HRM at Autoliv - Case Study Example

HRM at Autoliv Student’s Name: Grade Course: Tutor’s Name: Date: Executive Summary Autoliv Australia is a company that has gained recognition for its role in advancing women’s position in the organisation, and providing them with flexible working schedules in order to enable them to attain a sense of balance in their work and career commitments. Notably, Autoliv was not always sensitive to the plight of working women; the transformation in the organisation began in the late 1990s when a new CEO recognized that the organization’s majority employees were women and hence it would be of strategic importance to the company to invest in their advancement and retention. To identify the skills gap and other needs present in the organisation, a human resource development needs investigation was carried out. As a result, training and development programs that aimed at encouraging more women to advance their careers in managerial and engineering positions were designed. The programs were implemented through motivational and technical training and evaluated against identified key performance indicators. In the end, Autoliv managed to attain its two main strategic objectives, which were increasing women representation in middle and senior management levels, and increasing the number of women working in the engineering department. By attaining the two strategic objectives, Autoliv succeeded in packaging itself as the employer of choice for women. However, for it to retain such a position in the competitive environment, the company needs to work on continuous improvement of its human resource. Table of Contents Introduction 1 Strategic approach to HRM/ HRD 2 Purpose and task of the essay 3 Company Overview 3 Autoliv’s goals and objectives 4 Schuler and Jackson’s (1987) model, which has its basis on Porter’s strategy paradigm argues that varying competitive strategies used by an organization determined the type of employee behavior that the same organization seeks. Specifically, Schuler and Jackson (1987) identify cost-leaders and differentiators as the two HRM strategies available for use by an organization. The pursuit of cost-leadership means that a company designs relatively repetitive jobs, trains the workforce minimally, and rewards high output among employees only. The differentiation strategy on the other hand is projected as one where a company emphasizes on recruiting highly skilled employees; invest in human resource development, appraising performance, and rewarding efforts as well as achievements made by the employees (Schuler and Jackson, 1987). Following their proposed argument in light of Autoliv, one would argue that the company sought to attain a competitive strategy through differentiation, especially considering the investment made on human resource development in relation to enhancing women participation in engineering and management positions complied to Schuler and Jackson’s (1987) proposition that firms that seek to attain differentiation through the workforce use training and development for long term purposes, over a broad application (See figure 2). 6 True to the Schuler and Jackson (1987) model, Autoliv is seen to have focused on developing the desired behaviors and competencies in employees as one way of obtaining competitive strategies. Specifically, the company encouraged women to consider training for managerial and engineering positions in the firm, not only through mentorship training, but also through the provision of an enabling environment, which made it easier for the target employees to balance work and family commitments with relative ease (Plonsker, 2009). 6 Autoliv corporate culture 7 Context and function of SHRD /Learning and development at Autoliv 7 Needs analysis at Autoliv Australia 10 The learning process and learning outcomes 11 Implementation 14 Program evaluation and measuring results 14 Alignment of activities with Autoliv’s strategic intentions 15 Conclusion 17 Autoliv’s recognition of the necessity of advancing and retaining women in the workplace is testament to the important role that a HRDNI plays in contemporary organisations. Through identifying the most pressing HR development needs, Autoliv was able to design and implement a training and development program that helped women in attaining the skills needed in advancing their careers in the organisation and balancing their work-life commitments. Consequently, Autoliv has been recognized as a trendsetter in human resource development especially in relation to the development of women-friendly work environments and career paths. The undertakings that necessitated the successful identification of HR needs, and the consequent design, implementation and evaluation of HRD training and development programs were taken up by the human resource department, which according to Ulrich, Younger and Brockbank (2003, p. 839), has a responsibility to nurture corporate-level employees and ensure professional development among employees. 17 Recommendations 17 Torraco, R. J. & Swanson, R. A. (1995) ‘The strategic roles of human resource development’, Human Resource Planning, Vol. 18, no. 4, pp. 12-18. 