Human Resources of Operation Management in U Soft - Research Paper Example

Executive Summary Human assets are vital component of a business that offer competitive advantage and even economies of scale to a firm. It is this domain which actually handles and manages all other functions namely finance, operations, marketing and productions. In case of service scape, the significance and role of human resources increase manifolds because of the intangibility and the personalization factor involved, which is provided by skilled employees and people at work. Especially for U-Soft, which follows the strategy of responsiveness by tying up hands with Microsoft, it becomes all the more important for it to be at its toes in delivering the latest technology at reasonable prices to the ever demanding market in China. In order to ensure that the employees work at their optimum productivity level, the organization has to make sure that it has flexible and motivating human resource policies in place that takes care of the people- both monetarily and psychologically (Klein 87). This paper aims to study the performance gaps in the human resources management of U-Soft, a software firm that has been unable to meet the expectations of its workforce. Effective HR management forms the cornerstone to the success of any business and thus an analysis of its competencies and key human resource issues could help us recommend solutions to better off the working ambience at U-Soft, thereby enabling it to achieve its strategy and pre-determined goals in an efficient manner. Introduction U-Soft is a software production company that also operates in online gaming. Being a service oriented firm with technical requirements, it is of utmost importance to U-Soft that it recruits skilled and technically equipped people to deliver efficiency and optimal output. Theoretically, reduced HR costs get reflected in decreased production costs and enhanced profit margins. However, U-Soft is facing problems in managing its workforce due to increased competition, quality emphasis and performance gap between actual and expected. This paper delves deep into analyzing the competitive strategies of U-Soft and how its human resources policies are not supplementing its business policy. Starting with a brief overview of the company, SWOT analysis and identifying the current gaps in the recruitment and working environment form the basis for recommending solutions to problems caused by insufficient and ineffective management of its workforce. Background of U-Soft U-Soft is a technology driven organization which was founded by Chongging Hi-Tech Industrial Development Zone Innovation Service Centre and Cap Info. Co. Ltd in the year 2003. The company operates in Business Intelligence, Consulting and Alert Engine Tools with services provision to both government and business enterprises and core competency being independent intellectual and patent rights. The mission of U-Soft is to realize its customer’s full potential and provide them the best of the technology through efforts of its workforce (U-Soft). U-Soft is gaining prominence in Chinese as well as international market in developing quality and technically rich interfaces and business intelligence solutions which is attributed to the expertise and culturally diversified management of its workforce. Its biggest strength in capturing recognition and acclamation worldwide is its enterprise management and endeavor to create a friendly and flexible working environment. Recognizable features of human resources management at U-Soft comprises of following major points that account for its success as well as some of the probable loopholes: The company boasts of efficient and relative reward system, enabling employees to grow to their full potential. Effective team work with clearly set goals and objectives. Two-way communication channel with elimination of noise and distortions. Effective leadership where team work is appreciated and people are encouraged to assume supportive roles. Ad-Hoc Management that focuses on individual goals and accomplishments, giving complete justice to the cause. If we talk of operations management at any software company its operations are dependent upon the creativity and ingenuity of its staff and workforce. U-Soft has not been able till date to recognize the importance of employee productivity and as such, its recruitment policies, working environment and compensation grade system do not match to the software designers’ job characteristics. If U-Soft wants to increase its efficiency, productivity and quality proposition, it has to look after its employment policies and workforce management techniques as majority of performance gaps are being created by human resource problems. SWOT Analysis SWOT analysis is a strategic tool to assess the internal and external capabilities of a firm. Externally, the opportunities and threats can spell failure or success to the core competencies of the company. Thus, it is essential to know how well the company fares in response to changing conditions. Strengths The strengths of U-Soft emanate majorly from its tie-up with one of the world’s best and renowned software companies- Microsoft. Microsoft is acclaimed worldwide for its robust and effective human resources management. It hires world’s most competent and technically sound professionals that strive hard to deliver the best results. Its partnership with Microsoft delivers it the benefit of patent and original technology which imparts it competitive advantage. Its operating country being China, genuine technical expertise gives it an edge over its rivals along with association with Microsoft. This quality proposition offers better financial returns to U-Soft as compared to that of its competitors. Accredition with Microsoft gives it much certifications and qualifications that helps it to carve a niche for itself in the ever demanding technological market of software production. Software production and servicing being extremely competitive and creating new dimensions every year, knowledge management from Microsoft helps it in an extended way. Diversified workforce is secured which provides multiple solutions and ideas to probable