Importance of HRM in Automotive Industry - Mid Lancashire Automotive Ltd - Case Study Example

Consider the Information Given In the Following Case Halecar and Mid Lancs Automotive – Two Cultures Merge Table of Contents Introduction 3 Overview of the Case 4 Importance of HRM in Automotive Industry 5 Identifying HR Issues in the Mid Lancashire Automotive Ltd 6 New HRM Strategies to Deal with the Problems and Their Benefits 9 Analysing the Problems of the Recommended Strategies 12 Conclusion 14 References 16 Introduction The automotive industry of this modern day context is identified to be wrapped up with uncertain challenges due to the persistence of varied factors. These factors generally embrace increased level of globalisation along with digitalisation and gaining momentum of competition in the respective industry. Specially mentioning, ensuring greater safety of the people in a particular workplace can lead the modern business firms to attain success in future. Thus, it can be affirmed in this regard that only such companies finding new and revolutionary approach of achieving success can prosper in the upcoming days. From a theoretical perspective, it is to be affirmed that the ‘Strategic Human Resource Management’ (SHRM) practices allow companies to search for and utilise proficiency as well as understanding varied conditions of business market, which will prove to be beneficial in fostering innovativeness and long-term sustainability in long term (Shatouri & et. al., 2013; Ashton & et. al., 2004). In fact, an accurate HR practice can assists in developing an organization’s talent along with increasing its competitive benefits by a considerable extent. Hence, the organisations of this present day context are required to accept as well as implement effective SHRM approaches with the aim of attaining their predetermined business targets (Jain & Garg, 2006). With this concern, the prime intent of this coursework is to prepare a report for the Board of Mid Lancashire Automotive Ltd with providing suggestions on the generation of a new and appropriate HRM strategy based on the case study provided. Moreover, the crucial issues relating to HR practice that require addressing by the company as per the provided case study has also been outlined in this report. Overview of the Case The provided case study depicts the merger of two companies namely Halecar and Mid Lancs Automotive and also the issues concerning alignment of the cultures of the two business units. It can be ascertained that when two businesses merge or align together, their operations and various other business functions also get aligned as well. As per the provided case, Halecar is viewed to be one of the most prominent names in the automotive industry. Owing to the declined conditions of this industry in recent years, the company has expanded its operations in the Indian market to ensure long-term sustainability. The company largely employs male workers in between the age group of 25-30 years. The recruitment procedure of the company mainly follows the word of mouth format. However, owing to the health and safety concerns in the workplace of the company, a sense of reluctance has developed amid the workforce, which further results in high employee turnover rate. However, the rising problems relating to human resource have certainly made the company to take the decision of merging with Mid Lancs Automotive including TuTu as the Indian partner. Mid Lancs Automotive is one of the prominent and most successful operators within the industry and it possesses a different way of working technically. The company is equipped with all the latest technologies, which further enable it to emerge with innovative low priced products. The main vision of the aligned unit is to deliver quality products to the customers and at the same time keeping the price of the products reasonable. However, the management of the business is well aware of the problems of alignment of the functions of the two companies in terms of HRM and hence intends to take necessary steps to deal with the same in an effective manner. Importance of HRM in Automotive Industry In the present day complex business environment, the aspect of HRM is deemed to be one of the most vital parts of the operations of the business units. It would be crucial to mention that in order to ensure long-term sustainability in this challenging global business settings, companies need to perform efficiently in each business domain so that the overall results can be aligned with the desired organisational goals and objectives. In this regard, the importance and the tasks of HRM would be regarded as crucial (Paauwe, 2004). HRM includes the approach of the management of human resources and the issues associated with the same within the business operations. Since people are deemed as the most vital resource of any business unit, the role of HRM is quite prominent indeed (Chandramohan, 2008). Companies set both short and long-term missions in order to sustain in a particular business environment. This missions and vision of business units are largely accomplished by the workforce through their dedication and efficacy while delivering valuable services to the customers. Contextually, the HRM domain of the business units has the need of considering all the necessary measures and steps required for motivating as well as steering the workforce in a positive direction so that sustainability and competitive advantages for the business can be ensured in this composite global business marketplace (Mathis & Jackson, 2008). Similar to any other sector, the role of HRM and its daily activities are also deemed to be quite prominent within the automotive sector of the world. This particular sector is identified to grow significantly during last decade or so owing to the increasing demands of the products and/or services amid the people. Contextually, companies operating in this particular sector are in continuous verge to enhance their operational competitions and product quality in order to meet the changing