Impact of Competitive and Organizational Context on Manchester Unit of Amifood - Essay Example

?HRM at Work Table of Contents Table of Contents 2 Introduction 3 Impact of Competitive and Organizational Context on Manchester Unit of Amifood 4 Benefits and Costs from Increase to the Real Wages of Low Skilled Operatives 5 Insights from Motivation Theory 6 Impact of Change in Recruitment, Training and Other HR Processes 8 8 Difficulties in Implementing Change 10 Planning of Change in Pay Level 11 Conclusion 14 References 15 Introduction Human Resource Management (HRM) is a vital segment in any organization which deals with managing the relationships with and among employees and controlling their performance. The practices of HRM in organization include recruitment, training, performance appraisal and reward among others. Effective HRM at work can guarantee high quality loyal employees which are beneficial for organization. It is the duty of HRM to motivate employees so that they can put their best effort towards work (Marchington & Et. Al., 2002). The paper will analyze the case of Amifood which has confronted HR issues regarding performance of low skilled operatives. The objective of this paper is to examine the situation of Amifood and provide an insight about how increasing in pay can impact on the performance of employees. Aspects such as motivation of employees, change process and difficulties in implementing change process have been considered in this paper. Impact of Competitive and Organizational Context on Manchester Unit of Amifood According to the observation of Capalli and Sherer (1991), context can be defined as organizational settings related with certain specific occurrences which help to illuminate typical issues that are in relation to certain units of an enterprise. Context is a situational occasion which impacts the organizational behavior as well as efficient associations between variables. Context can interrelate with personal variables such as employees’ personalities or performances which can impact on organizational productivity (Johns, 2006). In the industry level, organizational context refers to the individualities of organizational background regarding the roles and the responsibilities of employees in a company. Managers constantly interpret the context of organization and hence it has a strong impact on the classification of any problem or incident (Dessy, 2010). In order to empower the low skilled employees of Amifood, it needs to generate the sense of responsibility so that they take their task seriously. It can be performed by offering employees with a few choices. The socioeconomic position and social background are the factors which can impact the choice of employees (Staw, 2006). Effective organizational context can support and strengthen the capabilities of employees by developing a supportive environment and by providing adequate resources in terms of training, higher wages and advanced equipment (Pierre & Et. Al., 2011). In the case of Amifood, it can be observed that the comparative pay of tray operatives is lower than similar jobs of other companies, which has directly created anxiety among the workers and reduced the level of performance. A reward system on the basis of performance of employees in the Manchester Unit can further promulgate effectiveness in healthy work environment. Benefits and Costs from Increase to the Real Wages of Low Skilled Operatives The wage setting in an organization is an uncertain procedure. According to ‘Conventional Theory’, it can be said that “marginal product of labor is similar to the real wage” of employees (Millea, 2002). If employees become more useful, then organizations can react with increase of the amount of real wages. On the other hand, the ‘Efficiency Wage Theory’ says that, higher wages provide an encouragement for employees to upsurge their efficiency. The cost of turnover of employees is directly related with the wage amount. According to the observation of Campbell (1993), employees who receive comparatively higher wages are much unenthusiastic to quit the job. It can be stated that high real wages are inversely related with employees’ turnover ratio, i.e. the more real wages will increase, and lesser the employees will leave the organization. The impact of real wage on employees’ productivity depends on the influential provisions of corresponding labor market. Extended interval of unemployment benefits, greater salary replacement ratio, and better labor market expenses decrease the employees’ sensitivity to wage because it can diminish the costs related with becoming unwaged (Millea, 2002). A few people believe that employees’ productivity is related with the real wages. The ‘Industry Wage Levels Theory’ assumes that when productivity of employees increases, the contribution of employees towards the organization also increases which lead to higher demand for labors. The amount of wages are decided by ‘supply and demand of labor’, i.e. increase in demand of labor will result in rise in real wages. Certain people thought that there is no relation with better real wages to employees’ productivity because if demand of a product or service reduced, the price will also be reduced. Thus, even if the productivity increases, the wages of employees will drop (Bruce, 2002). In case of Manchester Unit of Amifood, it can be observed that the pay rates of low skilled operatives are lower compared to similar jobs in other organizations. As the demand of the labor of Amifood is higher and is expected to increase, it will be beneficial for the company to raise the real wages of the low skilled operatives. Higher real wage can reduce the rate of absenteeism and turnover. It can raise the determination of operatives. Higher real wages can increase the motivation for operatives to act harder and result in higher productivity of employees. On the other hand, higher real wages can result in ‘Cost Push Inflation’ and Amifood will need to bear extra cost for higher real wages of low skilled employees which impact on the profitability of the company, because the burden of higher cost will be put on to the customers. Besides increase in real wage of low skilled operatives can also restrict the lifetime earnings opportunities because it can make it hard for employees to leave benefit and it will be difficult for Amifood