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APJEM Arth Prabandh: A Journal of Economics and Management Vol. 3 Issue 9 September 2014, ISSN 2278-0629, pp. 121-135 Pinnacle Research Journals 121 http://www.prj.co.in Monitoring Human Recources through People-Capability Maturity Model (P- Cmm) in Ansar Bank Zahra Vazifeh*, Bahram Tayerani Darbandi**, Fazlollah Khamari*** *Assistant Professor, Department of economic and management, Public Management branch, Sistan & Baluchestan University, Zaheadn, Iran **Co-Author MA Student, Department of economic and management, Public Management branch, Sistan & Baluchestan University, Zaheadn, Iran ***MA Student, Department of economic and management, Public Management branch, Sistan & Baluchestan University, Zaheadn, Iran Abstract Many consequences from researches about importance and role of human resource in organizations’ improvement and growth and somehow in development of human societies emphasize on this point that no society has not developed unless it has paid attention to the development or human capital. Meanwhile, banks and knowledge based financial institutes are easily able to take advantage of current opportunities using different models of maturity of human resource in order to achieve competitive advantages to survive and face with variable condition of e-payments market. One of appropriate models in this field is People-Capability maturity model (P-CMM) which has been designed to increase human force capabilities. This model helps organizations to identify maturity of its human forces; creates a continuous program to develop human resource and prioritize more important performances. Current study is cross-descriptive research and in terms of research methodology, it is applied research. Statistical population includes employees of Ansar bank in Zahedan city who are almost 42 persons. Due to limitation of statistical population, all of statistical population was chosen as sample. The main means to collect data is questionnaire. Banks and financial institutes are able to identify maturity of human resource and determine their critical issues using People-Capability maturity model (P-CMM). Keywords: People-Capability maturity model (P-CMM), Organizational Maturity, Bank, Human resource _____________________________________________________________________

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Page 1: Monitoring Human Recources through People-Capability Maturity Model …prj.co.in/setup/business/paper299.pdf · Monitoring Human Recources through People-Capability Maturity Model

APJEM

Arth Prabandh: A Journal of Economics and Management

Vol. 3 Issue 9 September 2014, ISSN 2278-0629, pp. 121-135

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Monitoring Human Recources through People-Capability Maturity Model (P-

Cmm) in Ansar Bank

Zahra Vazifeh*, Bahram Tayerani Darbandi**, Fazlollah Khamari***

*Assistant Professor, Department of economic and management, Public Management branch, Sistan & Baluchestan

University, Zaheadn, Iran

**Co-Author MA Student, Department of economic and management, Public Management branch, Sistan &

Baluchestan University, Zaheadn, Iran

***MA Student, Department of economic and management, Public Management branch, Sistan & Baluchestan

University, Zaheadn, Iran

Abstract

Many consequences from researches about importance and role of human resource in

organizations’ improvement and growth and somehow in development of human

societies emphasize on this point that no society has not developed unless it has paid

attention to the development or human capital. Meanwhile, banks and knowledge

based financial institutes are easily able to take advantage of current opportunities

using different models of maturity of human resource in order to achieve competitive

advantages to survive and face with variable condition of e-payments market. One of

appropriate models in this field is People-Capability maturity model (P-CMM) which

has been designed to increase human force capabilities. This model helps

organizations to identify maturity of its human forces; creates a continuous program

to develop human resource and prioritize more important performances. Current study

is cross-descriptive research and in terms of research methodology, it is applied

research. Statistical population includes employees of Ansar bank in Zahedan city who

are almost 42 persons. Due to limitation of statistical population, all of statistical

population was chosen as sample. The main means to collect data is questionnaire.

Banks and financial institutes are able to identify maturity of human resource and

determine their critical issues using People-Capability maturity model (P-CMM).

Keywords: People-Capability maturity model (P-CMM), Organizational Maturity,

Bank, Human resource

_____________________________________________________________________

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Arth Prabandh: A Journal of Economics and Management

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Introduction

In recent years, various tools about human resource development have been suggested to the

managers. Development of competencies Model, evaluation and choosing people based on

intelligence and their competencies. 360 degree feedback, knowledge management, team

building, participatory decision making, performance-based payment, rote learning and reminder

system are such advices, but using these means in most of cases haven had a considerable result.