20 Introduction In the contemporary business environment, developing the human resource has become a key strategy that organisations use to support their long-term competitive agendas. Such importance is especially inspired by such organisations realizing that their workforce is not only an essential resource, but also that the knowledge and skills in the same workforce is critical in determining whether the organisation succeeds in its business undertakings or not (Delahaye, 2011, p.3). In this essay, the human resource development strategies are evaluated, starting with the investigation exercise that identified the exact areas in which Autoliv Australia needed to use training and development strategies. Next, the essay evaluates how the HR department designed, implemented and evaluated the HR intervention measures. The essay concludes by observing that Autoliv Australia has proven that it is a trend setter in innovative human resource practices especially since it realized that its workforce was predominantly female and hence set out to train and advance them accordingly. The essay however notes that such success in the company only occurred because the HR department and the CEO of the company took time to carry out a needs investigation on employees, and based on the results, they designed and implemented training and development programs that enhanced the skills and knowledge of the targeted employees. In the end, it is noted that in order for Autoliv to sustain its competitive strategy through workforce training and development, it needs to invest in continuous HRD practices. This means that the company needs not take comfort in its past success, which has been greatly publicized; instead, the company needs to continue investigating, designing and implementing innovative human resource practices that will give it a competitive edge in its business. Strategic approach to HRM/ HRD There is contention in literature regarding what exactly a strategic approach to human resource management is. For the sake of this essay however, a strategic approach to HRM or Strategic Human Resource Management (SHRM) is defined as “the process of linking human resource function with the strategic objectives of the organisation in order to improve performance” (Bratton, 2001, p. 31). Accordingly, SRHM is organized into five basic steps which include: identifying the mission and goals of an organisation; conducting an environmental analysis; strategic formulation; strategic implementation; and finally, strategic evaluation (Bratton, 2001, p. 40). A strategic approach to Human Resource Development (HRD) on the other hand is defined as the ongoing process that organisations adopt in order to maintain their competitive edge through ensuring that the employees’ competence matches current and future organizational needs (Torraco & Swanson, 1998, p.12). Dessler et al. (2007) define HRD as the activities that an organisation adopts and implements in different departments and organizational levels for purposes of improving the overall performance of its workforce. Dessler et al (2007) specifically argue that HRD enables the organisation to match expertise requirements with the necessary skills, at the right time and in the right quantity. On his part, Haslinda (2009, p. 181) defines HRD as “a series of organized activities conducted within a specified time and designed to produce behavioral change”. Following Haslinda’s definition, one would thus argue that organisations need to identify their exact HR needs or desired organizational behaviors if at all HRD is to be effective. Seeing that the human resource needs are not as straightforward as many organisations would like, a needs investigation and analysis becomes necessary. This has led to the development of the Human Resource Development Needs Investigation (HRDNI) concept, which Delahaye (2011, p.117) defines as the “process that identifies the gap between what is currently happening and what should be occurring”. HRDNI is therefore a process that identifies the performance gaps that exist in organisation, therefore providing human resource managers with the knowledge needed to rectify the situation. Purpose and task of the essay This essay will investigate how Autoliv Australia used the HRDNI concept to identify a HRD initiative. Additionally, the essay will evaluate how the company designed and implemented a HR program in order to seal performance gaps identified in the HRDNI exercise. Company Overview Autoliv Australia Proprietary Limited is a subsidiary of Autoliv Inc., which is a Swedish manufacturing company dealing in the manufacture of vehicle safety restraint products such as seat belts, child restraints and airbags. Just like the parent company, Autoliv Australia deals with similar products and markets them to major car makers in Australia. Initially, the company, which started its Australian operations in 1988, had operating problems that threatened its existence. In 1997 however, a new Chief Executive Officer introduced changes in the work practices, by paying more attention to the value and diversity of the company’s workforce. Since then, the company has registered more productivity which is reflected in its profit margins (autoliv.com, 2011, about us page). Autoliv identifies its mission statement as “to create, manufacture and sell state-of-the-art automotive safety systems”, while the vision statement is identified as “to substantially reduce traffic accidents, fatalities and injuries” (autoliv.com, 2011, about us page). The company further identifies its strategy as being the first choice safety systems supplier for vehicle manufacturers through “technological leadership; complete system capabilities; highest-value safety system solutions; cost efficiency; quality excellence; global presence; highest level of service and engagement; [and] dedicated and motivated employees” (Autoliv.com, 2011, about us page). Autoliv’s goals and objectives The company lists its goals and objectives as: attaining sustainable growth; attaining world-class manufacturing; becoming the employer of choice; customer focus; and social responsibility. Information posted on its website (autoliv.com) reveals that it seeks to maintain its position as a leading vehicle safety accessory manufacturer through a continuous focus on the needs of its customers, flexibility on its employees, and the