Strategic HRD and HRM - Essay Example

Strategic HRD and HRM Situational Analysis of Problem In order to reach a solution to the case study problem starting point has to be a situational analysis. The situational analysis comprises of a situational statement and identification of organizational problems arising from that situation. After statement of complete situation and identification of all of the organizational problems solution strategies would be addressed buttressed with support from the literature. The situational problem could be stated as under: Fume Go Lt, a manufacturer of bespoke fume-cupboards used in R&D processes within laboratories has customers located in Pharmaceutical industries and Universities. Each cupboard is a complex ensemble of fume extraction units, plumbing and electrical systems to be designed and fitted. Each cupboard is unique and requires flexibility and an attention to detail within the manufacturing process to suit client’s customization needs. Company delivers bespoke fume-cupboards to customers' gate but does not get involved in its installation. The Company consists of 220 personnel, 175 of them work on manufacturing process-the core process. Balance of 45 personnel work in the sales department, design department and the support function. Support functions include payroll, accounts, HRM, and administration. HRD problem as identified in company structure appears to be the fact that HRM function is small and inadequately staffed within the company. Further evidence in the case reveals that this function is not able to achieve its objectives to a very large extent. Similarly sales and design departments appear to be under Staffed.The Company has core operations in the manufacturing process in which 80% of employees are deployed. It comprises of several functional sections like the sheet metal cutting and folding for the cupboards, protective coating application, initial assembly, plumbing, and electrical sections. The first HRD/Organizational problem identified in core operations appears to be loose span of supervisory control over laborers. Assuming 4 supervisors per functional section, we have about 20 supervisors in 5 sections and 155 laborers under such supervisors. Each supervisor on an average has about 8 laborers under him. Second problem relates to very high labor turnover on manufacturing shop floor. This disturbs the supervisor span of control further which is already high at 8 laborers and possibly obstructs the product customization process leading to defectives and quality deficiencies. Moreover quality control function at the company is very weak too. Orders schedules are not adhered to and orders are not built as per customer specifications. In fact that there is no separate quality function in the factory, and there is a general apathy about the quality of the product produced. Apathy is also evident in the untidy workplaces. The production process does not seem to be efficient and has not been reviewed for several years. The only quality checking that is done is the check of the final product against the original specification, and the standard of skills available within the company do not match the high level of product specification required to ensure custom quality. As a result orders are sent to customers despite errors of the manufacturing process that have been logged on final inspection, in order to meet delivery dates. This involves the company in having to rectify problems once the cupboard has been either delivered or installed, and attracts additional unnecessary costs that are borne by the FumeGo.Design function, within the core manufacturing operations, is understaffed and has weak organizational linkages resulting in poor intra organizational communications. The designers do not liaise at all with manufacturing for ensuring adherence to product design. The design section is finicky about costly perfect solutions rather than value engineering. They often add some otherwise redundant aesthetic features to the product that only increase cost. The above indicates that the overall personnel motivation is very low. There is a general lack of initiative and poor morale among employees. In critical manufacturing activities this can mean delays and defects caused solely by acts of demotivated employees aggravating quality concerns and increasing company's manufacturing costs. Since production processes have been old it appears that training function of HRM is routine, sporadic and may be not very effective. Training and retraining appears to be entirely absent Sales department also appears to be understaffed and just doing billing, collections and logistics ignoring entirely genuine customer concerns. Responsiveness to customers seems to be entirely concentrated in the design department. There are plenty of things which a customer requires apart from specifying the required designs. Sales has legated its own functions to design department and is concentrating on a narrow and clerical job definition. There appears to be total absence of marketing function. Company has order book up and ready for next six months. However company has already set itself in alarming situation by supplying quality-deficient/delayed products to its customers requiring post sale costly attention. Company's image has taken severe nose dive and repeat orders are becoming rarer. Company is in red and it needs solutions to turn around. In order to gather further evidence on above problems company can concentrate on shop floor on the one hand and customers on the other. Small focused studies can be ordered on dispatch log data to identify the percentage of defective orders delivered. These can be correlated with HRM data on laborer turnover on the shop floor. Correlation could be established order wise. Interviews could be held with