Capper Engineering Limited - Human Resource Management - Case Study Example

11 January 2009 Capper Engineering Limited: Human Resource Management – Case Study The three most significant “Human Resource Management” problems in this organization which can also possibly rationalize the recently witnessed high staff turnover can be broadly outlined as (1) Lack of Effective Performance Management / Monitoring System leading to Performance based Remuneration, Rewards & Bonus Program, (2)Lack of Contemporary Employee Recruitment and Selection Process, (3)Requirement for an effective Employee Retention Strategy. Each one of them is dealt with in the order presented together with aptly suggested recommendations that the organization can actively consider towards effectively resolving the problems and realizing significant improvement in the respective areas only to be benefitted by an honest HR approach to it. Performance Management System: It is very difficult to formulate and setup an effective performance management system and placing it before managers making it work for the employees immediately. There has to be a lot of planning and design effort spent on it. Basically it should extend to employees’ four fundamental benefits namely, (1) Clear understanding of job expectations, (2) Regular performance feedback, (3) Steps and advices required for performance improvement, (4) Recognition and acknowledgement of good performance. Overall the goal of a good performance management system is to bolster the employee performance levels leading to increased business productivity. It is however critical for a performance management system to be effective to inherently constitute of some critical elements which are as described below. Up-to-date job descriptions should make a clear mention of job functions, required skills, expected employee relationships with peers and customers, performance expectations, deadlines and goals to be met etc and must be regularly kept updated according to changing scenarios in the organization such as following a downsizing effort or a merger when there is a radical shift in employee responsibilities and workloads. Next are Performance Measures and Standards. There has to be a clear cut performance standard as to what is average performance, above average and below average performances. One has to weigh the best case and worst case scenarios before arriving at an optimal performance standard. Also the assessment of performance has to be both objective and subjective since though it is possible to quantitatively measure performances like employee productivity in terms of number of products assembled or customer accounts brought in, it is rather difficult to similarly assess customer service skills, or attitudes and coping skills of employees. Also the evaluator has to avoid potential bias creeping into assessment of behavioral aspects being excellent or unacceptable. It is rather highly important that the performance evaluator is properly trained first in order to avoid his poor interpersonal or communication skills from hampering effective employee appraisals. Also under performing employees have to be given an opportunity to perform on par by proper mentoring or training and setting goals and deadlines for realizing their improvement. This will lift the morale of such employees to perform better. Also it is only fair and modest to invite suggestions from employees towards bettering performance strategies and incorporating their valuables inputs into the system to achieve the set objectives. Finally no performance management system is successful if it does not recognize or acknowledge and compensate / reward the above average performers. This will not only boost employee morale, but retain his loyalty and generate improvement in productivity. Although it is still debated in many organizations whether there has to be a closely knit performance related compensation program which might outcast and undermine the employees who are not over achievers, a consistent achiever should be rewarded and recognized. Capper Engineering also has to adopt such a consistent performance management system leading to a suitable compensation, rewards and bonus program coordinated effectively by the HR department instead of the operational managers deciding on the disbursement of bonus to teams based on their purely subjective observations over a period. Also the support services manager of Capper Engineering has to focus on performance standards of employees too instead of solely relying on and trusting their educational qualifications and sponsoring educational progress and development schemes. Employee Selection Process: It is rather a disillusion prevailing in organizations that once you release a “Wanted” ad in the local newspaper you are bound to get the best of employees quickly enough for the job. It is no more valid. In fact it is the people who come with personal recommendations who are more apt to fit into a job requirement and stay for a longer period of time in the organization delivering the expected results. So as far as Capper Engineering is concerned it should pass on the word to customers, colleagues, acquaintances and their own internal employees about openings and job requirements to get the recruitment done within the available time and to specified job requirements. The business of recruiting is as important as the core engineering business of the company and must be taken as seriously and creatively enough. Every new employee is a major investment for the company in terms of costs of training, time and efforts and obviously in this one would want to avoid the cost of hiring a misfit. Have a formal interview process by gathering resumes of prospective employees and then drawing a formal interview schedule. Prepare a set of interview questions to be asked to the invited candidates and follow a consistent pattern of interviewing to elicit uniform, traceable and comparable inputs from the interviewees. Do a background check on the candidate specified references and concentrate on their interview answers evaluating it with your gut feeling and business intuition while asking impressive candidates to appear for a second interview. Be very clear in outlining job responsibilities and expectations from the to-be-employee candidates to avoid confusion on tasks and reporting structures. A good job description conveyed to the candidates would be in order here. Finally after selecting the best candidate suitable