Monday, September 29, 2014

The Evolution and Environment of HR Management

Below is a fictionalized case study that presents dilemma faced in real organizations. And written by me is the recommended solution to the problem. This has been published in Business Manager Magazine October 2014 edition.

Amity Brakes Limited produces automobile spare parts on a large scale and supplies them to several major automobile producers in the world. This Hyderabad multinational has a commendable sales and profit performance. It is also a market leader in its area of operations. The company has a staff strength of 9,500 on its roll. As part of its platinum jubilee celebrations, the management recently did self-introspection of its functioning; analyzing the relevance of its mission, vision, policies and programmes covering all aspects of the organization. As far as HRM was concerned, the management concluded that the workforce composition of the organization not reflecting the reality of the diversified nature of the labor market. In fact, the HR policy of the company was not offering equal opportunity to all segments of the labor market. The number of women employees in the workforce was insignificant while the number of physically challenged persons was trivial. Thus the company took an administrative decision to change its recruitment policy in a way that would reflect the labor market conditions. Also its management decided to implement these changes with immediate effect. 

The proposal of the management received a mixed response from the employees. A section of the employees viewed the proposal favorably and supported it on the ground that it would do social justice, reflect reality of the market, make optimum utilization of the talents available in the market and prepare the organization for an inclusive growth. However another section of the work force viewed the proposal with doubt and disbelief as they felt that a well-performing organization like Amity should not take any unwarranted risk. They also feared that the cost of training would go up substantially. Besides, they were afraid that gender-related issues could crop up in the organization. Further, they foresaw an additional investment commitment by the management to improve the infrastructure facilities, especially for the physically challenged.

Finally, however, the company went ahead with its revised policy and implemented it. It also directed the HR department to do what was necessary for the successful implementation of the diversity-based HR policy initiatives. The HR department prepared the ground for the implementation of new ideologies and of the policies of the company. Soon after, the proportion of the employees belonging to these categories began to pick up.

Questions for Discussion and Solutions

1. How do you view the new proposal of the company in the light of the current performance of the company?
  • Amity Brakes, a Hyderabad based multinational supplier of automobile spare parts to large automobile producers completed 25 years. The company was doing very well in terms of sales & profitability and commanded a market leadership position.
  • The company decided to review its overall organizational vision, mission, policies & programmes with a focus on the future. As part of the review process, it was observed that the existing workforce was not reflecting the diversified nature of labour market and hence Amity Brakes Management decided to change the recruitment policy that would reflect the market conditions with immediate effect. The changes included having more women workforce & also giving equal opportunity to physically challenged people.
  • Amity Brakes by addressing these changes may help to ensure a loyal and stable workforce that also represents the diverse ideas of the customer community.
  • This hiring process also reflects a terrific opportunity to attract and hire workers with diverse ideas and cultures, without which it will be difficult to capitalize on diverse ideas, cultures, and thinking. This in turn may limit the ability of the organization's workforce to be engaged, innovative and empowered. Productivity suffers, as does the organization’s ability to meet the challenges of today's highly competitive labor environment.
  • These changes were also aimed at bringing about labour reform legislations and to increase effectiveness of its workers to face global competition. 

2. Do you foresee any problem for the company in the execution stage of the proposal?
  • The proposal received mixed response from the employees. While some viewed it favorably citing the need to do social justice, adapt to changing market realities, make optimum utilization of the talent available, etc... others viewed it with doubt and disbelief fearing change. They cited factors such as increase in cost of training, gender-related issues and other cost issues like providing infrastructure facilities suited to the needs of physically challenged.
  • There could be discontent brewing amongst the existing employees who are unable to cope with the changes taking place. These early warning signals should be tackled immediately and employees should be assisted to cope with the change. 
  • Better understanding of the ground situation is must while executing. 
  • Amity Brakes should look at handling internal conflicts bilaterally and resolve differences that may arise as a result of the changes taking place in the workforce especially with new employees from diverse backgrounds being recruited.
  • Train supervisors to effectively communicate and deal with employee issues frontline. Constructive  co-operation and respect for the human personality should be promoted. Management personnel should set high standards. Trust of the workers should be earned and they should be empowered.

3. Do you have any better suggestions and strategy for the company to adapt itself to the emerging labor market environment?
  • The workforce should reflect not only the diversity of the hiring community but also the customer community. By failing to reflect the customer community, the workforce may find it difficult to develop and support strong customer relationships.
  • Amity Brakes in order to adapt itself to the emerging labor market environment and given the fact that it wants to position itself for the next 25 years, the recruitment systems must be so designed as to identify the potential workforce who will inherit the organization’s culture from their seniors, enrich it with professional values & business excellence skills and hand it over to the next generation.
  • Amity Brakes during its next cycle of growth process must look at hiring and retaining a very result oriented team of employees, comprising of both young and experienced personnel from almost all possible geographical regions.
  • These changes should be complemented with a focus on using technology and improving processes.
  • Skill mapping process should be in place. Amity Brakes before hiring new workforce members should compare the skills it needs to achieve its Vision, Mission and needs of the emerging labor market environment for the next 25 years with the skills its workforce currently possesses. By doing so, it will be able to effectively make better hiring decisions. The failure to identify the needed workforce capability and capacity increases the likelihood of not having appropriate staff in the right places.
  • Invest heavily in the workforce. Training and retraining, frequent communication and career counseling to be carried out to enhance the capability and capacity of the employees focusing on the emerging labor market environment.
  • Ensure Equality at the Workplace. Amity Brakes should place special emphasis on the variety of approaches used to satisfy a diverse workforce with differing needs and expectations. Examples include recreational and cultural activities, formal and informal education, flexible work hours and benefits packages. As the workforce becomes more diverse, it becomes more important to consider and support the needs of those members of the workforce with different services.

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