issues and concerns, thereby enhancing the scope of working. Weaknesses Though U-Soft extracts human resources from Microsoft, yet it is unable to align its policies with the local culture and practices which ultimately costs on its human productivity. It does not possess skilled manpower to create and design apt technical interface that is quality and commitment equipped. Any software designing flows through a series of steps which is limited by deadlines, testing and maintenance phase. U-Soft lacks here where its workforce is not committed and neither does it enjoy good leadership that could set goals for the teams for timely completion. Subsequently, motivating factor and team spirit are absent from the working environment at U-Soft. Monetary incentives and perquisites are also not sufficient to retain the knowledge and skills of employees that is a vital component in software industry. In software industry, time constraints are not considered feasible because developers and designers would not like to work in limited hours. In U-Soft, the developers are bounded by timings which affect their output level in a negative manner. Moreover, salary constraints and lack of promotional opportunities further hinder the way of all round development of employees as well as of the organization. Opportunities U-Soft operates in the software industry which is flooded with plethora of opportunities in the recent times. Its association with Microsoft along with an increasing demand for technical interfaces and developments present huge scope in front of U-Soft. The prime advantage in software industry is the imitability feature of technology. Even if U-Soft does not invent any unique or new technological marvel, it can always imitate the work done by competitors at reasonable prices, because there cannot be monopolistic market in software industry. As per market trends and demand for online games and software production, it is forecasted to see an upsurge in the coming 20 years. Moreover, there is dire and requisite need to upgrade the existing software every year, thus U-Soft can ensure better productivity and secure loyal customers through its servicing. Software industry is also optimistic of the potentials of export, import and outsourcing of technology which could provide major revenues to U-Soft. It can diversify along various lines of business to expand its coverage, thereby securing constant cash inflows. Threats Threats for U-Soft emerge basically from its workforce competency and attributes of professional, technical and personal skills. Just tie-up with Microsoft or any other big software giant does not ensure success unless and until it has efficient and skilled manpower in place. U-Soft is able to secure patents and original technology with the support of Microsoft but locally, the success of its service and product capabilities depend much on how its people are capable in generating new ideas and keeping up the Microsoft’s brand name. It needs to get patents renewed every 5 to 10 years which is granted on the basis of fulfillment of certain specifications. In the absence of professionalism and compliance, genuine competency of U-Soft might face a setback. Secondly, in order to develop squarely, it needs to build long term contracts and partnership which requires key staff and personnel, lack of which can cause hindrances to its expansion and diversification prospects. If the rivals are paying its designers and developers more than average salary, they can quit the job at U-Soft which is hard to recover because the premise of success in case of U-Soft is the retention and management of its knowledge base. It needs to come up with innovative ideas and technology that could turn the tides in favor of U-Soft. Performance Gap Performance gap is an effective tool to determine how the policies and plans have fared in reality and whether the benchmarks have been complied with. Performance can be under or over which creates the need to develop further. As per U-Soft’s human resource management policies, it seeks to offer a conducive and friendly working environment where employees are presented with opportunities to develop in an all round manner. Performance gap is actually a measure to determine the difference and the area in which the difference arises between actual and expected. This gives the opportunity to modify the processes and activities that might be faulty. In case of U-Soft, its current performance gets visible in the following ways upon observation: To expand its online gaming production business line, it needs qualified developers and designers which is in reality a dearth for U-soft. As such, its quality designing and product proposition gets affected negatively. Up-gradation of existing software is a pre-requisite for U-Soft success, but the developers are not getting proper amenities to come up with new ideas. This places hindrances in the way of developing innovative software tools. Since the market is soaring high, even the rivals need quality staff and this is a potential threat for U-Soft that it might lose its key employees due to absence of motivating incentives and career development opportunities. Turnover rate of employees in case of software industry is already high compared to other industries, the fact being they are professionally and technically sound expect more perquisites and avenues from the employer side, failing which they do not hesitate in switching to other company. This is the major loophole in the human resource policy of U-Soft which hampers the retention of its key staff. Salary structure at U-Soft is not following the industry trends, along with some sort of favoritism and partiality involved. Levels of compensation and remuneration are not fixed where it should be based on work and job description. Being a technology company, its emphasis should be on retaining and motivating its technical staff by catering to their development needs. However, U-Soft does not differentiate between managerial and technical positions and places them in the same cadre, which de-motivates the technical staff. After all, the major operations and designing is looked after by technical people (Schuller & Jackson 90). Another