Australian Cladding Company free essay sample

What are the immediate and underlying problems facing ACC? Introduction In the case study, Jim Hackett (Jim) started the Australia Cladding Company (ACC) as the Managing Director in the year 1998, where new light weight and low cost house cladding product was created. From there, ACC grew rapidly and also supplied its products to other states and internationally. The products from ACC have gained popularity in major building projects, home buildings and extension work. ACC supplies and install the products to large building projects in Western Australia which had gained positive comeback in the construction industry. Jim had chosen the management team from his mates from the building industry whom they are Ben Harper (Engineering and Design), Reg Grundy (Marketing and Sales), Arthur Seymour (Financial Controller), Ted Clark (Production Manager) and Jill Hackett (Jill) who is Jim’s wife (Personnel – Wages and Salary or Personnel Admin). As the business is good in ACC, they have rapidly grown and employed more staffs. However, even though the sales are increasing, but the profit earning is decreasing. Problems were identified, where it is related to the human resource management (HRM) planning, and a consultant, Terry Wild (Terry), was employed. Nevertheless, these problems and solutions related to HRM will be further discussed in this paper. Kramar et al. (2011) states that, HRM relates to â€Å"policies, practices and systems that influence employees’ behaviour, attitudes and performance†. Therefore, HRM in an organization plays an important role in justifying what are the best activities to be done in the organization to ensure constant strategic competitive advantage in the business industry. In every business, there will be problems and issues arise due to the management issues, employee issues and many more. In the case study, symptoms identified is very much related to the employees in ACC. As employees are valuable resources to the organization (Brundage amp; Koziel, 2010), which is also agreed and acknowledged by Meers (2007) that employees in the organization are indeed important to the organization, hence, this paper is to identify the immediate and underlying problems that ACC is facing in regard to HR issues. There are also limitations to this case study as it is based on limited number of articles and the data collected is from secondary resources. Furthermore, limitations on the problems identified in this paper are solely based on the case study given and it’s not identifying the problem where all companies are facing in the current society. Immediate Problems (Symptoms) Identified in ACC In the case study, there are a few immediate problems identified in ACC whereby there is an increase on workplace accidents. This can be seen from the case, and Sandra, who is one of the machine operators, had told Jim that the workers are not careful when they are working around the machine. Following on will be the high turnover rate on employees, whereby there are increasing numbers of skilled staffs, key engineers and an IT specialist who have left ACC. Next would be the problem where the employees are discontented within the workforce. This is due to the lack of professional development on the employees and they are unhappy about it. Moving on is that the female workers felt uncomfortable with the way some men spoke to them, which could lead to sexual harassment cases if it is not addressed properly. There is also inefficiency problem among the employees as the employees at times will hang around doing nothing, while at times, they will be stressed and working flat out. Moreover, there is an increase in labour costs and scrap and wastage cost in ACC which eventually decrease the profit earned by ACC despite of the sales which is in the rise. And lastly, there is unfairness in the company where Jim was offended by Terry’s suggestion that his wife, Jill, was not managing the personnel issues well, and has not put much attention to the report, which seemed not to be favouring Jill. Underlying Problems Faced by ACC In an organization, problems arise are an inevitable issue whereby proper HRM on how the problems should be addressed is vital. In ACC, there are a few problems identified through the immediate problems which surfaced from the case study. From the case study, one of the underlying problems identified is that the occupational health and safety (OHS) measures are not properly conveyed to the employees, and training on OHS measures is not conducted. In order for the employees to put more attention onto OHS, the organization has to impart the knowledge and importance of OHS, and train the employees to put more effort in practicing OHS measures (Gravel, Rheaume amp; Legendre, 2011). As ACC did not address OHS’s importance to the employees, it can be seen that there is an increasing cases of workplace accidents in ACC, and some incidents happened as the employees did not practice diligence when handling the machineries. Frick, Jensen, Quinlan amp; Wilthagen (2000) also further state that, companies tend to overlook the importance of OHS when they are facing economic instability. Since ACC is facing economic instability, this might be the reason why OHS is overlooked by the personnel department. There is also staff retention problem faced in ACC. It is seen that there is a high turnover rate whereby the skilled staffs, several key engineers and an IT specialist had resigned. The high turnover rate might be due to the employee’s job satisfaction which is not addressed, and therefore, it is always tough for the organization to retain the employees (Deery, 2008). It is also linked with another problem where there is a lack of training and career development, and the employees felt discontent within the workforce as they do not have enough professional development. When retaining employees, they tend to stay in the company and feel contented when they have experienced meaningful work, participate in issues that is related to the organization, have learning and improvement space, have a say in the organization and many more (Dieleman amp; Harnmeijer, 2006; Wagner, 2006). Following on is the problem whereby there is a lack of equal opportunity, training on gender equality issues and company culture. A number of scholars have identified (Alvesson, 1998; Alvesson and due Billing, 1997; Hall, 1993; Leidner, 1991), that the job sector has relation to the gender