quality staff to ascertain reasons for missing quality deficiencies order wise. These could be correlated to training and qualifications of quality staff available with HRM.Type of quality misses and associated costs could be ascertained and a possible accountability structure could be drawn covering quality staff and shop floor supervisors. Delayed orders could be investigated by listing standard and exceptional reasons. Customers could be interviewed to ascertain how they found design interface and if they needed a more dynamic interface to be able to monitor product development better. A motivational study could be taken up administering staff a test under say, Maslow's need hierarchy, to determine worker needs and present demotivators. Design department and shop floor could be interviewed to explore possibilities of comprehensive and better interface to avoid missing quality and specifications. Strategic HRD issues within overall strategy- a literature review In the volatile economic environment and changed business realities for organizations HRD interventions can contribute substantially to growth of organizations. Several authors have examined how the HRD interventions can contribute strategically to the success of the organization, in changed business realities, by augmenting and nurturing the potentialities of its employees, (Garavan, 1991; Noel and Dennehy, 1991; Holden and Livian, 1993). (Garavan,  Heraty & Barnicle, 1999) opine that despite the signposting of several HRD dimensions, no unified model of HRD is yet in evidence. The literature on HRD is generally preoccupied with identifying the factors that trigger HRD activity and proving that there is a causal link between human resource development investment and organizational and business performance. Yet three major movements in HRD developments can be noted these are widely termed major HRD models. The first is a functional model. The HRD function, where one exists, is functional in nature, usually staffed by a specialist whose role is focused primarily as a provider of possible HRD solutions when requested by managers (Markwell and Roberts, 1979). The model is operational, educational in orientation, subject matter driven, jug and mug type trainer role and passive transfer of knowledge (Bratton and Gold, 1994). Second HRD model is competency-oriented perspective on HRD. It adopts a broader definition of the activity to include employee, self-managed, career and organizational development (Bristow and Scarth, 1980). The primary focus of all development activities is their contribution at the tactical level within the organization, rather than any explicit links with corporate priorities or strategies (Saunders and Holdaway, 1992).The third HRD model is based on a strategic view of HRD activity (Garavan et al., 1995; O'Donnell and Garavan, 1997). The main theme of this model is to set in strong linkages of HRD function with overall corporate goals and strategy with attainment of vertical integration. (Heraty and Morley, 2000) also note that HRD function has been assuming strategic approach as against the earlier held view that HRD function lacked any strategic focus. Farquharson and Baum ,while detailing two major organizational changes introduced by British Airports Authority, have the opinion that," Now that HR functions have been accepted as more than simply "hiring and firing", organizations are increasingly turning to this area in order to leverage the immense potential of its employees. As HRM gradually establishes itself as integral to the strategy of an organization, companies are integrating this concept into more and more initiatives, programs and schemes..... By putting the emphasis on Human Resource Management.... was, in effect, countering one of the main obstacles to successful change - resistance from employees (Farquharson &Baum 2002). Similarly Becker et al (2001) have been quoted as stating that the past decade has produced research evidence supporting the critical role human resource management plays in the success of an organization. This evidence has been generated in a variety of different types of organizations including manufacturing, professional services and healths care (Burke, 2001). Total Quality Management (TQM) can be reckoned as a strategic HRM initiative. It involves the entire organization in a process of continuous improvement (Powell, 1995).Continuous improvement in an organization can occur only through unstinted commitment of employees. Therefore Employee Involvement (EI) is considered to be a valid strategic HRD move. Customer satisfaction levels improve as a result of empowering of employees. Many researches have opined with strength that employee participation should be actively ensured in problem solving (Dale et.al, 1997; Pun, 2001). In order to integrate HR functions with of the company in the case study within the overall strategy of the company HR function should activate and find out blockages to enthusiastic commitment to work and to convince workers to chose and actively aim vital work goals when they are distracted with less important alternatives a complete motivational analysis of human resources is essential. In order to answer these and other questions about motivation at work one can use a general cognitive motivation model which, if adopted at work, may help achieve work goals (Graham & Weiner, 1996). For the purposes of this discussion, motivation is defined as “...the process whereby goal-directed activity is instigated and sustained” (Pintrich & Schunk, 1996). Motivation is also concerned with the amount and quality of the “mental effort” people invest in achieving goals. Mental effort is defined as “the number of non-automatic elaborations necessary to solve a problem” (Salomon, 1984). Modern, multi-national organizations applying