Human Resource Management Practices in Monarch Fabricators - Case Study Example

Human Resource Management Practices: A Case Study of Monarch Fabricators Name University 1 Introduction As Chadwick and Dabu (2009) assert, to gain a competitive edge in the market place, successful corporate leaders have implemented strategies that govern effective human resource management (HRM). In essence, HRM practices are usually designed in such a manner that they maximize the performance of the workers. For this reason, HRM is mainly concerned with managing human resources within an organization and focusses on formal systems and policies. The human resource manager is usually given the responsibility of effectively managing the corporate’s human resources, and is mainly tasked in areas such as employee compensation and benefits, staffing, and work design. Also, it is important to note that HRM practices are intended to maximize the company’s productivity by increasing employee effectiveness. To do so, the human resource department if any organization has to train and develop its employees, and ensure that they are optimally performing by conducting performance appraisals, as well as ensuring that they are motivated, which is mainly achieved through rewards. HR is also involved in managing diversity within an organization, especially where the company operates in the global environment (D'Netto, et al, 2014). Also, HRM is involved in managing industrial relations through aspects such as collective bargaining and meeting the legal requirements set by governments. As such, enterprises should ensure that they are governed by HRM practices that concur with the laws set by governments, and since most of the companies are involved internationally, the HRM practices have to be inclined to regional, international, and local standards. This current paper covers aspects of human resource managements, mainly diversity management, culture, international performance management, as well as training and development for the company. Since it has been afflicted by a set of problems in these fields, as well as the fact that it has established subsidiaries and operational departments in Australia, Singapore, China, and Vietnam, it is the perfect organization that can be used as a case study for this paper. In essence, Monarch Fabricators, being Australian, sells aircraft to over 50 countries globally. Most of the aircraft parts are mainly produced in Vietnam and China while most of the design engineers are based in Singapore. On the other hand, the aircraft are assembled in Australia and Singapore. 2. Diversity Management and Culture Human Resource Management gives a lot of emphasis on the value of diversity, as well as individual learning and development. In addition, HRM practices ensure cultural diversity. Culture can be considered as an agglomeration of knowledge, beliefs, meanings, roles, demographics, attitudes, ethnicities, and values among other factors. For instance, demographics is an important component of culture, which mainly is involved with what makes up the population, and thus, focusses on ethnic, gender, and racial break downs, education levels, and religious affiliations. Shen et al. (2009) acknowledge the fact that workforce diversity is inevitable within organizations primarily because people differ in numerous dimensions, such as gender, marital status, disability, social status, sexual orientation, culture, ethnicity, religion, and personality among other factors. a Culture The organization culture is a strong component of HRM practices. In essence, human resource management practices, such as recruitment, selection, as well as training will affect the corporate’s stability and performance (Chang and Lee, 2007). As the writers assert, these HRM practices have the capability of shaping the organizational culture and employee behavior, as well as influencing the creation of values that define the culture for the company including effective communication. The culture at Monarch Fabricators is not effective in ensuring that the company achieves competitive advantage. For instance, the teams are not working well, and there is a breakdown in the communication structure between integrated teams, as well as across team management. Communication, as Neves and Eisenberger (2012) point out, is an important aspect of any organization, and either works to pull down the organization or promote its success. In the case of Monarch Fabricators, there is no effective communication between the teams. Also, the organization culture is negative, and subsequently, it can be identified with the mantra, “near enough is good enough.” The teams resist change. As Schneider et al. (2013) point out, organizational change is inevitable if an organization is inclined to succeed. Quality management seems to be a problem at Monarch Fabricators. For instance, parts from China and Vietnam are tied to ineffective quality, and since aircraft need modifications even after being delivered to customers, governmental and non-governmental clients are complaining about quality issues. They have subsequently warned the CEO, O’Meara that unless they improve quality, they will make partial payments. The supervisors and the design teams are not enough as there are only three in over 50 teams responsible for assembling the aircraft. It is important, as Chung et al. (2008) point out, that an organization incorporates total quality management in the operational parameters of the organization, especially in aspects of design. Monarch Fabricators has failed to do so, and thus, this has contributed to a poor working culture, which is mainly characterized by not achieving the best. As Schneider et al. (2013) assert, the development of a strong organization culture that is inclined towards providing an excellent service to the customers, respecting individuals, striving for excellence, and