Human Resource Management - Assignment Example

Human Resource Management Introduction In contemporary times, growing diversity in the global market, intensified competition and rapid development in Information Technology has caused great pressure on the organizations to improve their efficiency (Brester et al. 2008). Workforce of an organization plays the dominant role in the development of the business entities. Efficient management of human resources is one of the key determinates of organizational performance of the organization. The human resource management focuses on how effective the organization can manage its people, policies and system to gain higher return and improve its organizational efficiency. ABC Company is one of the largest electronic manufacturing companies that have showed magnificent performance and rapid growth in the past few years. However, in the last two years the revenues and profits have slowed down. The human resource management practices of the company have been extensively criticized. Thus, the present report critically analyses how the human resource management practices of the organization influences organizations effectiveness (Brester et al. 2008). It further evaluated how the issue has been dealt with the organization up to data. Recommendation and Action Plan has been proposed in order to deal with issues, focusing on the acceptability of its stakeholders. Case Overview ABC Company is recognized as one of the leading multinational electronic manufacturing company headquartered in China. The company manufactures a wide range of electronic products and services for local and international customers. The company’s has rapidly expanded its business and revenues since 2009. The financial of the company reveal that by the end of 2009, the revenues of the company have increased by $60 billion. However, after 2011 the revenues and growth rate of the company has constantly declined. The strategic decisions and human resource practices of the company are being extensively criticized. Despite the declining profits and growth rate, the company faces management and social issues within the organization (Dransfield 2010). The employees of the organization went through great deal of stress due to which most of the employees were switching the job, and two of the employees of the organization committed suicide. The investigation of the cases reveals that the two employees at ABC Company that committed suicide underwent depression and anxiety because of the work stress. It was criticized that the employees at ABC Company were the victim of harsh treatment and had to work harder to raise their salaries (Greece 2011). The corporate culture of ABC Company was identified as one of the major causes for the ill treatment of its employees due to which there were a high employee turnover and incident of suicide. ABC Company was located in the central china, as was considered to be the best place for uneducated individuals with average wages. However, the wages paid to these employees were below the scale of the standard global wages. ABC Company provided accommodations and home to its employee, but the salaries and wages were low and the employees had to work more in order to raise their salaries. The only reason that the individual preferred working in ABC Company was because the payments of the wages and salaries were made on time. The majority of the work force was young people when as young as 15 years old and were low skilled labour. The company violated several ethical and global standards of Human resource management that make their practices illegal and unethical. The rules and regulation at ABC were strict, and the leadership style, which companies adopted, were inflexible due to which its employees had to work harder to have higher salaries. The employees had to work day and night, were not allowed to communicate with each other at work and were hardly given time for sleeping. The human resource policies and practices at ABC Company were strict, mainly followed military leadership due to which most of the non-monetary aspect were denied (Coplan, Hikino & Lincoln 2010). There were other social problems that led the company towards failure like increased number of migrated workers who were low paid (Coplan, Hikino & Lincoln 2010). These immigrants were subjected to discriminatory behaviours and were present in the company in big numbers. Racist behaviours led the constant fear and sense of insecurity among these immigrants who were a part of the company. The employees at ABC had low morale; unfair compensation and needs of the employees were not adequate met within the organization. There was a great discrimination between educated and uneducated workers (Brester et al. 2008). The managers treated employees with a lot of discrimination and were humiliated, they were not allowed to complain or speak in front of their managers, as speaking against or confronting people with the higher designation were considered to be violation of disciplinary concerns (Eccles, Serafeim & Cheng 2013). The number of unethical practices, organizational culture and the conflict prevailing in the organization adversely affected revenues and performance of the company (Badenhorst-Weiss, Cant & Bervis 2009). It eventually leads to the lower performance level of its employees that also affected overall profits, quality of production and revenues of the company. Identification of key stakeholders From the case above, it can be identified that the stakeholder involved in the present case of ABC Company are as below (see Fig: 1). Fig1: ABC company stakeholders Identification of key issues Rigid policies and regulation Military Leadership Negligence of employee’s monetary and non monetary needs Unethical employment practices Lack of training and development Discriminatory treatment with employees Communication gap Analysis The information provided on the Human Resource issues prevailing in ABC company