The Australian Cladding Company: Strategic HRM

Introduction

This study is to review the requirements that human resource (HR) activities need to be put in place reasonably quickly and also the HR approaches need to be taken in the longer perspective. In an organization, HR is considered as the most important element, as an organization can function only through people. The success of an organization depends on the effective utilization and motivation of its HR.

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Presence of the employees at the work place is highly essential for the smooth running of the production process in particular and the organization in general. High attrition indicates the failure on the company’s ability to set effective HR priorities. Clients and business get affected and the company’s internal strengths and weaknesses get highlighted. New employees need to be constantly added; thereby the company has to incur further costs in training them, and has to get them aligned to the company culture, etc.

There are number of opportunities for a talented person. There are many organizations for these talent employees as talent increase the productivity of the organization. Retaining these employees is very difficult because their main intention will be career development and the monetary benefits so if they are not satisfied their current job which gives them more satisfaction organization. In the present scenario it becomes difficult for every organization to retain the employees as the employees are the heart and soul of every business. Every organization is competiting with each other to retain their employees and they attract and motivate the employees in different ways.

This study reaches to the conclusion that the basic cause of attrition in ACC is that the employees finds it difficult to cope up with the working conditions of the company in spite of many other factors as well. Recruiting the right employees is easy. Even if the employee is very loyal to the organization retain and motivating them is very difficult and they also feel unhappy and bored when they are not satisfied with their job. It is true that everyone is looking for better prospects and the present organization so they go on searching for a job when they feel happy and satisfied.

The Australian Cladding Company

The Australian Cladding Company (ACC) had its origin in Australia with its headquarters in Sydney. It was founded by Jim Hackett in the year 1998. The cladding product developed by the company showed a very good market in Australia. Its sales showed a great progress in a number of states around Australia and it was also attracted to international competitors as well. The cladding product was mainly used for building projects and it was also used for the purpose of building houses. First Home Owner Grant scheme was introduced by the Australian government during the mid 2000 in order to offset the effects of the Goods and Services Tax.

They were also involved in the installation of products. The construction work in Australia was found to have a positive flow which helped the Company to have a remarkable growth. The company employed only a few labor at the beginning but because of the increasing demand, the company went from a small operation to a larger operation.

Nearly 150 production staff and a further 25 staff are working in support roles such as logistics, engineering, personnel, sales and accounting & finance. The management team of ACC consists of following members:

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  • Jim Hackett, Managing Director,
  • Ben Harper, Engineering and design,
  • Reg Grundy, Marketing and sales
  • Arthur Seymour, Financial controller,
  • Ted Clark, Production manager, and
  • Jill Hackett (Jo’s wife) Personnel (wages & salary / personnel admin)

Problems

Efficiency problems with the production staff: because of efficiency problem, staffs were hanging around not doing anything and they seem to be under stress. Stress is that which affects a person’s physical and emotional condition. It is seen that in addition to physical and psychological distressing, the consequences of stress my affect the achievement of the goal of an individual. Prevention and management of stress is very important to improve the performance of employees. (Black 2002).

Company was having problem with staff retention. It is expensive and difficult to substitute suitable blood quickly when people leave the organization. High level of attrition leads to inefficiencies and loss of business opportunities. When people having specialized skills leave the organization, it causes potential damage. A highly skilled professional leaves the organization through the front door. Unwanted staff turnover result because attractive, alternative job opportunities are more readily available. In order to understand the reasons for attrition of employees, an organization should try to get answers for the following questions.

Why do people choose to leave organization?

Why does this matter?

What can be done to reduce its occurrence?

All unwanted turnover may affect both the employer and the employee. (Taylor 2002, p.7).

  • Unhealthy working conditions: Poor working conditions will irritate the workers. Accident in the work place has increased and some of the workers failed to take enough care around the machinery cause poor health of the workers.
  • Female workers faced the problem of sexual harassment. That is, they felt uncomfortable with the behaviour of some males in the workplace. “Sexual harassment is usually defined as repeated, unwanted and unreciprocated sexual contact, which can take the form of leering, ridicule, embarrassing remarks or jokes, unwelcome comments about dress or appearance, deliberate abuse, demands for sexual favours or physical assaults. In this study women experienced sexual harassment in various forms relating to comments on appearance and dress, and unsolicited sexual attention.” (Itzin & Newman 1995, p.5)
  • Lack of expansion in HR approaches. So most of the problems were connected with the accelerated growth of the company.
  • Lack of opportunities and challenges :Another problem was all the senior positions were taken up by the existing management group, and therefore, other employees could not see any career growth in the organization. In ACC it most of the employees is looking for their career. They look for job satisfaction and contentment in their work

