Changing HR practices in Cable Co Case study Table of Content 1. Introduction………………………………………………………………….. 3 2. Problem diagnosis……………………………………………………………. 3 3. Data collection and analysis…………………………………………………. 5 4. 1 Problem #1 – Human Resources planning……………………………….. 5 4. 2 Problem #2 – Performance Management System……………………….. 6 4. 3 Problem #3 – Recruitment and Selection processes……………………… 7 4. Proposed Solution……………………………………………………………7 5. 4 Human Resources planning………………………………………………8 5. 5 Performance Appraisal System…. ……………………………………. 8 5. 6 Recruitment and Selection process………………………………………10 References List………………………………………………………………12 Appendix 1 – The 4 stage Leadership Model Appendix 2 – Performance Appraisal form Appendix 3 – Giving Feedback Tool 1. Introduction This case study is based on CableCo which is a joint venture between an Australian corporation AuzCo, and two Chinese organizations Post Bureau and PTA. The purpose of this report is to help the company to diagnose the problem, after research of the company’s background information, identify its causes and offer a solution.
This new Australia and China joint venture is located in an Economics and Development Zone about 47 km from the downtown area of Tianjing, a well-developed industrial city in China. The main products of the joint venture are telecommunications and various other kinds of communication cables. The Company has 184 employees in total; most of them 60% (113) are employed in the Production Department, as it is the most important functional part of CableCo. The Company’s mission is expressed “to produce quality products, provide first-class service to customers and guarantee reliable delivery. The Company’s business strategy is to continuously develop new products, improve the quality of goods, reduce costs, and manage its human resources efficiently and strengthen management control. Implementation of the company’s strategy depended strongly on effective employee performance and management control (Zhu, Case Study A). The telecommunication sector in China where CableCo operates has undergone rapid development. There has been a steady growth in the total number of phones in China.
Because of this reason, the cable industry in China has attracted many domestic and international investors. As supply exceeds demand in this market segment, it is more difficult maintain key employees. The CableCo management team has realized that improvements in efficiency and effectiveness had to be achieved through better utilization of its human resources (Zhu, Case Study A). 2. Problem Diagnosis After the initial meeting with the client it is found that the company’s authenticity is rather low in regards to managing their human resources.
Although Cable Co realizes that its employees are the most valuable asset they have, the company still has a lot defects and inefficient processes in the HR management area. The key problem that the company is concerned about is how to improve effectiveness and efficiency of the Human Resources management that is the most important area in a highly competitive market. Cable Co is in danger to lose their image as a good quality product manufacturer because of uncertain business development strategy and employee internal dissatisfaction within a growing competitive market.
The Management consultant’s main objective would be to assist the company in changing its HR practices and processes in order to improve Cable Co’s Human Resources Management and to enable effective operation in the highly competitive market within a multicultural working environment. A Structured model (Issue tree) enables us to see Cable Co’s situation more clearly. Using this model it would also facilitate in recognizing main causes and find the best ways for possible solutions for company’s problems (Fombrun and Nevins, 2004). Inefficient Human Resources Management Problem #2
Defects in performance management system Job analysis/Performance appraisals Bonus system Problem #3 Recruitment & Selection Candidate database Selection Methods Problem #1 Organization’s Structure & HR Planning Short-term oriented HR planning To keep a stable workforce 3. Data collection and analysis In order to analyze the situation within Cable Co, data collection had been processed. There were two basic data collection approaches used – deductive and naturalistic. To gain a more detailed overview of the company’s situation the 4 stage leadership model is used.
Structured interviews with each leadership team member were conducted. Also questionnaires based on employees’ current job satisfaction, understanding of job requirements and a rewards system were used in the data collection process. The work environment observations and interactions between managers, supervisors and employees along with the organization’s documents were an important information source during analyzing the situation in Cables Co. Based on previously constructed issue tree model, the main problem and its causes can be stated: 3. Problem #1 – Human Resources Planning * Organization’s Structure A lot of Chinese companies are operating under strict control of the government. There are unclear and different views between Chinese and Australian managers at Cable Co. Common ground rules and guidelines should be introduced. Currently some leading positions and responsibilies are overlapping or two positions are held by the same person. * Short-term oriented HR planning Both management parties (Chinese on one side, Australian on the other side) have different approaches to business development.
