Reforming HRM at Ardo Enterprises
- Pages: 17
- Word count: 4077
- Category: Management
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Contained herein is a report on the currents state of Human Relations Management in the company. This follows observation undertaken in the last few months. Despite the company having a working Human Relations Department, it is evident that there is little connection between the departments and different operations. Companies in the conglomerate seem to disengage themselves from the central HR office. In addition, different departments in respective companies have their own HRM procedures that negate those of their parent company. This report intends to develop strategies that would lead to bringing these HRM fringes under one fold. The report shall, however, address issues at departmental level—this approach will make it possible to investigate each department conclusively.
Ardo’s HRM needs drastic overhaul for the company to be able to reap from its diverse human and capital resources. The conglomerate is indeed endowed with well qualified staff, but the poor management of their talents has resulted to under performance. Equally, individual companies are well provided with enough capital resources to use in the production process; poor HR practices have meant that resources are underutilized. Reforming the system is therefore important for production potential to be realised. Though the reform measures contained herein will be implemented by the HR department, management in individual companies and departments should feel obliged to support the process.
Among the most serious concerns include the cost of labour in conglomerates companies. As it turns out, each of the three arms (agriculture, transport and hotels) have been paying handsomely for respective labour supply. The return on investment in labour is, however, not well captured in productivity laves. Indeed, it can be seen that labour costs has been rising whereas productivity levels have been stagnant or decreasing. The reforms in each department will therefore focus on assessing reasons for respective companies to have productivity that does not collate with labour inputs. This is especially considering that members of staff have been complaining of not being remunerated as they should.
The independence in each company’s HRM will be maintained for the purpose on increasing efficiency within (Leopold 2005). This will also increase the probability of management in respective companies to be supportive of this process. Indeed, any attempt to show that they would loose power over HR issues would reduce compliance and therefore make the project less effective. However, each company will have a designated human resource individuals, who will be coordinating with central HR department. These individuals will be selected from respective company’s labour force. Sine these individuals are insiders in their respective companies and departments, they would be in a position to report important information and equally implement solutions developed by the central HR.
In addition. Their peers in respective companies would also feel more free to express themselves to the fullest. These individuals would be selected through inspection of previous appraisal records. For the sole purpose of avoiding conflict of interest issues, management in the companies would just be asked to forward names of individuals they think should be become HR representatives. However, central HR department shall have its own list of perspective representatives. The department shall henceforth embark on perusing employee appraisal records and to come up with final lists. Employees selected would be trained in human relation issues by department officials with the help of consultants that are experts in the filed. The little role provided to management in the companies is because of the reform resiliency coming from leadership in some departments.
Hotel and Leisure
The hotel and leisure is consistently been the most profitable among the three companies in the conglomerate. This is due to the high demand for the hotel and restaurant services in the region. In addition, most of company resources are located in high traffic areas, which increases patronage. The leisure and hotel company’s revenues have been lower that the industrial average. This calls for immediate attention from the management. HRM is on opinion that addressing labour issues would be one of the surest ways of changing fortunes of this division as well as the entire company. This section is also the easiest to control and manage. Among the issues to be addressed in the hotel sector is the employee turn over of 27 percent, which is way above the average in the industry.
Fact that employees in this sector have to undergo serious training means that the country has been wasting lots of time and resources to bring new employees up to speed. In order to reduce the turn overs to lowest levels, the HRM will embark on engaging the current labour force in interviews regarding their job satisfaction. Those that would be leaving the company during the study period would be requested to participate in exit interviews, which will be performed with the help of various professionals. Results of these interviews would be used to develop measures aimed at reducing the turn over. HRM will also embark on performing regular interviews with the labour force in the attempt of understanding impacts of the policies to be implemented. Involving members of the labour force in this process would help increase their morale, which arises from the feeling of being appreciated.