it can be determined that the organization faced number of unethical practices (Eccles, Serafeim & Cheng 2013). The lack of the communication with the organization broadened the gap between the management and employees. Discriminatory practices, recruitments, reward and compensation, lack of employee training and career development and planning were the major issues that the company encountered (Brester et al. 2008). The corporate culture of the organization was one of the major areas that have resulted in stress and dissatisfaction of its employees. The Human Resource Management and practices of the company have affected its overall financial performance. According to Dransfield (2010) human capital of an organization is the crucial factor to its success failure, any of the organization that neglects effective management of its human resources would face severe losses (Dransfield 2010). In order to assess Human resource management practices at ABC Company, theoretical underpinning, and HRM model have been implied to develop critical understanding of the issues prevailing in the company (Badenhorst-Weiss, Cant & Bervis 2009). Organization Culture Organizational Culture plays a dominant role in the to preserve core norms and values at the workplace and strengthening business practices of the organization, in terms of employee’s belief, values and perceptions. Hence, the management and leaders at the organization are one of the essential components to define the role of the each employee working in the environment. The organizational culture of the organization is composed of various aspects, related to the social. The organizational behaviour and leadership style of the company define the overall Theory X and Theory Y In order to assess organizational culture of the organization, it is essential to identify organization’s behaviour. The Theory X and Theory Y developed in 1960 by Douglas McGregor is human motivation theory. The theory has been extensively implied to determine human resource management. It allows determining organizational behaviour, focusing on the perception of the managers and its employees. In order to determine organizational culture of ABC Company, Theory X and Theory Y has been implied. The techniques and leadership strategies, which the organization adopts, plays a key role to motivate its employee. In terms of ABC company, it can be determined that the most of the employees that were working in the company belonged to rural areas and young people. In addition, they were had lower education qualification as compared to the other employees. The managers at ABC Company enjoyed higher designation and respect; there was discrimination in between education and uneducated employees within the organization. The managers perceived that the individuals are inherently lazy, as they uneducated and less skilled. Hence, every work that was done in ABC Company was ensured that it is done under the supervision of managers. ABC Company made use of authoritative management style to persuade its business operations and attain their objective (Eccles, Serafeim & Cheng 2013). According to the Theory X and Theory Y the organization with the authoritative management style are rigid and inflexible (Dransfield 2010). The employee is directed and instructed about every aspect and concern that should be taken by the employees of the organization. It can be determined that the hierarchical structure of the company was narrow; for this reason each of the work that was performed at every level was done with the consent of the managers. The employee or labour in the field had no authority to make a decision or confront their managers about their issues (Brester et al. 2008). Even in the small cases, if the employee has to leave from the work for going to washrooms had to find a replacement. In addition, the managers had a higher post and talking to the manager would perceive against disciplinary concerns of the organization (Monsanto 2014). The Theory X manager is more inclined to make decisions and reward individuals according to their actions. It was evident from the practices at ABC company that the management was only concerned about the work that was done, in order to get higher salaries and wages the employees had to work for longer period of time to get additional wages (Draft & Marcic 2010). Draft & Marcic (2010) states that the theory X management structure is only effective when there is a need to motivate the workforce in which the promotions are stagnant (Draft & Marcic 2010). In addition, most of the employee potential under this management structure is often discouraged. It is evident from case that the employees of ABC Company the uneducated employees were not provided sufficient ways to prove their abilities (Eccles, Serafeim & Cheng 2013). Perhaps they were rewarded according to the amount of the hours they worked. In ABC company’s case, it lacked a good work environment as employees were constantly yelled at, and the company demanded loyalty. The management gave importance to organizational goals and neglected personal interests of its employees. The wages of low-skilled workers were very less as well. In addition, there was no concept of training and development although the company required advanced technology and innovation in their scope of work (Eccles, Serafeim & Cheng 2013). Employee Motivation Maslow Hierarchy of Needs – Motivation Theory ABC company work culture was directed by authoritarian management style due to which the emotional, moral and materialistic needs of its employees were neglected (Eccles, Serafeim & Cheng 2013). It greatly affected the psychology of its employees it is one of the reason that the employees working at ABC Company underwent stress and committed suicide. The company was unable to fulfil basic psychological needs of the employees that included their working times, resting times and hygienic factors. Maslow’s Hierarchy Theory can be implemented in the case of ABC company, as focuses on the basic needs of the human to motivate people that could have allowed ABC’s employee to overcome emotional dilemma and remain dedicated to work (Simms 2010). The model is based on the five stages: 1- Biological and Physiological Needs ABC had strict disciplinary rules and was greatly inclined on execution and efficiency, due to which most of the necessary needs of the employees were neglected (Monsanto 2014). In addition, there were no recreational activities or facilities for the employees working in the similar area. The employee did not have appropriate sleeping time, resting or activities at ABC that could fulfil their needs (Brester et al. 2008). 