Human Resource Management at GM Holden - Case Study Example

Name Unit Class Executive summary In December 2013, Holden announced that they will cease their car manufacture in Australia by 2017. This is a condition that will lead to loss of more than 2900 jobs in Australia. The company has two plants in Port Melbourne and Adelaide. During this period, the company will still be manufacturing cars in Australia. The major issues that the company faces are maintaining a productive and efficient workforce and coming up with strategies that will enable them to reduce and eventually lay off workers. As a director to human resource, I have outlined how to tackle these issues. The major obstacles to productivity are employee engagement and motivation. The organizations have to create a supportive workforce environment, listen to employees, enable commitment and utilize line managers to make the employees engaged. Motivation can be achieved through incentives. The exit strategy should start by reducing work force. This is through first evaluating impact of employees’ reduction on productivity and coming up with a smooth reduction process. Finally the employees should be given exit incentives to help in maintaining company image and retain remaining employees. Table of Contents Executive summary 2 Table of Contents 3 Introduction 4 Current situation 4 Maintaining productivity levels 5 Employee’s engagement 5 Creating a supportive workforce 6 Commitment 6 Employee voice 7 Line managers 7 Expected Outcome of Engagement 8 Intention to stay 8 Motivation 8 Incentives 9 Evaluating the impact of employee reduction 10 Smooth employee’s reduction process 10 Exit incentives 11 Conclusion 11 References 12 Introduction GM Holden announcement to cease manufacturing cars in Australia has affected several stakeholders. Among the most affected stakeholders are the employees who face the ultimate loss of their jobs by 2017. This is a highly skilled manpower some who have worked with the company for a long time gaining the best training and skills (Mark, 2014). At this point, the employees’ productivity levels are highly possible to go down as they prepare to look for other places of employment and try to figure out their next move. This is a critical point for human resource management as the department has to ensure that they retain the workforce of 2,900 employees who face ultimate layoff (Matt & Phillip, 2013). The department is supposed to ensure that the employees are retained up to the time of layoff. This involves maintaining this group of highly efficient workforce as they prepare for new opportunities. Holden has to maintain high productivity levels prior to closure. The Human resource department has to come up with strategies that will enable the reduction and ultimate layoff of the employees to be carried out smoothly. As a director of the human resources, I will outline a report on how the human resource management intends to achieve this and maintain high productivity up to 2017. Current situation At the moment, the workforce at Holden Australia is aware of the ultimate closure of the Port Melbourne and Adelaide plants. This is a situation also faced by employees at Toyota Australia. This is a group of workers with great skills and talent. Some of the workers have been in the company for a long time. The knowledge that the company will be closed in 2017 has led to most of the workforce seeking for future employment. This has been the main problem as the productivity level may be affected. The workers are also subject to lose their engagement and motivation as they are aware that they will eventually be laid off. The company is making efforts to remain productive up to 2017 when they will cease production. This is vital since it will help them to pay their employees and also cover the loss for their closure. Faced with such a crisis, the human resource department has to act in such a way that the productivity level is maintained. According to Mondy, Noe & Gowan (2005), this is through crisis management function of human resource. The survival of Holden Australia during this period will be determined by the human resources strategies. It’s important to realize that without a well trained and motivated workforce, Holden Australia cannot attain their goals (Matt & Phillip, 2013). Maintaining productivity levels The human resource department has to ensure that all workers are able to contribute adequately and maintain the company productivity levels up to 2017. This is a task that requires utilization of effective strategies. The human resource department has come up with strategies that will enable the workforce to commit themselves to their tasks and maintain the required productivity levels. According to Macey et al. 2008, two major problems faced by HR are employee’s engagement and motivation. Employee’s engagement At the moment, the human resource department is faced with lack of engagement in employees. Most of the employees are engaged in looking for other employment that will sustain them after closure of Holden Australia in 2017. This is a broad strategy that will enable the employees to be committed to the company. Engagement has effects on performance, quality, innovation and the absenteeism levels. This is a strategy that will benefit both the employees and the company. The employees will benefit from their personal well being while the company productivity will rise. Employees’ engagement has three main facets. The facets are; intellectual engagement, affective engagement and social engagement (Macey et al., 2008). Intellectual engagement involves the employees thinking more about their jobs and how they can perform better. Effective engagement is about feeling positively about doing a good job while social