To evaluate the demand for new employees the company uses its forecasted production needs, based on the market situation. Also data from AuzCo Australian are used as a standard to formulate the staffing needs in the production department. It seems that staffing needs analysis is more affected from how it is done in the West than in China, although it should be based more on China’s market situation. Obviously judgmental forecasting is used to forecast the company’s future employment needs this means that managers and other people within the company decide on staffing requirements. Gully, M. , Phillips M. 2009) There is no research data of Cable Co’s target market in China, and this causes management uncertainty and different opinions where the company is going and in which direction they are supposed be heading? Without knowing the company’s goals, it is very difficult for the managers to agree on a common staffing strategy. * Unstable workforce High turnover in locally recruited employees make it difficult to keep workforce stable which affects the effectiveness of the company which reflects badly on HR recruitment.
Intensifying competition in employment market, gives a lot of opportunities for employees to seek employment elsewhere. This would have an impact on Cable Co’s productivity as production workers are one of the key employee groups in the company. 3. 2 Problem #2 – Performance Management System * Performance Appraisal system After conducting research interviews with production workers, it is understandable that the company’s performance management system had many defects that reduce its effectiveness. Effectiveness of the existing performance management system in Cable Co is very doubtful for the reason listed below:
Key performance criteria for both managerial and non-managerial employees are the same. Appraisal performance results have been kept confidential from the evaluated employees. Evaluations made upon appraiser’s daily observations and individual judgments, make the current system very subjective and results do not have validity. The company currently doesn’t have job analysis for most of its positions, which makes it really hard to evaluate the employees’ performance or to explain what are the main responsibilities and tasks for a position. Bonus System Currently there is no bonus system in the company. The previous system was used more to avoid potential conflict between employees and lost its function as a motivational tool. The bonus system based on defected performance evaluation process fails and decreases employees satisfaction. Operating in such a highly competitive market, it is essential to have motivated employees, and tools that help to keep them engaged. 3. 3 Problem #3 – Recruitment & Selection * Applicants database
Because the company does not have a common computerized database for all applicants, the recruitment process for every new position is more costly and more time consuming. Previous unsuccessful candidates and interview records might be useful for the next recruitment project, but it is difficult to find this information without a database. * Candidate selection There are no common guidelines for the department managers to use when conducting the recruitment process, no selection criteria that would be based on and aligned with the company’s business strategy. 4.
Proposed Solution To make changes in the organization’s structures, systems or processes managers should have support from people working within the organization otherwise it will be impossible (Fombrun and Nevins, 2004, p. 209). It is suggested that inefficient Human Resources Management system in the company can be improved by more effective HR planning, a reviewed performance management system and recruitment and selection processes. 4. 1 Solution #1 – Human Resources Planning 1. Organize meetings between Cable Co Board of directors, General Manager and Executive Manager.
The objectives for this meeting should be: * To review company’s goals and business strategy; * To identify and review all Cable Co target market segments; * To organized repeated market research to evaluate domestic (China) market demand for their product; * Based on research, reformulate the company’s business development strategy; * Management team should always be present, especially if the company put such a great emphasis on management control in its business strategy and product quality. Formulate Human resources strategy aligned with business development goals that will enable to plan the company’s people resources more efficiently. A previously mentioned problem is that the company is unable to offer accommodation for its employees should be seriously reconsidered. * Review employment offer package – concentrating on accommodation facilities for employees other than those from the local area. * That way company’s candidate pool would be extended, that can increase the best applicant attraction and give the company a competitive advantage. Organize a team to conduct accommodation market research; * Revise the company’s opportunities to offer accommodation or a housing allowance for their employees. * This will expand the company’s candidate pool and stabilize the workforce and turnover. 4. 2. Solution #2 – Performance Appraisal System “Employee Performance Management is a process for establishing a shared workforce understanding about what is to be achieved at an organization level. It is about aligning the organizational objectives with the employees’ agreed measures, skills, competency requirements, development plans and the delivery of results. (http://www. peoplestreme. com/what-is-performance-management. shtml, 20/05/2012) It is essential to make sure employees know what the positions key requirements are for high performance are. It is hard to maintain or try to achieve any performance level if the employee is not aware what the key aspects they have been evaluated for are. It is recommended to revise key performance criteria for managerial and non managerial positions in the company. These key areas for both types of employees should be formulated in the positions job description.
