Human Resource Management of MAS Linea Aqua - Case Study Example

Running Head: HUMAN RESOURCE MANAGEMENT Human Resource Management s Human Resource Management IntroductionThis paper examines MAS Linea Aqua (sister company of Speedo International) HR practices in order to maintain dominance in the industry. The company maintains high performance standards for employees as a strategy to create shareholder value through exceptional workforce: Not allowing extended probation periods for new comers who are not performing at the desired level to ensure that the organization does not spend time and money on below par employees. Use the forced bell curve to ensure that performance standards are raised year on year. 100% performance related pay structure to ensure performance is duly recognized in the compensation structure. Non existence of a seniority based management system to encourage progression through performance. Rationalizing manpower structure to optimize departmental, sectional performance. The Recruitment Strategy A policy of recruitment and selection is established to guide and facilitate the Managers and Executives who involve in the recruitment process. As an Equal Opportunity Employer, Linea Aqua is committed to meeting the spirit as well as the letter of the law (Gordon, Philpot & Spiller, 2008, 479-499). They have been, and continue to be, committed to Equal Opportunity Employment regardless of creed or any other factors that are not job related (Wall and Wood, 2005, 429-462). The company policy is to remove barriers to employment opportunities and to ensure that access to jobs is based strictly on an individual's competencies. Role of senior management and the line management (Wall and Wood, 2005, 429-462): Project manpower requirements in the company budget process Discuss the requirement at the Executive Council (Exco) Raise a manpower requirement form and get the approval from the Exco Identify job duties Determining special technical aptitude tests (if any) Making up the final selection decision Orientation and on the job training Role of the human resource department Assist in developing the Job Description for first time recruitments and write JDs Generate the organizational manpower requirement calendar Competency Development The MAS Competencies represents the range of competencies that supports successful performance in job roles within the organization. It describes behaviours that will make a person competent and successful. MAS's competency framework (Noe, 2007, 4): Provides a framework for effective performance. Provides a common language to improve performance and develop. Focuses on how (attitudes and behaviours) and not just what activities are performed. Attitudes and behaviours are observable and measurable, and thereby increase objectivity. On the job training Once the Induction program is completed the recruit will be directed to his/her respective department. The employee will first undergo on the job training for duration depending on the position and the department (Daft and Marcic, 2005, 145-327). During this period the employee is required to understand the core functions of the job. Thereafter he/she will undergo a further training on other departments, which are directly relevant to his / her day-to-day activities. The departmental manager and HR manager will identify duration and the schedule of this program. (Wall and Wood, 2005, 429-462) Rewards for excellence MAS being an ethical apparel manufacturer believe that the employees are the most valuable asset. Linea Aqua, as an SBU of MAS, offers a large number of reward schemes to its employees with the intention of uplifting their living standards and to motivate them to perform at best in their job role (Kane & Grant, 2009, 494-515). Transport, Food, Medical facilities, Scholarships to their children, EPF and ETF contributions are some of the basic hygiene factors that they offer (Schweiger and Sumners, 2007, 3-7). Apart from above, there are number of work/performance related reward schemes that Linea Aqua offers to its employees. One of the most popular rewarding schemes is Women Go Beyond awards which are offered annually (Pfeffer, 2005, 95-106). This is not only performance based but also it involves other achievements in their personal lives. The aim of this program is to empower women. Some monetary awards and lots of other benefits are given to the winners of the annual 'Empowered women of the year' program (Wright, Gardner & Moynihan, 2007, 21). Attendance awards are given for teams who show zero absenteeism for the entire week. At the end of the year, awards are given for employees who show zero absenteeism throughout the year. These are given for employees of all levels. Vehicle loans, fuel allowances, Vehicle insurance and maintenance allowances are given for Managers and Senior Managers. (Storey, 2006, 3-16) Competitive Compensation Performance Management is a process for improving performance by optimizing contribution, skills, knowledge and behavioral competencies of employees of Linea Aqua. It is the central vehicle that allows the organization's reward, development and career progression policies to be effective (Fullaga, 2006, 129-143). Performance Management aims to provide both appraiser and employee a sense of focus on what they have to deliver in order to achieve business and personal success. It is about managers at all levels motivating and rewarding their people in order to achieve business goals and objectives. (Wall and Wood, 2005, 429-462) Performance Management process Cycle At MAS, this tool is very closely linked to the Competencies identified for the organization. The feedback questionnaire designed for MAS asks individuals to rate persons against all Competencies and all levels (Bamberger, Kluger & Suchard, 2009, 304-318). The feedback obtained will help Managers to decide if the individual has not met, met or exceeded the "Competency Profile" required for their job role (Peacock, 2008, 26). The 360 degree feedback questionnaire is one of the tools used to assess an individual's performance against the competencies identified for job role (Peacock, 2008, 26). Linea Aqua is an organization which rewards excellence and promotes a performance driven culture. Employees are rewarded on their level of performance, indicated by the final performance rating communicated by EXCO for that year. (Pfeffer, 2005, 95-106) Human Resource Strategic Support of Business Strategy Global economic downturn is also one of the biggest threats for the organization and the human resource department also feels this in many ways. It has become very challenging to keep maintaining the higher salaries, fringe benefits, bonuses and rewards that were been given to employees over last few years (Piekkola, 2005, 619-635). Specially with the fall down of the UK economy it ahs become difficult to earn the targeted profits and keep the margins as it has been planned and therefore the HR is experiencing a threat in terms of providing above mentioned facilities to the employees (Bamberger, Kluger & Suchard, 2009, 304-318). Another threat which has been there over the last one or two decades is the perception which has built on Juki machine operators among the society. (Williams, 2006, 43-47) 2006 was of Linea Aqua's most successful year in terms of profits