KND Corporation is a clothing manufacturer set in Fall River, Massachusetts. The company was founded in 2011 by Kevin Smith, who had extensive experience in production after having spent most of his life working at a factory. Over the years, the company has grown from 20 to 400 employees, with Smith remaining the CEO. The company went public in 2016, and the Board of Directors currently includes five persons owning the most significant volume of shares.
The company’s slogan is “Where fashion meets quality,” and it reflects the values of the top management and KND’s fundamental values. However, the organization experiences issues in performance, motivation, and communication, which require a well-designed human resources management plan.
KND Corporation produces medium-priced clothing for girls and women under the brand name Bliss, and its products are currently sold online, as well as in four physical stores in Portland, Boston, Springfield, and Manchester and multi-brand stores across the United States. Although Smith intends to expand to other countries in the future, KND remains domestic at this time and focuses on opening more stores in the United States.
Therefore, the main competitors of KND are other domestic clothing brands, such as the All American Clothing Co., Flynn Skye, and Hackwith Design House. Along with other medium-sized clothing manufacturers, KND also faces competition from large and famous brands, such as Zara, H&M, and American Apparel. Since the clothing market is highly competitive, it is essential for KND Corporation to use an excellent human resources structure to foster sales growth.
Operations at the organization include six key activity areas: design, production, distribution, sales, marketing, and administration. The key goal of production and distribution departments is to prevent stockouts in stores and deliver products to online customers quickly. The sales department is tasked with finding new distribution partners and monitoring sales performance. The marketing department is concerned with the operation of the online store and marketing of the Bliss brand to potential partners and customers. The administration is involved with the overall performance of the company and includes the accounting function, management, the CEO, and the Board of Directors.
Projects at KND Corporation have a seasonal nature and require a collaborative effort of all departments to design, establish production, market, and distribute clothing for a new season. As with most other clothing brands, KND has two seasonal lines: fall/winter and spring/summer. Projects are accomplished in a linear manner, beginning with designers and ending with the delivery of new collections to distributors, stores, and individual customers. This makes operations somewhat easier but increases the time required to complete each project.
The organizational Structure of KND corporation is rather flat, with three to five levels of hierarchy in place between the top management and regular employees in most departments. Figure 1 details the company’s organizational structure and includes some of the key positions. A flat organizational structure has advantages and disadvantages, but it can be beneficial in KND’s case. According to a study by Närman, Johnson, and Gingnell (2014), it promotes employee autonomy and enables workers to fulfill their needs for self-actualization, thus leading to increased motivation.
Nevertheless, in the presence of organizational issues, a flat structure could have a negative impact on performance due to limited supervision (Närman et al., 2014). Thus, it is essential for KND Corporation to prepare and implement an effective human resources policy to yield the benefits of its flat structure.
Flat organizations can also experience communication issues if there are no reliable means of transferring information within the organization. In KND, communication occurs mainly through corporate e-mails and in person. This communication style has been in place since the company’s founding. While it is suitable for small companies to pass information in this way, in medium and large enterprises, it could lead to the loss of important information due to the volume of e-mails and the time-consuming nature of face-to-face communication.
Organizational culture is an important variable influencing the behavior and performance of its human resources. It is defined by the shared values and attitudes of a company and its employees in relation to seven key domains: innovation and risk-taking, attention to detail, outcome orientation, people orientation, team orientation, aggressiveness, and stability (Robbins & Judge, 2018). In KND corporation, the focus is placed on attention to detail, stability, and outcome orientation, whereas other domains lack emphasis. This creates issues in organizational culture due to impaired human resource management, innovation, and teamwork.
Tools such as goal-setting, corporate policies, and mission and vision statements can all help to redefine organizational culture. To foster a new culture across the workplace, however, it is essential to align human resource management activities with it. For example, the focus on innovation requires selecting and recruiting creative employees, whereas team orientation calls for training in teamwork, conflict resolution, and organizational relations.
In order to achieve success in the domestic retail market, which is the primary aim of KND Corporation at the moment, the organization needs to produce high-quality clothing at an affordable price while also providing excellent service to customers and building long-term relationships with distributors and partners. Based on the analysis of the organization, there are three key factors that prevent KND from achieving success.
