Problems That Affect Hartley Electronic Ltd - Case Study Example

Your name:   Course name:         Professors’ name: Date: Content 1. Introduction………………………………………………………………………..Pg.3 2. Salaries and wages…………………………………………………………………Pg.3 3. Trade Unions……………………………………………………………………….Pg.4 4. Low Morale…………………………………………………………………………Pg.5 5. Training and Development………………………………………………………….Pg.6 6. Recommendation………………………………..………………………………….Pg.6 7. conclusion…………………………………………………………………………Pg.8 8. References…………………………………………………………………………..Pg.9 Introduction Human Resources (HR) function in any company deals with many ethical issues or challenges; being the department in a company that deals directly with employees in the company (Barney, 1986), Human resources includes a lot of issues or pitfalls that can damage company’s financial sustainability or reputation if not handled rightly (Barney, 1991). Thus, it is important for any business owner or company to understand human resource problems, whether in a multinational powerhouse or a local startup company (Miles & Snow, 1984). In the period of liberalization and globalization, employees are becoming competitive advantage for businesses (Rumelt, 2005). A business may be managed by mediocre but competent employees can be propelled to greater heights (Rumelt, 2005). On the other hand, bad workers can cause a successful business to collapse (Danley, 2000). In a competitive business environment, keeping good workers and developing employees’ loyalty in a company has become a continuing challenge and increasingly important (Koch, and Greg, 1997). With tight labour market, companies need a strategy to retain their crucial skilled employees (Danley, 2000). Businesses need to retain their employees, businesses must therefore allocate sufficient resource to keep workers satisfied and motivated (Danley, 2000). This report is divided into two parts: the first part will discuss main problems that affect Hartley Electronic Ltd, Human Resources (HR). Second part of the report will provide recommendation on whether the company should adopt a ‘best practice’, ‘best fit’ or resource-based view of the firm model of HR strategy to achieve a long term solution to these HR problems. Salaries and wages Salaries and wages affect levels of employee commitment to the company. Pay affects the way employees work-how much and how well. A large part of the compensation that employee receive in a company is monetary. Although HR managers are expected to save money and distribute it wisely, many employees in Hartley Electronic Ltd feel they should be paid more for what they do for the company. For instance, salary structure at the company is distorted; some employees are doing identical jobs but their pay is different between them amounting to some 2000 pounds to 3,000 pounds per year. Regardless, salary discrepancies among the employees at the company can be de-motivating for those employees who are paid less. The prospect of getting higher salaries elsewhere may contribute to higher turnover among the skilled workers at the company (Rumelt, 2005). Although money is not the root cause of turnover in most companies, some experts believe that high turnover may persist in a company because it may create an atmosphere in which workers look for reasons to leave. Trade Unions Trade union is another challenge facing Hartley Electronic Ltd, Human Resources (HR). In our case, trade union has been very ruthless when it comes to employees’ negotiation and this includes the workers to strike (Hirsch, 2004). Unionized labor has increased the salaries or wages across the board to the company’s employees (Koch, and Greg, 1997). For example, production employees’ salaries have been capped at how much the company can compensate the employee for their labor. This has force the HR to give underperforming employees wages that are above the market rate for their production levels and skills (Koch, and Greg, 1997). Collective bargaining among the unionized employees has been used to create a heavily-favorable worker pension plans and other company’s benefits (Koch, and Greg, 1997). These benefits as a result of collective bargaining will increase the cost per worker that the company pay and add higher-than-average compensation rates compared to the open market (Hirsch, 2004). The trade union may also increase benefit plans when renegotiating bargaining agreements, and this will continually raise the company’s cost (Koch, and Greg, 1997). Low Morale Employees’ morale is also another problem that affects Hartley Electronic Ltd, Human Resources (HR). Moral can be the factor that drives a company forward or factor that feeds the fires of employee absenteeism, poor performance and discontent (Gallup Oganization, 2008). Low morale has a high price tag for a company (CCH, 2007). The Gallup Organization estimates that there are 10 million actively disengaged workers costing the U.K economy as much as 150 billion pounds annually in lost productivity including illness, absenteeism, and other problems that result when workers are sad or unhappy at workplace (Gallup Oganization, 2008). The country’s largest employers estimate that unscheduled absenteeism costs their company more than 750,000 annually in direct payroll costs, and even more when lost revenue, lower productivity (CCH, 2007). In the case study, there is low morale among employees at the company following the recent round of redundancies (Gallup Oganization, 2008). Employees at the company have been found to be vulnerable and fearing that they likely to lose their jobs in the wake of the macro-economic situation (CCH, 2007). Due to low morale at the company, the HR face the following: increased conflicts in the work environment, decreased productivity, increased employee turnover rates and costs associated with replacing staff, and increased rates of absenteeism and associated costs (Gallup Oganization, 2008). Training and Development Worker’s training enhances worker’s understanding of work-related duties. Many companies have become successful because of their