Further Human Resource

ManagementBY: AIN ATIYA AZMI BINTI NAZMICIE A LEVELS BUSINESS STUDIES

INTERNATIONAL ISLAMIC SCHOOL MALAYSIA (2016)

CASE STUDY:HUMAN

RESOURCES CRISIS IN THE

FACTORYCOURSE BOOK PAGE 186

Accord Lighting Co. is the manufacturer of specialist lighting equipment for theatres and cinemas. Demand for the firm’s products had increased following the recent rise in customers’ income.

The deputy manager of the factory, Bernardo Alves had received an influx of customer complaints. They were dissatisfied at the poor delivery times and poor quality goods.

The departmental managers faced trouble in recruiting and training staff and this resulted in high labour turnover and reduced annual output.

Bernardo decided to update his report to the directors of Accord Lighting. His proposal to create a specialised human resource department was rejected two years ago. However, following recent crisis, he hoped to convince them about the importance of specialist management of people.

1. Outline the HR problems experienced by Accord Lighting Co.

(8 marks)

There are several HR problems identified in this case study. Firstly, the factory was short-staffed. This had led to customer dissatisfaction due the poor quality goods and late delivery times as there were not enough staff to carry out these services efficiently.

Next, skills and experience of employees are not matched to the responsibilities being given to them. For example, there were unsuitable recruits being asked to take on quite skilled jobs without training. This has resulted in poor decision making and failure to complete tasks to the required standard

Moreover, there was poor management of employees. Recruitment of workers was carried out by outside agencies and new recruits were not properly explained about their tasks. This has impacted the motivation and productivity level of employees and caused the recent ouput to decrease.

Furthermore, there was high labour turnover in all production departments. It is due to the lack of people management skills among the departmental managers. This further increases recruitment costs for the factory.

Calculate labour productivity for:a) i- 2012 ii- 2013 (4 marks)

Labour productivity:

Annual output / Total production

2012: 1400/25 = 56 units/worker

2013: 1100/22 = 50 units/worker

b) Assess how this manufacturing business could increase labour productivity. (10 marks)

Accord Lighting Co can increase its labour productivity by creating a specialised human resource department. This is a strategic approach to the effective management of an organisation's workers so that the business can gain a competitive advantage. The function of Human Resource Management (HRM) is different to the work of other departments.

Firstly, HR can conduct a proper workforce planning for the factory. They will have to audit the current staff and identify future labour needs. By planning ahead, HR can provide managers with the right number of people, with the right skills, in the right place, and at the right time.This is to ensure that the problem of short-staffing can be overcomed. The HR work dependently on the business cycle so there will be no need for panic hiring or lay-offs following the business' boom or bust. Since there is a recent growth in demand for the factory's manufactured products, the HR professionals should be able to recruit suitable number of workers for these tasks. Thus, the factory can run its operations smoothly and avoid delays due to staff vacancies.

Next, the HR will aid in in the recruitment and selection of staff by drawing up suitable job descriptions and person specifications. This is to ensure that recruits are capable of performing their roles. Training may also be required to develop skills of employees to meet the responsibilities they are given. For example, new recruits need effective induction training to familiarise themselves with the layouts of the factory and also the health and safety hazards. Thus, they will be carefully communicated about the stresses of working under the factory environment so that they have proper guidelines to work by.

Moreover, the HR can tackle the problem of labour turnover. There is a high labour turnover in the factory indicating employee discontent, low morale , and a recruitment policy that leads to the wrong people being employed. The HR therefore have to come up with better recruitment and selection techniques to ensure that job applicants understand the pressure they will have to work under. Features of job enrichment can also be added for example letting the workers undergo complete units of work so that their contribution to the overall production can be identified. This will lead to an increase in employees' motivation and thus is vital to add productivity to the factory.

In conclusion, the HR has a central role in managing the workers in the factory. Workers, as assets to the organisation, can be properly developed in the most productive manner so that business’ objectives can be achieved.

3. To what extent would the profitability of Accord Lighting Co can be improved by more effective management of its human resources? (12 marks)

There are many ways in which effective management of human resources can help improve the profitability of this factory.

Firstly, in terms of workforce planning, it will ensure that the business has the necessary human resources to achieve its goals. Delivery of finished goods to the customers is important in the manufacturing industry so management needs to ensure that there are always workers to carry out this task on time. This will avoid customer dissatisfaction and improve the reputation of the business. Workforce planning will also ensure that there are appropriate level of staffing. As the demand for specialist lighting equipment and cinemas has increased, there should be sufficient workers to increase the production output.

Next, recruitment and selection of staff must ensure that the business has the right workers. For example, the factory needs to recruit skillful workers for each production process. This will ensure that the product is up to the standard required based on their performance and durability. The quality of the goods produced need to be maintained as this displays brand integrity and customers will be more likely to switch products should Accord Lighting fail to deliver high quality products. Training of staff also carries many benefits such as employees will be able to carry out their jobs more effectively. There will be less risks of accidents which in turn reduces wastage and increases the overall ouput.

Moreover, the proper management of human resources can retain workers in the factory and reduce the cost of high labour turnover. Effective two-way communications between the recruits and the HR personnels can make the recruits feeling more valued by the organisation. Proper induction training to expose about the pressures in the working environment can provide necessary guidelines to improve their sense of security. Added with features of job enrichment, the workers will be satisfied with their tasks and will be more inclined to stay within the company. Therefore, employees' loyalty and productivity are strenghtened.

In conclusion, human resources is just one of the functional areas of the business and must work in association with finance, operations and marketing to create a successful manufacturing business.

THE END