production of quality products. If one was to apply Porter’s generic strategies (see figure 1) to Autoliv’s case, it would be apparent that the company seeks to gain a competitive advantage over other market players by packaging itself as a company that not only cares about its customers (through the production of quality products, and hence uniqueness), but also as a company that fully understands the needs and wants of its employees to have healthy lifestyles over and above their careers. One can also argue that by becoming an employer of choice for professionals, Autoliv attains competitive advantage over other market players through attracting and retaining a talented and skilful workforce, whose input in the company would be seen in superior product quality. The superior product quality could also serve to differentiate Autoliv’s products from others in the market hence giving the company a competitive advantage over other competing products. Figure 1: Porter's Generic Strategies Schuler and Jackson’s (1987) model, which has its basis on Porter’s strategy paradigm argues that varying competitive strategies used by an organization determined the type of employee behavior that the same organization seeks. Specifically, Schuler and Jackson (1987) identify cost-leaders and differentiators as the two HRM strategies available for use by an organization. The pursuit of cost-leadership means that a company designs relatively repetitive jobs, trains the workforce minimally, and rewards high output among employees only. The differentiation strategy on the other hand is projected as one where a company emphasizes on recruiting highly skilled employees; invest in human resource development, appraising performance, and rewarding efforts as well as achievements made by the employees (Schuler and Jackson, 1987). Following their proposed argument in light of Autoliv, one would argue that the company sought to attain a competitive strategy through differentiation, especially considering the investment made on human resource development in relation to enhancing women participation in engineering and management positions complied to Schuler and Jackson’s (1987) proposition that firms that seek to attain differentiation through the workforce use training and development for long term purposes, over a broad application (See figure 2). True to the Schuler and Jackson (1987) model, Autoliv is seen to have focused on developing the desired behaviors and competencies in employees as one way of obtaining competitive strategies. Specifically, the company encouraged women to consider training for managerial and engineering positions in the firm, not only through mentorship training, but also through the provision of an enabling environment, which made it easier for the target employees to balance work and family commitments with relative ease (Plonsker, 2009). Figure 2: Differences in Training and Development in companies that seek cost leadership (left hand), and those that seek differentiation (right hand) Source: Schuler and Jackson (1987, p. 212) Autoliv corporate culture The working culture at Autoliv comprises of flexible working hours for all employees regardless of gender; an open form of communication where all employees are free to interact with their superiors formally and informally; and openness to diversity. With the majority of its workforce being women, the Autoliv management introduced a compassionate culture towards the plight of career women who have to balance between their families and work. There is also a ‘finish work early on Fridays’ custom that further perpetuates the flexible work culture in the organisation. Context and function of SHRD /Learning and development at Autoliv Of special focus to this essay is Autoliv’s strategy to inspire dedication and motivation among its employees. Closely tied to the strategy is the organization’s policy to promote the advancement of women to management levels. An intelligent guess would indicate that Autoliv’s actions were inspired by the fact that women were outnumbered by their male counterparts on the management levels. Following the HRDNI process as suggested by Brinkerhoff (1986) [cited by Delahaye (2011, p. 117)], it is apparent that a more detailed investigation probably took place at Autoliv. Brinkerhoff (1986) suggests that HRDNI can be carried out in four categories namely: a performance deficiency; a diagnostic audit; a democratic preference; and a proactive analysis (Delahaye, 2011, p. 117-118). In performance deficiency, Delahaye (2011, p. 117) states that the organisation measures its actual performance against its expected performance. If the expectations exceed actual performance, then the organisation identifies corrective measures to help it bridge the difference. In diagnostic audit, an organisation pays more attention to future problems rather than focusing on existing ones (Delahaye, 2011, p. 117). By focusing on future problems, an organisation is able to identify solutions for the future, which will probably provide it with a competitive edge over its rivals. In democratic preference, an organisation introduces programs that have the capacity to meet the unique needs presented in the workforce (Delahaye, 2011, p. 117). Instead of recommending the programs to workers however, the organisation gives them the freedom to select the programs that they feel will serve their development needs best. By giving the employees freedom to select programs, the employer enhances the democratic space in the organisation, hence creating wider acceptance of the proposed programs among employees. Finally, Delahaye (2011, p. 117) projects proactive analysis as a needs investigation approach that seeks to identify problems and challenges that may occur in the future. Such