Why organizations are unsuccessful to use these means (Curtis, 2009)? This problem is in all

over the world, but undoubtedly, it is more transparent in developing countries like Iran. In our

viewpoints, the most important reason and the origin of these failures is "no real need of

organizations to perform some management tools" and " development of fashion phenomenon”

in these areas (Ghafarian and Emadzadeh, 2004). Changes in global markets of e-commerce

have made many challenges for organizations, banks and other financial institutes. Even to

survive in local markets necessitates competition. Organization maturity knows the root of each

kind of ability and flourishing the human attempts domain in “human maturity” and also

accounts human as the major basis and fundamental factor of any changes. Now, organizational

maturity is one of the important and underlying lessons of educational courses in many schools

of behavioral sciences especially management in all over the world (Moosa Khnai and Monshi

Zade, 2006).

Literature Review

Organizations in order to move toward strategic management of human capital have applied

different techniques. Some of them are: Combined downsizing with restructuring, , re-

engineering and process improvement, improve information sharing, promoting the

organization's mission clearly throughout the organization, employees’ participation, establish

formal procedures for dealing with complaints, profit sharing or implementing motivational

plans, workforce training, performance management and feedback processes, Analysis and

Design jobs, support job rotation, teamwork design, formal mentoring programs and ultimately

align HR strategies with business objectives (Mirvis, 1997, Becker, 1998, Becker, 1996).

Until a few years ago, most of the strategic planning projects with following the prescriptive

approaches, moreover use the SWOT approach to develop and plan their strategies, pioneer

organizations with using organizational excellence model encourage their employees to have a

long-term and beyond the needs look at organization and personal capabilities (Jack, S &

Hyman,J 2006). Basically, a maturity capability model is a framework that describes main

factors of effective operational management. It can be financial management or project

management. In fact, this model creates strategic management framework of special processes. A

maturity capability model directs organization in order to reach its goals and subsequently

promote to the upper levels of maturity (Colin A, sharp, 2003).

General framework of organizational maturity models

Capability maturity model is applied in different areas. This model was firstly developed by

Humphrey for continuous improvement of software productions. This model has 5 levels which

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move from inconsistent management to learning level (Humphrey, 2000). Following the

development of this model, various maturity models developed based on this framework which

can be referred as People-Capability maturity model (PCMM) and Business Process Maturity

Model (BPMM). Framework of these models is based on Humphrey’s model and their contents

due to the discussed area are changing. 5 maturity levels in Humphrey’s model and evolution

nature of passing different maturity levels of this model have been shown in figure 1.

Figure 1. Five-Level Maturity Humphrey Model (Curtis Et Al., 2009)

Maturity network of quality management by Crosby (1996) expresses the underlying principle of

maturity model in this way: an action is not improved until it is repeated. After that, maturity

models have been applied in broad activities including software development, suppliers’

relationship, research and development activities, production development, innovation,

cooperation, production design as well as reliable information procedure.

People-Capability maturity model (P-CMM):

People-Capability maturity model is the path map that helps with implementation and

improvement of human resource capabilities in organization. P-CMM model establishes

integrated system of HR activities that knows the organization maturity based on alignment of

“development objectives and plans” with “changes needs” in organization. This model is based

on principles which are listed as following:

1) Human force capability has a direct relationship with organization’s performance.

2) Human force capability is a strategic and competitive resource in the organization.

3) Human force capability is defined according to organization strategic goals.

4) Competency has more importance than job task and elements.

5) Capability can be developed in different personal, group and organizational levels.

6) Organization has to develop capabilities in its employees in order to help with

organization’s key competency.

7) Operations managements are responsible for human force capabilities.

8) To promote capabilities, used and experienced procedures have to be applied.

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9) Organization provides promotion opportunity and people are responsible for using

provided opportunity.

10) Due to fast changes, continuous development and ongoing review is necessary.

In any level of maturity, especial processes and activities are needed which are based on built

infrastructure from previous level. Figure 2 shows the processes of maturity levels in P-CMM.

In HR’s viewpoint, this pattern is a kind of HR strategic management which emphasizes on HR

processes due to strategic orientations (Prahalad, 1990).

Figure 2. Process Model Of P-Cmm (Curtis Et Al., 2009)

In following of maturity levels, internal processes and relationships will be studied. Since, most

of Iranian organizations are in maturity levels 1 or 2; these 2 levels will be more detailed.

P-CMM history

The primary model was developed by Watts Humphrey in 1980 in IBM firm (Radice, 1985).

This firm due to low performance in structure of produced software was faced with downturn in

sales. So as, research team after reviewing numerous studies and according to obtained results,

the framework of processes maturity was proposed. This framework was presented by Software

Engineering Institute of Carnegie Mello University supported by the Ministry of Defense in

America (Crosby, 1979). This model was firstly published in 1995. Since then, it was used in

throughout of USA, Australia, Canada, Europe and India to direct and guide organizational

improvement activities so as since 2001, most rate of applying P-CMM has happened in the

India. Some of well-known firms which have used this model are: IBM, Citibank, Ericsson,

Boeing, Oracle (Curtis, 2001).

