How Will Business Restructuring Affect Employees - Term Paper Example

Executive Summary SportsCo PLC, dealers in sports, leisurewear and equipment is expanding its outlets by establishing large sports warehouse stores with adjacent health and fitness studios on edge-of-town retail parks in the UK. However, this expansion will adversely affect the staff in most of the high street outlets now closed that have been struggling to maintain their profitability; hence, some of our employees will have to be retrenched. This report is therefore meant at outlining the strategic plan for SportsCo in regards to this human resources management (HRM) developments including recruitment, training, employee relations and redundancy strategies. Table of Contents Executive Summary Introduction 1.0 Aim/Objectives 2.0 The Role of Recruitment and Retention in Human Resources Management 3.0 Appraisals 3.1 Best Management Practices 3.2 Strategic Human Resource Development (SHRD) Concepts 3.3 Training Strategies 3.4 Hard and Soft Approaches to Human Resources Management 4.0 S.M.A.R.T.E.R Objectives 5.0 Leadership in HRM Approaches 6.0 Role of Employee Motivation 7.0 Retrenchment and Redeployment 8.0 The Phased Approach 8.1 Clean-Break Approach 8.2 SportsCo’s Strategy 8.3 Conclusion 9.0 References 10 1.0 Introduction The importance of the human resource management (HRM) function in modern organisations has now gained prominence as firms take cognizance of the significance of employees as the major drivers in corporation’s growth. This is true for both small and large enterprises that adopt flexible less rigid organisational structures. As prominent management analysts Jack & Susan Welch assert the HRM function should be allotted a ‘position of power and primacy’ in an organisation. HRM strategies should encompass a systematic, non-bureaucratic appraisal approach that can be scrutinized for its veracity; efficiency, methods of remuneration, recognition, and training that inspires and therefore retains employees; involve the line staff in decision-making aspects; and design a level organisation chart that has logical reporting links and duties (Welch and Welch, 2008). 2.0 Aim/Objectives At SportsCo, our strategic plan will encompass a review of the staffing methods including recruitment, remuneration, training and work schedules to ensure a more competent workforce and better retention. Schuler and Jackson (2000) assert that the impact of HRM is primarily exhibited in the ‘formulation and implementation of strategy’. This include the planned vision or deciding the business of the firm, objectives, schemes, development and execution, appraising, modifying, and refocusing on the upcoming projects. During the SportsCo implementation stage, the classification of strategic business issues (SBIs) and the setting of strategic business objectives (SBOs) will be established that will incorporate measurable and achievable set targets. 3.0 The Role of Recruitment and Retention in Human Resources Management To further guard against frequent and undue high turnovers at SportsCo, there is a need to apply efficient recruitment strategies for suitable personnel with adequate capacity and value to generate affirmative effect on the organisation’s performance. The criterion and staffing approach employed is therefore critical in securing the retention of workers. The hiring process should follow a five-step method as illustrated by the U.S. Department of Transport: recruitment, selection, hiring, training and retention [See Figure 1 below]. Figure 1 Source: Adapted from U.S. Department of Transportation/Reinach (2007) The efficiency of the staffing procedures is increasingly being evaluated due to the high expenditure accrued in acquiring the right employees who in turn must stay for long haul to justify the costing (Harrington, 1997). In this regard, SportsCo will seek employees who are well trained and educated, as potential candidates must have technical understanding or qualifications that will enable the professional discharge of duties. Those candidates who are technically challenged by assignments are quite likely quit from duties due to their inability to perform. SportsCo will undertake an exhaustive enrolment vetting exercise, which has been cited as the primary cause of persistence of high staff turnovers in organisations (Goffee et al. 2007). Several assessment tests to establish whether the chosen worker has the requisite flexibility techniques critical will be performed including their ability to quickly make critical decisions or reconcile problems from various impediment or obstruction in varied arrangement and perspectives. 