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Journal number 4 ∘ Giorgi Tchuradze Giuli Keshelashvili Eka Chokheli Manana kharkheli Nugzar Paichadze Shorena Tielidze
Issues of HR Management Improvement in Private Sector of Georgian


Work offers overview the issues of HR management in Georgian companies. In particular, it provides analysis of the issues of personnel development planning, identification of the recruitment rules and techniques, personnel assessment, selection and employment, employee adaptation, training, qualification improvement and development, personnel motivation, communication and decision-making process, organizational strategy and organizational structure suitability, assessment of the personnel activities and labor potential, personnel carrier management and HR management system software.

The directions for improvements of these issues are identified.

Keywords: human resources, private sector, qualification, personnel motivation, organizational strategy, organizational structure.


Successful functioning of the organizations is the basis for their economic growth, i.e. degree of economic growth depends on the quality of management quality at various levels of management hierarchy. One of the most significant components of management quality is the quality of HR management. Numerous interesting publications of both, foreign and Georgian economist-researchers deal with the issues of HR management [1;2;3;4;5;6;7;8;9]. Given complexity of the mentioned problem and its permanent change with time, studying of the relevant issues is still of significance.  The work is focused on the factors affecting prompt decision-making and transparency of HR management processes.

Solving of the organizational issues requires application of the instruments and mechanisms not used before. These instruments and mechanisms include: organizational culture, business ethics, motivation, recruiting of the managerial personnel from the people distinguished with intelligence and smartness, their re-training. Mostly, the managers deal well with the current objectives of the organization’s functioning but often they have no sufficiently trained to deal with the development strategic objectives.

Such lack of training is the main cause of the managerial crisis in Georgian companies, whose errors result in additional risks, costs and restricts effective decision-making opportunities.

To study the HR management problems in Georgian private sector we have applied he qualitative research methods, in particular – in-depth interviews oriented towards problem identification. For each of the respondents the goals were pre-determined and on this basis the questionnaire was prepared to collect specific information. The representatives of Georgian companies (high, medium and low level managers) were interviewed.

2. HR Management Systems in Private Sector of Georgian Economy

HR management in Georgian companies is distinguished with certain characteristics. In most companies HR management is regarded as a sphere not closely linked with the business. Survey showed that only few managers regard that staff motivation management is their work. In many Georgian companies the role of HR manager is not quite clear and it is excessively simplified. It is mostly identified with the administration activities and is limited to making employment contracts with the staff members, recording of those who were late and arrangement of the leaves.

HR management strategy, similar to the relevant specific incentives, is effective only where they are adjusted to the organization’s general strategy, its goals and promotes achievement of the organization’s mission. Any organization is doomed without well-conceived strategy (both, general organizational strategy and HR management strategy are implied): its activities would be unbethought and inconsistent, while the resources would be spent unreasonably and ineffectively.

Actually, the directions of the companies’ HR activities basically depend on the organizational goals and plans. Business manager needs the HR manager as his/her business partner, able to provide information about whether the organization has reliable human resources to achieve better results or advices that achievement of goals would be complicated due to high personnel turnover. There are many cases where the organization’s manager instructs the HR manager to write the strategy and this is not correct. HR management strategy is the vision of how personnel should be managed so that the business was able to achieve the planned results. This is the set of decisions oriented towards improvement of business revenues, change the behavior of organization members, to ensure that the organization achieves planned results. At the same time, HR management strategy should be integrated into the business strategy. HR manager should be aware in business strategy and he/she should be the full capacity member of the business management team. Before organization strategy is approved, the HR manager should state what are the team’s opportunities and risks for achievement of strategic goals, i.e. the managers should plan personnel management directions together with the HR manager, to ensure achievement of the new results.

Mostly, Georgian companies apply the following HR management strategies: staffing (providing human resources to the company), development (making as much investments for personnel training and carrier growth as possible, outcomes management), maintenance (taking care about wider involvement) and labor remuneration management. In addition to these key strategies, there are some recruiting strategies (e.g. hiring of the best personnel only), development strategies (promotion of the staff members with the best achievements only) and remuneration strategies (offering the highest remunerations at market).

Depending on the organization’s needs, its capabilities and risks, its strengths and weaknesses, HR strategies, extent of its correspondence to business strategy, these issues should be discussed by HR manager together with the management team. The main management problem in Georgian companies is that only the humanitarian sphere is regarded as the sphere of activities of HR manager rather than business management. Actually, HR manager is required to provide information about the structure of the company’s human resources, staff turnover and what can be contributed to the company by each of the employees.

Studies conducted in the sphere of job descriptions, assessments and motivation systems showed that job descriptions comprise the key component of HR management. They state for each specific position the necessary functions, responsibilities, competences, improve individual and organizational effectiveness, familiarize the personnel with the goals of the specific positions and organization. Study results show that job descriptions are developed for almost all positions in the private sector though only 40% are provided.Study of the motivation methods show that in Georgian companies financial rewards comprise the most widespread form of personnel motivation, with 70% share in total motivation measures, while forced motivation cause by the fear of punishment has 20% share while development opportunity has only 10% share. At the same time, the bonus system of rewarding depends not on the individual achievements but rather on the supervisor’s subjective opinion. It should be noted that most respondents attempt to perform their duties properly due to financial expectations.

As human resources comprise the main basis for any organization, the quality and characteristics of the work performed by them directly affect the companies’ results. Organization should take care about not only selection of the highly qualified personnel but also about their permanent professional and personal growth and development.