discrepancy in the human resource policy at U-Soft is maintaining secrecy in salary and position information. Every position is accompanied by a fixed salary and anyone who knows the position can deduce the salary structure of that employee. It marks discrimination amongst employees where a manager might be getting higher salary than a key software developer, even though the contribution of the latter being more. If we were to fix the recruitment and selection along with human resources management costs at U-Soft, keeping in mind the actual and expected performance, the differences would come up as follows:   Current Current Cost/month After changed Difference Advert one time per month 2,000 1,000   selection one staff and department manager 5,000 4,000   Interview one staff, department manager and HR manager 10,000 10,000   Training 10 days per month         Developer and designer 10 staff 50,000 40,000     Trainer 7,000 3,500   waste working time 2 hours every day, 100 staff 154,000 38,500   Travel HR   6,000   Working Place     2,000   Administration     5,000   Total Expenses   228,000 110,000 118,000 Thus, it is pretty much obvious that U-Soft can achieve much of cost cutting and savings if it rationalizes its human resource policy and makes some changes in its recruitment and selection policies. The focus should be on retaining qualified and experienced employees that contribute to the organizational development. As already analyzed in the SWOT tool, majority of its weaknesses arise from the incompetency of its workforce and unsuitable timings of work. Moreover, compensation and incentive plans are also not up to the mark that can sustain the productivity level of senior developers and key technicians. Its weaknesses can be removed only when efficient and capable employee, designers and developers are recruited and appointed since the inception because training lacking candidates puts financial burden on the company. If efficient people are kept right from the beginning, there will be lesser time invested in their induction, getting them adapted to the new working culture and letting them understand the importance of recent technology development. For this, employees need to be given leisure breaks and entertainment packages in terms of holidays and travels so that they do not feel boredom. Operation Management Theory Operations management in a company refers to the optimum use of the resources for the production of goods or deliverance of services (Heizer & Render 384). For U-Soft, its biggest resource is its human asset and as such, human resource management in U-soft becomes synonymous to Operations management. The Figure given below helps us understand the elements of good human resource management in a company and it applies well to U-Soft. As discussed earlier, U-Soft is currently facing problems in its human asset management function. Theory underpinning the concepts and providing insights upon U-Soft’s current scenario includes: U-Soft does not have any success criteria or Key Performance Indicators in place. For a software firm, every task is accompanied with a deadline and thus, measurable criteria are required to judge the success rate and conformance to the standards (Lengnick-Hall 454). Lack of information diffusion across various levels also matters a lot when the operations are dependent upon information sharing. U-Soft has to ensure that relevant information reaches its prospective receiver. Finally, through effective leadership and value driven management, U-Soft can achieve its goals with sustenance of its competitive advantage and key success factors. Source: http://www.tbs-sct.gc.ca/res/images/mesrh04-eng.gif Recommendations Looking at various aspects of U-Soft’s human resource policies, its mission, vision and objectives and respective shortcomings in the management of human asset, it becomes obvious that the company needs to take some concrete steps in the immediate course of action to weed out the competition and sustain itself in the market. As seen from the performance gap section, U-Soft faces problems in exercising its human resource management practices efficiently where its workforce feels lagging behind the competition and does not feel that resources or policies are enough to foster that commitment and motivation level in them. As such, major changes suggested to U-Soft are: Recruitment tie-up with colleges and universities Recruitment is the first step to secure efficient and qualified candidates to the organization. U-Soft, as it operates in the technological domain, it becomes all the more important that it is able to find good and talented candidates specializing in technology demanded. If a suitable candidate is not selected, both the time and efforts invested go in vain. U-Soft requires employees that are adept at using technical interfaces and also equipped with the latest happenings in the technical world. Instead of conducting its recruitment from outside agencies and job portals, it should partner with major colleges and universities imparting technical education. This step would help U-Soft in the following ways (Nowak & Grantham 125): A large pool of prospective candidates can be gained with universities and colleges. The faculty and guides at universities and colleges make recruitment task easier by recommending bright and talented students. They have been seeing those students for the past 2-3 years. The recruiting team might not be able to judge a candidate in a short span of 2-3 days. Thus, words of university teachers and mentors could provide a testimony to the students being considered for selection. Even if a student is looking prospective but there are some minor hindrances like personality problem, communication, any specific area of knowledge, the university can be approached to impart the particular training to that student to make him or her suitable to the job. Revamping the recruitment way Another feasible option with U-Soft is to recruit candidates suggested by existing employees. This makes the recruitment task easier since the existing employee who is recommending another person is already aware of the company culture, so he will suggest only that person who can