The Prevailing Problem of Royal Mail - Case Study Example

HRM Table of Contents Table of Contents 2 Introduction to the case 3 Main reason behind the prevailing problem of Royal Mail 4 Application of SHRM toovercome the HRM problem 5 Application of SHRM as proactive tool 7 Reference 9 Introduction to the case Royal mail is the national postal service provider in United Kingdom. It is owned by Royal Mail Group Limited. Initially the General Post Office was a government department; in the year 1969 it turned to a statutory corporation and got its current name. With passage of time many changes were introduced in the company’s administration. According to the bill introduced in June 4, 2009 the company can be partly privatised as soon as the bill gets passed (Sparrow, 2009). In UK, Royal mail is the biggest postal service provider. In the financial year 2008-2009 Royal Mail’s financial performance improved as its operating profitability enhanced even in the difficult market condition. But the annual report indicated that mail volumes and revenues are falling, competition from private postal service providers is increasing and electronic mails are also a growing threat (Royal Mail group, 2009). By autumn 2007, a series of postal strikes started in UK and it severely affected those companies which were directly dependent on Royal Mail as a source of postal service providers (Data Lite, 2007). In 2007 the company agreed to work in collaboration with the union to implement modernisation. But at present the company’s employees are under the shadow of threat and fear of losing job and pay cut, hence they called for a strike in August 2009 and from then onwards the matter turned more severe (Kollewe, 2009). Royal Mail said they are losing number of parcels because the company is not as technologically advanced as the private competitors. But modernisation will result in job lose and pay cut, so the postal employees have gone on strike (BBC NEWS, 2009). The modernisation plan was prepared in 2007 but it was in halt because of certain administrative reasons, now as the management is planning to make the company more competent, this modernisation plan has to be put to use. The company is losing the sale because till date many works are to be done manually and for that company has to employ more workers. After modernisation, the work will be much faster even with less number of employees. This will enhance Royal Mail’s profitability by reducing cost of operation (Telegraph, 2009). Because of this prolong series of strikes, the one who suffered the most are local people and small businesses. In early October the Royal Mail lost its £25 million contract with Amazon, the second largest customer of Royal Mail. Amazon took this action to protect the Christmas sale to suffer from late deliveries (Boyle, 2009). As per the recent news, union has called off the strike till New Year. They believes within this phase something meaningful and concrete will mature from bilateral communication (BBC NEWS-a, 2009). Main reason behind the prevailing problem of Royal Mail From many years there is a never ending problem with Royal Mail’s employees and the management. Main problem behind such condition is poor management strategy. The company have taken a decision for modernisation, which is no doubt quite essential for company’s existence, but it took no initiative to involve the employees. For any organisation it employees are the most vital assets. So whenever a change has to be introduced, a pre-planned change management plan is required. Human Resource Management department should work hand in hand with other department for setting and implementing any organisation goal. So for proper implementation and execution of change, HRM department should act as a strategic partner with other departments. This element of collaboration between management and employees is completely missing in Royal Mail. Application of SHRM to overcome the HRM problem The company is at a crucial state. The competition is growing at a faster rate in postal service sector and the private competitors are well equipped with modern technology to provide better and faster service to the customers. To retain the competency and market share of Royal Mail needs technological up-gradation. But on the other side after modernisation it will need lesser employees and around 60,000employees may lose their jobs. The job market conditions are at a bad state and it will be highly difficult for the retrenched employees to get another job. So the problem can be solved only if proper HRM policies as applied. Strategic Human resource Management (SHRM) systematically links people with the organisation that means it links organisation’s employees with the organisational culture, mission & vision, corporate strategy (Schuler & Jackson, 1999, p.1). As per Walker (1992) “Strategic Human resource Management is a means of aligning the management of human resource with the strategic content of the business.” (Armstrong, 2006, p.116). By implying the SHRM, critical issues related to the organisation can be solved. It also assist in taking decision which have long term affect on success of the organisation. The management did a big mistake by not including company’s employees in modernisation process of Royal Mail. This made the workers believe that company is not at all bother for them and management can take any harsh decision to achieve its goal. Already company has suffered a lot by losing its market reputation, customer satisfaction and sale. All this gave a good opportunity to the rival groups to attract Royal Mail’s large customer base. First of all Royal Mail’s management have to win the confidence of employees that for company its employees are quite important and no unjust