Human Resource Management Assignment 1 by haris awang

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Effectiveness Improvement of Human Resource Management

in an Organization

A. HARIS AWANG

A. HARIS AWANG MBA2016-04-1001 MBA 6673 Human Resource Management

Assignment 1

Submitted to:

Mr. Paramjeet Singh

Senior Lecturer

Faculty of Business

ASIA METROPOLITAN UNIVERSITY

Tel: 03-9080 5888 Ext 731

02nd July, 2016

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Effectiveness Improvement of Human Resource Management in an Organization. A. HARIS AWANG. Asia Metropolitan University. 2016

Table of Contents

1. Trends Affecting Hiring .......................................................................................................... 1

2. HR as a Strategic Partner ......................................................................................................... 5

3. Human Resource Model .......................................................................................................... 6

4. HR Strategy for Effective Relationships ................................................................................. 8

5. An Employment Law That Affects Hiring .............................................................................. 9

6. Reference ............................................................................................................................... 10

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Effectiveness Improvement of

Human Resource Management

in an Organization A. HARIS AWANG

Imagine that you have applied for the position of Manager of Human Resources at your

organization. Your organization is planning to expand its services to meet the needs to grow. As

part of the application screening process, you have been asked to write a document that outlines

the steps you would take, as the manager of HR, to improve the effectiveness of HRM in this

organization.

The context of shop floor workers in the manufacturing of audio-video product will be used in all

answers discussed or analyzed in this assignment. Due to confidentiality, the name of the company

is withheld and shall be referred to hereinafter as the company or the organization.

1. Trends Affecting Hiring Analyze two (2) current trends in your organization that are affecting human resources

management that may likely impact your hiring decision as HR manager. Provide support for your

analysis/issues.

Based on an interview with the HR department personnel on 21st June, 2016, two current trends

that are affecting the hiring decision are identified.

1.1. FLUCTUATION IN DEMAND

One of the variables that dictates the hiring decision is the market demand of the products. The

higher the demand, the higher the manpower is needed. Any excess in manpower will only result

in higher cost and low productivity. On the other hand, shortages of manpower will result in

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unnecessary over time or order backlogs. This has been a challenge for the HR manager to optimize

hiring so cost is kept at minimum at all time.

The demand trend has moved from stable in the past to unstable at present as shown in the graphs

below. These graphs are typical examples of the yearly demand.

Figure 1.1. Stable demand throughout the year.

Figure 1.2. Unstable and fluctuating demand throughout the year.

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

1 2 3 4 5 6 7 8 9 10 11 12

Past (before 2012)

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

1 2 3 4 5 6 7 8 9 10 11 12

Present (2012 ~)

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Products demand has been stable in the past (before 2012) and follows the typical cycle as in figure

1.1. This is due to own-brand manufacturing. Furthermore, the demand follows festive seasons

such as Christmas and New Year since 75% of the products are shipped to the United States and

Europe. Under this condition, hiring is predictable and quite straight forward.

Since 2012, the company has expanded into OEM business in order to survive the challenging

economy and this has resulted in an unstable products demand. This trend is predicted to continue

as the company is planning to expand further and venture into other businesses as well. The biggest

challenge as HR manager is to fulfill the fluctuation and the unpredictability.

HR will have to look at several alternatives in the hiring decision that is to maintain skilled

workers, to hire part-time workers or contract workers, and to propose sub-contract jobs.

1.2. DIFFICULTY IN GETTING LOCAL WORKERS

Recently, HR is facing difficulty in hiring local workers. Local workers cannot last long in the

company. The absenteeism and resignation rate is very high among local workers. This trend has

been going on and important steps have to be taken to handle this situation. Prior to 2012 the local

to foreign workers composition was 70-30% and presently it is 57-43%. See charts below. The

trend of hiring foreign workers is becoming a norm for manufacturing companies in Malaysia

particularly in developed town areas like the Klang Valley, Penang and Johor Bahru.