First of all, employees throughout the organization have a low motivation to achieve performance goals, which affects their ability to complete tasks. For example, the four retail stores often experience stockouts, which means that the distribution and production department fail to address this issue and prevent it from occurring in the future. The sales department report a decrease in sales, which could be because of poor service in offline stores. As the turnover in KND corporation is low and most of its employees have been a part of the company for at least two years, these issues indicate poor motivation and require a targeted human resource management approach.
Secondly, the company has a weak organizational culture, which also impacts performance. To fulfill the company’s goals for domestic development, the organization should focus on innovation, team performance, and employee satisfaction. This would allow the company to create more appealing and fashionable clothing while also ensuring that teams and employees have a strong motivation to achieve performance objectives.
Thirdly, as seen in Figure 1, the company does not have a separate HR department, which is surprising given its size. Most of the HR functions are performed by CEO Kevin Smith or by departmental managers, which affects the quality of human resources management in KND Corporation. It is essential for the company to establish an HR department and recruit at least two specialists who will monitor workforce performance and create strategies for improving it. This would make a significant contribution to human resources management in KND, as departmental managers and the CEO usually lack the knowledge required to perform HR functions effectively.
Lastly, the communication style used in KND Corporation does not suit the company’s size and goals. A mixture of e-mail and in-person communication could cause messages to get lost and affect the work of employees. For example, a large number of e-mails could cause employees to become less attentive to them and miss important notifications, whereas face-to-face communication could distract people from work and lead them to forget some parts of the content.
Human Resources Management Plan
Recruitment and Selection
Recruitment and selection are a significant part of the company’s human resources strategy because they contribute to the production and maintenance of organizational culture. According to Robbins and Judge (2018), companies that want to foster a robust organizational culture should seek to hire applicants who possess similar values. Given that KND is advised to incorporate teamwork and innovation into its organizational culture, the company should select applicants who are creative and have extensive experience in teamwork.
The key vacancy that KND Corporation needs to fill at the moment is the HR specialist. Because the organization does not have current employees with work experience and education in this area, it would be useful to use external recruitment. This method allows to attract new talent into the organization and is suitable for newly designed positions (Sharma & Sharma, 2018). The best option would be for KND Corporation to advertise the vacancy on popular job search sites because it would draw more applicants without considerable investment (Sharma & Sharma, 2018).
In order to ensure that applicants fit the criteria and requirements, it is essential to create a realistic and detailed job description for HR specialist. According to the University of Pittsburgh (n.d.), a job description should be concise and include the most relevant information about the job, including duties and tasks involved and a description of the ideal candidate. The suggested description is as follows:
- Position title: HR Specialist.
- Position details: KND Corporation is looking for two HR Specialists to lead human resources management efforts.
- Job duties: HR Specialists will be responsible for creating and implementing human resources management strategies in the organization.
- Key tasks: The position includes performing the critical HR functions, including recruitment, selection, training, motivation, and communication. HR Specialists will also be tasked with conducting internal performance appraisals, as well as applying research and knowledge of human resources management to solve any HR-related issues.
- Expectations: The ideal candidate for this position should have higher education in the field of Management, Psychology, or Sociology, with at least three years of experience in human resources management. They should also demonstrate excellent teamwork and analytical skills and use a creative approach to problem-solving.
This job description would be useful in attracting candidates who fit the company’s needs because it indicates the required skills and experience. It also functions as an introduction into the position by listing the key tasks and setting goals. Since the description is concise and to-the-point, it is unlikely that KND will receive applications from candidates who do not satisfy the requirements, which will make the recruitment and selection process easier.
Asking the correct interview questions should help the management to identify candidates with strong teamwork skills and a creative approach to problem-solving. According to the information provided by Sharma and Sharma (2018), it is critical to ask about the applicant’s past experience in these areas and ask them to reflect on their strengths and weaknesses. Based on this information, the interview questions should be as follows:
- What is your experience in teamwork?
- Can you describe a situation when you were required to work as part of a team? How would you evaluate your performance and what are some of the areas that you could improve?