will be done with them. A board of directive has to be selected which can conduct an in-depth analysis and finalise a proper change management plan undertaking all the environmental factors (political, economical, social, technological, legal, and environmental). The members of this board should be from different departments so that while taking any decision all strategically important factors like finance, technology and man power can be taken into consideration. Employees should be asked to actively participate in change management process. This will make the process more transparent and employees will get a chance to put forward their own view in more organised way. While developing the change management plan, profits and risks associated with the business, both in long term as well as in short term should be taken into consideration (Cameron & Green, 2004, p.160-184). Training is a vital part of change management; many a time it has been found that due to lack to proper training the employees fails to adjust in new changed environment. So Royal Mail should make investment to arrange training to the existing employees as per the position they hold in the company. The employees who will be asked to leave the company should also be given alternative training so they can be employed in any other department or subsidiary of the company. Royal Mail should make attempt to arrange alternative job for such employees in any other company as it will be difficult for them to search another job because of economical slow down. This assistance from Royal Mail will bust worker confidence and they will feel more loyal toward the company. At present the company has to pay high wages to the temporary employees to deliver the accumulated parcels and mails. If they make extra payment to the existing permanent employees, the quality of work will be better and relation between management and employees will improve. As government have major holding in the company, it should come forward to resolve the problem. This will prevent further damage of the company’s image and market share. Application of SHRM as proactive tool Royal Mail’s employees also had problem with the HRM policies adopted by the company. They believed company hardly bother for wellbeing of its employees and its sole motto is enhancement of profitability. They also complain that Royal Mail’s management never ask the employees in decision making process. All such statements clearly indicate that the prevailing HRM policy making process needs amendment. HRM department should act as a strategic partner when the organisation finalises its organisational strategies. And before setting any HRM policy its impact on employees as well as on other department should be considered beforehand. A main cause behind series of strike in Royal Mail is the rigid nature of management and too much interference from union. The company should develop an organisational culture were the employees feel motivated and have job security. They should have faith in management and get opportunity to participate in decision making processes. Even the management should try to maintain a healthy atmosphere were the vital information can be shared with employees in more transparent manner. Worker should be provided a better communication platform and they should receive regular training to keep themselves updated. Royal Mail’s HRM department should not forget that employees are vital assets for a company and no company can achieve heights of success without satisfying its employees. Hence it can be concluded that SHRM should be implemented for developing future HRM policies. This is a way which can prevent or at least reduce future strikes. Management should not underestimate the cost of strike in monitory as well as market image terms. Reference Armstrong, M. 2006. A handbook of human resource management practice. 10th ed. Kogan Page Publisher. BBC NEWS. October 08, 2009. Union expects post strike support. [Online]. Available at: http://news.bbc.co.uk/2/hi/business/8295714.stm. [Accessed on December 14, 2009]. BBC NEWS-a. November 05, 2009. Royal Mail strikes are called off. [Online]. Available at: http://news.bbc.co.uk/2/hi/8345423.stm [Accessed on December 14, 2009]. Boyle, C. October 07, 2009. Royal Mail national strike looms for Christmas. [Online]. Available at: http://business.timesonline.co.uk/tol/business/industry_sectors/support_services/article6865562.ece [Accessed on December 14, 2009]. Cameron, E. & Green, M. 2004. Making sense of change management: a complete guide to the models, tools & techniques of organizational change. Kogan Page Publishers. Data Lite. 2007. Article Body. Mail Order Business - How To Cope With A Postal Strike. [Online]. Available at: http://www.datalite.org/mail-strike-business-coping.html [Accessed on December 14, 2009]. Kollewe, J. August 06, 2009. Postal workers to strike over pay and jobs. [Online]. Available at: http://www.guardian.co.uk/uk/2009/aug/06/postal-strike-royal-mail [Accessed on December 14, 2009]. Royal Mail Group. May 14, 2009. Current news releases. [Online]. Available at: http://www.news.royalmailgroup.com/article.asp?id=2534&brand=royal_mail_group [Accessed on December 14, 2009]. Schuler, S. R. & Jackson, E. S. 1999. Strategic human resource management. Wiley-Blackwell. Sparrow, A. May 5, 2009. Brown will back down over Royal Mail privatisation, predicts Labour rebel. [Online]. Available at: http://www.guardian.co.uk/politics/2009/may/05/brown-royal-mail [Accessed on December 14, 2009]. Telegraph. August 22, 2009. Royal Mail strikes to paralyse postal services. [Online]. Available at: http://www.telegraph.co.uk/news/uknews/6068924/Royal-Mail-strikes-to-paralyse-postal-services.html [Accessed on December 14, 2009]. Read More