2- Safety needs In addition, there was the lack of protection elements due to which the employees were often worried to work in the production units. 3- Love and belongingness One of the major issues at ABC was the lack of bonding and relationship between employees and employers that lead to communication gaps. Most of the workforce belonged from rural areas due to which were emotionally down (Eccles, Serafeim & Cheng 2013). The employees were not given times to talk to other employees, as the company only focused to work. The workers were often abused and humiliated at work for their mistakes. 4- Esteem needs The esteem needs are important to encourage employees to work. The employees at Foxconn were not appreciated for their extra efforts and over time due to which they were discouraged. 5- Self Actualization need The employees at ABC Company were compensated with monetary rewards. However, the employee’s efforts were not appreciated or acknowledged. In addition, discriminatory practices within the organization created a great gap and made them feel inferior. It adversely affected their esteem and self-motivation to persuade their careers in the organizations (Dransfield 2010). It never let them develop self-actualization, that is, to develop self-potential to grow in the field. It can be seen that the company has discriminatory behaviour for the employees belong from rural areas and less education. In addition, the company did not focus on training and development of its employee that would overcome the gap among its employees. Leadership style Leadership Style of the organization can be defined as the way and approaches that the management of the organization incorporates to direct implement plans and motivate its employee (Coplan, Hikino & Lincoln 2010). There are several type of leadership style that the organization adopts according to external factors, nature and internal factors (Greece 2011). ABC Company has military leadership styles due to which the employees at ABC Company had to encounter severe difficulty and obstacles (Coplan, Hikino & Lincoln 2010). Jenning (2014) in his research states that a supportive working environment is essential for the workers of manufacturing organization. ABC Company had strict rules at the workplaces (Jenning, 2014). The schedule of the workers was extremely tough due to which they had to work more than 12 hours in a day. In addition, the wages of the workers were low and the workers that were not qualified or educated they had no option but to be degraded in the organization. The employees worked like machines and had strict rules, for example, employees at ABC Company did not sufficient time to rest or leave their duty for the washroom until the manager did not find the replacement instead of that particular worker. In addition, the workers were not allowed to speak much with the workers; they were only allowed to respond them with yes or ok. The workers at the manufacturing plant belonged from rural areas where they were treated with low status. It shall be noted that the organization did not fulfil the necessities of its employees due to which they lacked motivation. Incentives The wages of the workers at ABC Company were low that adversely affected motivation level of its employee. According to Snell (2012) incentives and effective compensation packages provide job satisfaction and commitment to employees. Therefore, the individuals working at ABC should be provided incentives according to the performance of the individual rather than just focusing on monetary aspects of the organization. Hence, incentives in the form of praise, promotion or recognition (intrinsic or extrinsic awards) are essential to motivate staff to work effectively in the organization. Human Relations theory and Neo-Human Relations Theory provide an understanding of relationship of motivation and leadership management. According to Human Relations Theory, emphasis on human behaviours within an organization motivates employees towards productivity. Likewise, Neo-Human Relations emphasizes leaders to consider needs and wants of the employees, which can provide job satisfaction to the employees. This particular theory basically focused on three main aspects namely, satisfaction, incentive and intrinsic awards. These needs and wants of the employees can be fulfilled if they are given good incentives, are praised (intrinsic award) and in return it increases job satisfaction (McKenna 2005). Communication Gap Stakeholder Communication Model One of the core issues prevailing in ABC Company was the lack of top-down flow of communication. Badenhorst-Weiss et al (2009) in the study highlights that the developing effective communication in the organization is one of the key element that develops effective relation between employers, managers and workers (Badenhorst-Weiss, Cant & Bervis 2009). In other words, effective communication can allow the employees to express their emotions and problems effectively and is a source of relief their stress (Badenhorst-Weiss, Cant & Bervis 2009). Because of strict disciplinary issues and military leadership at ABC Company the employees were not able to talk with each other. At ABC Company, the workers did not have sufficient time to talk with their co-workers