Scotia Insurance Company Analysis - Math Problem Example

A summary of the key features of the case study and the problematic it presents. The case in study is Scotia Insurance Company, where by its CEO has been involved in a securities fraud and has been sacked. The company is faced with the duty of hiring a new CEO. Arlyn a group human resource director who has served the company for a decade is faced with the responsibility of hiring a new CEO. The succession planning system could not be implemented because the successor too was sacked. However, according to the group human resource director, the company needs changes and she is pondering over using her credibility to influence the senior team in implementing the most needed changes (Fryer, 2009, p. 33). Consequently, according to the group human resource director, the company needs a new kind of leader who will assist the company in gaining its lost cultural and ethical health. This person has to have unbiased ideas. Hoping to achieve this, the HRM discuss this with the chairman of the board with an aim of influencing him. But the chairman of the board does not concur with her. To him, the firm needs a CEO that will be more reassuring to the customers and the employers and not one that will bring change. The HRM director herself regretted the strategy she has adopted (Fryer, 2009, p. 34). Let us examine a video on important trends in talent management and employee rewards hr technology today OPEN-http://www.youtube.com/watch?v=cMYbdG-xIrQ A synopsis of the advice provided by the expert opinions cited by the case studies According to Venessa Robinson who is the head of HR Practice Development at the Chartered institute for Personnel and Development (C1PD) in Manchester, UK, Human resources managers play important roles in ensuring change within the company by working with the senior team of the firm. This is because it is the HR managers who are capabvle of seeing the need for change within the company and based on the case study, the HR has to play a crucial role in the appointment of the new CEO (Fryer, 2009, p. 34). Venessa Robinson adds that the situation at Scotia Company is not normal and ITS HR will have to work hard to gain the experience. She further adds that group HR director of the Scotia Company fails to act as chief integrity officer; this is because despite being suspicious about the ousted CEO of the company, she was not prepared to discuss the same with both the nonexecutive and senior executive management. Additionally, she is not in a position to influence the decision of the senior players of the company due to the fact that she is not considered an equal member of the company’s recruitment team. For instance, the board chairman points out that despite her recommending the candidates she will not be one of the key decision makers. According to the HR experts’ advice, Arlyn as the company’s HR director placed herself in a fix by meeting the board chairman alone and not the whole board. Hence, she has to think her strategies carefully in presenting the case to the senior team. One of the strategies she can apply is collect more evidence on the importance of the company adopting change and this can only be possible if she comes up with hard data (Fryer, 2009, p. 35). Consequently, Scotia’s HR should review the feedback of the board members on the rejected candidates with an aim of coming up with the traits of the candidates and compare it with ideal job profile. This will enable her to confidently present the board members and convince them on the need for change (Fryer, 2009, p. 36). On the other hand, Richard Hermon –Taylor who is a management consultant observes that the Scotia Company has a number of problems which include: improper governance, negligent board oversight and senior executive inappropriate actions. For instance, the board chairman has failed to lead the board members. Taylor further adds that there is need for change just as the company’s HR suggests. The rest of the team is also excluded from the appointment process (Fryer, 2009, p. 36). Charu G. Raheja another expert on the field has a different view. She thinks that it is challenging for the HR director to influence the decision of hiring her preferred candidate who is female because all the board members are male. Additionally, the board chairman seems to have gender prejudice an aspect that can negatively impact on the appointment process. The chairman also plays an important role in the appointment and other directors are unlikely to be against his decision unless they had a prior discontent (Fryer, 2009, p. 36). One mistake that Arlyn has done as the HR director is opting to meet the board directors dependently as this causes an element of mistrust. Due to the fact that HR has a role to play in the appointment of the company’s CEO, she should recommend that all the board members should be consulted when drafting the list of the prospective candidates. Additionally, company’s employees should be involved so as to boast their morale and improve productivity. Consequently, the company’s HR director should recommend that all the prospective candidates to be directly represented to the nominating committee so that all of them are given a chance to consider every candidate. Importantly, the HR director should suggest that