Human Resources Management

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Summary

The Human Resources Management is a fundamental phenomenon for any kind of business. An ambitious company should pay much attention to the development of its HRM department if it plans to withstand the competition in the world market. Ford Motor Company, the organization chosen for this research, is one of the largest car manufacturers in the world. Accordingly, the aim of this research was to consider its HRM in such its aspects as recruitment and selection, training and development, and appraisal. The major problem examined by this research is the relative efficiency of the Ford HRM as reflected by such factors as the fairness of recruitment policies, the levels of employees’ satisfaction with working conditions, and the overall performance of the company in the market.

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Specially developed questionnaire was developed to obtain the information on the specified areas from Ford employees and managers. The answers given were analyzed and compiled into respective charts and diagrams reflecting the picture of the situation. According to the research results, recruitment process is a great advantage that Ford has over its competitors. The respondents said that employment in Ford was like entering a new family rather than coming to a new workplace. However, the levels of satisfaction of employees with their working conditions, and the overall performance of the company over the last two years leave areas for the further study.

So, this paper is the report of the research findings aimed at gathering the information on the Human Resources Management issues at Ford Motor Company. Another objective of this work is making recommendations as for the possible improvements of the situation based on the data obtained.

Introduction

Organization

The organization whose Human Resources Management policies I will consider in this paper is Ford Motor Company, one of the largest automobile producing companies in the world. The organization under consideration deals with producing cars and their spare parts; it constantly introduces new trends and products to the market. It cooperates with such giants of the automotive business as Volvo, Mazda, etc. “Ford is now a multinational company with the developed Asian and African networks, but the major facilities are located in Europe and the USA.” (Fine et al. 1996). To be able to control and successfully operate such a huge net of plants, manufactures and business structures, Ford Motor Company uses it famous organizational culture and Human Resources Management Department as its integral part. “Ford is proud of its HRM policies as the ones that allow the company to claim its being more than a business enterprise. It is the family for its employees.” (Schuler & Jackson. 2003).

My Role

As a student of the master level, I need considerable time to cope with the requirements of my study and be one of the top students. There remains little time for other activities, especially for work. Accordingly, my role in the company under consideration is limited to the one of a researcher. In other words, I am not directly related to Ford Motor Company, and my indirect relation to it consists in the desire to carry out the research of the main problems in its Human Resources policies. That is why, my role in Ford Motor Company can be called the one of a reviewer with the possibility to develop into advisor, i. e. the person to give recommendations as for possible development of HR policies.

Organizational Structure. Chart

To begin the consideration of Ford Motor Company, it is necessary to understand and clearly imagine the organizational structure of this firm. Ford has a properly developed structure which embraces all the vitally important spheres of the company’s activity. It includes CEO, marketing managers, sales and promotion managers, logistics specialists, and, needless to say, Human Resources Department. First of all, the company is headed by the Chairman of the Board of Directors and by the President Bill Ford. The next position in the organization belongs to the President, CEO, and Director Allan Mullaly whose direct chief in Bill Ford.

The next layers of the organizational structure of Ford Motor Company consists of the specialists in the specific areas of the firms activity – Derick Kuzak is a person in charge of Group VP and Product Development in the North and South America; Lewis Booth is EVP of Ford of Europe and Premier Automotive Group; Chairman of Ford Europe, Jagaur, and Land Rover divisions. The Human Resources Management Department has recently been headed by a young and ambitious Jenny Ball, whose chief will be the Vice-President of HR division of Ford Europe Nick Caton.

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This is not a complete account of the organizational structure of Ford Motor Company, but it encompasses all the leading areas of its activities. To illustrate it, the following chart reflecting part of Ford structure can be implemented (Chart 1). As for the detailed list of all the members of this structure see Appendix 1.

The Structure of Ford Motor Company
Chart 1 (CogMap, 2009).