demands of the customers. In this regard, the role of HR in a business is deemed to be quite vital for meeting the goals and objectives of the overall unit. Contextually, the role of HRM comes into existence in this particular domain. HRM in automotive or any other industry primarily deals with the management of all human resource related issues including recruitment, selection, workforce management, workplace management, compensation and rewards, employees’ motivation and resolutions of conflicts amid workforce in a workplace among others. Each of these functions of HRM department directly impacts the operations of the companies one way or the other. It must also be mentioned that at times, when two businesses aligns or merge their operations, it is the role of the HRM domain to mitigate all the issues arising in the workplace. These issues can be measured in the form of lack of proper alignment of work process in terms of competencies and abilities of the two companies, alignment of the workplace culture of the two companies and other factors that can negatively affect the overall business (Harris, 2002). This particular study primarily deals with the issues arising from the merger of two units including Halecar and Mid Lancs Automotive wherein the intervention of the HRM manager for managing the issue is prevalent. Identifying HR Issues in the Mid Lancashire Automotive Ltd In relation to the provided case study, it can be ascertained that Halecar has been dealing with a bad patch within its business operations owing to the constant fluctuation of the external business market. In order to deal with this challenging phase, the management of the company adopted certain significant measures based on which the source of such problem or issue can be determined within the workplace. Contextually, the management of the company has intended to expand its business operations in various other markets to ensure the prevalence of its business sustainability. With the decline of the parent market i.e. the UK, the management of the company has stepped forward and initiated manufacturing automotive products for an Indian company named TuTu with a different brand name altogether. This further impacted the profitability of the business in a positive manner. However, there existed diverse range of operational problems especially in the domain of HRM that impacted the operations of the company one way or the other in a negative way. Notably, the workforce of the company mostly included the people with little skills and technicality, who were employed with a minimal legal wage structure. However, owing to the prevalence of the issues in the workplace, the employee turnover rate of the company raised to 55%. The increasing turnover rate of the employees, which experienced by the company, was mainly due to the prevalence of pathetic workplace conditions, that resulted in causing numerous accidents. Apart from this, the low wage structure of the company designed for the employees can also be duly considered as the other crucial factor contributing in raising such scenarios in the workplace within the company These factors certainly depict workplace health and safety concern of the employees, which has been one of the most vital issues of HRM that need to be addressed by the management of Mid Lancashire Automotive Ltd. In this context, the HR personal of the business will need to adopt efficient strategies in order to meet the demands of human resource that are viable and aligned with the predetermined organisational goals. These strategies can be measured in the form of identifying the problems in the workplace and likewise taking necessary steps towards addressing the detrimental issues (Ogilvie, 2002). By taking into concern the issues prevalent within Mid Lancs Automotive as per the above analysis made, it can be found that the employees often regard the company as an old fashioned workplace, which necessitates urgent reversal. It has also been comprehended that the management of the company including Managing Director and Personal Assistants were involved in managing the issues of the employees, which further lacked the expertise of a trained HR personnel. The training provided to the employees relevant to the operational approaches of the business was also deemed to be inefficient, which further not only impacted the level of competency of the workforce, but at the same time resulted in lack of proper motivation of the workforce to deliver best possible services to the customers. This has been a major flaw that needs to be addressed by the management of the company with the consultation of a HR expert (Renwick, 2002). As per the viewpoints of Moorby (1991), in order to attain success, companies and HR personnel need to provide proper training and other basic amenities for their workforce and ensure a culture within the workplace where they could be able to deliver effective performance in alignment with the desired organisational goals along with objectives. This signifies that the management and HR personnel need to understand the factors that influence employees’ motivation within the workplace and likewise devise their moves accordingly (Moorby, 1991). While analysing the case, it can be learned that the employees of Mid Lancs Automotive had minimal involvement with the overall decision making of the organisation. This can be comprehended from the fact that the employees of the firm caught in surprise when they came across with the decision of the Indian owner of the business i.e. Tutu to shift its production line and diversify its products range and design through aligning with Mid Lancs Automotive. Thus, it will be vital to mention in this similar context that minimal involvement as well as awareness of the employees regarding the policies and strategies of the business has been a pivotal issue prevailing in the workplace that needs immediate attention to get resolved. Notably, proper and integral involvement of employees within the daily strategic decision making of the business is also a factor, which