Strategic Human Resources Plan for Ford - Case Study Example

Running Head: Ford Strategic HR Plan Ford - Strategic Human Resources Plan and Section # of Table of Contents Executive Summary Owing to the advancement in technology, cut throat competition, globalization of businesses and rapid organizational changes the traditional role of the human resource department in an organization has changed over the years and it has become one of the most integral parts of the company. Like marketing or any corporate level strategy each company has to plan its own human resource strategy for profit and efficiency based on its culture, people, organization and the human resource system. To gain competitive advantage firms need high quality and flexibility. Strategy formulation is one of the ways of achieving this objective. It has the capability of transforming the organization. It is very important that the human resources of the business are aligning with the business model in order to support the organization's objectives (Baki, 2004). There are a variety of HR strategies that Ford can use; some of the firms use a combination of this in order to accomplish their goals. That strategy should be implemented which is likely to have a significant impact on the workers productivity and an impact on the human resource of the company. Introduction Ford is the world's fourth largest and one of the most successful automaker therefore it needs a strategy that will have a global impact and facilitate the entire organization across the globe to benefit from it. E-HR model is one of the ways of making use of the technology in order to control the human resource of the organization. This strategy can save costs and make the system a lot more efficient and enhance decision making in the organization. Its software and computer based tools can help the company in measurement, planning and controlling process. Suggested strategy and tactics for the function Ford is the world's fourth largest and one of the most successful automaker therefore it needs a strategy that will have a global impact and facilitate the entire organization across the globe to benefit from it. E-HR model is one of the ways of making use of the technology in order to control the human resource of the organization. This strategy can save costs and make the system a lot more efficient and enhance decision making in the organization. Its software and computer based tools can help the company in measurement, planning and controlling process (Daft, 2001). Improvement in the organizational performance Like technology has made work a more lot easier in various other fields it has also in HR management. With the inclusion of e-technology in Ford there would be less paper work involved as most of the work will be computerized. The company can benefit from the e-learning tools; there can be online tracking systems and assessment tests for the employees. Accurate data will be generated by the computer which can help in decision making for the senior management through the use of six sigma tools and the supply chain techniques and keep a track of the progress and need for improvement. This kind of information is helpful in maintaining employee retention, compensation and assessment decisions. if the implementation is effective then this strategy can have its long term impact on the HR because the use of technology has made work more efficient, fast and informed decisions are made closer to the customer. Larger data bases help to reduce the failure rate and increase the quality of decision making and alert the management in advance of any upcoming threats or problem so that timely action can be taken. Therefore the impact on this on Ford is going to be high (Hakala, 2008) . Key action items This strategy requires the implementation of technology and human resource information system in all the HR processes. Up to date technology and software are expensive and require training in order to be used effectively by the concerned employees. Moreover sometimes the back ups can also fail and lead to lost data and inability to draw conclusions but this is very rare and the over all benefits outweigh the cost of the strategy. Key metric measures The management of the company uses HR metrics for the evaluation of critical areas of the business for better results and productivity of the business. It gives a strategic role to the HR managers such as the balanced score card approach or the KPI (Key Performance Indicator). These metrics can play a productive role in all areas of the business like production, employee compensation programs, resource allocation and so on but it is only effective if each member at Ford knows that what is the measurement criteria and how they are rewarded for their work. For the E technology strategy the employees work can be measured on the basis of productivity. A set bench mark can be made and various outputs can be compared to that. Moreover the reward system should be aligning with the productions. This will lead to high level motivation and result at the same time (HR Campaign Foundation, 2008). In case of the failure to achieve the set targets and resulted outcome the software can give alerts and highlight the weaker areas of the entire process. The management can then take necessary actions to counter the weak areas. It also eases decision making by providing statistical facts and figures. Compensation plan to reduce turnover at Ford Among the many different functions of HR is the Employee turnover can be very frustrating and cost millions as it can hamper the growth and success of the company. It has been a persistent problem in the American industry. Ford has encountered the same problem in the year 1914 as well. Good management realizes its need; Ford can avoid the problem by adopting a multi-tier compensation plan which will retain the employees in the company. Ford will be using technology in the same way it will be using software to derive a compensation plan for the employees this will support performance management , help to record remuneration and allowances and value added data to managers to make pay decisions. Some of the incentives included in the plan will be increased pay, fringe benefits, and bonuses for the top performances. This will motivate the employees then the management can offer special benefits for employees who serve for a time period and as the time increases the benefits would increase. It is critical