workers. Employees often are responsible for the work to be done in a company, as well as customer or client satisfaction and the quality of products produced in the company. A lack of training among the employees can make the difference between ultimate failures, and maintain success. In addition, when employees at the lower levels of the company are not given proper training, this will become a challenge because the company will not be in a position to find competent employees to hire for positions higher up or find competent employee (Powell, Thomas & McGee, 2004). Recommendation A company is not restrained only by its imagination. A company may be limited by its own capability, by competition, by technology, and by the demands of its clients. If a company stubbornly fails to conform to the vision of their senior manager, we should not be surprised that organizational transformation has become one of the most popular branches of consultancy (Dierickx and Cool, 2000). According to problems faced by Hartley Electronic Ltd, Human Resources (HR), the best strategy that can be adopted by the company is ‘best practice’ strategy. ‘Best practice’ strategy is used to maintain quality as an alternative to mandatory standard; this HR strategy can be based on benchmarking or self-assessment (Powell, Thomas & McGee, 2004). In other words, it means a company finding the best ways of working to achieve its business objectives. As compared to best fit strategy which focuses on the importance of making sure company strategies are suitable to the different workplace circumstances of the entire company, together with operational processes, culture as well as external environment (Bogan and English, 1994). And resource-based view strategy which is based on a belief that it is the range of resources in a company that produces its unique character and creates a competitive advantage (Powell, Thomas & McGee, 2004). As compared to “best fit” strategy and “resource base” strategy, the theory of best practice approach is based on a principle that best HR’s practices and when these practices are applied in the workplace will help to superior company performance. A successful company is the one that attract, motivate, develop and retain the best employees. A company will be able to get most benefits on its employees if it has key strategies for doing so. These strategies may include: (1). communicating with employees; (2). setting targets and rewarding achievement; (3). offering employee development and training; and (4). involving workers in the development of the business (Teece, Pisano, & Shuen, 2002). In company, workers are always in a position to see when market demands are changing or where improvements to working methods of a company can be made. In our case, customer service employees in Hartley Electronic Ltd are in a position to know the common sources of complaints, while production staff will be aware of inefficient production processes (Teece, Pisano, & Shuen, 2002). Therefore, Hartley Electronic Ltd, Human Resources (HR) can used the detailed information by involving staffs in developing improved ways of working at the company. This likely to gain employee trust, as well as make employees feel valued, commitment and buy-in when implementing changes (Bogan and English, 1994). Fostering a culture of creativity and innovation in the business can help the company to be ahead of its competitors by ensuring that the company’s products remain up-to-date an in line with the customer’s expectations or needs (Teece, Pisano, & Shuen, 2002). Best practice strategy will help the company to be able to react to the changing markets, customer needs, and be able to see changes before other competitors do (Drucker, 2000). Best practice in innovation will involves looking at the company’s products, procedures and processes to see what the company need to improve in order to keep them at the cutting edge. Innovative company often has strong, well-trained and motivated employees, and inspirational leaders and management (Barney, 1991). Conclusion The ability for human resources managers to balance the tension in a company lies in the development of capabilities to integrate and create practices across the workplace function. Such capabilities allow firms to constantly renew their HR practices in a way that allows them to respond to multiple external pressures while being coordinated and integrated to ensure that these practices drive the firm’s sustainable competitive advantage. References Bogan, C.E. and English, M.J. ( 1994). Benchmarking for best practices: winning through innovative adaptation. McGraw-Hill, New York Barney, J. B. 1986. Strategic factor markets: Expectations, luck, and business strategy. Management Science, 32(10): 1231-1242. Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1): 99-121. CCH. (2007). Unscheduled Absence Survey [Poor Morale Leads Up to Even More No-Shows]. (2007, Summer). CCH Human Resources Management Ideas & Trends. Retrieved April 2, 2008, from www.CCH.com Web site: http:/​/​www.CCH.com Dierickx, I., & Cool, K. (2000). Asset stock accumulation and sustainability of competitive advantage. Management Science, 35(12): 1504-1512. Drucker, P. F. (2000). Managing for business effectiveness., Harvard Business Review, Vol. 41: 53: Harvard Business School Publication Corp. Hirsch, Barry T. (2004). What Do Unions Do for Economic Performance. Journal of Labor Research, 415-455. Koch, Marianne J. and Greg Hundley. (1997). The Effects of Unionism on Recruitment and Selection Methods. Industrial Relations 36: 349-70. Gallup Oganization. Health Care Practice. Retrieved April 4, 2008, from Gallup Organization, http:/​/​www.galluporganization.com Powell, T. H., Thomas, H., & McGee, J. (2004). Dynamic knowledge creation. Paper presented at the Dynamics of Strategy, University of Surrey. Rumelt, R. P. (2005). How much does industry matter? Strategic Management Journal, 12(3): 167-185. Teece, D. J., Pisano, G., & Shuen, A. (2002). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7): 509-534. Read More