cognitive models of motivation (e.g. Hewlett Packard Co., AT&T, Motorola, Wells Fargo Bank, The European Patent Office) have relied heavily on application models presented by Stolovitch and Keeps (1992). They recommend a “human performance technology” and their approach begins with a list of specific and measurable business or organizational goals. A current measure of goal achievement is analyzed. Analysis of three possible causes for failure to achieve a business goal is conducted. The Human Performance system draws heavily on Gilbert (1996), Rummler and Brache (1996) and Harless (1995) who suggest that all performance requires three primary factors: 1) Knowledge which can be presented in training or “hired” with new employees; 2) Organizational policy and procedures which must be analyzed to see if they support or are barriers to business goals; and 3) the motivation of employees to pursue work goals with appropriate mental effort. Most organizational goals require structures coalescing of all three factors. Once this cognitive model is run through workers and supervisors it is likely to throw out major motivational issue with a focus on quality lapses. It is also likely to suggest immediate techniques which can be adopted to raise worker retention at the shop floor. Even training/retraining needs can be identified through this process apart from other work place deficiencies. This would supplement well the Maslow test administered earlier to probe problems deeper. One very large multi-national high technology company has informally reported benefits of “12 to 50 times cost” when using the approach. Most importantly it would align the human resources management function with the overall strategy of the company. 'Human resources alignment means integrating decisions about people with decisions about the results an organization is trying to obtain'(US,1999).In the present case study the company critically needs low turning over, quality committed and motivated employees-the result which the company is seeking and HR alignment would be complete with HR now aiming to develop such workers. This would free the employees' move towards EI policies of the management. In fact a well developed EI policies centered around major organizational problems very often turn out to be motivating factors by themselves. A motivated employee is also a more involved employee. Organization Development Approach As the company is primarily a manufacturing concern with major worries related to slip shod product quality standards/delays and an archaic production process all of which is not only increasing costs for the company but also hurting its image as quality products' manufacturer. Therefore any realignment of organizational structure has to revolve around this activity closely woven with new found efforts to motivate workers to commit to quality. A Total Quality Management (TQM) strategy in combination with EI policies and a layered learning system needs to be adapted as a grand strategy of organizational development in the instant case for affecting a turnaround from a loss position. With limited scope for differentiation in bespoke cupboards the company needs to concentrate on improving service levels in terms of enhanced product quality and prompt scheduled deliveries while at the same time reducing costs for its customers. Critical to the realization of these goals is the adoption of total quality management (TQM) philosophy in conjunction with EI policies and a layered learning system. Jones and Hendry (1994) make a distinction between organizational learning and a learning organization. While by former they mean HRM, knowledge, training and skills acquisition; by latter they imply expansion and development of organizational capability (Pettigrew and Whipp, 1991).Initially the case company needs to adapt an organizational learning approach through extensive learning in the form of trainings in revamped production processes. Subsequently when it has achieved a 100% updation of skills in updated processes it should graduate to learning organization approach. Hence, restructuring, re-engineering of processes (refer above in the situational analysis a production process that has not been reviewed for long) and delivering customer requirements (refer quality complaints and delays in the situational analysis) are all part of a holistic TQM approach (Parkinson et al, 2000). TQM can be adopted either as a "push" or "pull" change methodology. Leonard (2000) and Schonberger (1992) define "push" as the operational improvement role of TQM whereas the "pull" is the strategic or direction giving, improvement role of TQM. These opposite movements and tension in between the two in TQM applications are shown by Leonard and McAdam (2001) who contend that many TQM plans limited themselves by devoting more attention on operational issues than to the strategic TQM issues. In order to search an appropriate change model under TQM, the analysis of exceptional companies done by Fitz-Enz (1997) is a good guide. They summarized best practices to include values driven culture, the formation of partnerships/strategic groups, ongoing review and refinement of strategy, experimentation and risk taking. This approach resulted in a more stable organization with meaningful inclusion of the views of the workers. It can be added that TQM can also have an objective of making the company an" agile" organization as the case study company has to look into futuristic development of customer relationships for increasing the falling repeat orders. This context of the modern competitive environment suggests that successful companies must develop close proximity to the customer and work with the customer to define solutions (Camison, 1998). Ghoshal and Bartlett (1998) note that "the objective is to build a place where people