Human resource management policies implemented by Watsons Engine Components - Assignment Example

Human Resources Contents Contents 2 Executive Summary 3 Introduction 3 Review of Issues 4 Review of Literature 7 Conclusion 12 Recommendations 13 References 14 Executive Summary This report deals with a thorough analysis on the human resource management policies implemented by Watsons Engine Components. There are different case related issues identified in this particular study. All these issues are closely related to degrading performance of the company in the industry. Strategic human resource management is essential to achieve competitive advantage. However there are factors which resist effective management of human resource. In this study, theoretical frameworks have also been incorporated to better analyze HRM policies and functions. A critical perspective for human resource management helps in determining the need for strategic HR planning to enhance company performance. The report will even highlight certain recommendations for Watsons at the end which can be implemented to reduce problems observed within the organization. Various approaches of human resource management are outlined in this study and each of them has a significant impact on workforce productivity. Introduction Human resource management is an organizational function structured to maximize employee performance. The major objective of this function is to meet objectives of employer. Management of human resource is related to developing systems and policies for effectively managing workforce in an organization. The units and departments of HR are responsible for employee recruitment, performance appraisal, training and development and even rewarding. HR is associated with industrial relations, or rather balancing governmental laws and collective bargaining regulations with organizational practices. In 20th century, human relations movement framed the concept of human resource management. Researchers worked on this concept and stated that strategic management of workforce can create competitive advantage for a business. During the initial phase the function was centered towards transactional work comprising of benefits administration and payroll. However globalization led to technological advancement and company consolidation, and this made human resource management focus on talent management, labor and industrial relations, acquisitions and mergers, inclusion and diversity. In Watsons Engine Components, the major problem witnessed by management was rapid turnover of managerial and technical staff. On the other hand, employees were not trained appropriately to perform multi-tasks. This resulted into some team members being over-burdened with work and some remained idle whole day. Watsons Engine Components were solely responsible for producing car engine parts. The intensely competitive marketplace demanded the firm to set high performance standards. In this study, strategic approach of people management will be analyzed to determine its impact on company’s performance. There are effective human resource management practices that can be adopted by a company to deliver desirable results. Review of Issues Watson Engine Components is situated in England and delivers car engine parts. The total employee base is around 200 encompassing technical staff, semi-skilled staff, managers and clerical workers. In recent times, the firm has been able to acquire desirable market share but with rapidly growing competition it is becoming difficult to sustain business operations. This competitive industry requires skilled workforce to deliver best results. Due to intense competition, order time tends to decrease and thus posing pressure on suppliers. The company possess workforce who are dedicated and passionate towards their work. It has not been observed that team members have any problem regarding business operations. Watson’s management was trying to identify the areas which need further improvement. Staff was happy with their work but in certain scenario they could not meet required standard for special production. There were qualified HR managers hired to analyze the faults in system. Late deliveries or degrading performance standard greatly affected Watson’s market share. Though management was happy with their staff but there was a need to focus on people issues. A report was framed to outline the HR practices followed in the organization. Firstly the issue was of rapid order processing. There was lack of flexibility on the shop floor which had an impact on staff’s ability to process order at a faster rate. Team members were observed to move rarely between finishing machines, assembly machines and press machines. On the other hand, demand at each stage varied as it was highly dependent on order stage. This led to some people being over-burdened with work while others were spending time in relaxation. The major impact of this unequal distribution or lack of flexibility was decreasing level of quality and time consuming work schedule. However as analyzed by the HR managers, there were problems in the recruitment process in Watson’s. Those people were generally recruited who were fit for a particular department and this reduced multi-tasking approach in the system. Team members often did not wish to move from one department to another due to lack of knowledge or skills, or because they were not motivated in monetary terms. Since incentives offered were less it resulted into employees being absent, approximately 9% average across the firm. The top management believed in closely controlling all departmental activities and this eliminated the scope of staff involvement. However this appeared to be a confusing aspect as shop floor staff were well aware about strategies taken by higher authority and its significant future impact. Another issue was rapidly increasing turnover rate of managerial and technical staff. The turnover rate has increased up to 40% and skill set possessed by these workers cannot be easily acquired from local market. Watsons Engine Components is not been able to retain employees since better terms and conditions are offered by competitors in the industry. In this company, issues related to workforce were handled by departmental managers. Top management was not responsible for any kind of human resource management activities. At the junior management level there was a personal officer appointed for pay administration and recruitment. There was no such performance and appraisal system and this made employees less motivated towards achieving set goals and objectives. A proper incentive structure was not present in the organization and