engagement involves the ability of the employees to discuss with others on how they can improve their work. To achieve this, the human resource department will utilize several methods. According to Macey et al. (2008), the methods to be used are; creating a supportive environment, employee’s voice and commitment. Creating a supportive workforce This will involve creating an environment where workers are supported. This has a capability of making the employees feel comfortable in their station of work hence increase their commitment. The human resource department has to ensure that the employee supports each other and the management is also available for support (Macey et al., 2008). This involves being there for each other when the problem arises. Teamwork is a key driver in achieving a supportive environment where the workers will have a common goal. The employees have to bond like a family so that they can put their energy together (Trevor, Charlie & Anthony, 2008). Commitment Though the company will eventually cease to operate in 2017, employees must be encouraged to remain committed. This involves instilling a sense of belonging to the employees so that they are happy to work for Holden Australia. The levels of team work will help towards determining the commitment level of the employees (Macey et al., 2008). Having pride to work for Holden is the key to employees’ commitment. The employees will be reminded of the benefits they have due to the skills that they gain from working at Holden. This can help them to be more committed as they try to gain more skills in their area of specialty (Trevor, Charlie & Anthony, 2008). Employee voice Level of the employees’ engagement can be improved highly if their voices are heard. Holden management in Australia must allow the employees to put their views in their meetings and participate in decision making. The employees should be highly involved in work related matters and their opinion listened (Trevor, Charlie & Anthony, 2008). This strategy will enable them to be engaged in their work. Holden Australia will have to adopt upward communication where people voices will be listened to. Line managers Holden Australia will have to utilize the role played by the line managers. Line managers are the link between the employees and senior managers. Holden being a large organization, there is typically little interaction between the senior management and the employees (Mondy, Noe & Gowan, 2005). This is through ensuring that the line managers are able to maintain good relationship with employees. Studies have revealed that employees’ engagement is directly related to their perception towards line managers in big organizations (Macey et al., 2008). This have proved that line manages has a great role in ensuring employees engagement. The line managers will be required to help the employees in gaining their insight on how their role contributes to the organization strategy. The relationship between the employees and line managers is vital in running the organization and should be looked at to ensure the skilled workforce is retained and engaged (Trevor, Charlie & Anthony, 2008). Expected Outcome of Engagement Intention to stay The maintenance of employees in an organization is the main goal. This is due to fact that the company will be able to retain its human capital and achieve its goals. Having engaged employees at Holden will enable them to remain in the company up to 2017. The employees who are engaged are loyal and have no intention of abandoning their jobs. For the employees to be engaged, they must be in a positive working environment (Macey et al., 2008). Innovative work behavior High levels of engagement at Holden will enable the workers to develop innovative work behaviors. This involves coming up with new ideas and solutions for difficult problems. The employees will be able to transform innovations into applications which can help the company for the remaining period. This outcome will also be vital to ensure that the employees’ contribution is valued and hence increasing their sense of belonging (Macey et al., 2008). Motivation Lack of employees’ motivation is another major issue that is faced by the human resource department at Holden Australia. Some of the employees have lacked the inner drive they had when joining Holden Australia. This is due to fact that employees are aware that they will lose their jobs soon. What directs motivation is crucial in any organization. The employees should be directed towards the goals of the organizations. When the employees are motivated, they put more efforts in their tasks to attain the organization goals. The reduction of employees’ motivation has led to their productivity going down due to poor job performance. This has led to human resource department coming up with strategies that will enhance employees’ performance through motivation. The human resource department has come up with a stimulation process that will enhance the employees’ performance. There are different types of incentives that will help the employees to increase their motivation levels (George, 2004). Incentives Incentives become important if they are able to evoke employees’ motivation. The human resource department has come up with incentives that are in line with the employees’ needs. The company will have to give tangible rewards to employees to encourage performance through motivation (Vernon, 2003). This is through financial and non financial rewards. Financial rewards are effective if they are awarded according to the job performance and responsibility. The employee will be given rewards which they can easily link to their efforts. Non financial rewards will be directed at enriching the lives of the employees (George, 2004). This includes