have the freedom to be creative, where they feel a real sense of accomplishment - a place that brings out the best in everybody". A change model built by Ghoshal and Bartlett needs to be considered for application in the case of Fume Go Ltd. This envisages a change from the traditional corporate structure to an organization characterized as an "individualized corporation". This model is built in a manner to provide managers and leaders a perspective from which to deliberate the changes required their organizations. In a traditional corporate structure where compliance, control and contractual employer/employee relationships dominate, the organizations turn bureaucratic and become less hospitable for innovations and quality consciousness. Such organizations preset work performance and quality standards which rarely improve from such preset standards. The model radically intends to relocate responsibility and the sense of ownership to the employee encouraging greater discipline in getting to targets- a process ably supported by requisite systems and visibility of information. This generates a new "moral" contractual relationship in which each and every employee "takes responsibility for his or her best in class performance and undertakes to engage in the continuous process of learning that is necessary to support such performance amid constant change" (Ghoshal and Bartlett, 1998).This approach is a total integration with EI policies. This model is most appropriate for Fume Go Ltd as it exhibited all the features of stricken situation which this model seeks to treat or change. Moreover this models employee orientation would directly dovetail with HR alignment as discussed earlier as there would be little or no resistance from employees to change. This model has the capability to have both strong "push" and "pull" change forces for best outcomes. A major part of vision statement of the organization viz. HR initiative with concerted employee orientation for quality has already been achieved by the HR initiative as above (through motivation therapies, EI policies and learning systems). Change model has to institutionalize these initiatives so as to make them regular and ongoing HR managerial practice at the organization. Some 'push' aspects of this institutionalizing are stated below: (a) Evolving a quality linked bonus structure where in employees saving a quality lapse or producing uninterrupted quality are awarded monetary bonus and/or Employees Stock Option (ESOP).Even promotion needs to be directly linked to quality production and contribution therein. (b)Setting up strategic work groups-for instance one can have work groups handling universities' orders and another work group handling laboratories' orders. Within these groups there are possibilities of having sub groups handling individual orders, say, coming from particular areas. This would tend to improve and rationalize span of control. Each work group would draw its own critical path for each order and answer delays. Departmental structure of the shop floor will be retained with only workers from each department identified with particular work group/orders. This would crystallize accountability for quality and schedules. (c)Initiating a system wherein design department has combined briefing of the work group and customers-order wise. Design department should combine more work groups and customers for similar orders. Design department needs to convene intervening review meetings with above participants at various stages of completion of orders. (d)Designing staggered and focused training for workers with emphasis on quality as viewed by clients as part of learning system. (e) Making workers hiring contracts with minimum stay with the company clause. Breach being expensive for worker. Each training should be gradually tied to this contract. (f) Beefing up the HRM function of the company either by hiring professional staff or by regularly outsourcing HRD consultants. This would be primarily required to assess worker motivation on an ongoing institutionalized basis, evolving relevant learning systems and floating new EI initiatives. (e) Increasing available man-hours by finely defining shifts. Some of the 'pull' aspects can now be listed below: (a)Production process is outdated. A consultant advice is required to rationalize and modernize it to deliver best quality. Time and motion studies should be conducted to ensure best utilization of resources (for instance weeding out aesthetic additions which only added to cost) in least possible time. Outputs of both of the above change actions may be directed as inputs of focused workers' training, as above. This would also throw out changes needed in work environment so as to make it neat and likeable by workers and take care of lower order material needs of workers. (b)A five year perspective plan may be drawn up setting production, sales and quality targets work group wise with provision for annual review and triggered action plans to address gaps. This plan may include a company wide bonus scheme triggered at preset sales/profits level achieved. (c)A separate and professional quality check system (multiperiod and multipoint) is essential. It needs to be introduced and integrated as part of work group structures. Workers require specific training on quality issues-from the perspectives of both quality producers and quality inspectors. Quality standards codification may be revised. (d) Sales and marketing department may be strengthened internally or by outsourcing and a concerted media campaign may be taken up with focused message of a revamped company delivering best quality. Sales function should be strengthened to obtain more repeat orders with the background of above media campaign, in first instance. Once they recover all repeat customers they need to intensify