Human Resource Management - Essay Example

Human Resource Management Case study: Introduction Mattel was an ailing business firm when Eckert was named CEO in 2000. He took on the more conservative approach to his leadership saying “there is no need to reinvent the wheel every time you have a problem”. Thus, instead of looking for another blockbuster toy product, he focused on the human resource management (Verma 2007). What is Human Resource Management? The activity within an organization that focuses on the recruitment of, management of, and the development of human resources is called Human Resource Management. The issues related with Human Resource Managements are the following: Compensation, hiring, management performance, development of the organization, overall wellness, and benefits; motivation of people, good communication, good administration, and training (Heathfield “date unknown”). Overhauling Mattel was not an easy task for Eckert, but it was a fruitful endeavor for Mattel’s CEO. Question 1: Identify the key elements of Mattel`s HRM Strategy. Critically evaluate the HRM strategy in relation to relevant theories and models and the current external environment. What potential issues does the company face in balancing the organizational HRM strategy with divisional personalization of it (as discussed on page 9of the case study) The key elements of Mattel’s HRM strategy are workforce development, and the standardizing people development1. Workforce development could mean a lot of things, for there seem to be no single meaning to describe the term. However, workforce development has become a term to illustrate any one of a comparatively broad range of national and international strategies and programs associated to learning for work (Jacobs & Hawley “date unknown”). Many scholars in this particular field use the term national workforce development to mean the articulation between the private-sector and government programs (McLean 2003). According to Jacob and Hawley (date unknown) “Emergence of Workforce Development: Definition, Conceptual Boundaries, and Implications” there are five reasons for the coming out of this particular phenomenon in the field of industry. To be precise, these are globalization, technology, new economy, political change, and demographic shifts. These five factors are all connected with each other and have become a great challenge especially for adults (Jacobs & Hawley “date unknown”). Globalization opened the door for the free flow of market among nations. International Standardization has been established, and even the manufacturers in the remotest part of China and Vietnam are now allowed and able to compete with the manufacturers with modern facilities in the more developed countries (Jacobs & Hawley “date unknown”). Global competition calls for human resource development, and has become one of the driving forces in workforce development (Ashton et al 1999). Technology plays a major part in the development of human resource. A change in technology calls for planned workforce development. This technology change aims to increase the productivity of people and firms in all divisions (Foster, A. D., & Rosenzweig, M. R.1996). Communication technology made it possible for countries like India to be in equal footing with more developed countries (Jacobs & Hawley “date unknown”). New economy is generally defined by the characteristic of free market. Adults are particularly challenged, and in need of training in specific fields because of the sudden change in job classifications (Levy & Murnane 2004; Osterman 1999). Political change is also one of the reasons for human resource development. There has been a mark change in the political atmosphere; one in particular is the forming of European Union as a single entity in the market place. There is also a great degree of openness in many countries to (FDI) foreign direct investments (Jacobs & Hawley “date unknown”). Demographic shifts are the last one of the driving forces for human resource development. The U.S. workforce for example which has grown to more than 50% in the past 20 years will slow down its growth dramatically in the next decades. There is the need for the succeeding generations for quality training and plenty of it to be able to cope up with the continuous challenge the global workforce is facing (Jacobs & Hawley “date unknown”). These five have forced the whole world to respond and invest on human development. Eckert understood that resource development was of utmost importance in order for Mattel to bounce back to its original healthy footing. Mattel through the leadership of Eckert responded to the need of the company in a way that has never happened before in its history. The first observable fact that was negatively affecting the operation of Mattel was that the employees were “disjointed and unmotivated”2. There was a great need to unify the workforce. Here the theory of jointing of the workforce is applicable. Whenever there is discord inefficiency follows. Mattel is an international company that has operations in different places of the globe. To be able to run it successfully, unified workforce is a must. Eckert’s Strategies: 1. Consolidate divisions/ streamlined workforce He started with the proposal to create solid programs with the aim of producing and developing more skilled workforce. This was relevant and important step to make better the operations of Mattel, and in lined with the existing human resource development theory. He also proposed the establishment of metrics on which the performance of Mattel’s workforce shall be gauged. Eckert through HR made sure that all his people are well informed, from the top management to the bottom line employees. 2. Workforce Strategy/People Succession planning was established. This was for sustainability; to secure and retain Mattel’s homegrown talents. According to Linda Barker of Business Impact Associates (2008), this is particularly important in identifying the best candidates for extremely important positions (top-down). It also means pipelining and securing leadership continuity (down-top). Unlike before Eckert’s appointment as CEO of Mattel, the supervisors were choking the information regarding the potential people that could possibly be posted in key positions in the future. With regards to divisional personalization, issues that may arise in Mattel include possible regression of a now already strong organization, and the possibility to slip back to a scattered Mattel. Mattel being not only an organization, but also individual business units, there is the need for individuality to some degree on each individual business division. However, Eckert was confident that Mattel has already learned its lesson well. Mattel standardized its people development, and better equipped now to handle sensitive matter, and were now working as one for “one Mattel”. They may be divided in their functions as business units, and should be given some leeway to function as such; nevertheless each business unit should operate with one goal, and that is to maintain the excellent standing of Mattel locally