company cars and sport allowances. For the employees at senior position, monetary incentives may not be a priority to them. This is due to fact that they earn enough to cater for their needs. Positive job evaluation and public praise can serve to motivate the senior employees. Strategies for ultimate Layoff and Reductions Due to the fact that Holden will cease operating in Australia in2107, there is need to come up with a strategy for workers reduction and ultimate layoff (Vernon, 2003). This is one of the most vital steps towards the eventual closure of Holden Australia. The first step towards the eventual layoff of the employees is downsizing. This should be done with care to avoid sending wrong signals to the employees and the media. To achieve this, the human resource department has come up with a strategy that will enable the company to reduce employees effectively (Lublin, 2007). Evaluating the impact of employee reduction Before embarking on employees’ reduction, the firm will have to evaluate the total cost of the process (Vernon, 2003). This will be done by looking at both financial and non financial aspects. The company will look at the value of total costs associated with employee reduction, benefits that are associated with the reduction and what the company will lose in form of sendoff packages. Employee reduction will also be evaluated on the basis of reduction in productivity due to talent loss. This will ensure that what Holden gains by reducing the employees should not damage the company reputation or lower the morale of remaining workers (Gandolfi, 2006). Smooth employee’s reduction process The management will invest in planning for the upcoming job cuts. This will involve forming a committee, which will come up with the required level of job cuts and create a process that will take into account the company and stakeholder’s interests. Communication is the key to help in a layoff process. The firm is supposed to issue layoff notices before conducting the exercise. This will involve having meetings with the employees and explaining the objectives of the process. This will enable the employees to leave the company with dignity. The company will have to train the managers to conduct the layoff exerciser appropriately and assist the employee in their job searches (De Meuse, Kenneth & Mitchell, 2003) (Lublin, 2007). Exit incentives Another strategy that the human resource will utilize in reducing the workforce is offering exit incentives. The employee who will be leaving the firm will be given incentives. This will give the firm a positive image and help in retaining the remaining employees up to the closure. This is a strategy which will take effect as the company start pulling out in some production activity in a bid to prepare for eventual closure (Lublin, 2007). Conclusion The current situation at Holden requires excellent human resources management skills. The employees are aware that they will lose their jobs by 2017 and have started to seek other jobs. This can have drastic results for Holden as they want to remain productive up to closure in 2017. The employees’ level of engagement and motivation are the main issues faced by the firm. Human resource department is the only tool that can help Holden to maintain employees’ engagement and improve their motivation. This is enabling employee’s engagement by creating a supportive environment, commitment, listening to employee voice and using line managers. Motivation can be improved through incentives to employees. The department has also to be strategic in their layoff plans to avoid litigations and loss of morale for the remaining workers. Being a global company Holden global image can be damaged through wrong strategies in reduction and layoff plans for workers. By following these recommendations, Holden will be able to enjoy productivity during the remaining time and also have a smooth exit from Australia. References De Meuse, Kenneth P., & Mitchell L.M. (2003). Resizing the Organization: Managing Layoffs, Divestitures, and Closings, Pfeiffer. Gandolfi, F. (2006). Corporate downsizing demystified: a scholarly analysis of a business phenomenon. ICFAI University Press: Hyderabad, India. George, J. (2004). Cutting costs: should personnel be the first to go? Employment Practices Solution. Retrieved 6th June 2014 from, http://www.epexperts.com/modules.php?op=modload&name=News&file=article&sid=14 09 Lublin, J. (2007). Employers see value in helping those laid off. The Wall Street Journal Online, Retrieved 6th June 2014 from http://online.wsj.com/public/article/SB119058596757936693.html Macey, William H., Benjamin S., Karen M. B. & Scott A. Y. (2008). Employee Engagement: Tools for Analysis, Practice, and Competitive Advantage. Wiley-Blackwell. Mark S. (March 7, 2014). End of Australian car manufacturing could cost up to 39,000 jobs , The Guardian, Retrieved 6th June 2014 from, http://www.theguardian.com/world/2014/mar/07/end-car-manufacturing-could-cost-39000-jobs Matt, J. & Phillip H. (December 11, 2013). Holden to cease making cars in Australia in 2017, while Toyota considers if it can go it alone. Herald Sun, Retrieved 6th June 2014 from, http://www.heraldsun.com.au/news/holden-to-cease-making-cars-in-australia-in-2017-while-toyota-considers-if-it-can-go-it-alone/story-fni0fiyv-1226780690797 Mondy, R. W., Noe, R. M. & Gowan, M. (2005). Human resource management. Upper Saddle River, N.J: Pearson Prentice Hall. Trevor, Charlie O., & Anthony J. N. (2008). Keeping Your Headcount When All About You Are Losing Theirs, Academy of Management Journal, Vol.51, no.2, p.259–276. Vernon, L. (2003). The downsizing dilemma; a manager’s toolkit for avoiding layoffs. Society for Human Resources Management (SHRM). White Paper, March 2003. Read More