additional marketing efforts to get new customers. Push and pull factors included above covered a holistic TQM model focused on getting the desired objective of turning around an ailing company by strategically weaving HRM strategy within. However it must be remembered that," TQM approaches in companies have been successful in 'doing things the right way'. However, there is evidence that it is much more difficult to apply TQM in a way that it is contributing to "doing the right things". Too high expectations about the latter application of TQM have in many cases led to disappointments. Therefore, managers should be realistic in what TQM can and cannot do for their organization. TQM goals should be derived from corporate strategy instead of the other way around"(TQM, 2004). "Plain and simple honest organic performance improvement is what TQM is all about"(TQM, 2004). Works Cited Garavan, T.N. "Strategic human resource development". Journal of European Industrial Training.Vol. 15 No. 1. pp. 17-30. 1991. Noel, J.L. and Dennehy, R.F. "Making HRD a force in strategic organizational change", Industrial and Commercial Training.Vol. 23 No. 2. pp. 17-9. 1991. Garavan Thomas N., Heraty, Noreen & Barnicle, Bridie ." Human resource development literature: current issues, priorities and dilemmas". Journal of European Industrial Training.Vol. 23 No.4/5. pp. 169. 1999. Markwell, D.S. and Roberts, J.J." Organization of Management Development". Gower. Aldershot. 1979. Bratton, J. and Gold, T. "Human Resource Management: Theory and Practice". MacMillan, London. 1994. Bristow, S. and Scarth, R. "Personnel in Change". Institute of Personnel Management. London. 1980. Saunders, M. and Holdaway, K. "The In-House Trainer as Consultant". Kogan Page. London. 1992. Garavan, T.N., Costine, P. and Heraty, N. "The emergence of strategic HRD".Journal of European Industrial Training. Vol. 19 No. 10. p. 470. 1995. O'Donnell, D. and Garavan, T.N. "New perspectives on skill, learning and training: a viewpoint". Journal of European Industrial Training. Vol. 21 No. 4. pp. 131-7. 1997. Holden, L. and Livian, Y. "Does strategic training policy exist? Some evidence from ten European countries", in Hegewisch, A. and Brewster, C., European Developments in Human Resource Management, Kogan Page, London. pp. 101-16. 1993. Heraty, N. and Morley, M.J. "Human resource development in Ireland: organizational level evidence". Journal of European Industrial Training. Vol. 24 No. 1. pp. 21-33. 2000. Farquharson,Lois and Baum,Tom. "Enacting organizational change programmes: a centre stage role for HRM?" International Journal of Contemporary Hospitality Management. Volume 14 Issue 5. 2002. Burke,Ronald.J. "Why Human Resources Matter". Reinventing Human Resources Management: Challenges and New Directions. Eds: Ronald J. Burke & Cary L. Cooper. Routledge. New York. 2004. Powell.T.C."Total Quality Management as a competitive advantage: A review and empirical study." Strategic Management Journal.Vol.13 No.2.pp 119-34.1995. Dale,B.,Cooper,C. & Wilkinson,A."Managing Quality and Human Resources: A guide to continuous improvement." 2nd Edition. Blackwell Publishers.Oxford.1997. Pun,K.F."Cultural influences of TQM adoption in Chinese Enterprises: an empirical study". Total Quality Management.Vol.12 No.3.pp 323-42.2001. Graham, S. and Weiner, B. "Theories and Principles of Motivation", in Berliner, D. and Calfee, R. C. (Eds.) Handbook of educational psychology. Simon & Schuster Macmillan. New York. 1996. Pintrich, P. R. and Schunk, D. H. "Motivation in Education: Theory, research and applications". Englewood Cliffs: Prentice Hall. 1996. Salomon, G. "Television is “easy” and print is “tough”: The differential investment of mental effort in learning as a function of perceptions and attributions". Journal of Educational Psychology.76.pp 774-786. 1984. Stolovitch, H. D. and Keeps, E. J. "The handbook of human performance technology". San Francisco: Jossey Bass Publishers.1992. Gilbert, T. F. "Human competence: Engineering worthy performance". Amherst Massachusetts: HRD Press, Inc. 1996. Rummler, G. A. and Brache, A. P. "The systems view of human performance". Training. 25:9.pp 45-53.1988. Harless, J. "Performance technology skills in business: Implications for preparation". Performance Improvement Quarterly. 8:4.pp 75-88.1995. U.S. Office of Personnel Management. Office of Merit Systems Oversight and Effectiveness "Strategic Human Resources Management: Aligning with the Mission". A Study.1999. Jones,A.M. and Hendry,C."The learning organization: the adult learning and organizational transformation." British Journal of Management.Vol.5 No.2.Wiley.Chichester.pp153-62.1994. Pettigrew, A. and Whipp,R."Managing Change for Competitive Success."Blackwell.Oxford.1991. Parkinson, S., McAdam, R., Henderson, J. "Organizational change evaluation: towards a more subjective approach", Journal of General Management. 25, 2.pp 59-81. 2000. Leonard, 2000D."The strategic dynamics of TQM". 2000. Schonberger, R. "Is strategy strategic? Impact of total quality management on strategy", Academy of Management Executive.6, 3.pp 80-7. 1992. Leonard, D., McAdam, R. "The relationship between TQM and corporate strategy: the strategic impact of TQM", The Journal of Strategic Change.10, 8. pp 439-48. 2001. Fitz-Enz, J. "The Eight Practices of Exceptional Companies: How Great Organizations Make the Most of Their Human Assets". Sage, New York, NY. 1997. Camison, C. "Total quality management and cultural change: a model of organizational development". International Journal of Technology Management.16, 4-6.pp 479-93. 1998. Ghoshal, S. & Bartlett, C. "The Individual Cooperation". Heinemann, London. 1998. "TQM: why it will again become a top management issue". International Journal of Quality & Reliability Management. Volume 21 Number 6. pp. 603-611.2004. Read More