There are various reasons as to why local workers are difficult to retain and hire. For example,

family expectations is one of them. Most do not want their children to work as factory workers at

shop floor level and would expect them to either further their studies or enter vocational schools.

Working in factories is no longer sought after by the local community due its reputation of

overworking, accidents and social status. The minimum wages imposed by the government has

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very little impact especially on millennial. Millennial are known to demand higher pay, more

relaxed work and less regimented work environment where they can chit-chat or do social media.

Chart 1.1 Chart 1.2

At present, the company’s composition of foreign workers is as in the chart below.

Chart 1.3. Foreign workers composition (present)

70%

30%

Past

Local Foreign

57%

43%

Present

Local Foreign

30%

40%

5%

20%

5%

Foreign Workers

Bangladesh Indonesia Myanmar Nepal Sri Lanka

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As HR manager, there are several alternative in handling this situation. One is to look more into

foreign countries that have reliable source of manpower. In the past, there were only Indonesia and

Bangladesh,. Now the company will have to look more into other countries like Sri Lanka,

Myanmar and Nepal. Another possible solution is to lower the entry level requirement for local

workers i.e. from SPM to PMR or PT3. Concurrently, the company has to develop a strong

program to train these workers to become more skillful and proficiency not only in the work they

do at the shop floor but also other skills such as english, computers, supervisory and technical.

2. HR as a Strategic Partner Suggest a significant opportunity for HR to become more of a strategic partner within an

organization. Justify your response.

A significant opportunity for HR to become a strategic partner starts with the right leadership of

HR management itself. HR manager must identify best practices while discarding ineffective HR

practices that do not contribute to the success of the company. For example, including 5S (Figure

2.1, a Japanese cleanliness concept) in the company’s policy is considered as best practice. Another

example is employee suggestion scheme for continuous improvement or Kaizen (Figure 2.2) which

is also to be included in the company’s policy. This HR position must be strategically placed by

reporting directly to the CEO for full support in order for HR to function effectively. HR must be

a strategic partner instead of merely a support function. Knowing the business inside out – what is

the business, how the company makes money, what is marketing, R&D, production, finance, etc.

is also a pre-requisite for HR manager. HR manager has to talk like a business person instead of

just an HR manager. He or she should be more proactive and sensitive to trends or changes that

take place inside and outside of the organization. HR manager has to make effective use of Human

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Resource Information System (HRIS) to handle daily administrative HR tasks. With the right

leadership, HR can be a significant strategic partner in the company.

Figure 2.1. 5S – Seiri, Seiton, Seiso, Seiketsu,

Shitsuke. A workplace cleanliness concept

originated from Japan.

Figure 2.2. A look at the Kaizen (continuous improvement)

concept. (Imai, 1986).

3. Human Resource Model Recommend a model of human resources management that would be the most appropriate for this

organization in question. Provide support for your recommendation.

The most appropriate model of human resources management for this organization is a merge

between Japanese and Western styles that consists of elements described as follows:

3.1. ENTERPRISE UNIONISM

According to Ojha (2000), “Enterprise unionism” is the system where the management and the

shop floor workers are represented by a single union independently. The main aim of the enterprise

Seiri

Seiton

SeisoSeiketsu

Shitsuke

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is to negotiate salaries and benefits in return for better productivity and efficiency for the company.

So it is a win-win situation for workers and the company.

3.2. SENIORITY BASED

The seniority based wage and promotion system, is described that the salary of a worker starts

from the bottom when recruited and increases as he or she stays with the company (Ojha 2000).

This system was crafted and originated in Japan to prevent job hopping. However, in this

recommended model, seniority acquired from previous companies can also be taken into account

and considered in determining salaries and benefits of a candidate. This is to attract talents and

competent workers. In other words, seniority is a transferrable attribute to be considered when

hiring.

3.3. EMPOWERMENT

Empowerment is a big word being talked about mostly in western organizations. However it is

gaining recognition as a useful management style by non-western organizations as well.

Empowerment is a management practice of sharing information, rewards, power and discretion

with workers so that they can take initiative and make decisions to solve problems at their

workplace and improve productivity, quality and efficiency. Empowered workers who are

responsible and accountable for outcomes of their actions are more confident and satisfied in

carrying out their duties.

