want to retain based on their levels of experience, knowledge, and skills. The firm does not require legal and paperwork processes in instances where it does not require the services of an employee.
Hackman and Oldham's Job Characteristic Model
The job characteristics model advocated for by Hackman and Oldham puts a lot of emphasis on the fact that employees are well motivated in instances where they are allowed to work on challenging tasks (Alfez et al., 2013). According to Nel et al. (2014), adoption of variety, autonomy, and instillation of decision authority among employees goes a long way in increasing the challenging nature of tasks. On the other hand, Torrington et al. (2014) identify task enrichment and rotation as two key ways of adding challenge and variety to tasks. The Hackman and Oldham's model posits that there are five key attributes of a job (feedback, skill variety, significance of tasks, the identity of tasks, and autonomy) which have a great impact on the three psychological statuses (knowledge of actual outcomes, experienced responsibility, and the experienced meaningfulness of the desired results). According to Kehoe and Wright (2013), proper realization of these attributes goes a long way in influencing the overall outcomes of the HRM function. Torrington et al. (2014) explain that the outcomes of work in Hackman and Oldham's job characteristic model need to be based on the levels of employee satisfaction, motivation, and turnover.
Hackman and Oldham's job characteristics model propose that motivation among employees has a direct relationship to the meaningfulness of work, responsibility, and knowledge of outcomes as the three psychological conditions possessed by any employee in their areas of work. According to Nel et al. (2014), meaningfulness of work is the psychological domain that looks into how a workforce derives value from the services they offer to an organization. Cooke (2013) explains that meaningful work plays a significant role in stirring intrinsic motivation as opposed to extrinsic motivation in which work is looked at as a means to the desired end.
The psychological domain of responsibility, as adopted by the Hackman and Oldham's job characteristics model, postulates that every employee is given the opportunity to succeed or fail in their places of work by availing the conditions required to foster freedom of action. According to Torrington et al. (2014), such freedoms include the opportunities to instill the desired changes through incorporation of knowledge acquired in the process of doing work. On the other hand, knowledge of outcomes is a psychological domain that increases the ability of an employee to demystify the success they have gained in their lines of duty (Purce, 2014). According to Alfez et al. (2013), knowledge of outcomes allows employees to make rectifications in their endeavors by leaning from their mistakes. Purce (2014) recommends that employees need to have emotional connections to the customers of their organizations. This plays a significant role in helping them realize the fruits of their outputs and further purpose of their duties at work.
Uber embraces the postulates of Hackman and Oldham's job characteristics model in its human resource management practices. According to Bloomberg (2017), the organization treats its employees with ultimate respect as its management is aware of the fact that the contribution of workers goes a long way in affecting the overall levels of productivity in the firm. For instance, The Guardian (2016) reveals that Uber selects its operational and technical teams with a lot of consideration of their levels of talent and skills as a way of ensuring that its workforce is highly diversified. Further, Uber aligns the job opportunities it offers in such a way that its employees are able to feel the contributions they make to their wider societies (Rauch and Schneider, 2015). Hackman and Oldham's job characteristics model posits that employees develop the sense of motivation if their outputs contribute to the well-being of the wider society. The employees of Uber (particularly the drivers) are not only satisfied with the financial gains they get from the organization but also the societal contributions they make in easing transportation in their areas of operation (Uber, 2017).
Reward Strategies
Different organizations have varied systems of rewarding their human resources as a way of ensuring that their operations are both effective and efficient. According to McGregor, Brown, and Gloss (2015), the competitiveness of the reward systems adopted by a business venture does not only lead to the improvement of the performance of employees but also plays an informative role in decision making processes. Nel et al. (2014) explain that remuneration is considered by many organizations as the most important system of rewarding employees. Renwick, Redman, and Maguire (2013) define reward as the compensations awarded to the employees of a venture commensurate to the services they offer. According to McGregor, Brown, and Gloss (2015), rewards in human resource management are diverse in nature and need not be looked at from the traditional monetary point of view. For instance, Cooke (2013) explains that rewards could be in service and non-financial forms. Jackson, Schuler, and Jiang (2014) explain that critical issues like the provision of comfortable environments of work, fostering favorable interpersonal relationships in all organizational levels, allowing workers to have access to the crucial decision-making processes of the firm, availing challenging tasks and favorable experiences, ensuring equitable access to growth opportunities among employees as key rewards a workforce should be exposed to.
Cooke (2013) explains that effective systems of rewarding employees play a significant role in creating the value of human resources. According to Kehoe and Wright (2013), reward systems play a critical compensatory role in organizational settings. For instance, Purce (2014) explains that rewarding is an efficient way of thanking employees for the services they offer to the venture. Further, Torrington et al. (2014) explain that employees who are effectively rewarded are also highly motivated. Nel et al. (2014) demystify that a motivated workforce goes a long way in ensuring that they produce high-quality work. According to McGregor, Brown, and Gloss (2015), the extent to which a workforce focuses on the clients of a firm is highly determined by the decision-making process adopted to institute the rewards as well as how these rewards are availed to the employees. Torrington et al. (2014) explain that the regulatory function adopted by a system of rewarding human resources should be based on aspects like reasonable allocation of the labor force as well as proper modulation of the quality of the workforce. Further, Alfez et al. (2013) reveal that reasonable systems of rewarding human resources go a long way in fostering effectual income whose value is far beyond that of the attributed costs.
Uber embraces a well-set system of rewarding its human resource function. Despite the fact that a greater population of its employees work on contracts, the organization ensures that they are properly motivated, well remunerated, and their working environments are properly vetted (Uber, 2107). This explains why the organization has a population of over 3,000 employees with its operations in more than 50 countries around the globe. According to Bloomberg (2017), Uber keeps its workforce motivated through increasing its levels of diversification by selecting based on qualifications, skills, and the levels of creativity of employees. Further, Uber offers extra non-financial rewards to its employees by providing them with proper training opportunities and flexible schedules of service.
Despite the flexible financial systems of rewarding employees adopted by Uber, the organization reveals some weaknesses. For instance, Uber has been criticized by Rauch and Schneider (2015) of its practices which are highly centered on generating profits for the firm rather than concentrating on the welfare of its employees. According to The Guardian (2016), the firm's policy of adopting employees on contract bases is highly flawed based on the fact that it does not allow for payment of employee benefits like pension and health insurance despite the risks the drivers are exposed to.
Conclusion
The human resource management model adopted by Uber is one of the most effective in the transport industry. Based on the analysis made, there is no doubt that the Universalist versus contingency, Hackman and Oldham job characteristic model, and reward strategies models are highly applicable in defining the HRM position of Uber. Despite the strong employee base enjoyed by the firm, this paper recommends that Uber should revisit its contract terms of adopting drivers to employ these crucial members of its workforce on a permanent basis. On the other hand, the organization should strengthen its reward system to include benefits like bonuses.
References
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