HR Audit of Jacob & Sons Bakery - Case Study Example

INTRODUCTION TO THE ORGANIZATION Jacob & Sons Bakery is also called as J Co bakery. J Co Bakery is a very leading bakery with four branches and twokiosks in the town. The bakery is very famous for its pastries and desserts and it is in the business for a long time. The company currently enjoys a good return on its investment and is planning to expand in the coming years. The company now employs 55 workers and is planning to conduct a human resource audit which covers the internal environment and the adaptability of the organization to the external. To conduct strategic human resource audit, first the objectives of the audit have to be fixed. For J Co bakery the purpose of the audit is mentioned as follows: 1. To identify the strengths of the company with respect to the human resources 2. To identify the areas of improvement in the area of human resource development 3. To identify the opportunities and threats that will arise in future 4. To analyze whether the organization is capable of exploiting the opportunities and overcome the threats from the external environment. The following is an audit report for J Co Bakery. MISSION, VISION AND OBJECTIVES As mentioned by Lado and Wilson (1994), “Although traditional sources of competitive advantage such as the natural resources, technology, economies of scale and so forth create value, the resource based argument is that these resources are increasingly easy to imitate, especially in comparison to a complex social structure such as an employment system. Hence, human resource strategies may be an especially important source of sustained competitive advantage”. The mission of the organization is to “provide quality bakery products at competitive prices”. The quality consciousness in reflected in the policies of the management in the production, marketing and customer service. But on the other hand the management should also try to evolve new methods to evaluate the cost of various operations more stringent. The assurance of quality should not be increasing the cost and this will tend to push the prices up and high prices will not help the bakery to achieve its mission. The vision of the bakery is “To be a leading bakery in major cities of the country”. The vision of J Co is not clear and it is very ambiguous in its definition of the exact terms. This kind of vision statement will not help in aligning the organization to wards achievement of goals. Based on the mission and vision, the management of the company has formulated the objectives. The annual objective of J Co bakery is to increase the sales by 10% in the year 2008. To achieve the target growth first an analysis of the planning activities and organizing activities is necessary. The audit of the plans show that J Co has planning done extensively for increasing the sales. But it is lagging behind in its lack of planning in the area of projection of resources required to achieve the sales. The plans do not allocate budget effectively for each retail outlet but only a general allotment of money on a whole. Hence, the personnel in each outlet do not have a clear picture about the allotment of money to carryout their operations and at the end of the year, it will also be difficult for the management to control the personnel. SWOT ANALYSIS A detailed SWOT analysis of J Co Bakery reveals that its strengths lie in the product range and its taste. Customer loyalty is high. Another major strength is the location of the retail outlets. Competitive pricing is another added advantage. Yet another key strength of the company is its strong financial position. The company has reaped high profits continuously over a period of time. The weakness of the company lie in its weak orientation of the human resource towards the objectives of the organization. The employees are not aware of the significance of their role in delivering the product to the customer. Also, the budgeting of resources is ambiguous. Another major weakness noticed during the audit is that the objective that has to be achieved is not translated into operational plans at the retail outlet level and at the kiosks. The personnel are not keen towards the objective stated by the management at the high level. Another weakness is that the company has made only little effort to modernize itself. The company has become lethargic in its response to the external environment. J Co has new opportunity in the town the coming year because, the town has announced plans for developing the suburbs and J Co can rush and find strategic locations in order to have the presence in the new housing settlements. In the larger scope, the bakery will have new opportunities in major cities because of the brand image and current success. It should try to evaluate the market conditions in the neighboring cities and can open retail outlets or can consider franchising. When it comes to the identification of the threats to the organization, J Co faces serious competition in the future. Competitors have identified the strengths of J Co and have tried to imitate the taste and the variety offered in the Menu. Also there are other small startups who are offering the same kind of products at a much cheaper rate. Their limited number of workers and lesser operating costs allows them to sell at a cheaper price. Hence, J Co has to seriously appraise itself about how fit it is to tackle these challenges. INTERNAL AND EXTERNAL ENVIRONMENTS The bakery is tuned in more towards its internal environment, rather the external environment. The changes in the external environment are hardly reported by the personnel to the management and the management also does not encourage the front lien personnel to provide information about the customer feedback. Like mentioned earlier, the company can enlighten the employees about their crucial role in the growth of the company. the company has very little market intelligence system. Information does not flow properly in the organization. The information that is held by the personnel does not reach the management and vice versa. This kind of stagnation of information decrease the effectiveness of the plans and budgets. Plans will be prepared with the information available to the management and most of the time the plans made without sharing