tends to develop and raise the level of employee motivation by a considerable extent (Anstey, 1997). Based on the case study provided, it can be apparently recognised that there exists a considerable difference between the work culture of Halecar owned by Tutu and Mid Lancs Automotive with which the company has planned to align its operations. Notably, Mid Lancs Automotive is well known for its innovation and creativity in terms of product design and deliverance of quality products and/or services to the customers. The company implemented all the updated technologies that are used within the automotive industry in an extensive manner. Notably, the company mostly employed multi-skilled workers to whom it provided efficient training for meeting the expectations of the customers in alignment with the short as well as long-term organisational goals. It is worth mentioning that adoption of proper health and safety measures within the workplace is amongst the most crucial parts of HRM practices of the company. On the other hand, the work culture of Halecar is quite less systematic as compared to Mid Lancs Automotive. The company mainly employed low skilled workers at low wage, which might align with the long-term objectives of the merged unit. Apart from taking into concern the deteriorating health and safety conditions of the business, the long-term policies of the merged company might be in stake. Hence, this aspect of difference in the culture of the companies can be duly considered as a major issue, which needs to be addressed by the HR personnel. New HRM Strategies to Deal with the Problems and Their Benefits It is worth mentioning that companies should opt for undertaking effective and successful HRM strategies so as to position themselves for motivating their respective personnel, resulting in fulfilling their short as well as long-term objectives at large. In relation to the case study provided, varied issues have been apparently observed in the above section that faced by Mid Lancs Automotive after the merger. In this regard, it would be suggested to adopt a few strategic measures that can place the company at a suitable position. HR managers and management team must develop an essential strategy that could focus and eliminate the challenges faced by this company. In response, the management team of the company must be able to adapt itself with the constantly changing mindset of the workers and their respective working profiles after the merger. For this, the management can adopt classical approach, which involves formal and rational decision-making procedure. The strategy will mainly encompass conducting a detailed analysis of the company’s existing units in parent country as well as abroad, selecting strategic options and ensuring proper implementation of the same. It will be certainly a top down planning for the company to address the aforesaid aspect (Schwarz & Hipp, 2007). In addition, Mid Lancs Automotive may focus on making organisational changes that will be intended to make a positive transformation within the company in the form of providing new leadership directions. The transformation can be planned as well as emergent in nature and must focus on following certain basic principles. These principles can be apparently noted as providing appropriate directions to workforce, promoting human values and most importantly establishing a suitable training environment. Hence, there is a need to focus upon assessing the pathetic workplace conditions that were largely prevalent within the organisation due to which it faced the issues like failure to attract as well as retain potential candidates with the development of their respective potentialities, reduce unwanted expenses, restrict increased level of employee turnover rates and reduce customer dissatisfaction. In respond to the above identified issues, the organisation may form and develop talent management skills amongst its selected employees so that their abilities do not go undefined and unexploited (CIPD, 2009). Furthermore, utilisation of instruction and mentoring techniques will also aid the employees of Mid Lancs Automotive towards delivering high performance and improved work, imposing significant impact on the development of employees’ personal attributes and certainly leading to self motivation. Mentoring will solve the issues of listening, questioning, clarification of doubts and reframing the solutions and policies as per the needs of the individuals (Pedler, 1991). Specially mentioning, one of the issues, which need to be addressed by framing effective HRM based strategies, is the problems faced by the line managers of an organisation, who play a decisive part in promoting collaboration amid the employees. In this regard, based on the case study provided, in Mid Lancs Automotive, the issue persisted regarding promotion in role of supervision without providing sufficient training to the staff members. Another issue was about the pressure for results placed and inadequate resources given to the line managers of the organisation. It is necessary to install the line managers as per the needs of the organisation so as to have a positive effect on commitment, quality, productivity and finally, business performance. For fulfilling this objective, it is necessary to develop leadership skills amongst the line managers that can lead towards improved operational performance (Larsen and Brewster, 2003; Hall and Torrington, 1998). The organisation i.e. Mid Lancs Automotive can adopt a matrix approach and its individual line managers may perform their respective activities based on this particular approach. Here, the leadership style can play an imperative part in directing the line managers. These line managers are often viewed to make judgments, present thoughts and invite queries, provide tentative arguments, make suggestions and control the work pressure of their respective subordinates. Hence, it is quite necessary to develop the performance of line managers by the organisation in order to resolve the above stated