An empowered organization is one in which individuals have the knowledge, skill, desire,

and opportunity to personally succeed in a way that leads to collective organizational

success. Stephen Covey

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4. HR Strategy for Effective Relationships Recommend a strategy that HR could implement in order to develop more effective relationships

between Human Resources and the organization’s managers and senior executives, indicating how

each strategy will achieve the desired goal.

To develop more effective relationships between HR and other managers and senior executives,

a strategy is recommended as follows:

4.1. OUTSIDE ACTIVITIES

Non-work related outside activities are very much needed to promote a work-life balance as well

as relationship building. Activities recommended for this purpose are sports e.g. golf, cycling,

scuba diving and also team building workshops. These activities will bring managers and senior

executives closer as they sort of create the concept of trust, camaraderie and bonding that will

enhance, encourage and improve relationships.

4.2. SMALL GROUP ACTIVITY

Small Group Activity (SGA) is where a group of between 5 to 10 workers from the same

workplace, form a discussion and problem solving group for problems that can be solved within

their own resources. This activity has to be promoted and championed by HR as it involves

everyone in the company. Workers from all disciplines are voluntarily guided by HR. Since it

involves all departments, managers and senior executives have better recognition of HR as the

facilitator which can only develop into better relationships.

4.3. IMPROVED COMMUNICATIONS

Communicating by current social media technology such as Whatsapp or Facebook will likely

have a positive impact on relationships. Individuals cannot work in isolation and therefore need to

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communicate with each other to discuss issues or share information. HR may want to set-up a

Whatsapp or Facebook group targeted at managers and senior executives so they can communicate

with each other more effectively. Effective communications are essential for effective

relationships.

4.4. COLLABORATIVE RELATIONSHIP

Collaborative relationship has to be an ongoing process and can be established through working

jointly towards a set of common goals and directions, sharing responsibilities of achieving those

goals and working together to achieve those goals, using the expertise of each collaborator. HR

has to play an important role in inculcating this type of relationship until it becomes a culture to

the company. Collaborative relationship can only benefit the company when everyone is working

together.

5. An Employment Law That Affects Hiring Determine a specific employment law that may affect the hiring and selection process in your

organization. Provide support for your rationale.

Since foreign workers hiring is the trend, HR has to look at a specific law to protect both workers

and employer. In the Malaysian context, there’s a law that covers the prohibition on termination

of local for foreign employee. According to the Employment Act 1955 (Malaysia) PART XIIB,

section 60M, “No employer shall terminate the contract of service of a local employee for the

purpose of employing a foreign employee”.

This law must be observed carefully when hiring foreign employees. HR manager has to ask has

there been any recent termination involving local employees before the new hiring of foreign

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workers takes place? Company can avoid possible costly lawsuit if this matter is taken into

consideration.

6. Reference Awang, A.H. 2010. Putrajaya Architecture. Photo for front cover.

Dessler, G. (2013). Human Resource Management. (13th ed.). US: Pearson.

Employment Act 1955 (Malaysia) (Act 265).

Imai, M. (1986). Kaizen: The Key to Japan's Competitive Success. (1st ed.). US: McGraw-Hill

Education.

Makhbul, Z.M & Hasun, F.M. (2007). Amalan Pengambilan dan Pemilihan Pekerja: Tinjauan ke

Atas Firma Terpilih di Sektor Perkilangan. IJMS, 14(2), 143-162.

Ojha, A. K. (2000). Can Japanese Management Practices be Successfully Transferred to other

Countries? In Lau, C. M., Law, K. K. S., Tse, D. K., & Wong, C. S. (Eds.), Asian

Management Matters: Regional Relevance and Global Impact, River Edge, N.J: Imperial

College Press.

Zulfikar Sameon, Wan Hilmee. 2016. Trends affecting hiring decision in the organization.

Interview, 21st June.

Recruiting & HR

Human Resource Management Assignment 1 by haris awang