People Management - Case Study Example

People Management Name: Course: Tutor: Institution: Date: Introduction The global labour market is radically changing. This is characterized by the changing business models, structures as well as overall strategic objectives. Moreover, changing external business environments such as increased competition, changing consumer buying behaviours as well as political structures dynamics. As a result, these changes warrant a drastic change in the development and assimilation of an organisations workforce. Traditionally, organisations employ and retained employees on a permanent basis. However, the described market changes necessitated the need for radical measures and approaches adoption in labour management. Today, as Miles and Muuka (2011, p.192) argued, employees serve as a key and significant component of an overall organizational success through their role in products quality as well as their share in the overall production costs. In a bid to reduce the existing organizational overall costs, organisations have over the years developed appropriate human resource management policies including the adoption of both the annual and zero hours contracts. This essay reviews both types of employment terms in terms of their merits ad challenges to both the employees and employers in the hotel industry. Subsequently, the essay develops an appropriate recommendation for employment in the industry. Annual Hours Contract System The annual hour’s contract system is an employment approach through which organisations recruit and retain employees on the basis of their overall working hours in a year (Reilly, 2001, p.58). The annual overall working hours are determined from the daily working hours through the weekly hours to the monthly working hours. In calculating the annual working hours, the contract considers allowances such as annual leaves and other paid up holidays. The application of this approach in the hotels and restaurants industry exposes both the employers and employees to a combination of merits and challenges. A focus on employers in the hotel industry demonstrates that they benefit from the program implementation due to the industry seasonal fluctuations. The industry fluctuates between increased demand periods such as during holidays and summer periods to reduced off-peak demands. As such, the organization requires varied employees input and overall services across the period. The application of the annual hours working system allows for the awarding of rest periods as well as leaves over the low season. As such, this reduces the overall number of employee hours served over this period. Therefore, the hours are reserved and applied in the high season period. Consequently, this provides the hotels with the required human fore to cover the increased demand. Unlike employees under the zero hours contract who can decline duty allocations, employees under this employment contract have no legal liberty to decline duty allocations, relatively making the source reliable in both the short and long run periods. In addition, the hotel industry was traditionally characterized by overtime payments, where employees, working over the stipulated time periods on permanent basis, would be compensated. In the long run, the cost implicated on production costs, reducing on overall profit margins. However, the application of the annual hours contract employment system has enabled employers abolish the overtime payment systems, an approach bound to yield reduced workforce and production costs in the long run. However, the application of this system poses a challenge to the employers in that the employees acquire increased payment rights and privileges. For instance, they are entitled to constant and stable wage rates across the year as well as other financial benefits like paid sick leaves, annual leaves and redundancy compensation. Therefore, despite its reduction of overtime costs, the system exposes the organization to increase indirect costs that increased overall labour costs in the hotel industry. For the employees, the benefits include a stable and reliable source of income and job security. Under the annual hour’s contract system, employees’ monthly wages and remunerations are defined and set. Thus, the employees’ wages are guaranteed allowing for proper expenditure budgeting at individual levels. Moreover, prior to the contract termination, the employees acquire a set minimal notification period (Pasfield, 1999, p.9). This allows for the adoption of the relevant and appropriate adaptation strategies such as seeking alternative employment basis. In addition, as already outlined, the system allows for their enjoyment of additional indirect benefits such as sick leaves and redundancy benefits. Nevertheless, the system exposes the employees to increased financial constraints. Traditionally, employees benefited from the overtime allowances. Therefore, employees were motivated to work overtime hours in the hotel industry peak season, due to the financial gains accrued, a merits deviated by the current annual hours system. In addition, employees can be called and recalled on duty over short notification periods in cases of operational emergencies such as unexpected demand rise or sick colleague duty take over’s. Thus, this lowers their ability to adapt to their external social life, due to the unexpected work related disturbances and interruptions. Consequently, although benefiting employers due to their legal response requirement, it at times negatively implicate on the respective employees social life set up, causing subsequent and gradual employee demotivation. Zero Hours Contracts The zero hour’s contract employment structure is a system through which contractual terms empower both the employee and employers equally. On one hand, the employees are not obliged by any regulation to accept and perform work presented by the employer. Thus, cannot be sued for such failures to perform. On the other hand, the employers are not obliged to offer the employees a set wage rate and only allocate duties and functions on an as and when basis (Leighton and Painter, 2001, p.77). This approach has acquired an increased incorporation across industries, the hotel industry included, as McDonalds workforce is largely composed of the zero hours contract workers. On one hand, the employment approach is of great significant to hotel owners. In this regard, it offers employees and labour costs flexibility. A majority of the restaurants and hotels demand is seasonal, in that it is characterized by both peak and off peak seasons. In this case, in peak seasons, the hotels easily acquire