to compete with other players. Due to increase in the real wages of low skilled operatives, the skilled employees might feel that they deserve more which in turn can raise conflict within employees (Pettinger, n.d.). Insights from Motivation Theory Several theory depicts that employees can be motivated by money, thus many companies apply higher pay to make them perform effectively. Where employees’ productivity is directly connected with the achievement of company aims, higher pay can be used as motivator. The motivation theory is applied in many businesses through performance based wages, incentives, bonuses, and promotion structures. Money is a mode to display that the efforts of employees are appreciated. Besides, employees will be distressed if the pay for a job is comparatively lower than their social group in other organizations (Houran & Kefgen, n.d.). The ‘Scientific Management Theory’ of Frederick Taylor is relevant for the issue of Manchester unit. Frederick Taylor had invented the ‘Piece Rate System’ where employees are paid according to their performances. The major feature of this system is that there are two rates on which employees are paid. One is higher pay rate for those employees who surpass the standard performance criteria set by the organization and the other one is lower pay, for employees who perform below standard criteria. The piece rate system acts as a punishment for unproductive employees as they will receive low wages (Aswathappa, 2007). The Manchester Unit of Amifood is characterized by low rate of employee motivation and one of the reasons might be the comparatively lower pay to the tray operators. The ‘piece rate system’ can help to induce employees to attain minimum standard and also restrain them to be reluctant in the workplace. The ‘piece rate system’ can be applied according to number of outputs or working hours (Aswathappa, 2007). In the case of Amifood, it can be observed that tray employees are not willing to work extra hours. Therefore using ‘standard hour system’ in the Manchester Unit’s Tray Set-Up Department can help to motivate employees by providing extra pay if they work for extra hours. Productivity beyond standard level can help employees to share the surplus earnings and it relies on the size of percentage increase in earning which are allocated at different levels of operation. If the percentage increases are big enough and grow gradually with productivity, the employees of Amifood can clearly enjoy higher wages. ‘Vrooms Expectancy Theory of motivation’ can also provide an insight in this case. Victor Vroom had identified that employees are inspired by the possibility of success in accomplishing specific purposes. Managers of Amifood need to resolve those specific purposes of employees in order to make them motivated towards work. Three things can be performed to make the low skilled employees of the Manchester Unit to be motivated. At first, there is need to relate the tasks to the consequence of better performance. Then, managers should generate expectations to the employees for possible advantages in case they perform better and reach or exceed the expectations. Finally, managers need to make sure that those advantages that are provided to employees are worthy for them. If the benefits are not worthy for the employees then they will not be inspired and it can lead to low enthusiasm for work. These factors can create enthusiasm among employees and it conveys enjoyment to perform task. As the tasks of tray operatives are tedious in nature, the expectancy theory of Vroom can help them to be dedicated for their work and they will attempt to satisfy the expectations of the company (IFM, n.d.). Impact of Change in Recruitment, Training and Other HR Processes Competition in the international environment forces big organizations to change their HR arrangement so that they can compete effectively in the changing circumstances. In order to strive with the fluctuating environment and improve the operations the Tray Set Up division of Amifood has undergone a change. There is also need to change the recruitment, the training and other HR processes for better productivity. For any organization, recruitment is a serious HR aspect and it is obvious that any change in recruitment process positively impacts on the organization. Recruitment is measured as a set of action accompanied by an enterprise to search appropriate employees with inherent objective of improving business performance. It is vital for Amifood to change recruitment process from company’s viewpoint and convey appropriate preparations to extemporize the business procedure. It can be observed that the current interview procedure of Amifood is not at satisfactory level and as a result 80% of the candidates fail to proceed in the next step. Ignoring the basic features of recruitment can have serious impact on the brand image, employee’s satisfaction and HR rules. Cautious planning of recruitment process requires discipline, obligation and support from top level of the company. In order to improve the interview process, the examiners should be taught appropriately for using suitable interviewing method. Examiners should confirm that candidates are conscious about the job requirements. The questions should exactly relate to the job along with candidate’s capability to perform the tasks of their respective positions (Agarwal & Et. Al., 2009). It is the duty of the organizations to judge the dedication of employees to perform tasks. In this way, Amifood can gain genuine benefits of change in recruitment process. Training is another aspect of HR process which is required to teach employees the knowledge and practical skills required for performing particular task and fulfill the expectations of organization. In present days, it can be observed that several organizations are trying to change the training process as a part of comprehensive change endeavor. Any change in HR process can impact on organizational culture and could lead to temporary fall in output and employees confidence. Thus, if Amifood undergoes change in organizational culture, it can generate a usual fall in workplace competency (Steinbrecher And Associates Inc, 2010). Employees can play significant part in directing and instructing operational change process of Amifood. Employees along with managers should be involved in