Restructuring TATA Group - Essay Example

Tata Group Table of contents Introduction 3 Task 4 Task 2 7 Conclusion 10 Reference 12 Introduction Tata Motors, the number automobile company inIndia, holds a position of prestige also in the international market. Apart from India the company has its operations is many international markets such as South Korea, Thailand and Spain. It was established in India, in the year 1945; and with the passage of time the company grew larger and larger to become a part of the global arena.(Tata Motors, n.d.). Among other factors, a well balanced human resource management is one that helped the company to attain such heights. Tata Motors is a subsidiary of Tata Groups. The parent concern is a well diversified business group which has existence in engineering sector, energy sector, chemical industry and hospitality as well as financial service sector. Tata group is a century old business established in 1874 by Jamsetji Nusserwanji Tata. (Goldstein, 2008, p.6). Tata Group is a conglomerate like many others in developing nations. At present the chairman of Tata Group is Ratan Tata, who is the grandson of the founder of the Tata Group. The changing business strategy has compelled the company to shift its management focus from traditional to more contemporary style. This change is adopted to make the company more competitive in the long run. This report gives a fair idea regarding various factors related to the human resource management. These factors include human resource planning, job evaluation, motivation, rewards, criteria for redundancy etc. The report includes relevant theories and their possible application in the context of Tata corp. Task 1 Since its inception, the company was able to develop a strong bondage with its employees and the HR department considered the employees as a strategic partner of the company. Though the nature of business changed from a family owned business to a conglomerate managed professionally by the corporate, but the traditional HR approach is still prevalent in the company. According to the higher management, the company is planning to introduce major changes in its HR practices (Tata-a, 2010). As per the company information, the HR department is taking due care to make the policies more transparent by making it more flexible to suit the changing needs of the employees (Tata-b, 2004). In Tata Ltd, the HR department needs to handle all the necessary activities associated with developing an effective human resource force. Hence the list of the activities range from recruitment & selection, remuneration related activities, human resource planning, performance appraisal, human force development, grievance handling and many other such vital activities. Different persons involved in the HR department have different role to do, as for example the responsibilities of line managers in HR practices is to motivate the employees to achieve their target and to put their utmost effort to attain excellence in their performance. For many years the company was practicing traditional management style but to attain competency in international market Tata Ltd decided to change its human resource planning. The company plans to expand its business because the economical conditions are ideal for expanding business practices; hence the company needs to hire more human resource. For making the remuneration policy competent to the industry standards, HR department of Tata Ltd needs to collect information regarding the benchmark level in local market and then to set the pay appropriate to the present market condition. According to Michael Armstrong and Angela Baron job evaluation is “a systematic process for defining the relative worth of jobs within an organisation” (Armstrong, Baron, 1995). In simple words it can be said that job evaluation is the process of describing and analysing the positions and making comparisons among duties of different employees in terms of individual responsibilities (Goel, 2008). The main objective of job evaluation is to determine employees’ wages based on their relative jobs or work in the organisation. It clarifies the responsibilities, authority and functions of employees. It is crucial to remember that it is the process of evaluation of job, not of the person who is doing the job. There are two factors that need to be considered during the process of job evaluation. These are internal equity and external equity of the job. Internal equity is referred to the value of job compared to other jobs in the organisation, whereas external equity of the job is referred to the job’s value in the external market (Bogardus, 2004). To determine more accurate pay structure for the employees, the HR department will have to conduct an in-depth job analysis. First and foremost the manager will analyse the respective job responsibility which the employee needs to fulfil, then they will have to find out the skill and knowledge required for fulfilling the job responsibilities (Gerhart & Rynes, 2003, p.84). It is a known fact that if the HR department hires highly skilled employees, the cost of pay will also be high. Hence the HR department prefers to hire semi-skilled employees and then provide training so that the employees are able to gather the required skill and knowledge for fulfilling the respective job responsibilities. The company believes in rewarding the employees for motivating them. Since the time the founder of the company realised the importance