Costs Reduction and Maintaining Desired Human Capital - Case Study Example

Name: xxxxxxxxxxxx Tutor: xxxxxxxxxxxx Title: Human Resource Management: Case Study. Institution: xxxxxxxxxxxx Date: xxxxxxxxxxxx Introduction Human Resource Management (HRM) is a function in an organization mainly concerned with the employee dimension. It is usually a support or staff functions in the organization. The role of human resource management is to provide assistance in line with the employees, or those directly involve in the production of the organization’s services and goods. Attaining people’s services, developing skills, motivating them to greater levels of performance and ensuring their continuing commitment and maintenance to the company are fundamental to attaining organizational goals. This report looks at human management issues in a Consolidated Global Mining Services Company and measures that can be put in place to make the human resource function more effective and efficient. The report also looks at how human resource function can be utilized to achieve the current conflicting goals of reducing labor costs and maintaining human capital. Question 1 Role of human resource function in developing both a medium and long term strategy to attain the conflicting goals of costs reduction and maintaining desired level of human capital Human resource planning is the HR function that will help Consolidated Global Mining Services (CGMS) to develop both a medium and a long term strategy to accomplish the diverging goals of cutting costs and maintaining the appropriate level of human capital. Human resources planning is the classic human resource administrative functions, and evaluation and identification of requirements of human resources for meeting organizational goals and objectives. It also assesses the availability of qualified resources that will be required. Human resource planning is a proactive process which both influences and anticipates the future of an organization through systematically forecasting the supply of and demands for workers under changing conditions, ad developing activities and plans to satisfy these needs (Gary, 2004). The key steps of human resource planning are forecasting demand for labor with considerations of organizational tactical and strategic plans, competitive and market trends, economic conditions, technological changes and demographic trends. Gary, (2004) argues that human resources planning should be the key component of CGMS’s strategic business planning. To ensure its competitive advantage in marketplace, CGMS is required to implement innovative strategies designed to promote its employee retention rate. An effective human resource strategy is the one that includes having adequate staff, with the appropriate mix of talent, and who are in the right locations, performing their tasks when needed. In modern day corporate environment, human resource planning is seen as a constituent for adding value to a company. In unanticipated business settings, the importance of strategic human resource planning might become obvious very fast. An organization that responds to circumstances through laying off its employees as a measure of reducing short term overhead costs can result to unwanted repercussions. What at first seemed like a necessary and smart move to economize in lean periods may end up costing the organization much a lot in the long run. The resources that will be required to consequently recruit, train and hire new workers might well surpass short term cost savings. Forward-looking human resource planning usually anticipates future staffing needs and will therefore help CGMS avoid cost errors. Strategies are formulated to anticipate staffing needs over time and also to consider most favorable solutions for the long terms, as well as challenging economic conditions. By adopting this approach, CGMS will reduce the possibility of short sighted and reactive choices that may be implementing by organizational decision makers. By putting a plan in place, and having an understanding of its long range objectives of cutting costs and retaining employees, the company will be able to decide to weather the current economic storm and keep talented, dedicated and trained employees in place for the unavoidable business uptrend( Cornelius, 2001). Question 2 How to develop a human resource plan that takes the present situation into account, while building a foundation for future Developing a human resource plan that will consider the conflicting goals of reducing labor costs while retaining employees CGSM can develop a human resource management plan that will review and assess the operation’s needs for its employees, followed by development of job descriptions to ensure that every employee is aware of his or her roles and responsibilities in the company. In the job description development stage, the human resource manager is required to compile an employee handbook, which will include both the job description and employer’s anticipations of the employees. GCMS human resource plan will begin with a review of operation over the past year and take into consideration the number of individuals working in the company along with their knowledge and skills. In needs assessment, the company should decide if its labor needs match its present workforce, if they don’t make changes or alterations in workforce to increase productivity and make business profitable (Haines & Bandt, 2004). The next step in the creation of a human resource management plan is writing a job description for all positions in the company. This will be very vital because at the present moment the executive is not aware of the role of every employee in the company. Preparation of a job description is a fairly simple task that will require the human resource manager to record what every job entails, the skills and duties required. The job description will include a list of the minimum experience needed for every position, and the salary range and any required training. Establishing a salary for every position might be the hardest part in the creation of job descriptions but it may help CGSM cut down its labor costs because a salary range is a superior way of handling the wage issue, because the most experienced and capable employees will be at the top of the range (Cornelius, 2001). Job descriptions are good management tools and may be used in selection, recruitment and appraisal of employees. They list specifics of the certain occupation, clearly stating duties of the employee. Lussier (2008) argues that offering honest and accurate job descriptions will help CGMS to minimize the current problems. If all parties concur on what every job entails and acknowledge the terms, future problems will be minimized since a job description will form a portion of the organization’s agreement with the employees. It must be reviewed and updated every year. Because the company’s labor needs match the present workforce, the human resource should make changes or alterations in the workforce in order to increase productivity such as changing job descriptions or shifting workers to different positions (Haines & Bandt, 2004). Question 3 How human resource management system will help CGSM According to Sadri and Chatterjee (2003), human resource management system (HRMS) also known as Human resource information system will make CGMS’s human resource department more efficient and effective because this technology is designed to assist offer information used in human resource decision making such as