History

The history of Ford Corporation reflects the way in which the company reached its current position of the world’s leaders of the automobile market. The late 19th century was the epoch when Henry Ford founded his firm as a small American enterprise destined to develop into an international giant. The first decades of Ford Motor Company performance were marked by the search of the most effective production techniques and Human Resources Management policies. “The beginning of the 20th century was marked by the mass production process introduced by Ford which improved both economic figures and HRM efficiency.” (McCarthy. 2001).

First of all, in the early 1900s, Ford saw the introduction of the mass production techniques based on the line assembly method. Specific departments dealing with the raw materials supply, marketing, logistics, promotion and sales were developed by Ford officials to ensure the permanent operation of their plants without withdrawing workers to carry out some tasks not included in their direct functions. After this step, Ford employees obtained the clear understanding of their obligations – engineers and designers were to develop new concepts, managers, assemblers and ordinary staff workers were busy with car assembling, delivery and sales. “Interchange and mutual help are developed in the company as an employee is trained in functions of his or her colleagues, which allows making the assembling process stable and efficient.” (McCarthy. 2001).

The next step of Ford Motor Company development was the division of workers into skilled and non-skilled ones with the subsequent introduction of high-tech machinery. These steps allowed Ford to reduce its costs for salary payments and production process costs. The clear distinctions between the different levels of income allowed the workers to define their priorities and strive for better performance to earn more. “Technological modernization provided for the economic growth and the increase of the market share of Ford Motor Company.” (Meyer. 2002). Respectively, the prices for the automobiles were reduced which both increased the customer base of the company and rise the wages of employees. Using these techniques, Ford Motor Company managed to develop into an international car producing company with subsidiaries in numerous countries and with close business ties with Mazda, Volvo, Jaguar, etc.

Aims and Objectives

Drawing from the information presented in the above sections, it is possible to establish the aims and objectives of the current research. First of all, the aim of this research is to study the Human Resources Management advantages and drawbacks in Ford Motor Company. Several secondary aims derive from this one, including further usage of the data obtained in the study process, understanding of the basics of the Human Resources Management, and ability to implement this understanding in practice while working in the HRM sphere.

Accordingly, the following objectives are developed to reach the mentioned aims. The first objective is to identify the major strong and weak points in Ford Motor Company Human Resources Management. Achieving this will allow the research to establish the directions for the further work. After identifying the areas of study, the next aim is considering such points of HRM as recruitment, training and appraisal policies as the fundamental elements of Human Resources. Finally, it is the objective of this research to analyze the data acquired and see which policies allowed Ford to become a successful company, and which sides of its performance still need improvements.

Problem identification

Hard and Soft Problems (Fish Bone)

Having considered the background of Ford Motor Company and stated the aims and objectives for this research, it is necessary now to identify the problem to be examined in this case study. The problem chosen might seem too general at the first sight but the more thorough consideration reveals its vital importance for the company’s performance – this problem is the efficiency of the HRM policies implied in the spheres including recruitment and selection, training and development, and appraisal of employees.

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As for the classification of this problem according to the possibility of its measurement, the efficiency of the HRM policies can be referred to the group of Soft Problems as far as it is a qualitative problem and it is not an easy one to measure. “HRM efficiency is such an abstract phenomenon that it can be measured only in relation to its surrounding factors.” (Lencsis. 1998). However, the efficiency of the HRM policies can be assessed based on such factors as satisfaction of employees with their positions, the rates of growth of the company’s sales as the reflection of the devoted work of its employees and of the high quality of recruitment and selection policies of Ford which is currently restructuring. “It’s going to take everyone in the extended Ford family – employees, suppliers and dealers – working together, over time, to make it work.” (Ford Motor Company. 2009a). So, to better illustrate the issue chosen for the analysis, the following Fish Bone Diagram (Diagram 1) can be used:

Fish Bone Diagram
Diagram 1.

Recruitment and Selection

Thus, having considered all the aspects of the company’s performance, and all the factors influencing them, it is necessary to discuss the three basic points of Ford Motor Company HRM. These points include recruitment and selection, training and development, and appraisal policies. They are given in this order as far as the development of any employee in the company is carried out in this sequence. “Employment starts at the interview, moves on to the respective training of the selected personnel and to singling out those who achieve the biggest progress in their positions.” (Noguez. 2002).