3.1 Appraisals Fresh employees will be appraised through challenging tasks that necessitate acute acumen and aptitude, but which establish their shrewdness and insight to their supervisors. Another compliance examination is their facility to distinguish and accurately assess potential developments in the assigned sectors or postings (CIPD, 2009). Unorthodox recruitment stratagems that utilize unusual interview techniques instead of the accepted panel procedures in boardrooms will be applied. This encompasses merging the conventional prescribed interrogation procedures with other spontaneous interviews that may entail engaging the prospective worker in an impromptu environment e.g. a team game. A further investigation can require the recruiter to take the prospective employee on a road test drive that indicates the candidate’s response under stress condition, assertiveness and frustration among other attributes. Holoviak (2004) stress that, ‘chances are that their performance on the … field will reflect their performance in the office’ (pg. 31-32). 3.2 Best Management Practices At SportsCo, the management has acknowledged the significance of having quality excellent service in conjunction with corresponding amenities and assets is what differentiates one class of a health and fitness studios from the others. This in effect mean efficiency in service delivery must be effectively demonstrated through quality services from employees, excellent facilities and menu that are appreciated by the customers. It is therefore imperative for the management to incorporate the best management practices at SportsCo. A strategy that integrates both external and internal stakeholders exemplified by total quality management (TQM) is desirable to enhance the SportsCo’s goals. TQM concept encompasses quality centred approach involving the entire organisation’s staff and seeking the long-term success through client approval and settlement to all members of the business and community (Accel-team.com, 2010). Management within the hospitality industry requires astute yield or revenue management due to the nature of fluctuating seasonal client streams. This ensures that the management is able to properly forecast the high and low seasons hence allocate resources including staffing accordingly. 3.3 Strategic Human Resource Development (SHRD) Concepts The conventional altitude that people are a variable cost has now changed as strategic human resource development (SHRD) concepts ascertain that to gain a competitive advantage in modern industry, a well educated, skilled, inspired and dedicated workforce is needed at every point of the organisation. At SportsCo, HRSD will be linked to service management as the management considers the fulfilment of our customers’ needs as our ultimate aim and reason for existence. Maxwell et al. (2004) cite the five major attributes of service management ascribed to HRSD that includes, general organizational viewpoint, client driven, holistic standpoint, excellence as a fundamental element of service administration, and internal growth of employees in alignment to the organisational goals. Garavan (1991) identified nine key characteristics of SHRD later redefined by McCracken and Wallace (2000b) [see Table: I] Table 1 3.4 Training Strategies Hansson (2007) argues that a company’s investment in the training of their personnel is mostly dependent on past economic benefits or profitability. This has been aptly demonstrated at SportsCo as the intensive induction programs have made our service delivery generate the firm a competitive advantage over our rivals. At SportsCo, we intend to expand the training of the staff to achieve even higher returns. Firms that have educated their employees have realised more tangible benefits hence tend to intensify training if it results in more enhanced performance. Hansson therefore proposes that the amount invested in training has a linkage with the firm performance or profitability. According to the Society for Human Resource Management (SHRM), organizational and employee development within an organization, merge the objectives of both the individual employee and the firm’s vision effectively. The career management of employees converge to form an optimum stage whereby the firm and employee needs become compatible (SHRM, 2009). Figure 2 www.shrm.org/ The conventional view of training in classroom has expanded to include contemporary modules like e-learning, Web 2.0 and social networking tools hence constant or regular training is sustained without reverting to formal classrooms as new generations of employees and customers become prevalent (Rush, 2010). 