Introduction
Human resource management and information system is considered an important aspect for different organizations and organizations stress a lot on these factors. That is the reason why organizations that usually possess a mammoth structure prefer a proper human resource management and information systems. In today’s world, businesses heavily rely on human resource management system and it is considered to be the part and parcel of organizations. This paper analyzes different human resource management issues of General Motors and then these issues are analyzed by using the theories of human resource management. Furthermore, implications of the issues are also included with conclusions and recommendations regarding certain strategies available to the organization.
Human resource management issues in General Motors
General Motors Corporation is considered as a power house in the car manufacturing industry and it was established in 1908. This organization is considered as the largest manufacturer of automobiles and GMC manufactures truck and cars under different brand names. There are a total of 284,000 employees in GMC and they are located in 35 different countries. GMC stresses a lot on human resource management and human resource management is considered as a corporate strategy of GMC (Noe and Hollenback, 2008). In the similar manner it can be clearly said that in the automotive industry General Motors is considered as the leader of innovative HR practices. GMC has reshaped the conventional policies of human resources and this organization is well aware of the fact that corporate function of HR is changing into a strategic option for different organizations. However, these policies vary with the external factors and these HR approaches are revamped by the organization in the scenario of financial crisis (Stein and Furman, 2008).
That is the reason why managing employees in General Motors is considered as an uphill task. Strategists and analysts believe that there are certain issues that are quite prevalent in the organizational structure of General Motors. These human resource management issues are listed below:
Downsizing due to technological advancement:This issue focuses on the scenario that in today’s world organizations are adopting new and modernized machines in order to pursue their businesses. That is the reason why they are laying off employees because through this approach. They can cut their costs and achieve effective and efficient results through this approach.
Downsizing due to financial crisis: This issue focuses on the fact that financial crisis disrupted the economy of different countries and the crisis actually started in the banking sector and slowly and gradually crept into the automobile industry. Many employees were laid off in the scenario of financial crisis.
Compensation of senior managers and CEO’s of the company:A major issue aroused in the automobile industry that many senior managers were getting very high pays. Therefore, human resource official decided that the pays of directors should be lowered in the scenario of financial crisis. However, this approach created a disruption in the entire automobile sector.
Issues related to pension funds: There are certain issues associated with General Motors that were related to pension funds. Organization officials claim that General Motors can enter into bankruptcy if employee’s healthcare benefits and retirement plans are not managed appropriately.
Downsizing due to certain external factors: There are certain external factors that actually resulted in the downsizing of different employees in General Motors. These external factors include the need for technology, stiff competition and issues related to globalization.
Downsizing due to technological advancement
Organizations usually stress a lot on their employees and successful organizations are those who actually consider their employees as their assets. These human assets benefit the organization in both short and long runs. Strategists and analysts actually believe that employees have the mental tendency to deal with diverse situations that is the reason why they cannot be replaced with technology. However, certain individuals and decision makers believe that because of increased competition and globalization issues certain employees that are working in the automobile industry can be replaced with technology like robotics and artificial intelligent information systems. In the scenario of General Motors managers and the decision makers believe that in this competitive environment organizations should cut their costs and through this approach they can attain a sustainable competitive cost advantage over their competitors. That is the reason why many employees were laid of because of the technological advancement in the company. Similarly, certain operational plants of General Motors were closed because of this. However, a balanced approach that is presented by different human resource professionals is that a combination of people, equipment and software must be maintained in an organization (Bernandin, 2008). However, General Motors like other automobile organizations is focusing a lot on quality and operational precision that is the reason why they are working on the scenario of lying of the employees and cutting their costs and as a replacement they are opting for improved and modernized technologies. Research depicts that there were number of factors involved in lying off the employees in which technological advancement and competitive factors can be considered as one of the most important factors.
Downsizing due to financial crisis
Financial crisis is considered as a menace that cannot be disregarded easily. Different organizations were tarnished and torn into pieces just because of the financial crisis. The financial crisis actually initiated in the banking industry and slowly and gradually it affected other sectors as well. The automobile industry was affected severely by this financial crisis. The global financial crisis jolted the entire economy of the world and like other sectors the automobile industry was badly affected by this. The crisis in the automobile industry actually shocked other sectors as well and this economic downturn tarnished the economic growth of many developing nations. That is the reason why it is considered as the part of global financial downturn. Research actually depicts that this crisis badly affected the European and the Asian manufactures of automobiles. But slowly and gradually it affected the automobile industry of America. The demand of the cars was severely affected by the economic downturn and this affected different organizations in both the short and the long run. This is the reason why General Motors started downsizing and thousands of employees were fired during this scenario. The officials of the company said that this was the last option for the company because GMC might even file a bankruptcy if employees were not fired from this organization. General Motors laid off 30,000 employees in Detroit and closed down nine plants and research suggests that the auto giant lost about $4 billion in 2008. However, the biggest misery of the financial crisis was the scenario that it transferred its effects into the upcoming years and the Swedish version of General Motors is planning to lay off 750 employees in Trollhattan (Reuters, 2009).