of information will not be successful. Hence, the plans made will not create the desired results but it will only result in waste of managerial time and effort. The plans that are created by the top management without sharing of information from the lower levels of the organization will not make the company focused toward the industry dynamics. The competitive forces in the industry have to be understood before creating strategies for the future. Hence, the management has to improve its market intelligence systems. Another aspect is that the internal environment in the organization is not very congenial for change. The organization culture and the general climate is too placid for change. For positive change to have staying power, for it to last beyond the lifetime of the leader, people though out the organizations must have developed the capability to lead the vision themselves, to institute positive change and to carry on under their own initiative.(David Whetton). But at J Co the vision of the company is different from the operations of the personnel. The personnel are not aware of the vision of the company and their role in leading their organization towards it. The organization has the human resource strategy based on the best fit to the situation. The human resource strategy is not based on any scientific analysis. The strategy is formulated in a haphazard manner and based on contingency approach. There is no clear vision and hence the organization is not proactive to the environment but reacts to it when it faces a problem. At J Co the approach towards human resource does not show any consistency. There are huge gaps in the job description and the actual job. The employees do not have clear definition of their roles and are not truly focused. The employees are carrying out the activities which are delegated to them without understanding the importance of the job. The employees are not motivated to try new approaches in their jobs. They re reluctant to try new ways of doing things because there is no need for them to do so. The motivation of the employees is average to evolve and grow further. This has set into an organization culture where people become docile to change. AREAS FORIMPROVEMENT J Co has to think about the way in which it is going to react to the changes in the environment. The question is whether j Co is going to indulge itself in the current status and deteriorate in future or is it going to upgrade itself now so that it becomes the industry leader in future? The management has to plan about their operation in future. First it has to formulate a new vision statement such as “to have continuous growth and emerge as a learning organization”. When we have the focus towards continuous growth, the organization automatically has the need to identify new avenues for growth. Continuous growth here doesn’t only mean growth in sales but also in other aspects of management such as human resource practices. Like mentioned earlier, human resource is the one resource the bakery has to tackle the competition and grow stronger. Hence, the challenge for the company is to devise policies to include the personnel at all levels in decision making. Also the employees should be empowered to take the lead in their own job spheres. Distributed leadership is another strong concept in management leadership, where the members in the organization share the responsibility of leading the organization. This approach can be very helpful for J Co. J Co should invest time and money to train and develop it employees so that they are more motivated to change. The organization depends on the personnel for growth, so if the employees do not know about their role in the overall business process, it is a big inefficiency which has to be corrected. The employees should be oriented towards the need for change and growth. The company has to insist the need for change in all aspects of its operations and should devise incentives plans for employees to motivate the employees to make them take an active role in the management process. READINGS 1. Cohen, S. G and Bailey, D. E, What makes teams work: Group effectiveness research from the shop floor to the executive suite, Journal of Management, 23, 1997, 239 -90 2. Day, G, & Schoemaker, J, Scanning the periphery, Harvard Business Review, 83(11), 2005 : 135-148. 3. Dubrin, A. J, Contemporary Applied Management, Plano, TX: Business Publications, Inc, 1985 4. Hackman, J. R, Oldham, G. R, Janson, R and Purdy, K, A new strategy for job enrichment, California Management Review, 17, 1995, 57 – 71 5. Huselid, M, The impact of human resource management practices on turnover, productivity, and corporate financial performance, Academy of Management Journal, vol.28, no.3, 1995 pp 635-672. 6. Kaplan, R and Norton D, ‘Having trouble with your strategy, then map it”, Harvard Business Review, vol. 78, no. 5, 2000: 167-176. 7. Lado, A. A and Wilson, M.C, Human resource Systems and sustained competitive advantage: A competency – based perspective, Academy Of Management Review, 19, 1994 : 699 – 727 8. McCauley, L, Next Stop – the 21st Century, Fast Company, 27, 1999, 108 – 12 9. Murlis, J and Wright, A, Rewarding The Performance Of The Eager Beaver, Personnel Management, 17, 1985, 28 - 31 10. Organ, D and Greene, C. N, Role ambiguity, locus of control and work satisfaction, Journal of Applied Psychology, 59, 1974, 101 -12 11. Oberstein, S, A strategic human resource audit, in The 1999 Annual: vol 2, Consulting, Jossey Bass/Pfeffer, San Francisco, 1999, 142-162. 12. Pelz, D and Andrews, F, Scientists In Organizations, New York: Wiley, 1966 13. Sheehan, C, Current developments in HRM in Australian workplaces, Asia Pacific Journal Of Human Resource, vol.44, no.2, 2006 :132-152. 14. Steers, R.M, Porter, L. W and Bigley, G. A, Motivation And Leadership At Work, New York: McGraw Hill, 1996 15. Ulrich, D Measuring human resource: An overview of practice and a prescription for results. Human Resource Management, 36(3), 1997: 303-320. 16. Whetton, A David and Cameron, S. Kim, Developing Management Skills, New Jersey: Prentice Hall, 2005 17. Yueng, A, and Berman, B, Adding value through human resources: Reorienting human resource management to drive business performance, Human Resource Management, 36(3), 1997: 321-335. Read More