the additional required labour force at minimal recruitment costs. On the other hand, in off peak seasons, the labour costs are held at minimum to allow for reduced production costs, allowing for profitability even in these low demand seasons. In addition, the approach allows for the retention of a large pool of personnel, from whom the organization can recruit employees, reducing on costs paid up to external recruitment agencies. However, the adoption of this employment approach leads to the loss of organizational workforce culture. As Coffie and Turkson (2014, p.332) argued, an organizational culture is developed and propagated through long-term relations and interactions among employees. In this case, the interactions and increased integrations enhance culture development. However, the zero hours contract employment approach reduces these interactions, resulting into weak or no organisational cultures in the market, an important competitive feature in the hotel and restaurants industry. Further, it raises employee availability uncertainty. As stipulated in the terms, the employees are at liberty to accept or decline the organizational duties allocations. Thus, the organization risks employee shortage if the relied upon employees are unavailable at the times of need, an aspect implicating on hotels ability and capacity to deliver quality foods and services to their consumers in the peak season. On the other hand, the employment approach has both merits and challenges on employees. Among the merits of the program is offering them job selection liberty. Unlike full time employed employees, workers under the zero hour’s contract system have the legal liberty to accept or decline responsibilities. As such, this offers employees the opportunity to pursue and perfect skills as well as gain experience in their areas of specialty, a major employment determinant in the hotel industry. In addition, the flexibility allows them to combine and concurrently function and serve in other social and personal capacities. For instance, parents would decline shifts conflicting with their children care periods, while the students would only take up work responsibilities in their rest and holiday periods. Nevertheless, the program denies employees a range of employment merits. As such, they acquire the title ‘workers and not actually organizational employees. This title variance implies that although they enjoy employment rights such as holidays and annual leave, they miss out on a number of allowances and privileges such as paid sick leaves and redundancy compensations. In addition, unlike the regular employees, they have uneven incomes. This implies that the employees income fluctuates depend on allocated monthly responsibilities. Thus, family budgeting and expenditure planning is imperatively hard, leading to low living standards in the low seasons when most of them acquire no work duties. Recommendations A review of both the zero and annual hour’s contracts employment systems, it is apparent that each of the systems has its application significance. However, this essay evaluation is based on the concept of balancing application effects on both the employers and employees in the market. The essay evaluations based on the argument developed by Maria Pilar de, Angel, Manuela and Vela Jimenez (2004, p.224) The authors argued that a majority of industrial based labour conflicts emerge as a result of variance and bias of adopted employment policies and systems. As such, the essay seeks to recommend an appropriate system that develops and adopts an equal and unbiased system approach. A review of the hotel industry across the globe illustrates that the market is characterized by seasonal demand across the years. Consequently labour needs vary as per the time periods. Moreover, an industry analysis establishes that the industry and individuals firms’ performance in the market is based on the presence of an existing organizational culture that forms an imperative branding component through which market reputation and positioning is achieved. Therefore, in cognizant of these industry traits, this essay recommends the application of the annual hour’s contract employment system. On one hand, the application of this system, and the subsequent employees’ responsibility to respond to duty call, unlike the zero hours system employee liberty increases employee performance reliability as well as the establishment of an organizational culture. In addition, the existence of reliable wage rates and other financial benefits for the employees will increase their motivation, propagating quality services provision. Therefore, this essay argues that the application of the annual hour’s employment system serves as the ideal system for the hotel industry. Conclusion In summary, the essay evaluates the application, merits and challenges of both the zero and annual hour’s employment systems. On one hand, the essay lists flexibility and reduced labour costs as key among employers’ benefits on the zero hour’s system, but also lists unreliability as a key challenge. Moreover, for the employees is lists flexibility as a merit but also unstable incomes as a major shortcoming. Further, an evaluation of the annual hour’s contract establishes that employers benefit from employees response reliability as well as reduction on overtime labour costs. However, demerits occur under increased indirect costs. For the employees, the essay establishes that they benefit from stable incomes as well as indirect financial benefits, but face a challenge under unreliable work schedule. Consequently, the essay recommends the application of the annual hour’s employment system in the hotel industry. References Coffie, R.B. & Turkson, J.K. 2014, "An Assessment of the Effects of Individuality on Organisational Culture in Selected Institutions in Ghana", Journal of American Academy of Business, Cambridge, vol. 19, no. 2, pp. 330-335. Leighton, P. & Painter, R.W. 2001, "Casual workers: still marginal after all these years?", Employee Relations, vol. 23, no. 1, pp. 75-93. Maria Pilar de, L.C., Angel, M.S., Manuela, P.P. & Vela Jimenez, M.J. 2004, "Analysis of internal and external labour mobility: A model of job-related and non-related factors", Personnel Review, vol. 33, no. 2, pp. 222-240. Miles, S.J. & Muuka, G.N. 2011, "Employee Choice of Voice: A New Workplace Dynamic", Journal of Applied Business Research, vol. 27, no. 4, pp. 91-103. Pasfield, J. 1999, Annual hour’s contracts & working time transformation, J.P. Associates, Horsham. Reilly, P. A. 2001, Flexibility at work: Balancing the interests of employer and employee, Gower, Aldershotd. Read More