Question:

It is about a 1500 words. It is to analyze the case study based on the 4 questions. It weighs 40% of the total marks of the topic. A minimum reference of recent (2002 and forward)5 journal articles or books only. Websites or magazines are not allowed.

Answer:

Title: Human Resource Management

 

Question 1

Strengths

The strengths that Consolidated Motors has include a nationally established manufacturer, a skilled labour force, financial support from the government, and an established brand. As a nationally established manufacturer, the company has the potential to market its products across the country. Through a skilled labour force, the company’s management is sure of continuity. The financial support offered by the government gives the company a new lease of life during tough economic times.

Weaknesses

The weaknesses include favoring inefficiency over efficiency and failure to innovate, authoritarian management style, negative public image- inward-looking management, and political meddling. By failing to be efficient, the company is unable to compete with others. The authoritarian style makes outsiders perceive the management as inward-looking, while political meddling makes it difficult for the company to concentrate on organizational goals.

Opportunities

The opportunities include potential for change and innovation, the ability to lobby for government, potential to get financial bailouts from the government, and a large network of dealers whose potential remains largely unexploited. Consolidate Motors still has the opportunity to pursue change and innovative means of production. After all, it can lobby government support any time so as to get favorable terms of trade. Similarly, its large network of dealers, if used efficiently, can take the company back on the path of increasing profitability.

Threats

The main threats include stiff competition from other more efficient and innovative automobile manufacturers both locally and internationally, take-over bids by foreign automobile manufacturers, and the likelihood of reprisals from other governments because of Australia’s breach of international trade agreements in its efforts to favor locally made cars to the advantage of Consolidated Motors. Stiff competition is a threat since it may ultimately lead to complete failure of the company. A take-over by a foreign company operating in a lower-wage economy may anger the workforce, leading to low morale and high turnover.

Question 2

One of the main HRM issues present at Consolidated Motors is the existence of an inefficient but highly paid workforce. For instance, majority of senior managers are non-performing. This is mainly because they accountable to their political patrons and the labour unions, where they enjoy permanent membership, as opposed to being accountable to the investing shareholders. These managers have managed to retain their positions despite being non-performers because of the existence of a policy of ‘promotion from within’. The HRM practices are inward-looking and very much in need of a major managerial shake-up.

The HR practices of this company, it seems, are not tailored to achieve the organizational goals of innovation, efficient manufacturing processes, and increased profitability. Rather, the workforce seems to owe more allegiance to the National Automotive Workers Union than the company for which they are working. The HR department is unable to adjust the salaries of the employees, let alone put in place and implement viable performance appraisal systems.

Traditionally, all members of the National Automotive Workers Union receive above-average salaries in addition to generous benefits, and there is nothing that the HR department can do about it. In other words, the human resources practices are not in line with contemporary HRM procedures that derive largely from the competitive nature of the market. This is the reason why a semi-skilled worker at the company is earning more than an average university-trained nurse.

The high labour costs at the company are a major HRM issue, considering that these costs are always passed on to the consumer through the maintenance of highly inflated car prices. Moreover, these high costs are pushing the government to impose tariffs as well as taxpayer-financed protective subsidies in order to keep the company running. It is impossible for the human resources department to put in place corrective remuneration measures in a corporate environment characterized by authoritarian management, a strong labour union, and intense government lobbying (Tyson, 1997). This problem manifests itself in all contexts where there is a large employer that endeavors to protect jobs at the expense of seeking the most efficient ways of production.

Question 3

The first thing would be to carry out an audit of compatibility between employer and union policies. From the findings of this audit, I would make recommendations on how best this compatibility can be achieved. I would make a suggestion to the top management regarding the need to maintain leadership and HR focus in efforts to inculcate total quality management (TQM) practices in the company. Key areas in this regard include strategic direction, instilling a culture of involvement and commitment, and emphasis on the role of top management in shunning excessive labour union interference and intensive government lobbying (Rahman, 2002).

I would also recommend that cut-backs be made on workforce so as to ensure efficient manufacturing practices. Similarly, I would suggest the reduction of salaries for employees working in departments where inefficiency is at its highest level. In this regard, it would be necessary to introduce a performance appraisal system at Consolidated Motors. This system would make it easy for the practice of rewarding employees on the basis of their contribution to profitability of the company to be introduced and successfully implemented.

Additionally, I would recommend that holistic changes to the recruitment and selection process be introduced in line with effective turnaround management. These changes would ideally involve an overhaul of HR structures, strategies, and practices across the organization. There is also a need for a lot of attention to be directed towards managerial accountability in the turnaround process (Harker, 2000). For this reason, I would recommend punitive disciplinary measures to be taken against all non-performing and incompetent senior managers. These measures would need to be followed up with HR changes at different levels in the company’s management hierarchy, all the while making decisions on who should be laid off, demoted, promoted, accorded a pay rise, or transferred to a different department.

Question 4

 

The best way to implement changes in a manufacturing company that is going through a turnaround process is to adopt a regard the human resource strategy simply as a management process, or in other words, as an integral part of an emergent strategy formation (Welch, 1994). I would adopt this approach in order to easily identify and work on different levels of analysis, namely individual, societal, and organizational.  These are the same levels that managers integrate into organizational settings in order to introduce new meanings into the turnaround process.

In order for the HRM problems being experienced at Consolidated Motors to be addressed successfully, the company has to accept to make one step backwards in order to make to steps forward. This is the reason why I would put in place a retrenchment initiative as part of the radical process of taking the company back on the path of profitability. Retrenchment would enable the company achieve stability. From there, I would go about hiring afresh all the while putting in place salary reduction measures aimed at triggering growth in a culture of efficiency and profitable growth. This hiring process would be inspired solely by the need to increase operational efficiency in the most adversely affected departments.

I would then assess all the external causes of the crisis and how this has been leading to a decrease in demand. In the internal environment, I would endeavor to make all the stakeholders understand the effect of poor management on the rising cost of inputs. Upon creating this understanding, I would find it easier to liaise with the company’s financial controllers in the process of introducing recruitment, selection and performance appraisal processes that are based on efficiency and profitability.

In the context of a newly restructured company, it becomes easy to inculcate the HR practices of job satisfaction, workplace trust, commitment, and perceived organizational performance (Ferris, 1984). I would focus on these HR practices, which are widely known to be very powerful predictors of both trust and organizational performance. I would advocate for adherence to these practices in a manner that reduces interference by labour unions and lobbying by influential government officials.

In the new workplace environment, I would give special attention to TQM experts and give them all the incentives they need to successfully transform Consolidated Motors into a setting where high-involvement practices prevail. This would entail inculcating an efficient complementary relationship between human resource practices and technology.

References

Ferris, G. (1984) Human resource management strategies in declining industries, Human Resource Management, 23(4), 381–394.

Harker, M. (2000) Leadership and the company turnaround process, Leadership & Organization Development Journal, 21(1), 36 – 47.

Rahman, S. (2002) Leadership and HR focus in TQM research in Australia: an assessment and agenda, Benchmarking: An International Journal, 9(5), 485 – 505.

Tyson, S. (1997) Human resource strategy: a process for managing the contribution of HRM to organizational performance, The International Journal of Human Resource Management, 8(3), 277 – 290.

Welch, D. (1994) Determinants of International Human Resource Management Approaches and Activities: A Suggested Framework, Journal of Management Studies, 31(2), 139–164.