Hotel and leisure sectors is the one mostly affected by the increasing labour costs while sales have been decreasing in the past three years. The increase in the cost of labour is little disturbing because HRM has established that employees’ pay equals the industrial average. This leads top a conclusion that Hotel and leisure sector is clogged with excess labour that is becoming less efficient. Reducing the labour force or enlarging the sector is therefore necessary to ensure efficiency. Sine the latter would only apply in the long run, HRM is considering reducing the labour force in order to control short term costs. Employees that would be affected by reduction of the labour force should, however, be given priority in the high season short term hirings (McEvoy et al. 2005).
The management at the hotel and leisure sector have already approached HRM asking for help regarding challenges they are facing. It is through their interest that HRM feels obliged to integrate hotel management in the change process. The sector’s management shall be requested to make some inputs in the process of reforming the sector. Fact that the management has been performing appraisal sessions more regularly than the entire company sets managers at better positions of deciding employees to be retained in the labour force and the ones who will have to be placed on high season help lists. HRM is currently working on modalities of collaboration with the sector’s management.
Ando’s transport business establishments has been acquired through buyouts from other companies. These acquisitions have helped Aldo’s management to escape the headache on establishing Transport businesses from beginnings. However, there has been a problem in integrating new business establishments to the existing ones. HRM has has continuously faced the challenge of incorporating newer members of staff to the existing labour force. This will be one of the major tasks of HRM reforms to be initiated upon approval of these measures. Considering that the buyouts have served Ando handsomely, it is vital that HRM developers mechanisms that would aid in the integration of newer members of the labour force.
The transport sector works closely with the agriculture sector to transport various goods; it also helps hotel and leisure sector to with logistic tasks. This means that the sector is vital to the smooth running of the other two branches of the conglomerate. However, achieving efficiency has been a nightmare through the department. Indeed, both hotel and agriculture managements are contemplating on outsourcing logistics to external firms. Such a move would be the end of the transport section, which gets most of its revenue through the other two departments. As mentioned earlier, the first step would be to improve integration and thus enhance team work among employees in the department. This shall be achieved though team projects, where employees from different sections would be require to work together. In addition, there shall be regular change in teams in order for employees to know each other.
Another problem in the department has been brewing from the technology department. This group is tasked with the responsibility of developing integrated systems to aid logistic processes. The problem is that this group claim of being treated as outsiders in the department. This is despite their inputs to the company. The group is not allowed to set the pace for their projects, neither does the management in the transport sector provide the group with enough support or communication channels to rest of the company. This makes the group feel less appreciated despite their attempts to facilitate the smooth running of logistics.
In the attempts to improve the technology group’s morale, HRM intends to establish them as an independent unit outside the control of the transport sector. This group will also be integrated with entire Information Technology department of the organisation. As a result, any sector that would henceforth need help from the IT department will have to approach an independent department. The IT team helping transport sector with logistics will therefore be free of the pressure they have been working under. In addition, they will easily communicate with rest of company departments without any hindrance, which would lead to increase in their productivity (Jayne 2002). The independence to be provided to the department would lead to the development of working relationships within the company. Instead of the current situation where the group receives specification for the projects, HRM will embark on requesting the company to start going round the three sectors looking for where their services would be needed. Considering that members in the group are experts in IT, their easy access to networks of the three sectors would result to increased efficiency (O’Reilly 2005).
As mentioned earlier, members of the logistics technical groups would be incorporated in the IT department. This will be followed by provision of extra jobs and responsibilities. In this regard, HRM will be sure to inform management of the existing IT department of the incoming changes, which would include having more members in the IT team. Providing such information to the IT team at earlier moments would also help in the preparation of ways and means of incorporating the two departments. HRM will further use the experience gained in the integration of transport sector tom come up with strong working teams.
In addition to adding the groups to the IT departments, it shall also be allowed to control its own calendar. There shall no more be situations where transport or any other sector shall determine the period by which logistics technicians will have to accomplish tasks. This shall also be a motivation to the group members; having them to control the way they want to handle various tasks would lead to more productivity. The groups will also be able to complete projects on time and therefore save the company lots of resources. In addition, having logistic technicians work closely with the IT department shall lead to both groups sharing information and thereby increase knowledge that will be vital in the long run.