So, the first stage of this process is recruitment. It is a rather significant phenomenon, and Ford Motor Company pays much attention to its organization. “Recruitment at Ford is at the highest level compared to other market players like GM or Chrysler.” (Denton. 1992). There are 25 major recruitment agencies of Ford situated all around the country. This helps to reduce the pressure on recruiting managers who would otherwise have to interview thousands of people every day which could not bring any positive results. The recruitment process aims at finding the most qualified and professional workers for the company, and to achieve the best results considerable time is needed. Thus, to save time and effort of the recruiting managers, and to give better employment opportunities to applicants, Ford has developed a nation-wide network of recruiting centers.

The recruiting managers and peer recruiters have experience in the tasks they offer for applicants to take in order to identify their levels of skills and their conformity with the demands of the company. “Out recruiters are former employees who realize the demands of Ford and try to find people conforming to them.” (Ford Motor Company. 2008). However, the issue in the aspect of recruiting is that Ford is mainly interested in unskilled workers, which makes the employment opportunities for skilled workers unequal. The same can be said about the racial and sexual inequality as unskilled workers are mainly from ethnic minorities, which leads to the reverse discrimination; women, at the same time, are mainly skilled workers, and here discrimination is direct. These issues demands further investigation so that some ways could be found to solve them.

Training and Development

Another important aspect of the Human Resources Management at Ford Motor Company is training and development policy. The major aim of this policy lies in trying to prepare employees, especially newly recruited ones, to the team work and overall cooperation in their working places. “Training of the newcomers, especially international ones, is conducted through specific counseling meetings and practical exercises at the sites of production.” (Kujawa. 1986) As far as Ford understands that the quality of its products and the efficiency of the car assembling process depend much upon the skills and motivations of their workers, the company encourages ordinary employees to take part in decision making, goal establishing and general discussions of the employees’ needs and achievements. The two specific policies are claimed to be paramount for Ford – they are ‘participative management’ and ‘employee involvement’ strategies developed to “Change management philosophy. Lean management strategies.”(HRM. 2009b).

The former is aimed at training the managerial staff in establishing contacts, friendly communication and fruitful cooperation with the ordinary employees of their departments. This is important as far as HRM recognizes the development of the cooperative atmosphere in a company as one of its basic objectives. The second strategy mentioned is aimed at training employees and encouraging them to participate actively in the development of the company by sharing their ideas, contributing to goals establishing procedures and decision making meetings.

However, this aspect of Ford Human Resources Management has its drawbacks as far as the satisfaction of employees with the training initiatives and development perspectives used by Ford is a disputable point. According to this, further investigation should be carried out as for the levels of employee satisfaction with the HRM at Ford.

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Appraisal

Appraisal is thus an equally important aspect of HRM at Ford, as well as in any other ambitious company. Employees should know how their performance is assessed and either be encourages to develop their skills in the similar direction or be informed about the drawbacks in their work to make the respective improvements. “Ford Motor Company motivates its employees through financial benefits and emotional encouragement providing for career development in the future.” (Burke & Morton, 1990) The former is observed in attracting employees to the most important meetings of the managerial staff and to the decision making process. The latter, needless to say, can be observed in the profit-sharing initiatives of the company including the opportunities for employees to work for a certain amount of the extra-paid overtime hours every month, employee shares in the income rates of the company, etc.

Moreover, certain forms of appraisal and remuneration can be observed in the compensations that Ford Motor Company offers its employees in cases of the staff-cutting threat, health issues or accidents at the working place. As contrasted to its competitors, like Honda, Chrysler, etc., Ford provides the full health insurance to its employees. “This encompasses both treatment costs and the after-treatment facilities need for the faster recovery.” (Ceeman. 2009a). Also, the compensation that Ford pays to its employees in case of an accident amounts to $500, 000 including all the above specified compensation points and the possible court-ruled payments. However, it is a disputable question whether the Ford employees’ satisfaction with these appraisal and remuneration initiatives is at a high level. This is another question for the investigation that will be carried out in the next section of this research paper.

