Role of Hrm in Manufacturing Company
ASSESSMENT 2: ESSAY This essay will evaluate the role of Human Resource Management in a manufacturing company. This will include a critical assessment of three functions being Recruitment, Selection and Employee Turnover function which are vital to the achievement of estimated goals. Being appointed as the Head of HRM by the General Manager of ABC company, certain problems are to be addressed such as poor matching of new personnel to their job and rising levels of staff turnover.
This essay will also point out certain aspects and changes which may be required by the company to retain employees reduce cost and increase profitability if considered. The main aim of recruitment is to ensure that the organization is adequately and effectively staffed at all times. The next step involves matching the suitable applicants to the jobs in the organization followed by the selection function. It is mandatory for Organizations to make the best of their recruiting practices because, in today’s increasingly market-based human resource management (HRM), effective recruitment is likely to be the ‘most critical human resource function for organizational success and survival’ “(Taylor and Collins 2000: 304). Another definition that throws light on the essence of Recruitment can be quoted as ‘those practices and activities carried out by the organization with the primary purpose of identifying and attracting potential employees’(Barber 1998: 5).
This definition highlights the important difference between two HR functions that are difficult to distinguish, namely recruitment and selection. An Overall recruitment policy and a number of processes need to be in place to determine overall outcomes for the organization before effective recruiting can take place. Recruiting should always involve analyzing the position to be filled, the person to fill it, writing a job description and person specification, and analyzing the organization’s short, medium and long term needs and goals.
It is essential that the requirements of the job are thoroughly understood through the process of job analysis. The success of recruitment can be measured in terms of diversity. For example, Bola M. Ogun (2004) examined the positive effect of encouraging diversity in the workplace wherein the best would be recruited not only to complete the task in hand but also add to the competitive advantage of the firm. In order to sustain long term profitability and growth, the firm should invest in assessment and retention of personnel.
Authors have argued that organization-employee fit is a two-way street and thereby understanding, effective communication and rewards are the important issues to be addressed here. Another type of explanation is the positive effect of recruitment on the profitability of a firm. For example, Terpstra and Rozell (1993) argues that the firms that analyzed recruiting sources for their effectiveness in generating high-performance applicants had greater annual profitability especially in manufacturing industries.
They suggest that this in depth analysis has a positive effect with generating profit in the industry. It would appear that Terpstra and Rozell’s explanation cannot be accounted for the cost involved in taking a decision to choose among the recruiting sources in consideration of the performance, culture and diversity. There is however, a positive relation between the annual profit and the budgetary cost to be incurred in the analysis. Another type of explanation is one that produces no connection between recruitment function and a Profitable organization.
For example, Rynes and Cable( cited in Recruitment Strategy,2007) argues the absence of any studies investigating the effect of the fit between recruitment and organizational effectiveness and descriptive research can be used to speculate about the possibly strategic imperative of such context-aligned recruitment practices. The problem with this argument however, is that it does not consider the fact that recruitment process is part of the cycle of an effective and efficient organization in terms of tapping into the market for qualified personnel.
In addition, Barber and her colleagues (1999) argues that the organizational size determines recruitment success. This may be due to the fact that the Recruitment and Selection function would be scrutinized from the beginning as re-hiring and re-training of new employees can be costly and ineffective for large industries. It is safe to point out that the work in large especially manufacturing industries does not require exceptional skill. However, Job security might be an issue if legal requirements are not fulfilled.
It is worth pointing out that human resource management supports goals pre-determined by the organization by providing crucial services for the benefit of the personnel in the organization. This can be explained by an example, Koch and McGrath (1996) argued how the capital intensity of a firm might positively interact with HR (including recruitment) planning to bring about increased labor productivity. Koch and McGrath are right; however it is necessary to stress the importance of recruitment planning and assessment in capital-intensive industries.
Prior to recruiting, the company should ensure that labor laws, laws on dismissal and legislation are complied with. In HRM, the Selection function is by far the most challenging task to be carried out on the basis of effective principles. Human Resource function can provide value to an organization in cognition to the objectives of staffing and personnel placement and making available specific human resources guiding principles, processes and techniques, directed towards the accomplishment of these objectives.
In order to determine the extent of ‘fit’ of personnel in the organization, provide standards to base and evaluate the capabilities of applicants and scrutinize the selection process clear and specific objectives for selection and personnel placement are required. The company image can play a major role during the selection process. An applicant’s view point of the firm also matters during the procedure as a positive or negative image of the Firm becomes viable. Final selection can be made more reliable by regularly reviewing the recruitment procedure.