actions that are defined within the precincts of integrity. These aspects are missing at Monarch Fabricators, and immediate mitigation is required as they are important aspects of organization culture. Coupled with a strong communication strategy, the company can cope with the imminent dynamic changes, and in turn, meet the various organizational demands. By doing so, the company will be in a position to enjoy competitive advantage in all its activities. In addition, according to Gangai (2014), poor employee relationships are indicators or poor performance. At Monarch Fabricators, there are poor working relationships across and within the teams, which are often characterized by poor communication primarily because staff does not receive adequate instructions. It means that the line manages, who are responsible for communication in the entire organization are not doing their job. For instance, the CEEO is constantly receiving emails from China, Vietnam, and Singapore that seek clarifications. b Diversity Management Shen et al. (2009) also point out that diversity issues differ from one country to another. Considering the fact that Monarch Fabricators operates in the four countries, it has to implement HRM practices that predominantly reflect diversity on the global scene. The company has set various goals that are intended to improve the diversity initiatives such as age, race, gender, ethnicity, physical abilities, religious beliefs, sexual orientation among other philosophies. As pointed out earlier Shen et al. (2009) acknowledge the fact that workforce diversity is inevitable within organizations primarily because people differ in numerous dimensions that the enterprise has already implemented. However, according to Shen et al. (2009), many corporations are reluctant to promote and hire those with disabilities among other diversity issues, and Monarch Fabricators, has fallen prey to this assertion. For instance, at the headquarters, there is intolerance in working with employees from different generations, there is lack of recruitment of people with disabilities, especially in the Chinese subsidiary where managers are increasingly ignoring disabled applicants, even though their skills are above those of the other candidates. As Dries (2013) points out, HRM practices should adhere to strategizing on talent management, and thus, to promote this, diversity is inevitable. As the author asserts, by adopting this move, organizations are in a position to attract and hire diverse talent, which increases performance and productivity of the employees. In Monarch Fabricators, these aspects are constantly being compromised, and could result to incompetent workforce. In addition, the HRM practices do not have clear sets of practices that enable the employees to comprehend each other, and they do not provide for the provision of understanding each other. The HR has not considered the importance of including this in its practices. As such, the firm’s HRM practices are not in line with HRM practices that promote diversity, which according to Niebuhr (2010), provides a distinct advantage by promoting creativity and flexibility, which in turn, produces better solutions to various organizational problems. Essentially, adopting workforce diversity ensures that an organization has the correct pool of talent, and the employees are in a better position to serve and understand the needs of the clients. Also, by adopting a culturally diverse workforce, an organization is in a prime position to embrace innovation. Essentially, cultural diversity is held within the precincts of education, and thus, when a company incorporates diversity in the hiring and selection, process, there is a high likelihood that the candidates are competent. Monarch Fabricators clearly discriminates against the disabled and does not provide practices that offer an appreciation of other cultures. Tung (2008) argues that the human resource management practices that are inclined to cultural diversity will ensure that an organization prospers, as it can provide a competitive edge based on a diverse workforce. In addition, more insight and helpful opinions that are important aspects of strategizing will lead to increased productivity. The aspects need rectifying at the firm. 3. International Performance/Training and Development Human resource management practices that advocate for international performance enhancement, as well as training and development are also the cornerstone for success for many organizations (Gruman and Saks, 2011). International performance management is concerned with understanding performance issues of multinational corporations, and thus identify gaps that need training and development (Colakoglu and Caligiuri, 2008). As the authors assert, one of the major challenges of organizations that operate within the global environment is managing its international workforce. These organizations have to ensure that its staff is performing optimally. Besides, performance management can be considered as an HRM practice, and is very important as it is closely linked to the corporate values and strategies. In addition, Colakoglu and Caligiuri (2008) stress that training and development for expatriates, as well as teams responsible for different MNC components is paramount to ensure continual improvement. a. International Performance Management As Keeble-Ramsay and Armitage (2010) cite, performance management is an important component of managing any business as it ensures that the company measures how well the company is performing and whether the productivity of its workforce matches the short-term and long-term goals. Also, it ensures that the resources are effectively utilized, and any apparent risk dealt with accordingly. Also, the appraisals can be used strategically as motivating factors, primarily by pointing out whether the employees are performing as expected