of its human resource, he provided a fair chance to its employees to be strategic partners. In 2000 the company announced Performance Ethic Program (PEP) for rewarding the high performing employees (Tata-c, 2003). Rewards and motivation are interrelated. This relation can be better explained by describing motivational theories like Maslow’s Hierarchy of Needs. According to Maslow there is a hierarchy of five different needs. These are physiological, safety, social, esteem and self-actualisation needs. Various physiological needs include hunger, thirst, sex, shelter etc. Safety needs are referred to the needs for protection from various emotional and physical harms. Social needs include needs for affection, acceptance, belongingness and friendship. The fourth need which is the esteem need is referred to the need for autonomy, self-respect, achievement, recognition, status etc. Finally the need for self-actualisation is referred to the drive of becoming what an individual is able to become. Each and every person has any one of these needs. A person, who has fulfilled all his physiological needs, would now look for meeting the safety related needs. Generally in an organisation like Tata Corp. employees are expected to meet their physiological and safety needs easily. As a result they would try to meet either safety needs or esteem needs or self-actualisation needs. If rewards that are given from the organisation help employees in fulfilling their needs then they will be definitely motivated. A middle level manager who has already fulfilled his first three needs will certainly look for meeting the other two kinds of needs. He will look for more recognition and status. He will try to achieve all the objectives in his professional life. If the organisation can help him in this process then that help will be considered as a reward. The company can give him more opportunities, responsibilities and more right to make decisions. On the other hand a top level manager is expected to fulfil the needs for self-actualisation. He will be keen to become what he is capable of. The best way to motivate him is to provide him all the opportunities from organisation’s side and help him in achieving his personal goals and objectives. The management not only provides monitory but also provides many non-monitory rewards to the employees to enhance their performance and motivation level. Thus it can be said that the HR department of Tata Ltd follows ‘Maslow need theory’ to motivate the employees. The company thereby follows a Balance Scorecard to appraise employee’s performance. Task 2 To determine the recruitment practices followed in different organisation, two companies have been selected which operates in the same car manufacturing industry. These two car manufacturing companies are General Motors & Toyota Motors. Later in the recruitment and selection practices in these companies will be compared against the best practises followed in the industry. Both the companies, GM and Toyota follows a well structured recruitment practices, but there exists certain deviation in the recruitment practices followed in these two organisations. GM rely more on external source of recruitment. All the vital information regarding vacancies at different post, the required skills and knowledge which the candidate should posses, full description of the job responsibilities, remunerations offered at different posts and respective career graph is provided at the company’s website. Hence the recruitment process is more open and transparent in the GM. For attracting potential candidates HR department prefer more electronic media and advertisement as available in different job providing porters. In Toyota the company website provide all the information regarding vacancies available in the company. If any candidate is interested in applying for a specific post, then one can upload the resume. The resume in analysed electronically and if the requirement of the post matched with the knowledge and skilled possessed by the candidate then he or she will be allowed to sit for the aptitude test. This test is conducted to analyse the reasoning ability of the candidate as well as one’s basic knowledge regarding the subject. There is a possibility that the candidate succeeds in clearing the aptitude test. The results of this test assist the company to develop a pool of potential candidates who are interested to work in the company. The company prefer only its website for recruiting the candidates; hence they advertise no other media for attracting attention of the potential candidates. Selection is a most critical activity of the human resource department because a single mistake can lead to selection of a wrong employee and the company had to suffer. There are many ways through which management can analyse where the candidate is the best one to take up the job responsibilities. An interview is one of the commonly accepted selection technique which assist the HR person to conduct an in-depth analysis of the candidate. Different types of interviews are: face to face interview, group interview, panel interview which can be structured or unstructured. Other common interviewing processes are behavioural interview, stress interview and situational interview. In GM the selection follows a well mapped process of interview and it is more structured in nature. The HR department in GM prefer to keep the whole process of section quite short as this saves the valuable time