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Maturity levels: It indicates a new level of HR capability which has been created through

designing and developing one or some of HR processes.

Maturity level1 (initial level, inconsistent management): most transparent organizations’ feature

in this level is their problems in maintaining talented people. Despite of emphasize on this issue,

organization’s attempts in this regard are incoherent and aimless (Rothman, 2001).

Organizational characteristics which are at the first maturity level are:

1) Incoherency HR activities

2) Replacement and irresponsibility.

3) Unclear tasks

4) Human force and emotional environment

Organizations In this maturity level develop forms and tools, but training and required following

to take advantage of is not happened. Managers of such organizations don’t have common vision

about management responsibilities and most of them consider management to reach

predetermined results not people development. So that, HR activities would have less importance

than real activities and it is not taken seriously (Buckingham, 1999).

Maturity level 2 (managed level, people management): In this level, managers pay attention to

the issues like coordination, commitment, resource supply, performance management and skills’

development. Reasons which force managers to pay attention to HR activities are:

Low spirit of employees

Weak organizational communications

Lack of required knowledge and skill among employees

Obscure performance objectives

High workload

This level aims to accept the responsibility of people and foster them. Some of features in this

level can be summarized including: 1) Organization has to provide a basis to apply common

processes, 2) Management has to establish a sustainable environment for professional

occupations, 3) Required condition has to be provided to basically control management, 4)

Enable people to repeat activities.

Activities which have been regarded in this level are: 1) Staffing, 2) Communication and

coordination, 3) Safety and work environment, 4) Performance management, 5) Employees

training and development, 6) Compensation. Mutual relationships between these processes have

been shown in fig 3. In following, each of 5 processes of management maturity levels have been

described.

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Figure 3. Relationships Among Competency Management Process Areas(Curtis Et Al.,

2009)

Maturity level 3 (defined level, competency management): After implementation of HR activities

in units, the next step is to develop organizational infrastructures which link HR capabilities to

strategic goals. This level is mainly aimed to help with achieving competitive advantages with

required competency development in employees. The conception of human force competencies

in People-Capability maturity model (P-CMM) is different with what has been proposed by

Prahalad and Hamel. “Core competency” points to the combination of technology and

production skills which lead to create services and goods and provide competitive advantages in

markets. In P-CMM, human force competencies point to one of abstraction levels in the

organization shown in figure 4.

Figure 4. Hierarchy Of Competency Abstractions (Curtis Et Al., 2009)

Each competency of human force needs a different combination of knowledge, skill, required

abilities in market and business which ultimately leads to “Core competency” (Prahalad, 1990).

So as with linking HR activities to competencies, human benefits would be in service of

organizational targets. Some of Iranian organizations have stepped toward competency

management using model of competencies and implementation of assessment centers, but they

are at the beginning of their way. This level aims to set and foster human force capabilities and

integrate them with enterprise strategic orientation. Characteristics of this level can be named as

following:

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1. Organization identifies the best activities and aligns them with common processes.

2. Processes especial for exclusive environment are combined, documented and integrated

with activities especial for sustainable environment.

3. Organization defines standard processes to do activities leaded to establish underlying

context for professional culture.

Activities regarded in maturity level 3, competency management, are: 1) Competency analysis,

2) Workforce planning, 3) Competency development, 4) Career development, 5) Competency

based practices, 6) Workgroup development and 7) Participatory culture. Mutual relationships

between these processes have been shown in fig 5.

Figure 5. Relationships Among Competency Management Process Areas (Curtis Et Al.,

2009)

Maturity level 4 (predictable level, capability management): the important feature of this level is

quantity-oriented approach. This approach should be dominant on the design, implementation

and operation of human resource systems. Therefore, organization can predict its future trend

due to performance and past results. Empowerment and integration capabilities of human force

and quantitative performance management are the skills of this level. Processes regarded in

maturity level4, capability management, are: 1) Competency integration, 2) Empowered

workgroups, 3) Competency based assets, 4) Quantitative performance management, 5)

Organizational capability management, 6) Mentoring. Mutual relationships between these

processes have been shown in fig 6.

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Figure 6. Relationships Among Capability Management Process Areas (Curtis Et Al., 2009)

Maturity level 5 (optimization, organizational learning and change management): In this level,

change management has become a permanent process and information in units and organization

levels are analyzed and any kind of non-alignment is identified and action is taken to resolve it.