Investigation

Thus, having discussed some of the most important Ford Human Resources Management aspects, it is necessary to carry out the investigation of the problematic areas in each of the aspects discussed. Here are the details of the special questionnaire developed in order to gather credible evidence on the issues under consideration, i. e. discrimination in recruitment, employees’ satisfaction with Ford HRM policies and the efficiency of Ford Motor Company Performance as the reflection of HRM efficiency. The questionnaire consists of 12 questions to which twenty employees and five managers of one of the Ford plants in UK were asked to give their answers (the address of the plant and the names of employees and managers are not revealed to ensure the privacy policy of the research):

  1. What is your position in Ford Motor Company?
  2. Do you refer yourself to skilled or unskilled workers?
  3. Can you recall anything special about your recruitment process?
  4. Have you experienced any prejudiced attitudes during your recruitment based on the level of your skills or any other criteria?
  5. How can you characterize your attitude to your work?
  6. Are you satisfied with the working conditions you have at the moment?
  7. Is it possible, in your opinion, to develop your career in the company of your employment?
  8. Are you satisfied with the management – employee communication patterns in your company?
  9. Are employees involved in goal development and decision making in your company?
  10. What are the overall results of Ford performance in the market over the last two years?
  11. What is the Ford market position in comparison to its major competitors?
  12. In your opinion, what factors affected such a position of your company?

Analysis of Results

As far as the questionnaire used for the investigation is considered, it is possible to present and discuss the outcomes of the research. First of all, the issue to investigate was the possible discrimination of employees during the process of their recruitment. Surprisingly or not, no one of the 20 employee respondents and 5 manager respondents recalled such an experience from the processes of their recruitment. The only special things they could recollect were either specific tasks they were asked to carry out during the recruitment procedures or the positive emotional states they experienced after being employed by Ford Motor Company: “I am a car assembler at the Ford plant. When I applied for this position, I was impressed by the level of recruitment developed by Ford. The peer recruiters were rather friendly and the atmosphere of the interview did not seem pressing. It was rather a talk with the people understanding the matter we were talking about. No discrimination that I can recall.” (Employee-respondent 7) Also, to present a comprehensive picture of this area of the questions, the following bar chart (Chart 2) can be used:

Chart 2.

Position Skilled/Unskilled Special in Recruitment Discrimination Experienced
Employee (20) Skilled (10)/Unskilled (10) Positive (20) No (20)
Manager (5) Skilled (5) Positive (5) No (5)

However, the questions about the satisfaction of the employees and managers with their working conditions, career prospects, and communication with other levels of the company’s organizational structure brought substantially disagreeing results. Over the half of the employee-respondents assessed their attitude to work as satisfaction, while the rest of this group turned out to be dissatisfied with their work. The same is the picture with managerial staff, as from 5 respondents only 3 managers reported to be satisfied with their work. The following pie-chart (Charts 3, 4) will best demonstrate the share of employees and managers’ satisfaction (green – satisfied; red – unsatisfied):

Employees
Chart 3. Employees
Managers
Chart 4. Managers

Finally, the block of questions dedicated to the third issue, i. e. the position of Ford Motor Company in the market as the reflection of employee satisfaction and HRM efficiency, resulted in the following data. Employees questioned displayed little knowledge of the market position of their company, but responded that over the last two years the company has been losing its influence and sales decrease. The managers gave more complete answers, stating that “beginning from 2007 our market share is on decrease from 15.1% to 14.2% in 2008.” (Manager-Respondent 3) Drawing from the other data obtained by the questionnaire, General Motors as one of the major Ford competitors has its sales at the level of 22% of the market. Thus, the respondents reported the obvious issues in the company’s performance, but the factors they thought to cause them were the same – the cooperation of all the layers of the company’s organizational structure needs to be improved, and it is impossible to single out the only cause of the market share reduction of Ford.