and globally. Question 2: With reference to relevant published sources and original examples, provide a critical analysis and review of the changes that were made to performance within Mattel instigated by Eckert, the CEO, how can Mattel ensure sustainability of its approach to performance? “Mattel's management has articulated its overall company vision: The World's Premier Toy Brands--Today and Tomorrow. Management set five key company strategies: (i) improve execution of the existing toy business; (ii) globalize the brands; (iii) extend the brands; (iv) catch new trends; and (v) develop people”( http://www.referenceforbusiness.com/history2/17/Mattel-Inc.html). The first steps Eckert did as the CEO of Mattel was to restructure and simplify the operations. Robert Eckert redirected Mattel back to its major competency, which was toy. He did this by taking a conservative “slowly but surely” approach. He did not take on the pressure of seeking another blockbuster toys, and this resulted to a relatively flat revenues in the first two years as the CEO of the company. Though the revenues were flat, the net income was decent at $298.9 million and $230.1 million, respectively. Eckert streamlined Mattel’s operations by making important business moves in lined with the new management’s structured strategies. He remained committed to establishing the bottom line profits instead of focusing on the top line, even though that by doing so, many experts were unhappy and disappointed (http://www.referenceforbusiness.com/history2/17/Mattel-Inc.html). The CEO ordered an internal survey around the world to see what Mattel has been doing right, and what it has been doing wrong from the viewpoint of its workers. He was personally involved with the readings of the responses of the workforce survey. He created then a corporate vision and strategy which up to that point did not exist. The workers around the world were bombarded by awareness campaign of the corporate objectives which include: globalizing, improving productivity, extending brands, and creating new brands. Divisions were required to follow one performance system – the outcome was it measured the contribution of the employees towards the firm’s strategic goals. Eckert spearheaded the performance management and naturally it flowed down to the workers all over the globe. Supervisors were made to follow set of goals that supported the corporate goal of Mattel. The 360-degree feedback system was put into practice, and training was made available to improve individual skills3. This was an excellent move made by Eckert. Even industry observers unanimously agreed that Mattel’s workforce prospered under the leadership of Robert Eckert4. The reorganization of Mattel’s workforce achieved the desired effect. It encouraged the overall system to act as one, which is the primary purpose of human resource management. It eliminated the divisions and sub cultures, and no one or no division was feeling left out. It gave a new sense of direction. Unity means power in a sense that no energy and talent were wasted, and that equaled to profitability. Formal talent management was set in place – this area of workforce strategy set a stage for a good succession planning, and it promoted communication among divisions. Identifying potential leaders were made by managers. Eckert felt that toy industry was part science and part art; it also required fast decision making since 80% of Mattel’s product were new every year. With little time left for careful planning, most of the decisions were made based on instinct. Eckert did not like to leave it that way, and opted to serious training investments. The company allotted budget, a substantial amount of about $2.5 million, with $700,000 for training seminars alone5. This involved training personnel of Mattel from all over the world. Mattel’s CEO Robert Eckert was very bold in his decisions on investing on people. He took on the calculated risk and he has proven himself to be very good at it. Eckert’s commitment to workforce development was one of a kind according to Kanan Ramaswamy6. By far, Eckert’s decisions were proven effective and fruitful. The sustainability of Eckert’s approach to performance largely depends on the success of the company as a whole. That was the reason in the first place of all these developments, to keep the company afloat. Mattel is the largest toy manufacturer in the world today with over $5.9 billion of net sales in 2008 (wikinvest “date unknown). If Eckert would continue to be sensitive to the need of the global market and would continue to take the challenge of an ever changing world, there is a very good chance that Mattel would retain its standing in children’s entertainment business. Problems and challenges Mattel has already made its name in the toy industry, and has faced and emerged victorious in many difficult challenges before. Surely, like many of its competitors it will continue to be facing challenges along the way. The largest challenge the toy manufacturers are facing today is the invasion of video games into the children’s entertainment world (wikinvest “date unknown). What could be done is to welcome this change and go with the flow. Mattel should continue to gear up in relation with this challenge. It could start focusing more on high technology children entertainment, while maintaining the already established products. Bibliography 1) Ashton, D., Green, F., James, D., & Sung, J. 1999. Education and training for development in East Asia: The political economy of skill formation in newly industrialized economies. London: Routledge. 2) Barker, Linda M.A. 2008. Building a Comprehensive Succession Planning System, www.bizimpact.biz,Date accessed 10/31/09 3) Foster, A. D., & Rosenzweig, M. R. 1996. Technical change and human-capital returns and investments: Evidence from the green revolution. American Economic Review, 86(4),931-953. 4) Gina Ruiz, “date unknown” Shaking Up The Mattel Toyshop,Workforce Management, 26th June2006, Vol. 85 Issue 5) Heathfield,Susan “date unknown” What is Human Resource Management, http://humanresources.about.com/od/glossaryh/f/human_resource.htm, Date accessed 10/31/09 6) Jacobs, R., & Hawley, J., “Date unknown”. Emergence of Workforce Development: Definition,Conceptual Boundaries, and Implications. The Ohio State University Columbus, OH 43210 7) Levy, F., & Murnane, R. J. 2004. The new division of labor: How computers are creating the next market. .New York: Russell Sage Foundation. 8) McLean, G. 2003. NHRD: Why countries can't do without it. Paper presented at the Asian Association of Human Resource Development, Bangkok, Thailand.(Date unknown) 9) Reference for Business “Date unknown” Mattel, Inc. - Company Profile, Information, Business Description, History, Background Information on Mattel, Inc . http://www.referenceforbusiness.com/history2/17/Mattel-Inc.html, Date accessed 10/31/09 10) Verma, Mridu 2007 Mattel’s Workforce Strategy, PDF, Pune: Icfai Business School Case Development. 11) Wikinvest “Date unknown”, Mattel(MAT), http://www.wikinvest.com/stock/Mattel_%28MAT%29, Date accessed 10/31/09 Read More