or whether there are any performance gaps and thus, the need of improvement. Additionally, it is an important aspect of pointing out the desired goals, as well as the need for training. For this reason, both performance and training are interrelated. In instances when the workers are underperforming, the organization takes necessary steps to train its personnel, and in turn, promote their productivity to an acceptable level, as well as ensuring that the productivity alights to the goals set by the organization (Salas et al. 2008). At Monarch Fabricators, there are a variety of performance issues, which are characterized by a lack of international appraisals. Mainly, performance reviews are conducted but the Australian HR but there are no reviews in the other subsidiaries, as well as lack of formal performance appraisals for expatriates. Another mistake that the organization makes is making decisions at the Australian headquarters that affect the other subsidiaries, for example, the headquarters issues a decision for the Singapore subsidiary to produce part quotas only to realize that there is a surplus in the Australian one. In addition, there is no policy that ensures effective performance management, as well as no appraisal methodologies. In essence, appraisals should include productivity standards for personnel in the warehouses as well as financial performance metrics whereby the warehouses have to maintain profitability above a certain level (Hannon and Trainor, 2007). b. Training and Development Training and development, being an HRM function, ensures that there is an appropriate agglomeration of necessary skills and abilities that ensure effective productivity (Aguinis and Kraiger, 2009). At Monarch Fabricators, there is no effective training and development parameters. For instance, expatriate training for those leaving the Australian headquarters to work in the other subsidiaries is only limited to half a day, which is not enough. Instead of acquainting the employees with tangible training and development, the HR refers the employees to online resources, especially for expatriates. In addition, there is no feedback pertaining to training approaches used, as well as the lack of rationale that focusses on training and development in the entire corporation. Monarch Fabricators does not have systematic workforce planning and management development initiatives, which allows the selection of internal employees for the manager positions and advancing their careers so that they maintain a high pool of knowledge and skills. Employees also are not aware of any career prospects because no career development plans are available. It is important to note that career advancement is important in motivating the workforce (Janeiro, 2010). Thus, as the writer asserts, organizations should be able to retain talent by offering career advancement criteria, as well as ensuring that those with senior positions develop their counterparts holding junior positions. 4. Conclusion and Recommendations To surmise, Monarch Fabricators is characterized by poor HRM practices that need immediate rectification. The organizational culture is poor, and the communication strategies are not working effectively as the teams are not integrated to suit the needs of the other teams, which in turn creates resentment. The working relationships are poor, as well as the lack or effective subsidiary management. The culture at the firm does not allow appreciation of other cultures, which forms a basis of poor diversity management. There is discrimination, especially for those with disabilities. In turn, this causes the organization not to incorporate qualified talent in the organization. For instance, as pointed out, those with disabilities usually possess greater talents compared to the other applicants but are not considered in the selection because of their disability. CEO O’Meara fears that the company might receive legal action. Workplace interactions are poor and the employees do not comprehend each other, which clearly leads to underperformance. In addition, there are no appraisal or performance metrics. In addition, there is no effective career development or training programs, which makes the organization to be characterized with poor performance, as indicated by poor quality of its products. In essence, the HRM practices need an overhaul. Firstly, it is recommended that the organization should come up with a communication strategy that incorporates teams, the headquarters, as well as the subsidiaries. This will promote effective problem-solving and decision-making. Secondly, there should be a clear training and development strategy. Expatriates should receive enough training, which can go for a week, not half a day. Also, there should be career advancement for motivating the employees. For example, supervisors should be given an opportunity to become junior then senior managers. Thirdly, the firm should incorporate a total quality management (TQM) approach that allows for lean manufacturing thereby eliminating chances of defective designing. Fourthly, the organization should set organizational mission, value, and vision that are inclined to the satisfaction of the clients, as well as ensuring that employees relate well, and appreciate each other’s cultural backgrounds. Fifthly, the selection and hiring process should not be discriminative, rather, it should respect diversity, and thereby, no one should be discriminated against based on aspects such as age, gender, sexual orientation, disability, and religion among other aspects. Lastly, performance appraisals should be incorporated in the organization, which should use metrics designed for the whole organization, including its subsidiaries. Performance reviews should be conducted on a frequent basis in all its subsidiaries, as well as the headquarters. 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