4.0 Hard and Soft Approaches to Human Resources Management Developing from the human resources approach of management, HRM models now can be classified in terms of ‘hard’ or ‘soft’ approaches (CU-Boulder, 2008). In the ‘hard’ approach, HRM is viewed in terms of a firm’s drive to strategically manage and control her personnel with specific objective of realising the company’s goals. Conversely, in the ‘soft’ approach, HRM is strategically organised around the firm’s personnel hence consider more about their welfare and dedication to the firm (Lingham, 2008). Conversely, Stern (2001) proposes maintaining the traditional rigid approach that he insists is more efficient than the modern casual system of indulging workers. A mentoring program is recommended whereby fresh employees will be inducted into SportsCo’s standards and vision by the more accomplished seasoned employees. This will lead to faster assimilation in SportsCo’s environment while ensuring a more prosperous lasting career. At SportsCo, the best strategy to employ in the new branches that should be integrated in all other sectors of the firm must integrate both the hard and soft approach. Although finding a middle ground between the two will be difficult, a progressive approach that encompass careful control of easing micromanagement tactics with a more relaxed management style will be adopted that will empower employees to take personal initiatives in the workplace. Employee relations are therefore enhanced when the prevailing cultural and management practises within the organisation are more developed. Outlaw (2005) argues that when the management of the organisation spawns confidence, enthusiasm and affirmative altitude, it automatically leads to an improved performance in the organization; and the opposite is true where gloomy, mistrustful, and negative altitudes in the workplace are predominant, hence performance suffers. Our management staff should therefore lead from the front by actively engaging staff rather than behind closed doors. This will more readily illustrate our commitment to improving standards and meeting the organisational objectives. The most important motivational tool should be self-motivation, it is more effective in recognizing what motivates you and how your job is aligned or configured to sustain your motivations (McNamara, 2008). 5.0 S.M.A.R.T.E.R Objectives There is no secret formula or set of rules in enhancing management objectives, however it takes personal style plus some unyielding dedication to succeed by SportsCo’s strategic objectives of enhancing earnings, expansions and growth. Nonetheless SportsCo’s management must always be conscious of the adage that, ‘By failing to plan you plan to fail’, hence the need to establish long and short-term objectives. The planned objectives have to be S.M.A.R.T.E.R, i.e. Specific, Measurable, Attainable, Realistic, Timely, Ethical, and Relevant (Blair, 2006). Successful team building will improve the functionality of SportsCo tremendously leading to enhanced analytical, competence, staff motivation and returns. This also assists in easing tension in the workplace, turnovers and expenses (Accel-team.com, 2010). This is illustrated by the following formula: Sense + Simplicity + Relevance = Results 6.0 Leadership in HRM Approaches Though most companies recognize that the significance of the workforce for the organisation to succeed, managing the people within the firm entails far greater perspicacity by the executive. Lindner (1998) advocates for a blend of systematic bundling of benefits, including career enhancement, progression, internal and external stipends, and non-financial rewards [see illustration Figure 4]. Gamez, el at (2006) describe managing people as a multiple-step process a manager undertakes towards achieving the desired objective. These are voluntary choices and cannot be enforced though may be inspired by the employee’s executive by properly infused performance management systems. The lack of a positive attitude has been attributed to generating negative emotions within the organizations, leading to employees becoming de-motivated hence causing massive absenteeism and illnesses that affects negatively on many lost working hours and medical insurance expense (Fredrickson, 2003). Figure 3 7.0 Role of Employee Motivation Contemporary HRM strategies require organisational leaders assume the responsibilities of a therapist, guide, organizer, taskmaster, trainer and adviser to the workforce. The foremost test for corporations nowadays is keeping their workers motivated and performing their duties properly. As people constantly interact with each other, they unconsciously mange each other in their transactions and thus learn how to relate with diverse people in addition. However, within a workplace environment, managing people is a deliberate act that has to be cultivated and enhanced through leadership skills and training. Contrary to expectations, people like to be managed! Individuals feel more secure, supported and appreciated when they judge that somebody is ‘looking out’ for their interests, development and is at hand to assist in case of problems. However managing people has challenges, “a manager's most important and often most difficult job is to manage people.” (Welch, 2008) 8.0 Retrenchment and Redeployment As part of the expansion program, management has decided to close down some of the underperforming branches in high street outlets. In this restricting strategy, some