an approach seeks to gather knowledge that may be helpful to the organisation especially when uncertainties in the operational environment are rife. A review of Autoliv’s policy to promote the advancement of women into management positions against the four HRDNI categories as advanced by Brinkerhoff (1986, cited by Delahaye, 2011, p. 117) indicates that democratic preference may have been used in the organisation. As Torraco and Swanson (1995, p. 17) observe, for HRD to have strategic value, it must make a direct contribution to the key goals and performance requirements in any business. Evaluating Autoliv’s case, it is evident that while women constituted 71.4 percent of the entire workforce, only 20 percent of them were working at managerial levels in 1998 (Australian Government, 2003, p. 1). To make matters worse, women representation at executive management levels by 1998 was at 11 percent only (Australian Government, 2003, p. 1). The realization (mainly inspired by observations made by the relatively new CEO who took over management of the company in 1997) that women formed an essential percentage of the workforce led to the formation of two objectives, which would specifically contribute to the goals and performance requirements of the organisation. The first objective targeted increasing the percentage of women representation in team leadership levels the medium term, while the second objective sought to increase women representation in executive management levels in the long-term (Australian Government, 2003, p. 1). Clearly, the CEO understood how the “roles, relationships and perceptions” of the employees interacted to affect their performance at work as suggested by Foley (2001, p. 111). It is also evident that the CEO took time to understand the internal workforce as a way of managing talent in the organisation as suggested by Lewis and Heckman (2006). Lewis and Heckman (2006) posit that managing talent in any organisation takes the deliberate and organised efforts by the management especially in regard to encouraging employees towards individual advancement. At Autoliv, such type of encouragement is observed in the organization’s efforts towards increasing the percentage of women representation in managerial levels and in the engineering department. Needs analysis at Autoliv Australia In a statement published by the Australian Government (2003), it was revealed that Autoliv had a 600+ workforce population, 71.5 percent of whom were female. Data collected from the organisation revealed that of all the women, 91.7 percent worked on the shop floor. Unfortunately, such wide disparities in the women population and their placement in managerial positions meant that it would be hard to create a creative, cohesive and profitable workforce necessary in serving the short-term and long-term needs of the company. Specifically, Autoliv identified the need to attract, retain and develop the best workforce as a most pressing organisation requirement (Plonsker, 2009, p. 1). However, seeing that the workforce was predominantly made up of female employees, the company realized that it had to develop and implement family-friendly policies that would shape its organizational cultures (Plonsker, 2009, p. 1). Based on the inadequacies identified in the organisation, Autoliv set its strategies as becoming an equal opportunity employer; becoming the employer of choice for women; becoming an attractive employer for talented female engineering graduates; developing attractive career paths for women to hold key managerial positions in the organisation; and instituting a mentorship program for employees (Australian Government, 2003, p. 1). Through mentorship, the organisation would provide continuous performance improvement to its employees as suggested by Rao (2008, p. 3). Additionally, it would ensure there is clarity about roles through listening to employees talk about their expectations and clarifying any existing misconceptions. While the employee relations manager at Autoliv admits that the initial needs assessment was conducted through observation and deduction from organizational records, he states that consecutive needs investigations have been more involving and use informal and formal feedback from employees. Such include regular meetings, electronic interaction between the management and employees, and performance development reviews (Plonsker, 2009, p. 2). It is worth noting that the observation and deduction data collection methods as used initially by Autoliv are valid in literature. According to Delahaye (2011), organizational records can be used to provide a guiding overview of the situation in an organisation. Additionally, the records are a good source of the history about the organisation, and can also be used to gain measurable evidence of issues facing it. The records can also be used to indicate possible problem areas in the organisation (Delahaye, 2011). The observational method of data collection on the other hand has the advantage of being relatively cheap, highly relevant, and pretty simple to interpret (Delahaye, 2011, p.132). The learning process and learning outcomes Learning in Autoliv was initiated in two fronts: through motivational training and through technical training (Plonskar, 2009). Motivational training was directed to all female employees and was specifically meant to inform them of the vacancies that they could occupy as either leaders, or as professionals in the engineering field. Motivational trainers had the responsibility of inspiring the female employees by informing them that they too could become managers and engineering professionals just like their male counterparts. Additionally, the motivational trainers had the responsibility of demystifying the roles of managers and