In order to deal with problems during the process, Reference and credential checking are effectively carried out. To select the right person considered fit for the job, HRM is required to conduct a Job Analysis which refers to the identification, collection, synthesizing, understanding and application of job related data. The job analysis process has three pivotal components based on its outcome for both the manager and employee. These elements include Job profile, Job requirements and People relations.
The key to achieve consistent quality and productivity is to provide a feasible working environment to the employees. The overall culture of the organization is connected to its employee satisfaction, performance and turnover. Turnover includes both Voluntary and Involuntary Turnover. The main cause of voluntary turnover or the need to quit can be due to the receipt of negative feedback in informal performance check by the management or threat to job security. Involuntary instances occur when the employee has no say in the termination of his duties.
Although it is unrealistic to achieve a turnover of zero percent however, a high turnover can have a negative effect on the organization as it is the case of ABC company. There can be a number of causes to a high turnover, although in this case it can be on the grounds of the existence of a communication gap between the manager and the newly hired personnel. For example, Mushrush (2002) argues that causes of turnover are varied which may include, “high stress, working conditions, monotony, poor supervision, poor fit between the employee and the job, inadequate training, poor communications, and organization practices” .
As a result of this, the manager has a duty to ensure proper training and development and a feasible working environment is provided. Moreover, an Overview of Employee Turnover Research (2006) indicates that there are costs involved in replacing existing employees, recruiting replacements, new-hire training and unemployment insurance which can be of a prime concern here. Although our main focus is to retain new employees, there is a possibility of employees abandoning their jobs due to a time lag between identifying the appropriate role of the employee and re-training him.
Retention, not only includes re-training and analyzing roles but also reassuring the employees of the company. As illustrated by Levine, fear of losing one’s job can be categorized as another cause for turnover wherein constant encouragement and support from the management is necessary to prove that “their career is not at risk by staying with the company” (n. d) A company that understands the needs and reasons of its employees are more likely to reduce turnover and save cost on re-hiring.
However, it can be argued that the high staff turnover may be a product of the conduct of the employees as well. For example, Meyer, Stanely, Herscovitch, & Topolnytsky, (2006) argues that an individual can have an impact on the turnover rates by putting forward “unrealistic expectations” or lack of performance. Meyer et al. (2006) offers a valid explanation in terms of examining every aspect of the abnormal rise. The obvious way to reduce turnover would be to instill flexibility, training and reducing the communication gap within the organization.
Employees are to be reassured and retrained in this case to fit their qualities with their roles. There is a strong requirement for investment in training which is supported by Zig Ziglar who emphasizes that “When an employer invests in employees with training, they return with more productivity and more loyalty” (Love, 1998). As a result of this, the organization along with its personnel grows in a productive manner. Being the HR manager, for ABC Company a solution is to be sought out to deal with the HR functions at a policy level and actual HR level.
Human Resource strategies are required to ideally suit the needs of the manufacturing company. Inconsistent application of HR policies can leave the organization open to legal challenges, increased costs and turnover along with reduced morale. There is evidence of poor matching of skills of new employees with their work roles. To face this problem head on, an accurate account of employment data for all the employees in the organization is to be maintained. This can be owed to the unawareness of the entity of its current staff needs and skills.
At a Policy level, a strategic change outlining the objectives of the organization and consequential imbalances in skills to job of personnel is to be identified wherein at an actual level, maintenance of promotion potential, experience information and career data of personnel would act as a source for identifying shortages and surpluses in the operational plans of the organization. Action plans that include training and development, relocation and time frame for implementation are devised. These Action plans are then required to be monitored to ensure achievement of pre-described goals.
The Recruitment function would help in attracting the qualified personnel considered ‘fit’ for the job in the organization. At a policy level, internal versus external recruitment and agencies can be considered to find the right personnel to match the job requirements. At an actual HR level, cost of further recruitment might be unnecessary however, effective communication of the recruiting function to the authorized persons of the organization can provide a strong foundation to avoid future problems.
Identification of the roles of the current personnel along with a written description of the job process, duties, terms and conditions is to be documented and filed. At the policy level, Selection function plays a fundamental role in identifying the key attributes required from a person recruited to fit the job/duty efficiently. Selection can be effectively executed based on the qualities, type and level of work needed to achieve perceived goals of the organization. In regards to the Actual level, the selection function would be based on the documented description of the requirements of personnel available to the recruiters.