- Why do you think teamwork is a critical factor to organizational success?
- Do you consider yourself a creative person? Why or why not?
- Can you describe an instance where you were required to use your creativity to solve a particular problem?
- How do you think organizations can develop creativity and innovation in their employees?
Asking these questions will achieve three key goals that are vital to the selection process. First of all, it will show whether or not the candidate possesses the required experience and skills in creativity and teamwork. Secondly, it will help in assessing the candidate’s capacity for personal and professional development. Finally, it will encourage potential employees to apply their knowledge to practice and prove that their culture is compatible with the new organizational culture of KND.
Compensation and Benefits
When planning a compensation and benefits package for the organization, it is critical to take into account the employee value proposition (EVP). The primary purpose of an EVP is to attract and retain talents in an organization, thus leveraging performance outcomes and workforce quality. As noted by Goswami (2015), organizations providing excellent EVPs proved to have a higher level of employee commitment, job satisfaction, and motivation. These findings make EVP a vital tool for KND Corporation, which will allow the company to solve some of its HR issues.
An EVP varies from one company to another and focuses on a combination of the employer’s requirements and the employees’ needs. For instance, Goswami (2015) states that the most effective EVPs address pay and benefits, work-life balance, and growth and development. For KND, it would be beneficial to create a compensation and benefits package with these concepts in mind to promote positive HR outcomes and strengthen its corporate culture. Since store managers have a direct influence on the company’s financial performance, an example of an excellent compensation and benefits package will be based on this position.
The compensation for a store manager should comprise of base annual pay and bonuses. Ensuring that there are valuable bonuses based on sales performance will assist in motivating store managers to enhance sales in their retail points, leading to consistently high performance (Sharma & Sharma, 2018). Based on this idea, the base salary should be similar to the ones offered by other companies, whereas benefits should be somewhat higher. According to Salary.com, 50% of retail store managers in Boston, MA are paid 65,000 annually or less (“Retail store manager,” 2019).
Thus, setting an annual salary of $65,000 and with added quarterly and annual bonuses for performance would make KND a competitive employer and contribute to its EVP. Average total bonuses for the year for store managers in Boston, MA is about $5,000, which means that KND should offer more than that (“Retail store manager,” 2019). A quarterly bonus of $1,500 should be provided to managers whose store exceeds each month’s sales goal by 10% or more, and an annual bonus of $4000 should be offered to those whose stores have managed to increase sales results by 15% or more during the year. This would motivate store managers to improve the performance of their employees, leading to improved productivity.
The benefits package for the organization should seek to offer employees value beyond financial matters. Sharma & Sharma (2018) discuss that benefits should be aimed at improving the quality of an employee’s life. For KND Corporation, it would be useful to offer store managers comprehensive health insurance, including dental services, four weeks of paid vacation annually, paid sick leaves, and a pension scheme, such as a 401(k) retirement plan.
These benefits are valuable to employees as they encourage health promotion and work-life balance. Health insurance and paid time off are also among the benefits that proved to be associated with lower turnover intentions and increased job satisfaction (Ko & Hur, 2014). Additionally, store managers should receive a 15-20% discount on all of KND’s clothing lines, which would motivate brand loyalty.
Performance management is also essential to KND Corporation because it will help to enhance the productivity of employees and result in increased sales. Since strengthening organizational culture and improving motivation are the critical goals for KND, it is recommended that the company implements management by objectives (MBO) as a performance management and appraisal system. The methodology of MBO is to define company goals and translate them into employee goals to evaluate their performance and reward achievements (Aksoy & Bayazit, 2014). In this case, the company’s objectives are to increase sales volume, open new retail stores, and gain brand awareness to attract more customers.
These objectives can be translated into individual departments for the purpose of performance management. For example, the sales department should be evaluated based on the increase in sales volume, while production and distribution departments’ performance can be measured by the frequency of stockouts and the number of complaints regarding item quality. This performance appraisal and management system is useful because it aligns corporate goals with individual objectives, motivating employees to perform better and strengthening the organizational culture.