payroll, administration and performance analysis. HRIS combines HRM with information technology to simply the process of decision making and to also help in complex debates that fall under human resource umbrella. It will help the company to computerize employee databases and records and maintain an updated account of decisions need to be executed as a portion of a human resource management plan. The four major areas of human resource that are influenced by HRIS include payroll, labor and time management, HR management and employee benefits. Since GCMS does not know how employees are being utilized but the main standout memory is that the company is regarded by its customers, competitors and employees as the industry leader, HRIS will help the human resource manager to see online, the chronological history of every employee form her or his position data, to payroll records, benefits information and personal details (Sadri & Chatterjee, 2003). Because CGSM’s greatest expenditure is in wages and salaries the HRIS will help the company to automate the whole payroll procedure through gathering and updating employee payroll data regularly. Additionally, it will also gather information like employee attendance, and calculate various taxes and deduction on salaries and generate automatic period paychecks. In labor and time management, HRIS will help the company’s human resource personnel to utilize new technologies in order to efficiently gather and appraise employee work and time information. Currently, CGMS staff is composed of skilled professionals but there is no any supervision or incentive packages and though people are sticking to deadlines, HRIS will enable the company to know what every employee does in the company. The executive views employees as being able to solve problems, look after work, and getting things done, but the employees require more than trust and good will to properly manage this sort of workforce (Hal & Stone, 2005). HRIS will enable the company to easily track employee’s information and assess it on a more scientific level to determine if employees are performing to their entire potential or not, and whether there are any improvements that can be performed to make sure that employees feel more secure. GCMS do not use complex employee incentives to motivate workers into effectively performing their tasks. However, employee benefits are very vital because they assist to motivate workers to work harder. Through utilizing HRIS in employee benefits, the company’s human resource department will be able to keep a superior track of the type of benefits being availed by the employees and how every worker is profiting from the provided benefits. A HRIS will be advantageous to CGMS’s human resource management because it will curtail cost and time consuming activities and lead to a more effective human resource department. IT will reduce the long human resource paper trail that is found in CGSM and result to a highly conducive and productive HR department (Hal & Stone, 2005). Question 4 Legal issues addressed when CGMS decides to reduce the size of its workforce or change its employment arrangement According to Collins, (2010), before undertaking layoffs and redundancies CGMS should first seek advice from an attorney who specializes in employment law. The company should also be able to offer documented business reasons to validate downsizing, with an explanation of how it decided which workers to include and showing the criteria utilized in determining who has to stay and who has to leave the company. The company is also supposed to undertake a legal review for unlawfully discriminatory effect on protected classes of employees, and offer legally needed notice to employees. It should also get signed releases of liability from the employees and consider the effect of various state laws on the overall procedure (Collins, 2010). An accepted criterion for selecting which employees to remain is based on individual performance, subsistence of disciplinary conduct or actions, required abilities and skills after downsizing, punctuality and seniority. Collins (2010) notes that the company is supposed to consider workers in all functional areas, and if this is not possible, then it must be prepared to validate, and only particular functional areas or departments are to be considered. Before redundancies, the company should keep the staff informed on proposed redundancies, to avoid falling foul of Trade Union and Labor Relations (Consolidation) ACT 1992 which needs employers with over 19 employees to consult and inform relevant union or workers’ representatives on their proposals before redundancies are implemented. When there is no obligation to collectively consult, a redundancy dismissal is usually unfair under Employment Rights Act 1996 if there is no or there exists insufficient consultation with individuals (McMullen, 2009) Stacey is not right by saying that layoffs and redundancies would be legally justifiable because the company has not consulted employees. There are numerous legal pitfalls that the company is required to negotiate when evaluating for redundancy. To prevent claims of unfair dismissal, what the company is about to do should be objectively justifiable and fair. Therefore, it is significant for the CGMS to consult with workers because the legal frameworks dictate how and when employers must consult. For instance, the Employment Rights Act states that employers have the obligation of consulting with workers prior to execution of redundancies, so as to seek their proposals as to how redundancies might ne prevented, such as job sharing or reducing hours, and to answer questions that they may have (McMullen, 2009). Conclusion Human resource management planning is an important human resource function that CGSM Company can use to develop medium and long term strategy to attain the conflicting goals of cost reduction and maintenance of desired levels of human capital. By using human resource planning, the company will be able to assess the current situation in the organization and anticipate the future by systematically forecasting the demand for and supply of employees under the changing economic condition and develop plans to meet these needs. Additionally, the company can develop a human resource plan that has a job description of every employee to present the role of each and every employee in the organization. Because management of people in CGMS is not effective implementation of a human resource information system will make the human resource department more effective because it will enable the company undertake activities regarding payrolls and employee performance and motivation. Bibliography Gary, D, 2004, Human Resource Management. 10th ed, Pearson/Prentice-Hall, Englewood Cliffs, NJ. Hal G., & Stone, D., 2005, eds. The Brave New World of eHR: Human Resources Management in the Digital Ag, Jossey-Bass, San Francisco: Cornelius, N, 2001, Human resource management: a managerial perspective, Cengage, London. Haines, S, & Bandt A, 2004, Successful strategic human resource planning, Systems Thinking Press, New York. Lussier, R, 2008, Management fundamentals: Concepts, application, skill development, Cengage, London. McMullen, J, 2009, Redundancy: The law and practice, Oxford University Press, Oxford. Collins, H, 2010, Employment Law, Oxford University Press, Oxford. Sadri, J., & Chatterjee, V, 2003, Building organizational character through HRIs, International Journal of Human Resources Development and Management, 3(1), 84-98. Read More