Integrating logistics technicians with rest of IT will make it easier for the management to test the competences of members of the labour force. This has recently been hard to achieve while some IT members were directly under another sector’s management. Having all IT employees in under the same department shall also aid in the sharing responsibilities. This is because members of the IT department will know competences of each and every one of themselves. The formation of working teams will also be easy in the new arrangements; employees in the departments will not have to travel from one location to the other in order to engage in the team projects. Instead, the cooperation between group members will easily be reached within the office.
This integration of departments will be extended to the other two sectors. However, only services that can be performed centrally and serve all the three sectors would be pulled together. For instance, accounting departments of the three sectors will be integrated into the office controlled from the conglomerate. Taking such measures would lead to better management of these services. These central offices shall be responsible for controlling affairs inn the threes sectors. In order to have a good communication link between these central offices and the management, HRM will ensure of appointing liaison officers at the three sectors. These individuals will be the link between the central office and three arms of the company. However, employees and senior management will have access to the accounting and IT offices accordingly. HRM is hopeful of this scenario having positive results. In this regard, HRH will be available for support at all times.
The agriculture sector is the most de-fragmented among the three divisions of the conglomerate. This is shown by the significant number of small holdings operated under the sector. Operating too many small operations has the tendency of resulting to management’s failure to be informed of employees’ daily activities (Miner 2004). As a result, employees in the agricultural sector have taken the independence to far. Some of them rarely attend to their duties, but they receive regular pay checks. As a result, the agriculture department has been loosing money through payment of labour that has not been productive in any way. To make the matters worse, the sector does not have clear communication channels to the small holdings. The management of the small holdings have been slow to adopt ways that would lead to better productivity from their independence. This is degenerating from lack of follow-up procedures from the management level.
Operating in small holdings has the puts the sector at some disadvantage, because it cannot take advantage of economies of scale (Ulrich 2005). For instance, each holding is responsible for sourcing respective inputs. It therefore becomes hard for respective holdings to get discounts on their inputs. This means that cost of production in the sector is high for nothing. Another disadvantage facing the sector also generates from fact that employees do not feel as part of the larger Ando Enterprises. This is actually affecting their morale, which makes this reform process more meaningful to them.
To address the issue, MHM is em,barking on the process of establishing communication channels between fringe holdings and the management at both agriculture department as well as conglomerate officials. This shall be done by establishing a direct access to all company offices to these employees. The long run solution would be to appoint HRM liaison officers in each of the small holdings. As explained in the introduction, individual to be selected for the task will be selected by embarking on perusing employee appraisal reports. Managers in each of the holdings would be asked to submit names of individuals they feel should fill posts. Agriculture department leaders will equally be asked to submit names of the individuals to play that role. Involving holding managers in the selection process would lead to the establishment of progressive working relationship between the two groups.
Employees in these establishments would also be asked to express their concerns to the HRM. This shall happen at the beginning stages, and then continue after decisions have been made. By undertaking the process on a regular basis, HRM and company management would be in a position to understand employee needs, and thus develop measures that would successfully address the problem. This process shall actually be carried in all the sectors and would become a regular exercises. In order to make it more fruitful and conclusive, HRM representatives’ offices will be sending information to the central offices regarding employee concerns. These liaison officers will be granted be dealing with simple issues, whereas the complicated ones will be dealt with at the central level. However, the officials will be required to submit information on all reported cases to the central office. Compiling a database of employee complains shall help in understanding trends and therefore develop appropriate measures on time.
This sector is the one that HRM feels will provide the greatest hurdle in the reform process. Reason: senior managers in the sector are seeing reforms initiated by the HRM as threatening to their positions in the company. HRM is in the process of convincing the managers that reforms are directed at increasing efficiency and productivity in each of the sectors and the conglomerate in general. There is some hope that the managers in question would come around. Despite the progress being made, HRM is hereby requesting the management to help in the process of convincing managers at all levels and their employees to embark on the process of supporting our initiatives. The management can achieve this goal in various ways. First, senior managers at the conglomerate level should speak in one voice regarding the reforms.