At the policy level, Employee turnover function can be reduced by the provision of extensive training and development program, fair working environment, incentives and bonuses. At the Actual level, effective communication with the personnel is essential along with providing a feasible and flexible working condition. Rising Staff turnover can be owed to the fact of poor fit of employee with job, poor guidance and ineffective communication of tasks. An extensive training and development program can hone the skills of the required personnel to fit their job
It is difficult to offer a stipulated time period wherein the policy goals can be achieved due to an uncertain outlook of ABC Company. However, a written documentation with complete data, qualifications, availability, experience of the personnel and all other relevant data can be completed within a time span of 3-4 months. Moreover, training of the new personnel to acquaint them with the required duties is to be carried out immediately which can be assumed to span once every 3 weeks for a period of 2 months.
Extensive re-training can then be provided every 6 months to keep up with technology and development in the market. Apart from framing policies, there is a need to understand the behavior and total outlook of the company. In reference to Labor Mobility in Australia(Refer Appendix 1) Manufacturing Industry has less than 12% of employees shifting from the Industry as compared to Mining which has the highest Labor Mobility of 21. 6%. Keeping this in mind, voluntary turnover might not pose an issue in this company.
Employee turnover is beneficial in some companies, however in the manufacturing industry stability in terms of Job performance and Employee satisfaction is beneficial. Finally it is worth pointing out that, according to research, Management must understand the value of quality staffing throughout the organization, and proper care is taken to ensure an individual ‘fit’ their roles in the organization to ensure long term productivity. This essay also illustrates the importance of HRM to bring about a balance in the organization by increasing staff satisfaction, reducing turnover and increasing organizational productivity.
Each policy level and actual level goal has a timeframe for execution which can be accurately estimated after consultation with the Management of ABC Company. REFERENCE LIST Beach,R, Brereton,,D, Cliff,D,2003, ‘Workforce turnover in FIFO mining Operations in Australia: An Exploratory Study’, Retrieved on 24th Oct 2010 from: www. csrm. uq. edu. au/docs/TURN_FINAL. pdf Cable, DM, Turban, DB, 2001, Establishing the Dimensions, Sources and values of job seekers’ Employer Knowledge during Recruitment, ‘Research in Personnel and Human Resource Management’ , Vol 20,pg115-163.
Khan, S 1991, Selection and placement, Volume 1,Issue 4 Retrieved on 20th October 2010 Levine, T, 1998, ‘How to Reduce Employee Turnover’ Retrieved on Oct 23rd, 2010 from: http://www. nettemps. com/employers/hrcorner/printer. htm? id=21&pf=1 Love, T. 1998, ‘Training can Relics [sic] Employee TurnoverReducing employee turnover’. Retrieved on Oct 23rd 2010 from: http://findarticles. com/p/articles/mi_m1154/is_n8_v86/ai_20934425 Meyer, J, Stanely, D, Herscovitch, L, Topolnytsky, L, 2006,‘Overview of Employee Turnover Research’, SIGMA Assessment Systems. Retrieved on Oct 23rd, 2010 rom: http://www. sigmaassessmentsystems. com/articles/empturnover. asp Morley,MJ,2007, Person Organization fit, ‘Journal of Managerial Psychology’ Vol 22,No. 2,pp109-117. Retrieved from: www. emeraldinsight. com/0268-3946. htm Mushrush, W. ,2002, ‘Reducing Employee Turnover’-Creating Quality Newsletter, 11(5). Retrieved on Oct 23rd 2010 from: http://www. missouribusiness. net/cq/2002/reducing_employee_turnover. asp Orlitzky,M. 2007,’Recruitment Strategy’,Oxford Handbook of Human Resource Management,Boxall,P,Purcell,J,Wright,P,Oxford University Press,New York,pp273-299.
Tipper,J, 2004, How to increase diversity through your recruitment practices, Vol 36, No. 4 pp 158-161. Retrieved on 23rd Oct 2010 from: www. emeraldinsight. com/0019-7858. htm Zeffane,R. 1994,’Understanding Employee Turnover: The Need for a Contingency Approach, vol 15,no. 9. Zimmerman, RD, Darnold,TC, 2007, ‘The impact of job performance on employee turnover intentions and the voluntary turnover process-A meta-analysis and path model’ retrieved on 23rd Oct 2010 from www. emeraldinsight. com/0048-3486. htm APPENDIX Figure 1: Labor mobility by industry, Australia www. csrm. uq. edu. au/docs/TURN_FINAL. pdf