planning new training programs which can improve the employees’ abilities and develop practical talents. Through changes in training program, Amifood can lead and guide employees about good performance and motivate them, which in turn encourage the operational behavior and approach. Difficulties in Implementing Change A critical part of any organization is to implement the change process. Organizations implement change in HR or operation processes in order to adjust with the fluctuating business circumstances, but executing those changes can cause misperception, low confidence, and turnover and reduced efficiency among employees. The main objective of change process in any organization is to improve the business performance. In the case study, it can be observed that the airline catering industry where Amifood operates is highly competitive and the company is under huge stress to maintain its product costs, quality, hygiene criterions, and appropriate delivery system to sustain in the industry. So, there is need to implement change in the company operations and HR practices which can foster the quality and ultimately help to retain customers. One of the major difficulties Amifood can face while implementing change is resistance from individual employees or group of employees. The main reason for resistance of change is due to lack of consciousness regarding change which can generate the fear of risk within low skilled employees. Some employees can feel that they lack the ability to cope with the change in organizational process. Thus, successful implementation of change requires training of employees aimed for making them understand the causes and benefits for such change (Val & Et. Al., n.d.). Implementation is a vital phase where Amifood can confront with two resistance groups. The first group contends with political and social difficulties to implement. This group involves divisional legislations or resistance from those divisions which can impact with change implementation. For example, the finance department of Amifood can resist change due to increase in cost of new training and recruitment process which can impact on organizational efficiency. Besides, operations department can also resist the change as it can hamper the performance of low skilled employees. The other resistance group has different characteristics which defy the implementation due to threat of uncertainty, risk of alteration in ‘status quo’, fear of change in usual routine and lack of essential ability to bear with the change. Moreover, changes in pay pattern of low skilled employees can cause anxiety for expert employees to raise their salaries (Val & Et. Al., n.d.). Planning of Change in Pay Level For any kind of change in organization, whether in operational process or change in pay scheme, the resistances for other employees are expected. In order to plan the pay level change, Amifood can contemplate by following ways: Identification of Potential Reasons to Resistance: It is the first part of planning in the pay change. Amifood needs to recognize the critical reasons which probably generate resistance for increasing pay within different employees (Secord, 2003). Selecting Methods to Evade Resistance: In order to avoid the resistance from other employees or group of employees, Amifood needs to select ways which can help to evade the resistance. Involving employees in decision making, communicating the vital aspects of change process can help to reduce the resistance to change (Secord, 2003). Alignment: Amifood needs to decide the amount as to how much it will increase the pay level of employees and align it with the standard performance criteria for low skilled employees. Amifood must ensure that the actual impact of change is recognized by all employees before implementation (Steinbrecher And Associates Inc, 2010). Implementation of Change: After aligning the pay level of employees with the performance criteria, Amifood needs to announce as to when these changes will take place. Amifood can prepare workshop session for telling about the implementation which will be useful for the company to communicate the change in pay level to the employees (Steinbrecher And Associates Inc, 2010). Monitoring: Monitoring is a pivotal step in planning of pay level. It is intended for improving the efficacy and success of the change scheme. It is based on the expectations of organizations towards meeting the standard performance criteria. Through monitoring the daily performances of employees, Amifood can keep track about the productivity and any difficulties in the operation (Shapiro, n.d.). Evaluation: After increasing the pay level, Amifood needs to evaluate the impact of the change through three criteria which are Efficiency, Productivity, and Influence. The ‘Efficiency’ will help to evaluate the increase in pay of employees with respect to the profit of Amifood, i.e. if he increase in pay has any impact on the profitability of the company. ‘Productivity’ will help to assess whether employees are meeting the standard performance criteria or not. Ultimately ‘Influence’ can help to judge if the increase in pay level has actually made a difference compared to the previous situation or not (Shapiro, n.d.). Conclusion Motivation of employees is significant for any organization to improve the productivity and gain competitive advantage. Among other factors the financial aspects can be used as a motivator for low skilled employees of Amifood because their pay was comparatively lower than other organizations which in turn resulted in higher absenteeism, less enthusiasm to work for extra hours and high rate of turnover. The industry where Amifood operates includes high level of competition where employees’ performances play vital part in providing quality products and satisfying customers. Demotivated employees can fail to deliver quality services and it can harm the reputation of the company. Therefore, appropriate change in HR process is significant for Amifood to make them dedicated towards work and make a strong position in the international market. References Aswathappa, K., 2007. Human Resource And Personnel Management. Tata McGraw-Hill Education. Agarwal, M. & Et. Al., 2009. Rethinking The Recruitment Process: Time For Change. Indian Institute of Management Kozhikode. 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