Conclusions

To make the respective conclusion to this research paper, the Human Resources Management at Ford Motor Company is a vital sphere of its business activities. Throughout its long history, Ford has developed a proper system of HRM aimed at both improving the company’s performance and presenting its employees with acceptable working conditions and career prospects. From the early 20th century till today, the company under consideration has been developing its employee-friendly policies and obtains respective results – Ford Motor Company is claimed to be the family for its workers.

However, the efficiency of the HRM policies implemented has its disputable sides. Such areas of HRM as recruitment and selection, training and development and appraisal pose certain questions as for their objectivity and effectiveness. In this research, we have managed to find out that the above mentioned areas are really problematic in Ford, at least the specific Ford plant in UK where the questioning of respondents took place. Both employees and managers are satisfied with the recruitment process at Ford, but their satisfaction decreases when their working conditions or career prospects are considered. Moreover, the recent reduction of Ford market share and of the overall company’s performance is associated by the respondents with, among other factors, the drawbacks of the HRM policies implemented. Accordingly, the following section presents the recommendations as for the steps to be taken to improve the situation.

Recommendations

First of all, to positively affect the levels of the employee satisfaction with working conditions, career prospects and the overall picture of working for Ford, it is necessary for the company to reconsider its remuneration and appraisal policies. It is evident that people search for work as a means of earning money to feed their families and satisfy their needs. Accordingly, if the employees of Ford will be better motivated in the financial aspect, their level of satisfaction with all the above considered points will be higher.

Moreover, the effective motivating practice may be the policy of the constant career development for any employee based on his or her experience in the company. Thus, after working for Ford for a certain period of time at a low position, an employee can be put into a higher one with the respective increase of wages. The balance between working days and days-off should also be reconsidered to enable the employees to plan their time. These steps will improve the satisfaction of workers with their working conditions. Also, they will make employees consider long-term careers in Ford Motor Company and develop the sound organizational culture in the company.

Appendix 1

  1. Bill Ford, Chairman, CogID 1231;
  2. Alan Mulally, President, CEO, and Director, CogID 1232;
  3. Derrick Kuzak, Group VP, Product Development, The Americas, CogID 8752;
  4. Moray Callum, Design director, Cars, CogID 22069;
  5. J. C. Mays, Group VP and Chief Creative Officer, CogID 22102;
  6. Jenny Ball, Senior Director of Human Resources, CogID 22187;
  7. Marcy Fisher, Director, Design Engineering, CogID 22077;
  8. Patrick Schiavone, Design director, Trucks, CogID 22112;
  9. Mark Fields, EVP; President, The Americas, CogID 8754;
  10. Ted Cannis, President, Ford South American Operations, CogID 22070;
  11. Dom Dimarco, Executive Director, Operations, Finances, and Strategies, South America, Mexico, and Canada, CogID 22075;
  12. William Osborne, President and CEO, Ford Motor Company of Canada, CogID 22107;
  13. Paul Mascarenas, VP, North American Vehicle Programs, CogID 22099;
  14. Lewis Booth, EVP, Ford of Europe and Premier Automotive Group; Chairman, Ford Europe, Jagaur, and Land Rover, CogID 8755;
  15. Joe Bakaj, VP, Product Development, Ford of Europe, CogID 22062;
  16. Birgit Behrendt, VP Purchasing, Ford of Europe, CogID 22065;
  17. Hans-Olov Olsson, SVP and Chief Marketing Officer; Chairman, Volvo Cars, CogID 22106;
  18. Fredrik Arp, VP; CEO, Volvo Car, CogID 22061;
  19. Joseph Greenwell, VP; Chairman and CEO, Jaguar and Land Rover, CogID 22085;
  20. Bibiana Boerio, Managing Director, Jaguar Cars, CogID 22066;
  21. Murat Yalman, Executive Director, Marketing Services; VP Product Marketing, Ford of Europe. CogID 22121;
  22. Stephen Odell, VP, Marketing, Sales, and Service, Ford of Europe, CogID 22105;
  23. Ian Slater, VP, Communications and Public Affairs, Ford of Europe, CogID 22115;
  24. Ingvar Sviggum, VP European Sales Operations, Ford of Europe, CogID 22117;
  25. Alain Batty, Director, European Sales Staffs, CogID 22064;
  26. Dave Schoch, VP Strategic Planning and CFO, Ford of Europe, CogID 22114;
  27. Bernhard Mattes, Chairman, Ford-Werke AG, CogID 22100;
  28. Werner Harbers, Director, Manufacturing, Ford of Europe, CogID 22087;
  29. James Tetreault, VP Manufacturing, Ford of Europe, CogID 22118;
  30. John Parker, Ford of Asia Pacific & Africa & Mazda, CogID 8756;
  31. Mei Wei Cheng, VP; President, Ford Motor (China) Ltd., CogID 22071;
  32. Jean Mayer, Executive Director, Asia-Pacific and Africa Purchasing and Global Systems, CogID 22101;(CogMap. 2009)