domination (Samardzic amp; Taksa, 2011). When ACC first started, Jim hired all males as the management committee, and hence, this has created a male dominance company culture, and female workers felt uncomfortable with the way some men spoke to them. The newly employed female workers also felt unprepared to settle into the ‘boys club’ approach. As seen in the case, the next problem identified is the weakness in HR planning, whereby the job design and work flow is not properly planned. To establish a more competitive company, employees play a major role, as their knowledge, skills and abilities are valuable tool to the company (Schraeder, 2009). However, in ACC, the employees are either having nothing to do or working flat out, where it shows a great deal of inefficiency in ACC’s job design and work flow. This lead to ACC’s decline on performance and they did not properly arrange the employees and utilize the employees’ knowledge and skills for the construction projects during the peak demand period. Next, will be the problem identified whereby there is a lack of proper recruitment and selection process and lack of training on the proper way to manage the resources used for work. By hiring employees who is â€Å"fit† to the company’s goal will enable the company to achieve success (Heraty amp; Morley, 1998). This is supported by Mudor amp; Tooksoon (2011) as the increase of labour cost could also due to the high turnover rate as the employees are not â€Å"fit† to the company, and training will need to be provided to the employees to fill up the key positions or skilled job positions over and over again, which is costly to ACC in the long run. Furthermore, when the employees in ACC are not clear on their job scope, which can be seen from the inefficiency of the employees and that the employees are not trained properly on how to manage the resources used for work, it will eventually increase the scrap and wastage rates which affects the profit earned by ACC. Lastly, there is a problem arise due to poor leadership and poor company culture practiced in ACC. As Tsui, Zhang, Wang, Xin and Wu (2006) states that leadership in the company will eventually affect the company’s culture. Company culture can influence the way people think and make decisions and affect the company’s performance (Lok amp; Crawford, 2003). When Jim saw the performance of the company was in a declining stage, he had hired Terry to identify the issues. Terry then identified that ACC is growing rapidly, but the HR approach is not expanding on par with ACC’s expansion, and Jill was not managing well on the personnel issues. However, Jim was offended and when the report by Terry was completed, Jim did not put much attention to it. This has portrayed poor leadership by Jim, whereby he have sided his wife, Jill, and did not accept the problem stated by Terry. On this, Jim has also imparted poor company culture as he disregarded the report by Terry when the problem identified is related to his wife, Jill. Overall Key Problem in ACC On the whole, in ACC, the key major problem is the lack of SHRM that causes all the discussed problems to arise. SHRM is a strategic approach that is used to manage the HR in an organization (Wei, 2006). As these are the few underlying issues which are identified from the immediate problems, steps have to be taken in order to address and curb these problems. In view of these problems, there is a need to have SHRM in ACC. SHRM is methodically related to the strategic needs of the organization and will ensure that the employees’ needs are addressed (Schwind, Das amp; Wagar, 2007). There should be a â€Å"fit† between HR practices and the company’s business strategies (Wei, 2006). As the personnel department is considered as HR department in ACC, Jill did not carefully plan out the HR practices that were supposed to be practiced in ACC. There are two types of â€Å"fit† in SHRM, which is the horizontal and vertical fit (Wei, 2006). As in the case study, ACC did not practice any HR practices, and the strategic goals of ACC is not clearly conveyed to the employees, therefore, ACC did not meet any of the â€Å"fit† in SHRM. Apart from that, ACC can be viewed from the resource based view (RBV) theory, and can be applied into viewing SHRM, whereby RBV shows that human resources are one of the important competitive advantage which HR team have to acknowledge (Wright, Dunford amp; Snell, 2001). The skilled workers in ACC are considered as a competitive advantage to ACC as they are â€Å"valuable, rare, inimitable and non-substitutable† (Wei, 2006). The workers in the construction sector are valuable as the skills of the workers are equipped through experience and skills learned. It might take a few months to a few years for a worker to be able to master the skills in construction sector (International Labour Organization, 2001). If these problems are not rectified, the organization will continue to suffer from high turnover rates on employees as the employees are not valued and job satisfaction are not met. In addition, ACC can adopt the human capital theory, whereby the company can opt for internal employment without the need to develop the employee (Mudor amp; Tooksoon, 2011) as they already have the skills and knowledge from the company. This could curb the problem of employees’ discontentment and turnover rate as the employees were dissatisfied with the lack of space to grow in their job because the senior positions were taken up by the existing management group. Short Term HR Activities In view of several problems identified in the question above, to have training and development on gender issues and OHS measures as a solution is vital to curb the gender issues and workplace accidents which is happening in ACC. The training for gender sensitivity issues is also encouraged to be done and educated to all management and employees of the company (White, 2009). This is because a lot of the workers, especially in male dominance workplace, do not voice out the OHS risks in order to be portrayed as matured and manly (Breslin, Polzer, MacEachen, Morrongiello amp; Shannon, 2007). From the case, ACC is more of male dominance than female dominance in the workplace. In addition, from the research done, implementation of OHS training is found to be reducing the accident rates in the workplace (Gravel, Rheaume amp; Legendre, 2011). Hence, training has to be implemented for the employees as well as the management level so that everyone in the company