Characteristics of this level include following cases:

1) Organizations use deep and quantitative knowledge for continuous improvement in

processes.

2) Organization, based on data, finds which process can better exploit continuous

improvement practices.

3) Development management is built as a standard organizational process and process

improvement and like sustainable and permanent thought in all over the world. Processes

regarded in maturity level 5, change management, are: 1) Continuous capability

improvement, 2) Organizational performance alignment 3) Continuous workforce

innovation. Mutual relationships between these processes have been shown in fig 7.

Figure 6. Relationships Among Change Management Process Areas (Curtis Et Al., 2009)

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Implementation advantages of P-CMM

Implementation advantages of P-CMM have been theoretically shown in numerous studies

(Huselid, 1995, Labor, 1993, Kling, 1995, Appleby, 2000, Delaney, 1996).

Organizations which have applied HR integrated strategy have considerably stood in world-class

organizations level (Appleby, 2000). In some cases, even the influence of their reputation

relevant to HR practices has been directly related to the increase in their share value ، (Hannon,

1996). Analysis of different samples in 1990 shows a strong (positive) relationship between high

performance of job activities and organization’s financial performance (Becker, 1998). In a study

about job force activities which has been done in almost 100 companies, it is brought that

applying such activities causes 7.05 percent decrease in job quitting and at the expense of each

employee, it is along with 27.044 dollars more sale, 18.841 dollars increase in market value and

3.814 dollars increase in profit (Huselid, 1995).

Now, according to aforementioned descriptive cases, advantages of P-CMM have been

categorized as following:

1) Regarding capabilities rather than job elements

2) Establishing an appropriate context to implement excellence systems

3) Having comprehensible HR systems

4) Repeatability of activities

5) Accurate and clear practices to implement systems

6) Decrease deviation in performance

7) Continuous improvement of activities

8) Spread best practices throughout the organization

9) Institutionalizing systems

P-CMM applications

Organizations use P-CMM for different objectives which the most important ones are:

Determining extent of maturity practices of HR

Continuous development of HR practices

Determining improvement priorities (development projects of HR management)

Integration HR development and processes improvement

Establishing excellence culture

We follow 2 aims with organization evaluation based on HR capability model:

1. Evaluate HR practices based on standards and take advantage of these standards to solve

problems of HR practices. In another words, we compare current and desirable situations

described in the model and program corrective actions to improve practices.

2. According to the organization’s maturity steps and conducted evaluation, they are used as

a HR strategy guides and alignment of HR activities with goals and needs of organization

changes.

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Research Hypothesis

1) There is difference between current and expected situations of staffing system.

2) There is difference between current and expected situations of communication and

coordination system.

3) There is difference between current and expected situations of work environment system.

4) There is difference between current and expected situations of performance management

system.

5) There is difference between current and expected situations of education and

development system.

6) There is difference between current and expected situations of compensation system.

Research Methology

In this research, at first after studying books, papers and different researches conducted in the

organizational maturity field and also using professors’ and experts’ opinion, theoretical basis

and literature review and questionnaires were provided and questionnaires’ reliability was

verified. This study in terms of research categorization based on their goals is accounted as an

applied research. In terms of the way that required data was obtained (research plan), this

research is accounted as cross-sectional one. Statistical population includes employees of Ansar

bank in Zahedan city who are almost 42 persons. Due to limitation of statistical population, all of

statistical population was chosen as sample. Out of this number, 37 reliable questionnaires were

collected. To test hypotheses, obtained data collected by questionnaire which has been measured

based on 5-point Likert scale was used for quantification the responses. It includes standard 42-

question questionnaire which has been originated from P-CMM introduced by Software

Engineering Institute (SEI). Reliability of questionnaire was verified by literature review and

scientific reliable references such as second volume of P-CMM which has been developed by

SEI in 2009 and also experts’ and professors’ opinion. Questionnaire durability also was

calculated using Cronbach’s alpha (0.878). Statistical methods used for data analysis is

descriptive one. To test hypotheses, single sample T-Test was used. To prioritize hypotheses,

Friedman test was used.

Finding

Research hypotheses test:

As it is seen in table1, to study current and expected (desirable) situations of research variables,

single sample T-Test was used and hypotheses ware analyzed.