engineers in the company in order to make them more acceptable among the female employees. This was intended to match the development needs identified in HRDNI, where it had been established that the company needed to advance women participation in management and engineering, if at all the company was to enhance its competitive capacity both in the short-term and long-term (Plonsker, 2009). After the completion of motivational training, employees who had expressed interest in the two development areas; i.e. management and engineering were vetted for potential by the HR department, and those who met the set criteria were committed to technical training. Due to the differences in their interests, the employees were then divided into two groups: those who would pursue leadership training; and those who would pursue training on engineering. To help in the attainment of the set objectives, Autoliv established key performance indicators (KPIs), which included: i) The percentage of women in team leadership, and management positions; ii) Percentage of women representation in executive managerial positions; iii) Percentage of women working in engineering; iv) Percentage of women in industrial-based learning programs; and v) Percentage of women returning to work after taking maternity leaves (Plonsker, 2009). These KPIs are the main learning outcomes, objectives and competencies that those who developed the HRD process at Autoliv hoped to attain. The learning outcomes are in line with Delahaye’s (2011) suggestion that the HR developer must design and develop a curriculum to be followed by identified learners. At Autoliv, learners were identified as women whose current knowledge probably was not adequate enough to position them in managerial positions, or engineering departments. Additionally, Autoliv must have realized that adequate motivation to encourage women to break the status quo where a majority of them were working on the shop floor was lacking. To ensure that effective learning and development took place, Autoliv needed to consider the learners’ current knowledge, motivation, learning orientation and learning styles that would be most effective for them as suggested by Delahaye (2011). As Choy (2007, p. 2) suggests, Hierarchy of Learning Outcomes (HLO) provides the HRD designer with two essential indicators- “the type of content that learners need to cover and, secondly, the most appropriate learning strategy that should be used”. As seen in Plonsker (2009), Autoliv designed the content of learning in a manner that would make the female employees aware that they too could occupy top management positions in the organisation; that they could acquire skills and expertise needed to work in the engineering department; and that they could balance family and career for their own good and for the good of their employer. The learning strategies that Autoliv used included mentorship and training since they were best suited for the mature and self-directed learning population that the organisation was dealing with. Hence, Autoliv seems to have used HLO especially since the company used mentorship training to build interpersonal and intrapersonal relationships amongst the employees. Through inspiring all female employees, the motivation trainers appealed to their collective social power as a way of encouraging them to take up the challenges of leadership and technical courses such as engineering. On an intrapersonal level, one can argue that the motivational training instigated self-awareness among the target employees such that they were able to realize that they too were capable of accomplishing tasks that were previously perceived to be masculine. By setting up a return-to-work strategy for mothers who would be tempted to give up work in order to concentrate on child rearing, the company was appealing to the mothers’ emotional resilience as suggested in the HLO. In other words, the motivators were providing mothers with a way of making the most use of both situations; i.e. work to their best of their abilities without the risk of neglecting their families. Strategically, this empathy by the employer would appeal to the emotional sensibilities of most women who choose their families over their jobs if the environment in the latter proves to be too cumbersome. Implementation The implementation of HRD followed the two strategies identified elsewhere in this paper: mentorship training and technical training. Both approaches were meant to enable female employees at Autoliv to acquire the necessary skills and motivation needed to excel in the workplace. Motivational training was the first to be implemented, whereby all employees were invited to group discussions and group outdoor activities such as team building exercises. At the end of the training, interested candidates in management training or engineering training were asked to forward their names to the HR department. The next implementation stage included vetting the interested candidates for potential. In this phase, those interested in management positions were rated on self-motivation, customer/people’s skills, confidence, communication, optimistic attitude, team spirit, conflict-resolution abilities, and knowledge of the industry. Those who had expressed interest in engineering training were evaluated for commitment since the course involved intensive learning, and potential. Those who scored high ratings on the two exercises were then enrolled for the two respective training programs where Autoliv sourced professional trainers to tutor and mentor them (autoliv.com). Program evaluation and measuring results According to Dwyer, Stanton and Thiessen (2004, p.171), evaluation enables organisations to determine whether they had attained what they had set out to attain. In