and other achievements such as introducing 'fast skin swim suit' for the swimmers take part in competitions and most of the winners in many top competitions including Olympics wore that in the competition. It was manufactured solely by Aqua according to the new technology of reducing the resistance with water (Wall and Wood, 2005, 429-462). Therefore, it can be said that the turnover and absenteeism are very low in the year 2006 and this reflected in organizational results as described. The high growth rate of the company in 2006 can be explained as such (Kane & Grant, 2009, 494-515). There was a drop in growth in the year 2007 but they quickly caught back and in 2008 and they exceeded all projections and had to even expand the factory and had to give many orders for subcontracting since the factory capacity was full. As a result HR was given unrealistic targets of bringing huge number of workers (new recruits) during 2008 September, October, November and December. They were able to somehow meet the requirements satisfactorily. (Wright, Gardner & Moynihan, 2007, 21) Critical Evaluation of Human Resource Policies In this section the selected HR policies are evaluated using common criteria (Daft and Marcic, 2005, 145-327): Timeliness and timely action: are the policies developed or amended recently to match the present dynamic environment and are those procedures been carried out without a delay plus are the solutions fast enough. Flexibility: are the policies adjustable to the situation Transparency: are the policies been communicated and all employees are aware of the policies Competitiveness: are the policies matched with the other competitors' policies Alignment with the business strategy: how well the policies support the business strategy. Flexibility: According to the policy, at the initiation stage of the job description, there may be an interview done on the job holder in order to understand the job contents more thoroughly. But in reality this interview is not there and because of that all the employees of the same designation will get the same identical job description (Storey, 2006, 3-16). Determination of compensation is solely based on the job description and hence the competencies or the skills of the employee are not taken in to consideration (Boselie, 2005, 67-94). This is an instance where more flexibility would have been introduced to the policy and makes it more users friendly. (Kohl, 2007, 3) Transparency: With regard to the job description there is no transparency at the initiation since there is a gap between the procedure given by HAY system and how it is been practiced. Compensation is determined according to a set procedure and therefore any employee gets the opportunity of knowing the composition of his/her pay. Competitiveness: As the company follows one of the best procedures to design the job description and determine compensation, it can be said that they are well above the competitors. Strategic integration: As the company is not following a low cost strategy, they are capable of paying high compensations. The most pertaining consideration of the company is the quality since cost is not a critical factor for them. They are willing to pay a high amount in order to achieve the necessary quality requirements for the customers. Therefore, the policy is well in line with the business strategy of the company (Boselie, 2005, 67-94). Although the salary scales are formalized by the HAY system, it is a disadvantage that only the functions defined by the Job Description are considered when determining the Salary of an employee. They are not paid for their competencies or qualifications. This leads to a culture which does not encourage education and developing competencies. It can be recommended to calculate at least a minor percentage of the salary based on competencies and qualifications. (Noe, 2007, 4) Performance Management and Appraisal It can be seen that the Human Resource department manages get all the appraisal done on time and there is hardly any delay in the performance appraisals. Flexibility Determination of performance expectations are been clearly discussed between the employee and the manager during the appraisal and therefore it is a flexible process. Department Managers are forced to have a fixed percentage of employees under each rating (Boselie, 2005, 67-94). Performance appraisal system is a hundred percent transparent system because appraisals are done in one on one basis. When comparing the appraisal system and the performance management procedures with the competitors, the company is in an excellent position. This can be depicted in organizational performance as well. (Wright, Gardner & Moynihan, 2007, 21) There can be one department which has many high performers in a particular year, while there is another department which has a lot of low performers. But due to the forced Bell curve, management is forced to rate some people who have performed well, under a lower rating while they rate some low performers under a higher rating than they deserve (Williams, 2006, 43-47). Due to the forced Bell curve, the central tendency effect also can be seen very often in the performance evaluations and this leads to de-motivation of employees (Storey, 2006, 3-16). It can be better and fairer to do a free rating process and when it comes to performance related pay, it can be decided what percentage to pay based on number of employees fall under each rating level. This method will treat people equally and fairly than the current method (Daft and Marcic, 2005, 145-327). Output of the method would be motivated employees and outcome would be a better achievement of organizational goal as a result of better achievement of individual goals. (Schweiger and Sumners, 2007, 3-7) Recency effect and inconsistency in rating are some other commonly experienced difficulties in appraisals at Linea Aqua. These problems can be minimized by educating and training Managers well on doing appraisals (Hill, 2006, 12). Also it is recommended to introduce a criterion to test the knowledge of line managers on appraisals (Wall and Wood, 2005, 429-462). As a result, year by year the standard of ratings goes up because every year the bell curve forces to have 5% of single rated players (Monroe, 2005, 22). This can increase the performance level of the organization but also one can argue that this might be unfair for the employees. Reward systems such as best attendance and efficiency achievement can create a misunderstanding among employees thinking that they have done something extra to the organization. But the truth is that they are paid to do so. They are paid to come to work and they are paid to hit the predicted efficiency. But it has been forced by the industry to give these kinds of awards to motivate employees. (Williams, 2006, 43-47) Conclusion The human resource management policies and practices of MAS Linea Aqua have been evaluated and the participants' opinion about those policies and practices are clearly portrayed throughout the term paper. Even though, the company is initiating and practicing best human resource policies and procedures, it is advisable to review their policies time to time in order to make them more contexts specific and flexible (Boselie, 2005, 67-94). 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