issues that it faced after the merger. The pathetic working conditions of this organisation, as observed from the case study provided, can get improved by considering and applying the technique of performance management with the focus on varied important aspects. These aspects may entail determining the requisite performance levels and managing behavioural attitudes of the personnel among others. More importantly, the company must focus on fulfilling their requirements and prospects that will lead towards creation of driving force in terms of behavioural actions and outcomes (Guest & et. al., 2012). It will be vital to mention in this similar concern that reward management can be a successful technique for overcoming the challenge of employee turnover, which faced by the organisation in an extensive manner. An effective and proper execution of this technique will certainly lead towards recruiting, retaining along with motivating employees, strengthening the ‘psychological contract’ and making the employees to feel self motivated and financially sound. The rewards can be extrinsic along with intrinsic in nature. Extrinsic rewards such as satisfying basic requirements, pay, conditions and treatment facilities for the individuals can be employed by the organisation. On the other hand, intrinsic rewards will be offered based on fulfilling superior intensity needs such as self actualisation and development of self abilities. These rewards can also be based upon individual’s qualification, overtime, cash and shares of direct along with non-monetary pays such as recognitions and advancements (Schwarz, 2008). Analysing the Problems of the Recommended Strategies It is quite important to note that the organisation Mid Lancs Automotive might face certain challenges while applying the strategies discussed in the above section. This can be justified with reference to the fact that focusing on rapidly changing work profile of the individuals may create problems in the form of disturbing the prevalent organisational structure as well as culture by a considerable extent. The negative consequence of this problem may result into affecting the operational performance of the employees, which in turn, may cost the organisation in a broader manner. Without targeted incentive mechanisms, the organisation will not be able to retain such quality personnel and thus the case of employee turnover rate will be much prevalent within it. Even if several managerial leaders can be persuaded by the organization, still, it may become vulnerable towards facing the threat concerning increased level of employees’ turnover rate (KPMG, 2010). In addition, preparing the newly appointed candidates for topmost managerial positions in the organisation will pose major challenges. Justifiably, in situations, wherein there exists high unemployment rate, the organisation may face the problem of allocating the available resources in an effective manner. By taking into concern the strategy of forming, adopting and developing matrix approach for the line managers, the organisation may face the problem of incurring huge expenses, which might affect its profitability level at large. With regards to the strategies developed for lower level workforce, the problems lay in shortage of soft skills, creativity, adaptability to varied situations, poor work experience, improper cultural fit, inappropriate qualifications held by candidates and lack of language along with communication abilities among others. If such low-level employees are provided with effective training, still there is no guarantee whether they will become as much productive as per the expectations of the organisation (KPMG, 2010). To tackle the above stated issues or problems, the HR team of Mid Lancs Automotive needs understanding the working nature of individuals, adopt necessary measures for retaining along with engaging skilled workforce, establish volatile work culture, merge latest innovations with universal management strategies and manage the risks of global operations (Economist Intelligence Unit Limited, 2014). Conclusion From the above analysis and discussion, it has been quite apparent that Mid Lancs Automotive faced certain issues after the merger that affected its operations by an elevated level. Throughout the discussion, several strategies have been suggested along with the benefits that can be obtained from the same to the organisation in order to address and resolve such issues. These mainly included utilising the varied HR related techniques such as training, team management, performance based rewards management, leadership and motivation that impose positive impact on the overall performance of the organisation. Furthermore, managing knowledge can also have direct impact by knowledge sharing and information on the overall performance of Mid Lancs Automotive. However, the mechanisms or the strategies explained above are still open for consideration and experiential investigation as it was not possible to explain every aspect related to strategies and their management. In future, possible researches can be utilised to discover and exploit effective strategies and tactics that can be implemented by Mid Lancs Automotive for resolving issues that it faced after the merger. To be specific, the execution of the proposed strategies and considering the benefits acquired from the same would significantly aid the organisation to reap several significant benefits in future with proper mitigation of the identified issues or problems. References Ashton, C. & et. al., 2004. The “Fit For Purpose” HR Function. Strategic HR Review, Vol. 4, Iss. 1, pp. 32 – 35. Anstey, M., 1997. Employee Participation and Workplace Forums. Juta and Company Ltd. Chandramohan, A., 2008. Human Resource Management. APH Publishing. CIPD, 2009. Learning and Development. Annual Survey Report, pp 1-32. Economist Intelligence Unit Limited, 2014. Challenges for Human Resource Management and Global Business Strategy. Whats Next: Future Global HR Trends. 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