By supporting these reforms at private and publicly in company activities, then the rest of managerial staff at the three sectors, as well as their employees, would most likely respond by supporting our move. Secondly, senior management at the conglomerate level should embark on accompanying HRM teams as they embark on the process of educating employees on the importance of these reforms on the company’s future and their jobs. Third, the management should combine the above two approaches to the current crisis. This means that the management should speak in one positive voice regarding the reforms and then support HRM in popularising same reforms to the labour force and all the stakeholder groups (Donnison 2006). HRM department is ready and willing to work with the management in this process. Indeed, convincing the management to support the reforms was the chief reason of undertaking the study whose results are contained in this document. In addition, HRM will embark on the process of visiting various managers at the conglomerate, sectoral and departmental level to ask on views regarding the process. The human resource will also have have their offices open for members of the managerial team to present their views. Other forms of communication such as inter office mail, telephone or emails can also be used to express views.
The collaboration with the management would help in having employees and other individuals resisting change to understand that nothing will stop the change in this company. It would indeed be hard for this company to continue existing if change does not happen in earnest. This is why the HRM is determined to undertake the just mentioned measures. The department however understands that change would be hard to accept, especially among sectoral mangers that have been in the company for long periods of time (Harrison 1995). Fact that these individuals have developed interest in the way this run currently mean that it will take hard stand for HRM to convince them. Some of them have actually threatened to influence respective employees to down their tools in the name of their work positions being at risk. In order to avoid confrontation, the management should embark on the process of convincing these individuals that reform is vital for the company and their work positions. Management’ failure to convince these important members of the labour force could lead to serious implications in the company’s production process. In any case, HRM department is determined to undertake the necessary reforms; nothing will stop the reforms from happening, and especially not individuals or departments that have been sources of inefficiencies in the conglomerate.
HRM understand that there could be confrontation between it and some of the departments to be adversely affected. The department is, however, ready to deal with the accruing results. One of the ways that HRM is developing to deal with the situation and establish a new beginning in the management of labour include organisational culture, which will be established during the reforms and start being practice henceforth. The interest of developing organisational culture originates from fact that this company does not have any, meaning that there is nothing to bind employee and their employers’ goal together. This is considering that organisational culture helps in developing helping senior management, employees and other groups of stakeholders to have similar goal of serving in the best interest of the company and customers (Ryan 2003).
Considering that the company has never developed nor practice any sort of organisational culture, HRM department has embarked on a process of looking for consultants that can help in this process. The professionals being sought are the ones who have had experience with developing and helping implement cultures in companies that deal with transport, hotel and agriculture. This will help in the development of culture that will help the company entirely. The role of developing the organisational culture for Ando swill not entirely rest with HRM department and the consultants alone. All members of the labour force will be involved. Indeed, each department in the three sectors will be asked to compile a list of characteristics they would like the company to be associated with. All the list will be compiled and presented to the drafting team that will compromise of the departments involved. At this drafting stage, work of the consultants will be to coordinate the process. They will be guiding the drafting team in the process. Representatives from each department will regularly be updating their colleagues in the developments. The resulting organisational culture will therefore be employee oriented, considering that all in the conglomerate would have participated in the process, which will raise chances of all in the company practising the culture (Alder 2001). Starting to practice the culture will be a new beginning for the company.
HRM office is optimistic that all of the above measures would succeed in leading the company to new heights. The practice of organisational culture will especially mean that employees understand vision, mission and goals of their employer. They will therefore embark on helping Ando achieve the set goals. On their part, members of the labour force would start being more motivated to deal with their day to day activities. This shall lead to higher job satisfaction, which will mean increase din their productivity and that of the company. The management also stand to gain from the implementation of the above measures. For instance, having members of the labour force understand better their roles in the company would mean that few employees, if any, will have to be followed in order to perform tasks as expected. This shall mean that management at departmental, sectoral and conglomerate levels would have enough time to dedicated to the long run business strategies, which are going to benefit all the stakeholders in the long run. In order to ensure to ensure that the above strategies are put in place and that results are always positive, HRM office will be taking regular studies through appraisal systems, provide members of the labour force with avenues to express their concerns and invite professionals to compare the company with the industry. Results from the three undertakings would be used to seen measures that should be improved, those that should be removed and new ones that should be introduced.
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