New Policy of Human Resource Management - Coursework Example

Human Resource Management Introduction The Korean automakers followed a mass production technique to produce large number of cars for the large markets in the USA. The firms present in the industry gave minimum priority to the employees and to their development. The earlier mass production system followed the same set of rules and principles in the production system. Therefore, the labors were given less importance in the organization. (Russell, Dee & Woo, 2004). A new chief executive has been appointed in one of the companies in the auto making industry of Korea. She has been appointed in the crucial juncture when the auto making industry is transforming itself from the mass production system to a flexible production system. In this system, there is an increased importance given to the ability of the employees. The production system is varied and flexible and it needs inputs from the labor to make it a success. Therefore, there should be importance given to the employee relations and the human resource management of the company has to be developed. It is the responsibility of the new executive to introduce a new policy of the human resource, which will give importance to the employees. The paper deals in the justification of the introduction of the new HR process and the issues the new executive has to tackle to introduce the new policy. It has to be noted that the introduction of the new policy is of utmost importance due to the change in the production process of the industry. Justification of the introduction of the new policy The industry is in a transformation stage with the production process being changed into more flexible mode. In this process, the employees are to be given utmost importance. The HR management has assumed great importance in the contemporary world of business as organizations world over have understood that the employees are the cradle of success of any organization. Human Resource Management is “all those activities associated with the management of employment relationships in the firm.” (Boxall & Purcell, 2003) Therefore, it is essential for a firm to develop the HR management for employee satisfaction and for its development. The HR management, like any other modes of study, has undergone a change to suit the needs of the contemporary era. In this age of high economic development and the growth of business, the employees have to be given importance for the overall development of the organization. This means that the organization has to take all care for the training and the development of the employees. A more contemporary approach to the HR management is “Distinctive approach to employment management which seeks to achieve competitive advantage through the strategic deployment of a highly committed and capable workforce’. (Storey, 1995). Unlike the old age practices of controlling the employees from the top management, today, the employees are encouraged to make contribution to the decision making process. The production process has become flexible which needs the employees to contribute in the production process. The HR management has become more proactive than the reactive process followed earlier. Today, the employees are regarded as social capital and are thus an important part of the organization. Therefore, it can be clearly inferred that the old age practices of HR management followed in the auto making industry of Korea has to be discarded. The more scientific approach of the modern day HR management has to be included in the organisation. This has to be done as the importance of the employees has increased manifold in the new production process and they have to be trained and developed accordingly. They have to be looked after well as they are the base on which the organization stands and will stand in the future. Importance of the Human Resource Strategy in accordance with the organization In the auto making industry of Korea, the companies followed the traditional methods of Human Resource Strategy (HRS) where the employees were not given much importance. This had much to do with the type of production strategy followed in the industry. With the change in the production strategy of mass production to flexible production, importance of HRS has increased. It has to be noted here that the production strategy of the Korean companies were changed due to the change in the demand of the markets. Earlier, the market was based primarily in the US and the US manufacturers were the leaders in the market. However, with the globalization in the economy, the car manufacturers all over the world have equal chances in succeeding in the US market. Subsequently, the world economy has seen the rise of emerging markets in the Europe and the countries of China and India. The demand for the different markets is varied and the car manufacturers all over the world are vying for market share. There is increased competition from the companies of Japan and Europe. The global car industry is continuously influenced by alliances of different companies, which provide a certain degree of competitive advantage. The example of Nissan and Renault is important in this regard. With such a huge and varied market, there is a need for different models of cars and continuous innovation. The Japanese concept of Kaizen has taken the industry by storm, which means “continuous improvement.” This concept promotes the employees to innovate continuously and to improve their skills. The future