Autoliv’s case, it is evident that by 2003, the organization’s program had already started bearing results since women representation in low and middle management levels had increased to 60.7 percent, while their representation in executive management levels had increased to 20 percent (Australian Government, 2003, p. 2). Additionally, the number of women engineers in the company had doubled, while there was a 100 percent return rate for women who had taken maternity leaves. Also, there was a 20 percent increase the number of women in the engineering department (Australian Government, 2003, p. 3). If one was to gauge the 2003 results based on Victor Vroom’s expectancy theory, it is evident that female employees, especially those who had gone on maternity leave, valued the rewards that their employee was giving them. In other words, all young mothers who had worked for Autoliv before going on maternity leave attached value to the human resource development initiatives that the organisation had put in place in order to make the family-career balance a worthwhile experience for them. Alignment of activities with Autoliv’s strategic intentions According to the Australian Government (2003), the key strategic intentions at Autoliv included becoming an equal opportunity employer; becoming an ‘employer of choice’ for women; attracting female engineering graduates; developing female-friendly career paths; and setting up a mentoring program for employees (Australian Government, 2003, p. 1). The identified strategies were meant to help the organisation attain two main objectives namely: increasing female presence in middle-level management positions in the short-term, and increasing female participation in executive management positions in the long-term. Autoliv’s CEO, Robert Franklin, summarized his company’s strategies by stating that “when 80% of [your] workforce turns out to be female, it doesn’t take a rocket scientist to work out that it’s an absolute business imperative to find ways to advance and keep them” (Women & Leadership Australia, 2009, p.1). Evidence that the company was capable of aligning its learning and development initiative to meet the desired organizational objectives is apparent from the recognition that the company has been receiving from external sources since the inception of the program. In 2002 for example, Autoliv received recognition as a company that had initiated the most commendable measures in supporting the advancement of women in Australia (Australian Government, 2003). In 2009, Autoliv also received an award for being a fair and flexible employer for women by the Victorian Government (Plonsker, 2009, p.1). Conclusion Autoliv’s recognition of the necessity of advancing and retaining women in the workplace is testament to the important role that a HRDNI plays in contemporary organisations. Through identifying the most pressing HR development needs, Autoliv was able to design and implement a training and development program that helped women in attaining the skills needed in advancing their careers in the organisation and balancing their work-life commitments. Consequently, Autoliv has been recognized as a trendsetter in human resource development especially in relation to the development of women-friendly work environments and career paths. The undertakings that necessitated the successful identification of HR needs, and the consequent design, implementation and evaluation of HRD training and development programs were taken up by the human resource department, which according to Ulrich, Younger and Brockbank (2003, p. 839), has a responsibility to nurture corporate-level employees and ensure professional development among employees. Recommendations While the results of HRDNI, and the consequent training and development in Autoliv were impressive, the company cannot afford to rest on its laurels; it will need to work on continuous improvement initiatives in order to retain the expertise that it has helped create among its female employees. This is especially necessary considering that much publicity has already been given to Autoliv’s strategy to advance women’s capacity in the workplace through not only training and development, but also through providing them with an ideal work-life balance. Such publicity exposes their competitive advantage to their competitors thus meaning that the company needs to continually re-assess its situation in order to identify weak areas in the human resource that may cause dissatisfaction among employees. The company also needs to address issues relating to job security especially considering that the automotive industry in Australia is shrouded with pessimistic predictions about it survival. Generally, women would be more willing to train on leadership and engineering fields if they are assured that there training will not be wasted should their employer choose to downsize the human resource numbers thus rendering their training useless. To avoid the risk of loosing the skilled male minority, Autoliv should also concentrate on creating HR programs that would make the male employees feel appreciated, and not shrouded by the attention given to their female counterparts. Without them feeling appreciated, they may perceive Autoliv as a female-favoring employer, and such feeling would probably cause them dissatisfaction at work. References Australian Government (2003) ‘Autoliv Australia’, Equal Opportunity for Women in the Workplace Agency, pp. 1-3. 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Ulrich, D., Younger, J., & Brockbank, W. (2008) ‘The twenty-first-century HR organisation’, Human resource Management, vol. 47, no. 4, pp. 829-850. Women & Leadership Australia (2009) ‘The leadership toolkit ‘09’, Women’s Forum, viewed 31st October 2011, Read More