so team members did not prefer to work more for achieving targets. On the other hand, performance management was only in context of maintaining discipline, when required standard was not met by employees. However the company was eager to train their workforce and allocate budget for arranging training programs both for departmental managers and employees. The major issue was an inappropriate recruitment and selection process. Word of mouth or employee reference were generally taken into consideration while recruitment individuals. An informal procedure of recruitment reduced the scope for identifying an individual’s talent. This can be stated as one of the reasons behind high rate of turnover. Since employees did not possess required skills and knowledge, they were often not comfortable in a specific business environment. On the other hand people management in an organization cannot be done through maintaining discipline in every department but it requires effective strategy formulation such as reward system, performance appraisal system, talent management, regular training and development session and decent incentive structure. These aspects were not present in the company and its impact was observed in overall organizational performance. Sense of ownership amongst team members is essential as it enhances work performance and develops competitive advantage for an organization through efficient workforce. Review of Literature As per Kersley, Alpin, Forth, Bryson, Bewley, Dix and Oxenbridge (2006), human resource management can be defined as a mechanism of developing and hiring employees. This process enables employees to become more valuable for an organization. There are various HR functions and it is not bounded to recruitment and selection process. Human resource management encompasses job analysis, recruiting for right job right people, arranging training and development programs, effectively managing salaries and wages, providing benefits and incentives, resolving disputes, evaluating performance and communicating with employees belonging to any department in an organization (Kersley, Alpin, Forth, Bryson, Bewley, Dix and Oxenbridge, 2006). According to Chan, Shaffer and Snape (2007), HR management possesses certain core qualities such as extensive industry knowledge, effective negotiation skills and leadership. Personnel management can be closely associated with human resource management. Functions of human resource management have been illustrated in figure1. Figure 1: HR Functions (Source: Boxall, Purcell and Wright, 2007) As per figure1, strategic HR management can be regarded as strategic planning to maintain competitiveness through HR technology and HR metrics. This form of planning helps to determine the type and number of employees needed in order to achieve common goals. In this function, right people are hired for right job, and simultaneously personnel needs are analyzed to develop innovative teams. The next function is equal employment opportunity where equal employment opportunity regulations and laws are taken into consideration in all forms of HR activities. Staffing is a major function in human resource management. It is associated with providing qualified individuals in order to fill vacant positions in an organization. Job analysis and job design are an integral part of staffing function. Job analysis describes the job nature and human requirement specifications like experience, knowledge and skills essential to execute allocated job. Job analysis results into job description which elaborates on activities and work duties of an employee. HR planning enables managers to have a clear picture regarding supply and demand of employees in nearby future. The selection procedure is solely dependent on skills and knowledge possessed by an applicant. Talent management and development is another HR function that basically starts with orientation of new recruits. In this process, an employee is given all possible information regarding company rules and regulations, working hours, job description, benefit and pay programs, etc. This helps an employee to adjust in a completely new workplace environment. Training and development programs are a part of this function and it is related to delivering required skills and expertise within workforce so as to meet set performance standards. In all companies there are two forms of training programs arranged for employees such as on-job training and off-the-job training (Chan, Shaffer and Snape, 2007). This is accompanied by career planning activities where competencies possessed by employees are analyzed and then their respective potential is judged for advancement and growth within the organization. As per Bhattacharya and Wright (2005), performance appraisal is another element in talent management mechanism. In this approach, team performance as well as individual performance is evaluated. This function even states that there is link between innovativeness of an individual with company’s profitability. Compensation management system is another HR function which deals with pay, benefits and incentives given to workforce for keeping them motivated while performing job. There are many pay programs such as promotion from team, incentive rewards, balancing individual and team rewards, recognition rewards, etc. Worker protection and risk management are an important HR function that deals with meeting legal requirements and being concerned towards health and safety aspect of workplace along with recovery planning and protection from disaster (Bhattacharya and Wright, 2005). HR policies even encompasses maintaining employee and labor relations, comprising of resolving disputes, negotiating regarding wages with union, resolving grievances and effectively maintaining service conditions. According to Mueller (2006), there are different approaches for people management but the major objective remains the same that is to develop a productive workforce. Often two-way communication framework is established within an organization so that managers and employees can communicate effectively. On the other hand, staff involvement is even facilitated in these approaches so as to ensure that employees are aligned with organizational goals and objectives. Leaders too need to adopt certain skills such as preventing workplace conflict by taking into account personal needs. There are certain perspectives related to people management approaches such as pluralist perspective, unitarist perspective and critical or radical perspective. In pluralist perspective it is assumed that there are different groups present in the society and each of them possesses specific beliefs and