will be well informed and trained on the importance of OHS. By creating an awareness campaign apart from just giving training tends to better convey the message of gender equality issues and importance of OHS measures to the employees. For example, the International Labour Organization (ILO) has been doing various campaigns on echoing the gender equality and the importance of OHS in the workplace, which reflects positive improvement in the workforce (International Labour Organization, 2011). This is proven to be successful in capturing the attention of the workers in the workplace. Next, ACC can reconsider on hiring a HR consultant, whereby Jim can opt to hire back Terry as the consultant for ACC. Research also shows that, hiring a consultant will be able to greatly improve the company’s situation and ensuring that the strategic planning process will be clearly achieved (Foundation for Community Association Research, 2001). It is further agreed by Kendall amp; Kendall (2008) that, by hiring a consultant, the company will be able to obtain a new perspective and process to operate within the company. Thus, Terry can help to create strategic policies which can solve the issues faced by ACC. ACC can also create a duty roster or job workflow so that the employees’ job workload can be distributed evenly. For example, in the company Allocate Software, they have specifically designed a program named MAPS for the maritime sector to have a duty roster on how the job should be allocated between the employees (Allocate Software, 2011). This shows that the duty roster is indeed vital and feasible for companies to adopt and carefully determine the job workflow of the employees. Apart from downsizing as stated in the case study, it is not the best solution to date. Cascio (2009) states that, companies which only opt for downsizing and did not make other changes seldom achieve the long term goals that they have in vision for the company to achieve. For example, Cisco Systems, a company which had changed its workforce strategy, had also implemented other kinds of solutions, before they go into the last resort of downsizing (Cascio, 2009). Early retirement incentives (ERI) can be a solution apart from downsizing (Cascio, 2009). ACC could consider early retirement incentives, whereby the employees will be paid heftily on their retirement benefits if they opt to leave ACC earlier or at a certain age. This could possibly make a positive impact on the company, as the employees of a younger generation will have a chance to be promoted (Cascio, 2009). ACC can also consider having working shifts for the employees so that ACC can save on the labour costs when the economy is in a declining stage. However, ACC have to ensure the employees that they will be able to secure their job and ACC can then compensate the employees with better remuneration in terms of medical benefits or provide flexible working hours. Despite of layoffs on employees, the process of recruitment and selection of employees are important, and it is to be restructured and refined in ACC to encourage staff retention. HR department should look into the process and improve it in order to take in better employees and to hire skilled employees for ACC. In addition, replacing the key positions should be done in a short time in order to stabilize the employees and the company. The HR department should recognize the employees, who are â€Å"fit† for the position offered in ACC, and restructure the employees to handle the job, but at the same time, ACC can also hire people who are â€Å"fit† for the position if they could not fit any employees to the job position (Ployhart, 2006). Other than that, the high employee turnover rate could be due to the dissatisfaction on lack of professional growth. Hence, opportunities for career development and advancement will be vital in order to help employees to be able to identify their career path and feel fulfilled (Messmer, 2006). ACC can also arrange for discussion forums with the employees to identify the problems between the employees and company. ACC can then brainstorm with them on how to improve or restructure the company, and allow the employees to feel that ACC values their opinions and in time, the employees will develop a sense of belonging for ACC. However, for the communication to be conveyed from employees to the management, the employees need to be trained and is given the access and knowledge on how they could advance their opinions to the management (Eakin amp; MacEachen, 1998; Walters, 2004). ACC should then conduct consultations from external experts to better improve the issues brought up by the employees (Gravel, Rheaume amp; Legendre, 2011). Long Term HR Activities As stated by Stavrou-Costea (2005), successful HRM is the key reason to the success of a firm. Hence, it is vital for ACC to have a proper structure of HR development. ACC have to build up the HR department and hire a proper HR manager and executives to build HR practices which will lead to the well being of the employees and organization. As echoed by Lee and Lee (2007), indeed, HRM practices related to performance of the business, which includes training, HR planning, employee well-being and other factors that will improve the performance of the business on retaining staffs, having contented employees and increase of efficiency among employees. For example, Sargento Foods Inc. has uses various HR practices such as giving rewards, benefits, have learning program for employees and many more HR practices, which in time has been proven that their employees have better satisfaction, and the staff retention rate has increased and their company is able to save significant costs (Gannon amp; Sterling, 2004). Another example would be Portugal Telecom, whereby the company has put importance on the employee’s skills and gave them training on problem solving and self development. This eventually reflects that the HR department does manage their company and identifies the key areas to improve their company and has proven to be successful in achieving their goal on having the company-wide innovation culture (Pitta, 2010). Hence, through the restructuring of HR department, ACC can improve in career management, job design, employee recruitment and selection and staff retention. Conclusion In a nutshell, HRM are indeed a vital factor to strategic competitive advantage. It is correlated to job satisfaction, career development and lower turnover rates among employees.