Therefore, it can be said that both the issues are of critical nature and downsizing is the common problem that is present in both the issues. Hiring and firing of employees is considered as a major responsibility of the human resource department which is the reason why appropriate strategies must be developed in order to curb the element of downsizing or the human resource managers should provide an alternative to the company. Reduction of employees might depict a feasible and brighter picture in the short run but in the long run the effects of reducing employees from an organization can even tarnish the growth of the company.
Analyzing issues with respect to HRM models
In order to deal with these issues certain strategic HR models must be used by the organization which would incorporate different aspects of human resource policies that are implemented in an organizational structure (Mathis and Jackson, 2007). Similarly, it can be said that in the scenario of General Motors different models and strategic approaches can be used. However, one of the most appropriate models is listed below (Figure 1). This model actually revolves around the scenario of three basic themes which are global competition, stakeholder’s needs and high performance work system. These three themes are quite prevalent in the scenario of General Motors and the issues of downsizing and technological advancement are incorporated in these issues. However, when an HR personal is implementing these scenarios then it should be kept in mind that employees are ready to accept these changes. Therefore, the elements of change management must be incorporated in an organization.
Furthermore, it can be said that in this scenario a novel and a modernized approach is needed which would not just focus on day to day operations but also incorporate certain strategic issues. In the similar manner a new model should be less reactive and more proactive (Mathis and Jackson, 2007). The element of bureaucracy must not be incorporated in this model. Finally, these models should create the champions in the employees and such an environment must be developed in which the growth of an individual becomes directly proportional to the growth of an organization.
Recommendations
The major issue that is faced by the human resource executives and managers is the downsizing approach that is adopted by the organization. This therefore requires a proper strategic approach that must be adopted by the organization. The recommendations that are entitled for these issues are listed below:
Performance based pays: It should be clearly communicated in the organization that the pays of employees are based on the performance (Bernandin, 2008). In this manner organization do not have to worry about external factors because if employees work well then they should get their reward accordingly. However, this recommendation can be considered as an assumptive approach but in extreme conditions like financial crisis this approach is quite viable in both the short and the long run. In the similar manner employees remain motivated that they are not fired from the organization. However, on the other hand there are certain employees that would be de-motivated from this approach because they will not be getting their basic salaries.
Training and development programs: Training and development programs must be initiated in the organization and these training would basically focus on the issue of downsizing that why General Motors are doing it and what employees can do in this regard. In the similar manner certain options would be given to the employees that in the scenario of financial crisis they can work on lesser salaries and work with the organization.
Joint ventures and strategic alliances: General Motors in this scenario can find a strategic alliance with an organization and both of them can recover each other in the scenario of financial losses. In the similar manner in the scenario of financial crisis both these organizations can share their technological resources and even their trade secrets.
Conveying the strategy to the employees: General Motors should explain the vision, mission and objectives of the organization to each and every member of the organization so that they can align their personal strategies of work with the company’s strategies.
Development of HPWS: High performance work systems must be developed in General Motors in which autonomous teams, open systems and the scenario of performance based pays must be implemented in the organization. The core characteristics of this system revolves around the scenario that to what extent the employees are involved in the decision making process. In the similar manner certain factors must be identified that would affect the performance of the organization and the performance of employees (Noe and Hollenback, 2008). These factors in the scenario of General Motors are retrenchment of workers, layout design and technology used. Therefore, this system would help the organization to understand the importance of workers and employees on the other hand would have an idea that they have to work hard in order to earn a respectable salary. Furthermore, employees on the other hand should be motivated by this system and this would be beneficial for the organization in both short and long runs.
Conclusion
From the above analysis it could be induced that General Motors in the wake of current financial crisis and increased pressures on the company to improve its structure and offer innovative solutions to its customers is faced with numerous issues relating to human resource management. The company needs to improve its operating efficiency by taking bold steps of downsizing its work force and undertaking capital expenditure to introduce newer models which are technologically superior and induce buying by customers. Different HRM models and techniques are suggested through this report which could result in achieving these goals for the company and assist it in reviving its financially sickened business.
References
Bernandin. (2008). Human Resource Management. New Dehli: Tata McGraw Hill.
Mathis, R. and Jackson, J. (2007). Human Resource Management. Ohio: South-Western College.
Noe, R. and Hollenback, J. (2008). Fundamentals of Human Resource Management. New Jersey: McGraw Hill Higher Education.
Reuters. (2009). GM’s Saab to Lay off 750 Employees in Trollhattan. [online]. Web.
Stein, J. and Furman, M. (2008). The Art and Colour of General Motors. Philadelphia: Coachbuilt Press.