the company outsources for an external recruiting firm so that both internal and external candidates can be put into consideration without any bias (Fryer, 2009, p. 36). The most important issues in the case study The most apparent issue in this case study is the importance of adopting change within the organization. According to Lawler (2005, p. 34), there is need to develop a new relationship between the organizations and people so as reward skills and performance in a manner that contributes towards organizational performance. However, due to the fact that organizations are incapable of accounting for their member’s loyalty just like in the case of Scotia Company where the CEO was involved in financial fraud, it is important that they focus on hiring talented employees in addition to retaining the identified talent. In order to realize the aforementioned, it is essential for the management to adopt strategies that are not only advantageous to it but also to the employees. Scotia Company seems to lack an ultimate goal; a virtuous spiral. This is because the HR director and the senior management do not have an ultimate goal for the company. According to the HR director, there is need for change in the organization to ensure employees and organizations productivity. Lawler (2005, p. 39) in his study points out that virtuous spirals start when a firm adopts conscious, strategy driven and intelligent actions that will not only attract and retain but also develop as well as effectively organize individuals who are committed towards realizing the firms goals. In order for Scotia Company to sustain a virtuous spiral, it is important for the HR and the senior management to focus on recruiting a high performing and higher reward levels for not only the CEO but also the rest of the employees. This is due to the fact that employees who are highly motivated are likely to increase the performance momentum for an organization. Therefore, the company should focus on developing a virtuous spiral organization by ensuring that there is employee involvement and leadership development an aspect that currently lacks in Scotia Company. The HR and the senior management of the company should ensure that there is value proposition in the recruitment process. According to Lawler (2005, p. 40), value proposition will enable the organization to establish not only who they are but also what they should expect from the employees as well as what they offer. Brown & Purcell (2007, p. 28) adds that the main purpose of the value proposition is not only attract but also motivate and retain employees but not all employees. This is what Scotia Company should put in consideration in hiring a new CEO. In attracting competent CEO, the company should focus on enticing candidates who have the skills, competencies, motivation as well as personality to perform the practices, strategies and goals of the organization. Lowry (2006, p. 31). in his study however points out that in incorporating value proposition within the company, the management should consider aspects such as organizational capabilities, design, elements and competencies that the organization requires in order to be productive. Hence, there is need for Scotia Company to develop a reward system that not only attracts but also retains its employees. Another issue within Scotia Company is the in ability of the HR director to make full decisions regarding the appointment process. The board chairman and board of directors have the final decision on the recommendations made by group HR director. However, based on the Work Choices Act 2005, HR managers play a crucial role in employment conditions and have more discretion and responsibility in decision making. Consequently, according to Cox, Brown, and Reilly (2010, p. 20). the role played by HR managers are not only complex but also ambiguous. This is due to the existing emergent and complex set of political, structural and symbolic elements of the organization. Hence, it is the role of the Scotia Company HR manager should be given the opportunity not only to conform to but also devise rules and procedures as well as being in a position to debate and negotiate organizations activities in a manner that is culturally and politically acceptable. Another issue entails ethical choice that human resource director faces. According to Brown and Perkins (2007, p. 56) there is need for interaction that is characterized by negotiation and debate that is based on a blend of both personally and organizational held values as the mentioned is essential in giving the HR a say in the recruitment process. In the case of Scotia Company, it can be pointed out that the HR director does not only feel manipulated but also powerless by both the bureaucratic and organizational context in which she functions as she does not have the final decision in the appointment of the new CEO. The extent to which the case study reflects or challenges prevailing research The case study on Scotia Company reflects or reflects the prevailing research on the reward strategies in various ways. Drawing from the case study it is evident that loyalty contracts make change challenging within the organization. This can be explain why change within Scotia company is very challenging. However, loyalty contracts do require organizations should