According to the survey results, the process of staff selection and hiring mostly includes standard procedures, implying providing of personal information, testing and interviewing. Testing was mostly of general nature, in many cases, the existing standards did not correspond to the qualification requirements and said almost nothing about the candidate’s professional knowledge. 80% of the respondents regarded that that their advantage compared with the other candidates was their personal information, work experience and test results and 20% regarded that these were the place of residence, appearance and communication skills.A personal development may result from self-development and with the assistance of the organization to which he/she belongs to. It is necessary that the staff members had motivation for self-development to cultivate his/her abilities, seek the ways and methods for improvement of his/her professional and personal skills, plan and make specific steps and further, evaluate achieved results. He/she should be sure that these results would be seen and properly appreciated. At the same time, the company should ensure planning of the staff development process, its proper implementation. In most Georgian companies no proper attention is paid to staff development processes or they occur spontaneously. As a result, they have overtired employees dissatisfied with their monotonous work, with permanently decreasing productivity.

Knowledge improvement may be provided via formal trainings, self-education, professional and work meetings and other activities. The process of personnel development planning includes assessment of the personnel abilities, their education, immediate needs and potential resources. 90% of the companies have personnel development plans in Georgian private sector. Large companies mostly rely on general training courses that are not relevant, either with respect of their contents or their duration. Test period is quite long and frequently, the candidate’s labor is used for absolutely different purposes, before he/she is appointed to the specific position.

Individual’s motivation is impacted by the power. Structural role determines an individual’s formal power. Greater is such power higher is the desire and sense of self-realization. Better is match between the power and responsibility, more effectively the organization’s issues are solved and more motivated and willing are the people. And insufficient power and its mismatch with the responsibilities result in demotivation, demoralization of the personnel and increase their motivation to seek the other jobs.

Communication is the most significant factor for organization development. Communication between the managers and subordinated personnel is of particular significance. In Georgian companies, managers mostly use such communication means as e-mails, phone calls, meetings.

Decision-making process, in Georgian companies, is entirely authoritarian. Only few (13%) of the respondents regards that they are partially involved in this process. Proper decision-making depends on adequate decision-making process. Best means for involvement of the staff members into the decision-making process are the collegial structures, work groups and commissions. Working together the staff members apply their competences best and the organization has the opportunity to make better decisions, on one hand and ensure improvement of the staff involvement and motivation on the other. This significantly improves the sense of self-realization among the staff members.

Research showed that clearly defined responsibility is the best motivator for individual. If the staff members are well aware in the organization’s expectations, i.e. they know what are they responsible for, this makes them more active, inn achieving of the desired results. Clear responsibilities stimulate the personnel to work with greater willingness even when they are dissatisfied with the work conditions. Personnel make efforts to realize their responsibilities and only after this think about leaving of their jobs. At the same time, many employees with high remuneration and good work conditions leave their jobs as they were not able to find out what their actual responsibilities were. Such things undermine the personnel motivation and labor productivity and stimulate them to seek new jobs due to insufficient sense of self-realization.

Study has identified the deficiencies in the organizational structures of Georgian companies hindering implementation of the developed strategies and preventing achievement of the stated goals. In many cases, actual distribution of functions dramatically differs from the formally allocated tasks and the names of the positions, jobs and divisions do not reflect actual job performed by the relevant structural subdivisions and positions. Such facts become the cause of numerous misunderstandings, conflicts and unpleasant disputes, reducing the staff motivation, labor productivity and wasting time. We should not the great number of structural units subordinated to general managers, frequently hindering successful performance. There are many cases where more than ten structural subdivisions are subordinated to general manager directly.

And the experience shows that it is impossible to effectively manage more than 5-7 subordinates, allocate sufficient time to each of them and properly participate in dealing with their significant problems and objectives. In many cases the functions are grouped not by their necessity for the organization but by the better experience and knowledge in the top management group. Certainly, organizational structure cannot be effective without clearly defined priorities. It should correspond to the strategy and promote its implementation, Therefore, in many cases, most part of the skills and capabilities of the employees of Georgian companies are unused and significant part of the funds is wasted without any results.

In 80% of the companies, evaluation of fulfillment of the imposed duties is provided based on the percentage of monthly plans. Significant part of the companies has the rating system leading to unsound competition between the personnel. In many cases the personnel undertakes great quantities of work requiring so much time, while the remuneration is so low that this causes dissatisfaction of the personnel. This results in high personnel turnover. Ineffective remuneration system significantly undermines the personnel’s labor productivity. Here we can see also lack of respect to the personnel. This is one more cause of personnel turnover in the private sector, mostly resulting from low salaries and hard work conditions.

3. Conclusion

Analysis of HR management systems in private sector of Georgia showed that inadequately allocated roles, powers and responsibilities, improper motivation systems, inadequate management and poorly operating management systems result in low degree of taking advantage of the personnel’s capabilities and skills. Strategic development objectives are left without solution. In many cases, the persons responsible for the significant objectives are not even included into the organizational structure. For this reason, the organization misses the opportunities: ongoing processes slow down, strategically significant issues cannot be solved, positions at market weaken and finally, the companies fail to achieve the stated goals. Absence of persons responsible for the strategic objectives in the organizational structure and responsibility of the first person for whole set of strategic objectives hinders achievement of goals. Managers need to make great efforts to manage the personnel for achievement of the organizational goals.

Regarding the above, it is significant that Georgian companies implemented the following measures for the purpose of improvement of HR management:

- Adjusting of the administrative resources management strategies to the business strategies;

- Performing the process of identification of the company activities’ directions before the process of structure formation;

- Formation of the organizational structure  based on the in-depth understanding of the company’s purposes and adequate planning of the key processes to ensure best use of the personnel’s capabilities for effectively performing of the ongoing processes and implementation of the company strategies;

- Implementation of the effective HR policies directly impacting such qualities of the employees as: involvement in the management process, sense of obligations, motivation and skills;

-  Instead of vesting responsibility for each of the strategic objectives in the first person, appointing of several responsible persons to ensure achievement of the organization goals.


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