for attracting and retaining the best applicants for the job. This will be based on the level of productivity and performance of the employees. (Robbins & Judge, 2004). The Human Resources Budget Components of the HR budget The HR budget in the company is the operational budget. However, it needs special attention during the allocation and the creation of the budget. There are a lot of factors that can make up the total costs of the budget. These are like the cost of labor, their salaries, the retention programs, the compensation programs, the cost of hiring the employees and the cost of fringe benefits (Harvard Manage Mentor, 2009). Elements of the Budget Apart from that there are costs of other reimbursement offered to the employees such as day care for working moms, travel and training expenses of the employees, the cost of employing software technology in the business and its maintenance. If the company is getting outside consultation for resolving HR problems within the company then that can be costly too. These and many others are the components that make up the HR budget. Since the traditional role of the HR management has over the years so has the level of responsibility and the costs. The HR cost is no more only related to the hiring process of the employees in the organization, the scheduling and the advertising of the jobs. Now there is much more to it and company like Ford have separate allocated budget for all these activities so that work is planned beforehand. Cost reduction strategies and their impact on budget Today when the companies are competing for profits and market share, strategic planning along with cost reduction and enhanced productivity has become a key element for the survival and success. Ford is a manufacturing company therefore it can save up a lot of costs in areas such as raw material, here it can be the spare parts for the automobiles, opportunity buying, the annual rate contracts, the space management, automation, lightning, fuel and use of technology to save costs. Business will make cost reduction strategies based on the stages of the cost reduction. It can be short term, medium term or long term. A number of actions which are taken by the HR, there will be no hiring, only mandatory vacation is given to the employees. Employee's suggestions are take for the cost cut, Ford is a large company therefore it will not be possible to involve everyone, however the company can discuss with the employees representatives in this way they will also understand the situation and try to meet the efficiency and be motivated at the same time (Baki, 2004). The over time's will be cut, and a fall in salary increments will take place, there will be voluntary sabbaticals. But these are the measures which are taken depending on the prevailing conditions of the economy or it is slow for instance for a short term or a long term recession. In these times the company is bound to take such actions because the allocated budget for the departments is relatively less. Low HR budget means that the company either has to increase its efficiency in order to meet the standard and procedures otherwise it will have to cut down the costs. Ford is a global company and therefore has to make global business strategies. Ford adopted the Japanese approach of 'no defect' strategy. It established productivity goals and maintenance rule along with improved relations with the labor. Ford's goal has been to reduce costs through increased efficiency and producing high quality end products. Its vehicles are one of the best made in the world. Conclusion and Recommendations The human resource is the management of people in the company. It is an important part of the organization due to its contribution in the overall success and growth of the company. The labor is one of the most valuable assets therefore it is necessary that the human resource strategies should be drawn like other departments in the company. The strategies will differ depending on the individual characteristics and culture of the company. Ford has a history of being the best which reflects their successful strategic planning (Daft, 2001). There can be many strategies which Ford can use, however here we have covered E technology as a means of helping the human resource of the business for increased efficiency and productivity. It is a costly strategy but it has got tremendous efforts of organizing the people and measuring their output through the usage of performance indicators. This is not the only strategy there are others too which can have a global impact and high implications on Ford such as deploying performance cultural model where the corporate culture becomes the competitive advantage for the company, or a fact based business model where metrics are set for continuous improvement in every process. It is also uses supply chain and six sigma models like the E technology. In any strategy the implementation would be successful only if the employees know and understand that how the system works so that they given n their full potential to cross the bar of the metrics. This again is the role of the Human resource management and the leadership involved for the execution of the strategy. The budget is set each year for the company it includes different components and its amount indicates the different allocation to different areas by the HR management. The software for the compensation plan would further help the management to make informed decision making. Over all this strategy will enhance the working and functions of the HR and increase the level of employee performance (Robbins & Judge, 2004). References Baki, M. (2004, November). Automotive Industry Analysis - GM, DaimlerChrysler, Toyota, Ford, Honda. . Retrieved August 25, 2009, from www.academicmind.com Daft, R. (2001). Organization Theory and Design, 9th ed. Chicago: South-Western. Defining Goals: Preparing an Operating Budget. (n.d.). Retrieved August 23, 2009, from Harvard Manage Mentor: www.hmm10demo.lmmattersonline.com/courses/hmm10/budgeting/defining_goals.html Hakala, D. (2008, August 21). Promotion from within. Retrieved August 24, 2009, from HR World: http://www.hrworld.com/features/promoting-within-082108/ Human Rights Campaign Foundation: 2008 Corporate Equality Index. (2008). Retrieved August 24, 2009, from HRC: www.hrc.org/documents/HRC_Corporate_Equality_Index_2008.pdf Robbins, S. P., & Judge, T. A. (2004). Organizational Behavior. New York: Pearsons. Read More