of the car industry is the production of “hybrid cars” which denounce the use of traditional sources of energy. (Housley & Brandwood, n.d.) Therefore, the market is huge and the potential is good. The strategy of the Korean car company will be to cater to this huge market and to take advantage of the huge demand. For this to happen they should follow the concept of Kaizen and promote the development of the employees. The HRS has to be adjusted according to the policies and tactics of the organization. The strategic HRM is the construction of HR policies that would help to produce competent employees to fulfill the strategy of the company. This will need proper training and development of the employees and encouragement to think innovatively. (Dessler, 2009) The formulation of the strategy of the organization is of utmost importance as it defines the goal of the organization. For the Korean company, it has to assess the strengths and weakness and the environment it works on. The interests of the concerned parties are to be taken care of. It has to be noted that the employees are one of the most important parties in the business of the organization. The powers, values and the preferences of the employees are to be taken care of by the organization as the employees are the base on which the company stands. (Needle, 2004). To sustain the strategies of the organization, it is of utmost importance that the HRS of the company is developed. The main function of the management is to motivate and train employees to work hard and help to achieve goals of the organization. The HR strategy developed by the organization depends on the nature of the organization and the nature of the industry. The company in question is on the growth phase and the HR policies will be based on the formal practices like the training and development of employees and motivating them to perform better. In this phase of development, the company may look to differentiation strategy to conquer a large share of the market. The differentiation strategy looks for development of the products and offering something unique to the customers. This means that the company has to innovate continuously. Innovation is the need of the modern market with increased competition. To follow a differentiation strategy, the company must have a developed team of personnel dedicated to work to fulfill the goals of the company. (Porter’s generic strategies, n.d.) Therefore, the company has to increase the level of importance given to its employees. The company has to train and develop them accordingly and has to motivate them through rewards. Therefore, it can be inferred that the strategy of the Korean organization needs that importance must be given to the HRS of the company. It can follow the concept of Kaizen or product differentiation to capture more market share but in both the cases, the need for proper HRS cannot be nullified. Issues of HRS The above paragraphs have depicted the need for the change in the strategy of the human resource management. However, an organization like that of the Korean car company needs to tackle certain issues before it can develop the HR of the company. Traditionally, the company had followed a policy of HRS, which places less importance to the employees. With the need for change in the strategy, it needs to address certain issues. A major point in the HRS of the company is the labor supply and the quality of the labor. The company in question has not formed any alliance with other companies and is based in South Korea. The supply of labor is determined by the age as well as the size of the population. South Korea is well populated with high literacy rate. The working population stands at about 72.3% of the population. The labor force is huge with 24.37 million, which puts the country in the top 20 largest economies of the world. (The world factbook, n.d.) Therefore, the labor supply in the context of South Korea is not a problem. The country boasts of a huge supply of labor, which can be used in the production process of the company. However, the company needs a stable workforce in this phase of development. With the developed economy of South Korea, the economy gives the labor choices to move to different companies in relation to payment and work conditions. Though there is a competitive market, the payment may vary across the same industry between different companies. (Nolan & Brown, 1983, pp 269-287) However, more than the payment issue, the employees are influenced by the working conditions and the satisfaction of the job. In the recent times, the satisfaction level of the job has gone down for employees. This has much to do with the policies of the companies, which give more importance to earning profits. The satisfaction level of the workers over the age of 50 has substantially decreased from 37% in 1992 to 12% in 2002. They are not getting the same benefits, which were provided, to them earlier. (Green, 2006) There have also been issues regarding the inequality of work according to gender and race. This has also influenced the dissatisfaction among the employees. In the case of women, there has been a substantial level of decline in the job satisfaction levels. (Taylor, 2002) Therefore, it can be inferred that the Korean company will face a wide variety of issues regarding the change of the HRS. The actions of the management regarding the change in the HRS It is a fact that the company will face many problems in transforming its HR policy. However, it is of primary