motivate employees to improve their competencies, skills and knowledge. Additionally, the contract fails to not only attract but also retain new employees. The Scotia Company HR can be said to have been hired under the loyalty contract which is dysfunctional. The HR director seem not to be motivated to learn new skills an aspect that limits her chances to grow and develop within the company. According to Brown and Perkins (2007, p. 82) it is essential for organizations to adopt new skills and do away with the loyalty contract. This is because loyalty contract does not motivate selective retention as well as high performance among the employees. Cox, Brown, and Reilly (2010, p. 21) further point out that organizations that associate continued and skill development and performance with reward system are in a position to effectively handle change. This is due to the fact that they are in a position to establish mobile capital; employees who are aware that need to learn, perform and develop with an aim of maintaining not only their positions but also careers. The aforementioned seem to be lacking within Scotia Company, the ousted CEO lacked the motivation an aspect that made him to be involved in a security fraud. Brown and Perkins (2007, p. 82) further adds that currently, organizations require mobile capital and hence they should focus on hiring talented individuals who are capable of bringing change to the organization. In the previous sections, value proposition was highlighted. Consequently, company to attract talent candidates, there is need to put in place value proposition. It can be argued that Scotia Company failed to attract right candidates for the post of CEO because it lacked value proposition. Purcell, Kinnie , Swart et al (2007, p. 42) points out that branding value proposition entails creating not only a strong but a unique images that differentiates an organization from the rest. This motivates the employees as they are confident that they are likely to gain from the organization. Consequently, employees need to be motivate by ensuring that they are actively involved in the decision making process within the company. The HR of the Scotia Company as well as other employees may not be involved in the company’s activities as they are not actively involved in the decision making process. Companies that involve all the staff in the decision process are likely to be productive as workers feel motivated and their efforts rewarded. A critique of the outcomes presented by the case study and/or expert opinion The most important issue in the case study is the important of adopting change within the organization. The management should consider putting in place reward strategies that will ensure that individuals are retain and attracted to join the company with an aim of advancing their career and ensuring productivity within the firm. However, creating ultimate goal as highlighted by is not enough as employees need to motivated through open communications and their decisions welcomed in all the activities within organizations. Additionally, the experts failed to mention the aspect of branding. If the company have good image, they are likely to be motivated as individuals like to be associated with good things and their will strive and ensure that the image is maintained if not improved. On the issue of ethical change as represented in the case study, HR directors should made decisions on moral judgments. According to Moynihan and Wells (2010, p. 30) recognizing the moral nature or moral awareness is the initial step in ethical decision making process in the management and this is what all HR directors need to do. In conclusion, open communication is an important reward strategy that encourages firm’s productivity. The experts do not critically analyse this. The element of change and particularly on reward management systems and how Scotia Company should apply the same in recruiting and retaining the employees is not discussed by the experts. Questions Which reward strategies do you think can result into organizational change within an organization? What are some of the HR ethical issues that interfere with change within the organization? Can virtuous spiral contribute to change and productivity within the organization? References Brown, D., and Perkins, S. (2007). Reward strategy: The reality of making it happen. World at Work Journal, 16(2), 82–93. Brown, D., and Purcell, J. (2007). Reward management: On the line. Compensation and Benefits Review, 39(3), 28–34. Cox, A, Brown, D, and Reilly, P. (2010). Reward Strategy: Time for a More Realistic Reconceptualization and Reinterpretation? Thunderbird International Business Review Vol. 52, No. 3. Fryer, B. (2009) hbr case study. Time for an end run? Retrieved from hbr.org .Harvard Business ReView. Lowry, D. (2006). HR managers as ethical decision-makers: Mapping the terrain. Asia Pacific Journal of Human Resources. Retrieved from http://apj.sagepub.com/content/44/2/171 on November 3, 2012. Moynihan, D, P. and Wells, S. (2010) Designing Compensation Plans to Manage Today's Risk Environment. Compensation & Benefits Review. Retrieved from on http://cbr.sagepub.com/content/43/1/17 on November 3, 2012. Purcell, J, Kinnie N, Swart. J et al (2007) people management and performance. Newyork and London: Routledge. Read More