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Table 1 - Mean (T One Sample) To Check The Status Varibles

Test Value = 21

Variable (M.D) (Sig) (df) t Mean N

Staffing 6.29008 .000 130 21.609 27.2901 131

Communication and coordination 6.82443 .000 130 27.265 27.8244 131

Work environment 6.75573 .000 130 32.581 27.7557 131

Performance Management 5.41985 .000 130 20.573 26.4198 131

Training and Development 2.90840 .000 130 10.435 23.9084 131

Compensation -1.43511 .000 130 -8.846 19.5649 131

Due to observations from table 1, the value of t statistic is 9.912, 12.972, 17.303, 9.596, 8.103

and -5.334 for 1, 2, 3, 4, 5, and 6, respectively. Freedom degree is equal to 37 and significance

level is 0.000. Since, significance level of the test is less than 0.0, so H0 is rejected. Therefore,

with 99 percent confidence it can be claimed that in viewpoint of Ansar bank employees in

Zahedan, there is a significant difference between current and expected situations of staffing

system, coordination and communication, work environment, performance management,

education and development and compensation. Due to this issue that the mean of variables of

staffing, coordination and communication, work environment, performance management,

education and development is more than expected value (21), therefore these variables are in

desirable level, but due to this issue that the mean of compensation is less than expected value

(21), so this variable is not in desirable level. Therefore, all of research hypotheses were verified,

but in terms of desirability, all of variables except compensation were desirable and among

desirable variables, the highest mean is relevant to coordination and communication and the least

mean is education and development variable.

Friedman test

To rank various variables existed in the second level of P-CMM, Friedman test was used.

Friedman test prioritizes variables using output of descriptive statistics including scores mean.

So as the lower the variables’ mean is, the more important they are and they have better rank. As

it is seen in table 3, the value of chi-square statistic is 2 and freedom degree is 5 and also

significance level is equal to 0 which shows H0 is rejected. Based on outputs in table 3, we came

to the final conclusion that each of variables of the second level of P-CMM in viewpoint of

Ansar Bank employees has different ranks.

According to table to table2, the work environment variable has the highest rank and

compensation variable has the least rank.

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Table 3. Freidman Test

N 131 Chi-square 358.890 df 5 Asymp. Sig. .000

Conclusion and Suggestions

In this paper, we firstly referred to the organizational maturity and its goals. Then People-

Capability maturity model (P-CMM) was detailed. At the end, the maturity level of employees in Ansar Bank in Zahedan was measured. Conducted studies show that Ansar Banks in Zahedan

city still hasn’t completely covered second level variables of P-CMM and are in this level. In this

study, it was determined that compensation variable is in undesirable level and also education

and development variable has the least desirability. According to the obtained results, it was

determined that Ansar Banks in Zahedan city haven’t paid require attention to the lower levels of

human needs such as compensation and education and development. Subsequently, people

capabilities were ignored and haven’t considered actions on the agenda which fostering them can

cause establishing competency based organization. To reach this purpose, suggestions as

following are presented:

1. Due to this issue that P-CMM has had evolution trend and the lower levels are the

context for upper levels, it is necessary for organizations to initially take an action

in order to implement processes which provide appropriate contexts.

2. To reach competitive advantage, organizations have to align HR strategies with

business objectives.

3. In compensation dimension, following suggestions are considered as organizations’

guidelines:

1) Decision making about person's salary and benefits packages are put in contact with him.

2) Modification about salary and benefits is done based on person’s success in achieving

performance goals.

3) Practices to modify or eliminate inequity in compensation or other deviation form the

plan, strategy and guidelines of organization are done.

4) Compensation package of each person is determined based on documented procedures

that comply with the strategy plan and policy of compensation.

Table 2. Prioritze Second-Level Varibles Model

Variables Mean Rank Rank

Work environment 4.58 1 Communication and coordination 4.54 2 Staffing 4.32 3 Performance Management 3.78 4 Training and Development 2.60 5 Compensation 1.18 6

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4. In the dimension of development and education, following suggestions are

considered in organization’s policies:

1) Education is done based on comprehensible educational plan.

2) Issues relevant to improvement shall be periodically done with each person and

required knowledge and skills are identified to promote current and future

performance.

3) Improvement opportunities relevant to each person’s support in implementation his

personal improvement objectives are provided.

5. The most important discussed issue is the executive belief in promotion HR

capabilities. In this context, executive can consider following alternatives in

organization’s policy: A) Responsibility to manage and develop people by people

managers. B) Develop job force competencies and workgroups. C) Empower and

integrate job force competencies and quantitative performance management.

6. To implement this model, it is necessary to determine person or persons to program

and control affairs.

7. In order to perform processes continuously, comprehensibly and effectively, it is

needed to institutionalize them correctly.

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