for employment, it is advisable to put him through the best of training facilities and trainer available while simultaneously giving him a good amount of lead trial period for graduating to a fully productive employee. Given the best efforts and creative approach to recruitment as one would devote to other business projects, the organization can rest happy and content that it will readily attract the best of talent available in the market. Capper Engineering has to align its recruitment philosophy on the above lines and the management should buttress the HR department in implementing such forward looking HR policies and procedures towards effective contemporary employee recruitment and selection processes. Employee Retention Strategy: Time is money to all organizations. With the staff turnover problems persisting every minute of every day in any organization leads to futile wastage of valuable resources, energy and time. The costs of employee turnover can range anywhere from half times to 4 times his/her annual wages and benefits. About 80% of employee turnover can be related to mistakes made during the hiring process itself. Retention of employees is not only stunningly relevant with whom is hired but also what is done to him/her after hiring. According to Michigan State University it is observed that traditional hiring methods can ensure only up to 14% likelihood of a successful job hire. An ineffective employee retention strategy can drive any manager crazy and cripple the herculean efforts of the organization to stay profitable only adding to the already existing stress as a leader of the organization. But to the delight of the CEO of Capper Engineering remedial solutions do exist to prevent high costs of employee turnover, plummeting levels of employee retention and the mass exodus of quality workers. Now focusing on improving existing employee retention program one has to identify the cream of performers within a team and devise ways and means of retaining them in the organization. Also it is paramount to identify the reasons why an employee will leave an organization even before he is hired into the organization. Employees who are befitting the role and responsibilities of a job position and can blend with the organizational culture are to be hired for ensuring better retention. Communication and morale of employees as enjoyed by the IT staff of Capper Engineering have to be maintained at high levels in all the departments for retaining their loyalty towards the organization for longer periods of time. Also significant for employee retention is to suitably identify employee growth opportunities amongst team members and draw highly customized training programs to better individual performance and thereby deliver job satisfaction to employees. There are far too fewer issues faced by an employer than hiring and retaining good performing employees and this is the same situation faced by the CEO of Capper Engineering as well. The bottom line of Capper Engineering will be better served by effective employee retention strategies. There is no wonder that it is proclaimed universally that an organization is only as good as its employees. Just think of the far reaching benefits that would accrue if the turnover rate of Capper Engineering was half that of its competition while it possessed the capability to hire employees who fit to a tee to the job position offered to them. In turn the monetary consumption of recruitment processes can be diverted to enhanced training of current employees leading to increased productivity and overall business growth. The key to the whole thing then would be a transparent concrete knowledge on what makes the key team members stay back in the organization. Again two major factors contribute for the success of any effective employee retention strategy. One is the person who is hired to fill the job vacancy and the other is about what is done with him\her after hiring is done. Summing up the HR has to ensure that it procures the best employees onboard the organization. It is then impending for HR to be in constant touch with all the employees including newly hired and update them of the latest happening in the company including policies and initiatives and not leave anyone out of the loop. Also the HR should promote the role of employees in decision making process of the organization giving way to fresh and novel ideas which may sometime skip even the best of management’s minds. Knowledge sharing amongst team members and mentoring them will help promote healthy competency and understanding among each other. The HR should give frequent small time informal feedbacks or a pat on the back to employees for good performance in projects instead of reserving it as an annual affair during appraisals. The HR should mandatorily work out a competitive compensation package for the employees to retain them and not make them look around for a better offer. Adequate researching of salary levels in different organizations at the national and regional levels has to be considered here before fixing compensation and benefits. Even an extended luncheon session or an evening dedicated to employees’ family will fetch unwavering commitment and loyalty to the organization in return. Supervisors have to treat employees with courtesy, respect and friendliness while setting proper performance expectations and giving timely useful feedback on performances, acknowledging exceptional performance immediately. Finally at all costs favoritism and bias is to be totally abhorred and all employees are to be treated equally and fairly without any resentment of any nature. Capper Engineering and its new CEO will do a world of good to themselves if they draw their immediate attention to all of the above and focus on suggested recommendations and solutions to steer the organization to prosperity and longevity while ensuring sustained business continuity. Works Cited 60-Second Guide to Employee Recruiting. All Business, a D&B Company. 10 January 2009. An Employee Retention Strategy that Delivers Results. The Rainmaker Group. 11 January 2009. Boone, Louis E., Kurtz, David L., Contemporary Business. Dryden Press, 1985. Dean, Joan. Implementing Performance Management. A handbook for Schools. Routledge, 2002. Philips, Jack J., Connell, Adele O., Managing Employee Retention: Impact, Analysis, Solutions and ROI. Butterworth-Heinemann, 2002. Setting up a Performance Management System. All Business, a D&B Company, 10 January 2009. Read More