When conducting job analysis, human resources personnel should consider the company’s business strategy. In this case the company pursues cost leadership and differentiation strategies. This kind of business usually requires a workforce who are adaptable, efficiency oriented, trainable and willing to follow standardized procedures (Gully, M. , Phillips M. 2009). Firstly, it is suggested to determine key performance criteria for managers and all other employees, and show those in their job description. Job analysis, which include important aspects of a job and characteristics a worker needs to do it well (Gully, M. Phillips M. 2009) should be conducted for each position in the company. Job descriptions should be received by each employee on the day they sign the employment contract with the company. That way the employee clearly understands the company’s requirements for high performance and key performance criteria for their positions. Secondly, a new performance appraisal form should be developed (Appendix 1 – Performance Appraisal form), which allows matching the key performance criteria from the job description for different positions.
An evaluation process should still be conducted from the top to the bottom, but it is important to have open communication and feedback on the results after employee evaluation. Employees won’t improve if managers or supervisors won’t give them honest and constructive feedback on their previous performance against the key criteria. As this is a new thing for supervisors and managers, it is recommended to set up guidelines on how to give constructive feedback about an employee’s performance (Appendix 2 – Giving feedback model). It is also advisable to process 360 degree feedback for company’s managers and supervisors.
This would give managerial team a better understanding of their strengths and weaknesses and an insight on how others perceive them. Also provide an opportunity to adjust behaviors and develop skills that will enable them to excel at their jobs (http://www. custominsight. com/360-degree-feedback/what-is-360-degree-feedback. asp, 12/05/2012). A bonus system should be developed for key areas of the company such as Marketing and also Production Departments. It is also recommended to create an incentive plan for all employees if the company has reached its goal at the end of the year (for example, specific amount of sales or profit).
That way all employees would feel rewarded, because everyone has contributed to improve productivity, profitability and to keep the organizations’ competitive advantage. Employee performance appraisal form results should also be taken into consideration when building the bonus system. It should be based on sales results for the Marketing department and productivity and quality for the Production department employees. The company should consider a yearly bonus implementation for all employees if an annual target has been reached.
A bonus system is a great motivational tool that means more motivated employees, better work engagement, improved productivity and product quality, which help the company to gain better profitability. 4. 3 Solution #3 – Recruitment and Selection process * Candidate Database It is recommended to invest in the company’s development by creating a computerized HRM system, which includes all previous applicants and records on current employees. Included information on TeleCo employees would be a great source for Cable Co further recruitment processes.
In this HRM system the company could also create talent inventories – detailed records that summarize each employee’s skills, competencies, and qualifications (Gully, M. , Phillips M. 2009, p. 126. ). This can be used as a very helpful tool in filling in future vacancies and also developing succession management in the company. * Recruitment and Selection If the company keeps involving line managers and supervisors in Human Resources processes, the selection and recruitment guidelines for management and supervisor’s team should be developed.
It is important to have a formal instructions, and processes to follow when selecting, attracting, assessing and deploying employees (Gully, M. , Phillips M. 2009). Supervisors have to be competent to explain to the new employees what the key areas of the position are and what level of performance is expected from them. This information would be easily found in the job descriptions for each position, based on job analysis and performance appraisal reviews. These recommended changes will help Cable Co’s leadership team to improve the Human Resources management in the company and increase management control over organization’s processes.
Reference List Gully. M, Phillips M. (2009). Strategic Staffing (2nd ed. ) Upper Saddle River, New Jersey: Pearson Education Fombrun. J, Nevids D. (2004). The Advice Business. Essential Tools and Models for Management Consulting, Upper Saddle River, New Jersey: Pearson Education Warner J. (2002) The Janus Performance Managament System: A Complete Performance Management Support Process for Individuals, Teams and the Entire Organization (Volume I), HRD Press Zhu J. C. Organizations Development and Change. Changing HR practices in China – Cable Co. Case Study A PeopleStream Pty. Ltd. Performance management. Retrieved from http://www. peoplestreme. com/what-is-performance-management. shtml Custom Insight. com. 360 Degree Solutions. Retrieved from http://www. custominsight. com/360-degree-feedback/what-is-360-degree-feedback. asp Business Balls, Performance Appraisal forms. Retrieved from http://www. businessballs. com/performanceappraisals. htm
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