Reference List

Books

  1. Denton D. K. 1992, Recruitment, Retention, and Employee Relations: Field-Tested Strategies for the ’90s. Quorum Books: Westport, CT.
  2. Fine, C.H., St. Clair R., Lafrance, C.J. & Hillebrand, D. 1996, Meeting the challenge: US industry faces the 21st century. The US automobile manufacturing industry. Washington, DC: Office of Technology Policy, US Department of Commerce.
  3. Kujawa D. 1986, Japanese Multinationals in the United States: Case Studies. Praeger Publishers: London.
  4. Lencsis M. P. 1998, Workers Compensation: A Reference and Guide: Quorum Books: Westport, CT.
  5. Logue J., Yates J. & Greider W. 2001, The Real World of Employee Ownership. Cornell University Press: Ithaca, NY.
  6. Noguez I. S. 2002, Ford and the Global Strategies of Multinationals: The North American Auto Industry: Routledge: London.
  7. Schuler S. R. & Jackson E. S. 2003, Managing Human Resources in Cross- Border Alliances: Routledge: London.
  8. Womack, J.P. 1991, ‘A positive sum solution: free trade in the North American motor vehicle sector’ in Strategic Sectors in Mexican – US Free Trade, ed. M.D. Baer and G.F. Erb, Washington, DC: Center for Strategic and International Studies, p. 31-65.

Journals

  1. Burke P. T. & Morton D. J. 1990, ‘How Firm Size and Industry Affect Employee Benefits’, Monthly Labor Review, vol. 113, no. 12, p. 35.
  2. Ford Motor Company. 2007, 2008, 2009, Annual Reports, Washington, DC: Securities and Exchange Commission.
  3. Meyer, S. 2002, ‘An Economic Frankenstein: UAW Workers’ Responses to Automation at the Ford Brook Park Plant in the 1950s’, Michigan Historical Review, vol. 28, no. 1, p. 63.
  4. McCarthy T. 2001, ‘Henry Ford, Industrial Ecologist or Industrial Conservationist? Waste Reduction and Recycling at the Rouge’, Michigan Historical Review, vol. 27, no. 2, p. 53.

Websites

  1. Ceeman, K. 2009a, ‘15th Proceedings’, HRM. Web.
  2. Cog Map. 2009, ‘Ford Motor Company’. Web.
  3. Ford Motor Company. 2009a, ‘Ford Motor Company announces restructuring actions’, HRM Guide. Web.
  4. HRM. 2009b, ‘Structured On-the-Job Training and Change Management: Learning, Reducing Cost, and Increasing Productivity’, Slide Share. Web.
  5. Prokopenko, J. 2000, ‘Globalization, alliances and networking: A strategy for competitiveness and productivity’, Enterprise and Management Development Working Paper – EMD/21/E. Web.

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