adjust in that culture and take it to new heights. Secondly, this makes the existing employees responsible towards the organization and they feel obliged that the company trusted them in letting them suggest prospective candidates. This fosters motivation and mutual trust between employees and management. Obviously, when people will be motivated and obliged, they will deliver the right thing at the right time in the right quantity and at the right place. Subsequently, reduction in costs and employee turnover rate will be achieved. Flexibility in working time One major drawback with U-Soft human resource management is that it has confined the talent of its employees within time boundation. Designers, developers and software testers do not like to work under time limits. So U-Soft’s policy of 10 to 5 work schedule is hampering the working of its key professionals. U-Soft needs to allow 24*7 working time culture so that its developers and designers are able to use the resources anytime and come up with new ideas. Might be this is one of the probable reasons for lack of innovation in the company. Designers and developers are very particular about their work timings and they need freedom in using the resources as and when any new idea clicks to them. Obligation in terms of work timings and use of resources directly blocks their creativity which is a direct hit to the company’s financial returns and responsiveness. When we talk of flexible work timings, it should also be noted that in case a developer works late night and is late in the morning, he should not be penalized as he had been contributing to the development of the software at odd hours. Thus, such level of understanding between management and employees is deemed. Changing the work environment An employee feels happy and motivated towards his work and job if the working environment is friendly, cooperative and flexible. In U-Soft’s working environment, there is lack of clear and transparent communication channel, effective leadership and free use of resources. As discussed earlier, work timings at U-Soft need immediate attention since it is affecting the capability and talent of its technical staff. Not able to work at their suitable time, the employees are not being able to innovate or achieve any breakthrough technology. Moreover, boredom from the job is also a frequent situation at U-Soft due to which employee turnover has been high in the organization. To make the employees feel free and relaxed, there should be provision of casual dressing so that the work environment does not look like a formal binding. They should also be motivated through desk posts and pictures of their achievements and recognitions posted in the office where peers and colleagues can identify the successful people and their leadership traits. Improving the remuneration policy and secrecy Remuneration policy and secrecy makes much difference in the organization if it is not implemented properly or not communicated well to the workforce. In case of U-Soft, its pay grades are based on position and not the job description which many a times give way to discrimination in the mind of employees. This could distort the entire organizational set up at U-Soft if not attended to in time. U-Soft needs to draft its compensation plan, incentive criteria and promotion policy on the basis of contribution made by the employees. There should be fair treatment on the basis of task and activities done. A manager might be superior to a developer, but in the context of U-Soft, the work of the developer is much more important than the manager. The figure given below further illustrates how the suggested recommendations could help U-Soft bridging the performance gap prevalent. There are points at each junction which needs to be addressed by U-Soft through the suggested methods. Source: http://www.emeraldinsight.com/fig/0670360502002.png Conclusion Summing up the facts, U-Soft needs to revamp its corporate policy and especially its human resource management functions. Its people are the cornerstone to its success and also the foundation to expand and diversify. To achieve this feat, it needs to incorporate mutual sharing of ideas and trust in its employees along with a culture that is robust and flexible, providing space for both individual and organizational development. The performance gap created in U-Soft’s organizational and personal development is due to glitches in the human resource management policies being exercised at U-Soft and it will not be an exaggeration to consider the human resource management synonymous to operation management. Thus, in a way, its operation management needs to be more humane. As seen from the SWOT, both its strengths and weaknesses emerge from human competency and ability to deliver quality product and service in time. Even opportunities can be encashed only when it has competent people in place. Thus, motivated and committed people are the need of the hour for U-Soft. U-Soft needs to be a bit flexible and innovative in drafting its compensation and incentive plans where it can provide an all round development to its employees- monetary, technical, personal and professional. If all such factors are fulfilled, retaining key employees would not be difficult and productivity will enhance for sure. Its competitive edge is attributed to its staff and human asset and so U-Soft has to take better care of its employees to make a mark in the market and gain lion’s share in software development domain. Works Cited “About U-Soft.” U-Soft. 22 May 2010 < http://www.u-soft.com.cn/site_en/about_02.html> Jay, Heizer and Barry Render, OPERATIONS MANAGEMENT, Tenth Edition. New Jersey, Prentice Hall, 2011. Klein, David.A, The Strategic Management of Intellectual Capital, MA, Butterworth- Heinemann, 1998. Lengnick-Hall, C.A & Lengnick-Hall, M.L, “Strategic Human Resources Management: A Review of the Literature and a Proposed Typology.” The Academy of Management Review 13.3 (1988) Nowak, M.J & Grantham, C.E, “The Virtual Incubator: managing human capital in the software industry.” Research Policy 29.2 (2000) Schuller, R. S & Jackson, S. E, Strategic Human Resource Management, USA, Blackwell Publishers, 1999. Read More