of the management and also of the candidates who are short listed though recruitment process. However the HR persons personally participate in section process, therefore per head they invest good amount of working time in selecting the suitable employees from pool of the potential candidates, but the time allotted for each candidate depends on the fact that for which post they are hiring the candidates. On other hand Toyota conduct almost all the selection related activities virtually through their website. Ones the candidate is over with the preliminary written interview he or she will be asked to be in company’s office for giving presentation. The company gives time to the candidate to visit one of the production sites. On basis of candidates presentation the HR persons decides whether the candidate is eligible for participating in next part of the interview. In the next part the HR persons conduct a face to face interview where the candidate needs to talk about his or her past job knowledge. This is the most curtail phase where HR persons takes final decision regarding the candidate. The candidate who succeeds in clearing this stage has to clear a medical test and two references given by the candidate are verified. One of the references should be from educational lecturer and other a supervisor or manager where the candidate had worked. Hence the selection is a quite lengthy procedure in Toyota and the HR department spends a lot of time for selecting the persons for the vacant posts. After comparing with the best practices it appeases that the process of selection followed by Toyota is more in-depth and close to the best practices followed in the industry. However the turnover rate is quite less in Toyota so HR persons can devote enough time for selecting each employee. On other hand GM uses a short selection process but through this HR department can save enough time. Therefore while selecting the employees HR persons should understand for which post they are selecting the candidates; hence the process and time allotted per candidate should vary accordingly. Exit procedure of a company is developed to understand the reasons for which the employees decided to leave the company. As in western economies employees turnover rate is high, hence the management try to keep exist practices of the company as short and simple as possible. The same is true for GM where management accept the fact that if the employees have a better opportunity in some other organisation, they will shift from GM to that very company. Whereas the condition is quite different in eastern countries where employees and employer shares a family like relations, so Toyota try hard to understand the facts because of which employee leaves the job. Therefore in Toyota the exit procedure is quite lengthy. After comparing with best practices it appears that the policy adopted by Toyota is more appropriate as this help the company to understand why one leaves the company. There should be fair criteria for selection regarding redundancy. Criteria for both mandatory and voluntary redundancy need to be capable of justification and must have proper objectives which should be aligned to the overall organisational objectives. There should not be any biasness in the selection criteria in the form of gender, pregnancy, marital status, family status and disability. Redundancy criteria can be influenced by the factors like performance appraisals, efficiency at the work, tenure of the employment and attendance record (CCH Asia Pte Limited, 2009). Conclusion When compared to the industry standards, the HR policies of Tata Motor are not up to the mark. Nevertheless they are efficient enough to encourage the employees to put their level best and work hand in hand to achieve corporate goals. The company however, is not complacent with it and are making efforts to restructure the organisation and change their recruitment and selection policies to achieve corporate excellence. It needs to give more importance on factors such as job evaluation process and criteria for redundancy. Reference Armstrong, M. Baron, A. 1995, The job evaluation handbook, CIPD Publishing Bogardus, A. M. 2004, Human resources jumpstart, John Wiley and Sons CCH Asia Pte Limited, 2009, Termination and Redundancy Practices in Asia, CCH Asia Pte Limited Gerhart, B. A. & Rynes, S. 2003. Compensation: theory, evidence, and strategic implications. SAGE. Goel, 2008, Performance Appraisal And Compensation Management: A Modern Approach, PHI Learning Pvt. Ltd. Goldstein, A. January 2008. The Internationalization of Indian Companies: The Case of Tata. Organization for Economic Co-operation and Development (OECD). [Pdf]. Available at: http://www.ciaonet.org/wps/casi/0001617/f_0001617_830.pdf [Accessed on April 02, 2010]. Tata Motors. No date. Profile. [online]. Available at: http://www.tatamotors.com/our_world/profile.php [Accessed on April 02, 2010]. Tata-a. January 2010. Finding the right formula. [online]. Available at: http://www.tata.com/media/interviews/inside.aspx?artid=HQqRi4Xvg5A= [Accessed on April 02, 2010]. Tata-b. September 2004. All in a days work. [online]. Available at: http://www.tata.com/careers/articles/inside.aspx?artid=u7jLneDv8kE= [Accessed on April 02, 2010]. Tata-c. 2003August 29, 2003. Tata Steel ranks sixth on the list of top ten employers in India. [online]. Available at: http://www.tata.com/company/releases/inside.aspx?artid=O/xJuBV1UVY= [Accessed on April 02, 2010]. Read More