importance to change the policy because for the achievement of the goals of the company the HRS has to be transformed. The old policies of HRS, which did not give much importance to the employees, will not hold ground in the new era. The employees are important constituents in the organization in the modern era and new HR policies have to be developed accordingly. With the change in the production process of the company, it will be essential that training and development be provided to the employees. The production process of the company has changed and the company needs to train the employees in the new production process so that they can fulfill the goals of the organization. The company should conduct workshops in developing the skills required for the jobs. It will help the organization, as it will ensure that the production criteria are met without any hazards. With the new development in the industry, the company should train the employees to be flexible in different kinds of production. It will help the company to fight competition and prepare for the changing business environment. For the employees, the training and development ensures employment in the company and better payments. (Redman & Wilkinson, 2006) With the increase in payments, the company can decrease the attrition rate of the employees. Working environment is another important factor, which has to be looked into by the HR department. The employees spend a bulk of the time in their working place. Thus, the working environment must be conducive to work with good lighting, ventilation and proper furniture. The interior color must be light which promotes calmness. This helps the employees to give their best in their job. (Jones, 30th October, 2001). One of the main aims of the HR department is the motivation of the employees. It can be done with better payment to the employees. However, majority of the problems in the employee motivation rises from the non-monetary benefits of the job. Motivation is a psychological trait, which can be linked with the non-monetary benefits. The employees must be prepared to experience a part of the organization. This can be done by involving them in the decision making process and assigning them responsibility. In addition to this, the HR department may also provide the employees some non-monetary benefits like rewards, recognitions, flexible working hours etc. (Non- monetary benefits as an incentive to improve staff performance in public sector, n.d.). By keeping a tab on these points, the HRS of the company can address the difficulties, which can brew in the minds of the employees. This will help in the development of the organization. Conclusion the company is changing from the mass production system to a flexible system, the need for a change in the HRS is necessary. The new policy should give importance to the employees and recognize them as a part of the organization. It is very important to change the policy to recognize the goals of the company. The employees are the cradles of development and they have to be looked after well. The HR department will face difficulties in changing the policies of the HRS but it will have to be developed sufficiently to tackle the situation. In dealing with the difficulties scientifically and in a systematic manner, the company will succeed in establishing itself in the highly competitive industry of manufacturing cars. References: 1. Russell,Dee and Woo.(2004). Technology, human resources and international competitiveness in the Korean auto industry: the case of Kia Motors. Inderscience publishers. Available at: http://inderscience.metapress.com/app/home/contribution.asp?referrer=parent&backto=searcharticlesresults,8,72; (Accessed on 6th March, 2010). 2. Housley,J. and Brandwood,J. (n.d.). Changes in the car industry. Barcelona field studies centre. Available at: http://geographyfieldwork.com/CarIndustryChanges.htm (Accessed on 6th March, 2010). 3. Porter’s Generic strategies. (n.d.). Quickmba. Available at: http://www.quickmba.com/strategy/generic.shtml (Accessed on 6th March, 2010). 4. The world factbook. (n.d.) Central Intelligence Agency. Available at: https://www.cia.gov/library/publications/the-world-factbook/geos/ks.html (Accessed on 6th March, 2010). 5. Jones,K.(30th October,2001). The Russia Journal. Available at: http://www.russiajournal.com/node/11385 (Accessed on 6th March, 2010). 6. Non- monetary benefits as an incentive to improve staff performance in public sector.(n.d.). Thinking made easy. Available at: http://ivythesis.typepad.com/term_paper_topics/2009/08/nonmonetary-benefits-as-an-incentive-to-improve-staff-performance-in-public-sector.html (Accessed on 6th March, 2010). 7. Redman, T. and Wilkinson, A. (2006) Contemporary Human Resource Management, (2nd edition). Pearson. 8. Nolan, P. and Brown, W.(1983) ‘Competition and workplace wage determination’ Oxford Bulletin of Economics and Statistics, 45, pp-269-287. 9. Green, F. (2006) ‘Demanding work: the paradox of job quality in the affluent economy’. Oxford: Princeton University Press. 10. Taylor, R. (2002) ‘Britain’s diverse labour market’. Swindon: Economic and social research council. 11. Boxall, P. and Purcell, J. (2003) Strategy and Human Resource Management. Houndmills: Palgrave Macmillan 12. Storey, J. (1995:5) human resource management: a critical text. London, Routledge 13. Dessler, G. (2009) Human Resource Management: International Edition, Prentice Hall 14. Needle, D. (2004) Business in Context, 4th edn., Thomson: London Read More