even. Lack of communication creates gap between the supervisors and workers due to which the workers at ABC Company were not able to communicate their problems with a supervisor or else strict actions would have been taken (Bovey & Hede, 2001). One of the reasons communications was important to ABC Company was because most of the employees were young and has left their homes for better earning. Leaving the homes for young people if often depressive and not getting sufficient time to communication with their peers (Jenning, 2014). They were going through deprivation and distress. In addition, communication in the organization should be eliminated in any discriminatory words. It is essential for the managers to ensure that the communication does not cross the boundaries of ethics (Brester et al. 2008). It is the duty of the managers and supervisor to deal with the issue without the use of any harsh words. However, discriminatory, degradation and abusive languages were practices at ABC Company (Bovey & Hede, 2001). It did not only de-motivate employees to work but also casted a negative impression on their psychology (Greece 2011). The employees would have been discouraged in front of the whole crowd using abusive language that eventually put their moral down (Monsanto, 2014). In an organization where the communication is not effective, the employees have to face severe issues and creates dissatisfactory working environment. As a result, stress level increased and the number of suicides increased. Recommendations On the basis of the information analysed, it can be determined that the each of Comprehensive communication model can be one of the best models that can be applied to ABC Company to develop effective communication in the organization. The model emphasizes the development of communication flow within the organization as follow: • Formulation Formulation is the first stage that focuses on the designing of the communication plan through analysing the necessities of the organization. It shall allow ABC Company to analyse the core communication issues pertaining to the organization and develop a communication plan that shall suit the business operations (Monsanto 2014). • Implementation In this stage, the organization creates a plan and introduces to its employees and workers. The organization makes use of several mediums and channel to communicate the plan (Eccles, Serafeim & Cheng 2013). • Institutionalization The organization should evaluate the significance of the process that is required for the implementation of the communication plan (Coplan, Hikino & Lincoln 2010). In this stage, the management should be focused that the communication plan should be implemented in the entire organization. • Dissemination Dissemination is the final stage of the model that is also the most important. It is because in this stage the organization should monitor communication plan, through analysing strength and weakness of the plan (Dransfield 2010). The organization should be dedicated to continuous development in the plan (Draft & Marcic 2010). Recommendation Analysing the case of ABC Company, it recommended that the organization should increase the wages of its employees and reduces working hours that can allow the employees to take sufficient rest (Coplan, Hikino & Lincoln 2010). It is because usually the workers worked overtime because of the low wages. Hence, the increase in the wages can allow them to reduce their working hours and get sufficient salaries (Coplan, Hikino & Lincoln 2010). Phillips and Gully (2011) states that non-monetary incentives, such as motivation, encouragement, acknowledgement, etc. do not only boost up the moral of the employee, but also develops a stronger relation between employer and employee that eventually improves overall productivity of the organization (Phillips & Gully, 2011). On the bases of Maslow’s Hierarchy needs it is essential that ABC Company should initiate communication plans, activities and training programs that shall develop affection and strengthen the relationship between employees and employer. Developing friendly environment where the employees should be encouraged to participate in the activities and make friends can attain it. Teamwork is also an effective way to share the burden of individuals. However, ABC Company has several leisure activities at its production unit. ABC Company can encourage its employees to participate in the activities. Such initiatives can develop a sense of belongingness and morale of its employees. ABC Company should be more focused to incorporate Human Resource Management strategies to stabilize worker’s emotions (Greece 2011). The leadership style at ABC Company should be made flexible in order to overcome the work pressure and create friendly work environment. Discrimination should be effectively dealt, and strict policies should be implemented to overcome diversity issues prevailing in the organization (Badenhorst-Weiss, Cant & Bervis 2009). The managers and supervisors should encourage appropriate reward system and appreciation to the employee. It eventually shall contribute to stabilizing worker’s emotion and establish their career path for a better future (Maslow 1943). Retirement policies, provident funds, medical allowances should be provided to employees to reduce their uncertainty about their future. Action It is essential for the organization to ensure that all the decisions that the organization takes are acceptable for key stakeholders. For this reason, the action plan proposed for to overcome the issues prevailing in ABC Company can be overcome implying the following Human Resource strategies. The following is the action plan for ABC Company. • The Company will ensure that the recruitment process and selection of the candidates will be done according to the standardized global employment policies. It will allow the company to overcome the criticism of unethical practices and put the company out of legal consequences (Antonio Dávila 2012). In addition, the establishment of strong recruitment process would permit the company to ensure that the selections of each of the candidate in the organization meet the demands. For this reason, the selection and recruitment process of the organization will be done. • The Company will focus on external recruitment process and will make use of renowned employment agencies to carry out its recruitment processes. The establishing external recruitment process will allow the company to effectively manage its human resources and talented individuals. • The compensation and reward system of the organization should be replaced and strict measurement regarding the timings, working hour and performance appraisals of its employees should be developed (Brester et al. 2008). • The organization should focus on lean management practices also in its recruitment and Human resource it would allow the company to be cost effective. It can allow the company to reduce its costs and provide better compensation to its employee (Brester et al. 2008; (Antonio Dávila 2012). • The management structure will be made flexible through establishing healthy communication within the organization. The flow of communication within the organization should be improved, the communication between managers and employees will be developed strong through conducting different activities and different interactive means of communications. The use of the social forums, websites and software will be introduced in order to improve communication flow within the organization (Brester et al. 2008). • The training and development programs will be introduced, as well as workshops and different activities will be conducted in order to overcome the gap between the educated and uneducated employees. It will significantly allow the company to overcome the gap prevailing within the organization and improve its performance (Brester et al. 2008). • The work system within the organization will be replaced with the adaption of the new technologies and software that will improve the flow of information and communication within the organization. In addition, it will make the work process quick and easy and improve overall efficiency of the organization (Brester et al. 2008). • Benchmarking within the organization, specifically within the management level of the organization will be implemented. It is to ensure that management of the organization is meeting all the necessary criteria in its practices to keep employee motivated (Brester et al. 2008). • There should be a strong focus on the non-monetary benefits of its employee. Appraisals should be given to the employees to encourage employees to work (Brester et al. 2008). • The company should introduce pension plans, retirement plans, medical coverage and compensations for their families so that the employees feel more secure and dedicated to the employee (Antonio Dávila 2012). The compensation of long-term benefits plan will develop stronger relation with its employees, as feel them more secure working for ABC Company. It will eventually improve overall performance of its employees (Brester et al. 2008). Conclusion From the above information, it is evident that the organization behaviour plays a crucial role to develop organization’s culture. It does not only affect the productivity and profitability of the organization but also casts a positive impact on the organization, in the long run. It can be observed from the case of ABC Company that the leadership style was one of the major issues. Despite the fact that the organization yields enormous profits, but the employees of the organization were not satisfied due to which they committed suicide (Eccles, Serafeim & Cheng 2013). The reliance of the monetary benefits and neglecting non-monetary benefits could adversely impact the performance of its employee. It is essential for the organization to look into the both of necessary aspects of human to overcome these issues (Antonio Dávila 2012). It should also develop a framework of the ethical code of conduct that allows its leaders, top manager and workers to perform their duties within the defined framework (Anderson & Ackerman 2010). Before, the implementation of change it is essential that the organization should define it vision clear to its employees and should try to adopt change work culture in the organization, to ensure that its employees shall not resist the change in the future. Strengthen the communication can allow the organization to improve its performance, eliminate the doubts, fears and misunderstanding in the minds of its employees. It can strengthen the relationship between its employees and employer that can allow the organization to effectively accomplish (Antonio Dávila 2012). For this reason, it is essential that the organization should have changed its leadership styles, to overcome the issues that the organization has been facing through. If the organization made use of transactional leadership, it would have been effective for the organization to overcome the issue. As, the Maslow’s hierarchy theory suggests that the basic needs of the humans should be fulfilled by the organization. Hence, the organization should consider the basic needs of the employee, considering fair wages, incentives, leadership styles, safety and hygiene measures, etc. (Sperry 2013). List of References Anderson, D & Ackerman, L 2010, Beyond Change Management, John Wiley and Sons, New York. Antonio Dávila, MJEJJ-FM 2012, Performance Measurement and Management Control: Global Issues, Emerald Group of Publishing, Bingly. Badenhorst-Weiss, H, Cant, M & Bervis, T 2009, Business Management: A approach contemporary Approach, Juta and Company, New York. Brester, C, Carey, L, Grobler, P, Holland, P & Warnich., S 2008, Contemporary Issues in Human Resource Management; Gaining a competitive advantage, 3rd edn, Oxford University Press, Cape Town. 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