While selection and recruitment will aim to attract new employees with excellent creativity and teamwork, it is also critical to create a training program to foster these skills in existing employees. Based on research, the training program should include three key components. First of all, employees should receive two separate educational lectures on methods that enhance teamwork and creativity.
The lecture on creativity should discuss techniques such as brainstorming, the evolution of ideas, and the formation of connections, as these are all potent tools for generating innovative ideas and solutions (Ritter & Mostert, 2017). The lecture on teamwork should discuss the basics of conflict resolution and group processes to improve employee’s knowledge of the forces influencing cooperation (Robbins & Judge, 2018). These lectures will enhance employees’ awareness of the tools and techniques necessary for teamwork and creativity development.
The second part of the training problem should include employees working in groups to solve particular issues. Each team should be presented with two or three problems relevant to their department or the organization as a whole. Simulation-based training can help employees to apply their knowledge of creativity and teamwork techniques to practice (Brown, 2018). Moreover, it might assist workers in generating ideas that they can use to solve real problems in their department, thus facilitating intentional learning (Brown, 2018).
Lastly, employees will be asked to reflect on the training by identifying their strengths and weaknesses. Each employee will be asked to answer the following questions for themselves and one other group member:
- Do you believe that the training was effective in improving your/their creativity and teamwork? If not, how can it be developed in the future?
- What were the things that you/this person did well? Why do you think you/they succeeded?
- What were the things that you/this person failed to do? How do you think you/they can improve?
During this stage, employees will receive both objective and subjective feedback, which will allow them to gain a clear picture of their progress and areas that require improvement (Brown, 2018). The third stage will evaluate the success of the training program while also providing HR specialists with comments that can be taken into account while designing future training programs.
Leadership will play a critical part in the company’s future development, and thus it is essential to define the correct leadership style to be used. Given KND’s goals, the best approach would be to use transformational leadership. This leadership style is particularly useful for organizations undergoing changes in structure or culture because it creates shared vision and goals and motivates all employees to contribute to the progress (Robbins & Judge, 2018). As a result, transformational leadership enhances employee engagement, commitment, and motivation while also having a positive influence on the organizational climate and job satisfaction (Robbins & Judge, 2018).
To apply transformational leadership to practice, the management would need to define corporate mission, vision, and goals first, as these are the basics of KND’s strategy. Then, they need to communicate the expectations of each employee’s contribution, thus providing intellectual stimulation and inspiration (Robbins & Judge, 2018). High-performing employees should be praised, and high expectations with regard to their future performance should be communicated, thus creating a motivational cycle. Utilizing an individual approach to each employee would help to motivate them and prevent resistance to change (Robbins & Judge, 2018). Therefore, the company would also need to improve internal communications.
Communications are a pressing problem in KND because e-mail and face-to-face communication fail to fulfill the company’s needs, causing messages to be lost or disregarded. This is a common issue in organizational communication, which is linked to the overload of information and the inability of employees to filter messages (Robbins & Judge, 2018). A more innovational approach to internal communication would be to create a corporate portal.
The portal should include different pages for posts with varying levels of importance and urgency, thus enabling employees to prioritize messages and avoid missing notifications. It should also feature a tool for communicating with the management, thus encouraging open, two-way communication (Robbins & Judge, 2018). This would promote innovation and improve organizational climate by allowing employees to voice their ideas, concerns, and comments.
Overall, the three main issues that were identified in KND were poor organizational culture, the lack of an HR department, and impaired communication. These problems resulted in decreased motivation and performance, which could have a negative impact on the company’s future development. The proposed human resources management plan would assist KND Corporation in addressing all of these issues. On the one hand, it would encourage a flow of new talent into the organization, thus increasing the skill mix and innovation. On the other hand, it would strengthen the corporate culture and motivation through training and performance management, leading to improved productivity of current employees.
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Goswami, P. (2015). Employee value proposition: A tool for employment branding. International Journal of Scientific and Research Publications, 5(12), 263-264.
Ko, J., & Hur, S. (2014). The impacts of employee benefits, procedural justice, and managerial trustworthiness on work attitudes: Integrated understanding based on social exchange theory. Public Administration Review, 74(2), 176-187.
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