of the staff will have to be retrenched while others will be redeployed in the new shops. The criteria used to determine redundancies (Workinfo.com, 2008). The employment statutes and as a rule of thumb, LIFO (last in first out) approach is considered the most fair method of dismissing employees as this considers the disruption and long service of loyal staff. Nevertheless, employers have the discretion of electing to select the most skilled employees to be retained rather than on enduring basis. An effective retrenchment program must ensure ‘fair outcomes for affected staff, to ensure continuity of service delivery, and to minimise transaction costs’ (APS, 2002, p. 6). The Australian Public Service (APS) HRM guide advocates for adoption of either a ‘Phased approach’ or a ‘Clean Break approach’ in guiding the process. APS (2002) argues that an organisation should chose either of the two processes but not both or hybrid system to avoid duplicity and ambiguity. The organisation must ensure they inform the staff of the approach to be undertaken prior to affecting it. 8.1 The Phased Approach The phased approach is preferred when the company intends to retain some of the skilled employees hence offers options of voluntary retirement to others or proceeds in affecting the legally accepted retrenchment procedures. This includes offering a severance benefits usually a specified amount plus others benefits. This approach enables the company retain the desired skilled employees hence offering smother continuity. Likewise, the company avoids having to rehire the retrenched employees who they will have already paid of the terminal benefits. However, the expected protracted negotiations with employees and their representatives is a distinct disadvantage. The time-frame constraints will be affected if there are no immediate agreements between the two parties. 8.2 Clean-Break Approach Under the clean-break approach, all the employees in the affected branches will retrench and any rehiring is undertaken under new terms of service that ignores previous position or terms. This approach is managerially simpler as it can be finalised within a short time and their benefits processed as laid out in employment laws without any negotiations. However, this approach is expensive for the company particularly if it desires to rehire some of the retrenched staff in regards benefits payment. Similarly, there is expected to be a disruption of service, as clients have to deal with new staff. 8.3 SportsCo’s Strategy For the purpose of SportsCo’s transition and changes while closing down some of our high street outlets, the best approach will be the phased out approach, which we consider less expensive, and offers the possibility of retaining some of our most skilled employees. For those identified for retrenchment, SportsCo will offer a generous package in addition to the legally accepted benefits, which will ensure a smooth transition. Rothwell (2004) argues that well-structured redundancy process should aim at: To reducing tension and strain on the retiring worker(s) To uphold a business image of care and empathy To reduce the effect on confidence and incentive of those left behind The incidence of redundancies also inversely affects those employees retained as their morale and self-doubt will impinge on their performance. Workplace motivation is eroded with uncertainty, job rotation and new duties disorienting them while having to assimilate numerous changes is very challenging. This will therefore require the company to have induction training for those affected to ease the transition by reassuring them of their job security and vision for the company. 9.0 Conclusion This strategic human resource plan has outlined the main areas that must be considered as we embark on the restructuring of SportsCo to embrace the changes of new outlets and closing of the high street outlets. The plan lays emphasis on new programs in recruitment, training, employee relations and generally a new approach based on strategic human resources development that is entrenched in the company’s strategic goals and vision. The approach in hiring and redeploying the new employees will be structured on long-term goals while for those rendered redundant will be offered commensurate benefits to protect the image of the firm. With these envisioned strategic goals, SportsCo is bound to have a brighter future based on our greatest asset, the human resources. 10. References Accel-team.com. (2010). Human Resource Management. Retrieved April 28, 2010, from Accel-team.com: APS. (2002). Human Resource Management Guide for Market Testing and Contracting Out. Canabera: Australian Public Service Commission . Blair, Gerard M. (2006 Starting to Manage: The Essential skills - The Human Factor.) Chartwell-Bratt (UK) Ltd, London CIPD (2009) How engaged are British employees? Survey Report. 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