interests. Unitarist perspective is when all organizational members like owners, managers and workers have a common purpose. This helps to reduce workplace conflict as a common goal is set to be accomplished. Critical or radical perspective is associated with Marxist view of society (Mueller, 2006). This perspective displays the hidden reality of society and partiality at workplace is common in this approach. Harvard model of people management is generally adopted by many organizations and has been illustrated in figure2. Figure 2: Harvard model of HRM (Source: Boxall and Purcell, 2006) As stated by Mayo (2005), performance is a vital component in this approach as it describes strategic HR planning to be focused on achieving high performance standards. This model encompasses situational factors, stakeholder interests and long-term consequences to develop committed employee base. On the other hand, such efficient workforce gain competencies and work in collaboration with other team members to achieve common objectives. HR practices play a critical role in increasing worker’s competency and sustaining business operations in competitive environment. Productivity level of employees are dependent on wide range of HR practices such as training and development programs, performance appraisals, career succession planning, etc. All these practices are equally important since they are linked with motivational factor of individuals (Mayo, 2005). The personal needs of every employee need to be focused on so that they are able to closely associate themselves with mission and vision of an organization. Harrison (2005), in his studies stated there is another approach related to two types of fits in strategic human resource management. These fits are a pattern for deployment of human resource in order to achieve organizational goals and objectives. It has been elaborated in figure3. Figure 3: Two types of fits (Source: Armstrong, 2009) Horizontal fit and vertical fit are two different approaches that deal with human resource management. Vertical fit can be regarded as an alignment of strategic management process with HRM practices of a firm. Whereas, horizontal fit is congruence amongst widespread HRM practices and is productive during maximum utilization of resources. However this form of fits is essential for achieving required performance of firm as stated in figure4. Figure 4: Determinants of both fits (Source: Rao, 2004) On the contrary, these approaches or models in some real world scenario is not applicable as companies need to then give more attention on increasing revenue margins than retain employees. In many situations, even best HRM practices in a firm result into high turnover rate since employees discover best opportunities in a different field (Harrison, 2005). However effective HRM practices encompass creating a pool of talented individuals, retaining them, motivating them and imparting required skills or expertise through training and development sessions. Conclusion As per the study, strategic management of human resource is necessary to increase overall performance of an organization. There are different approaches that are generally incorporated by a firm to manage their workforce effectively. Watsons Engine Components was witnessing a major problem in its HRM practices. There was a rapid increase in turnover rate since employees were not motivated by any form of incentive structure. On the other hand, team members were even not actively involved in the decision making process. In overall context, multi-tasking ability was not present within workforce which resulted into delays in order processing. It can even be stated that improper recruitment and selection procedure resulted into a less competent employee base. Human resource management is not limited to designing recruitment program but comprises of many functions. The current scenario at workplace along with future outcome needs to be taken into consideration for developing effective HR policies. Performance management is a key tool for enhancing and sustaining exceptional qualities possessed by an individual. Recommendations On basis of the analysis it is evident that HRM policies at Watsons Engine Components need to be restructured. It can be done through implementing a proper incentive structure where employees would be paid a reasonable amount for multi-tasking at crisis situation. Incentives or rewards will help the company to retain its skilled workers. The pay structure of the firm can even be reframed so as to ensure employees that their personal needs are taken into consideration. Performance management system needs to be officially implemented within the organization. This would serve a two-fold purpose, on one end it will help in identifying those team members who are outperforming and on other end those individuals can also be focused on who are not being able to meet required performance standards. This kind of system would even provide clarity to employees in terms of their career path within the organization. However the major recommended change should be in their recruitment process where individuals need to be hired based on their skills or talent rather than employee referrals. References Armstrong, M., 2009. Armstrong’s Handbook of Human Resource Management Practice, 11th Edition. London: Kogan Page. Bhattacharya, M., and Wright, P.M., 2005. Managing human assets in an uncertain world: applying real options theory to HRM. International Journal of Human Resource Management, 16(6), pp. 929-948. Boxall, P., and Purcell, J., 2006. Strategy and Human Resource Management. Basingstoke: Palgrave Macmillan. Boxall, P., Purcell, J., and Wright, P., 2007. The Oxford Handbook of Human Resource Management. Oxford: Oxford University. Chan, L.L.M., Shaffer, M.A., and Snape, E., 2007. In search of sustained competitive advantage: The impact of organisational culture, competitive strategy and human resource management practices on firm performance. International Journal of Human Resource Management, 17(1), pp. 25-67. Harrison, R., 2005. Learning and Development. London: CIPD. Kersley, B., Alpin, C., Forth, J., Bryson, A., Bewley, H., Dix, G. and Oxenbridge, S., 2006. Inside the Workplace: Findings from the 2004 Workplace Employment Relations Survey. Abingdon: Routledge. Mayo, A., 2005. The Human Value of the Enterprise: Valuing people as assets. London: Nicholas Brealey. Mueller, F., 2006. Human resources as strategic assets: an evolutionary resource-based theory. Journal of Management Studies, 35(6), pp. 757–85. Rao, T.V., 2004. Performance Management and Appraisal Systems—HR Tools for Global Competitiveness. London: Sage Publications. Read More