Other problems are as follows:

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  • Regular flow of work in the factory/office is disturbed.
  • Orders cannot be executed in time as production schedule are upset or delayed.
  • Overall production of the company declines.
  • Pressure of work on other employees increases.
  • Repairs and maintenance cost increases due to frequent breakdown of machinery by inexperienced workers.
  • Incidence of industrial accidents increases.

Profitability from diversity

The solution for the customers and the performance of the people in the company has contributed for the development of diversity strategy within ACC. The key drivers include a managed approach to workforce diversity, and focus on aspects such as:

  • Employees: workforce diversity will help ACC position itself as an employer of choice, attracting the best people in the marketplace. The organization should have trust in the employees; this would help the employees to perceive the organization as a good place to work. They have to feel that they are valued as employees and have equal access to employment opportunities.
  • Culture: workforce diversity would help the company in transforming the culture of the company into value, development of skills and also enhancing the performance of the company. This would provide a significant basis from which the company can harness the commitment and energy of all employees.
  • Control: managing workforce diversity ensures that the company should comply with its legislative requirements and all managers and employees should be aware of the responsibility. Unless they are aware of their roles and responsibilities the company could not progress and there would be a tendency that the employees would leave the company.
  • Community: adopting a systematic approach would help the company to enhance the image of the company and would lead to the development of reputation in the community as a good corporate citizen. It should be ensured that the company acts with honesty and integrity as an employer.
  • Cost: The management should focus on implementing the diversity program that would help in reducing the turnover of the company. They should also focus on improving the morale of the employees and should enhance better productivity. All these would help ACC in significant employee effectiveness and cost saving to the company. (O’Neil Edited, Kramar & O’Neill 1998, p.209).

Retaining the best people is a key to success in the global market place. The organizations should look in for a good talent where they could develop the potential to grow their career. Superior human resource may constitute competitive advantage of the company. Having talented people in the organization would help the company to win over its rivals. A long term strategy has to be implemented for retention of the best employees, and the company should focus on moving forward and should stop moving backward. The focus should be on acquiring talented people and retaining talented people.

The company has to look in for people with attitude and not the people with skills. It is because skills can be trained but not the attitude. The chances of people leaving the company will be linked with their commitment towards the company. The company should focus on gaining the positive commitment from the employees. This would help in minimizing the retention level and would help in developing an emotional attachment with the organization as a whole.

The manager should have a good relation with the employees and should treat them with respect and dignity which would help in increasing the productivity of the company. Just filling the vacancies cannot contribute to the development of the company; they should search for right talents and should also retain them. The company has to ensure the development of energy and leadership among the employees rather than concentrating on management and administration.

It also has to be ensured that the employees are included in the decision making process and should be given the right to express their ideas, which sometimes would have good impact on the company’s profitability. There should a high quality of open communication between the manager and the employees. A high level of security has to be ensured. The income offered to the employees will have to be of reasonable standard. (Larkan 2007, p.24).

HR activities need to be put in place reasonably quickly

The outcomes that can be achieved in ACC are through two main channels. First is Equal Employment Opportunity (EEO) which should be integrated into the existing human resource management processes and systems. Second is to address areas of identified needs of the employee and business.

  • Policy: human resource policies and practices should be continued and reviewed to see that the policies are updated and communicated. The objectives of this should be to communicate the company’s commitment to a workplace based on the merit and to ensure that the staffs understand the variety of policies and programs available to them. All the employees should be made clear that sexual harassment is punishable and if any such activities occur they will be punished and will exit from the company.
  • Performance management: the integrity of the performance management system is to ensure that all the staffs are appraised fairly and equitably as this was a problem faced by most of the employees because all the senior positions were taken up by the existing management group and other employees could not see a career path for themselves in the organization. So the appraisal system should be based on the achievement made by the employees and the appraisal system should be based on their performance annually and their remuneration should be based on the performance rating. This would help the employees in ACC to see a career path for themselves which may be a good motivation thereby increasing productivity. It should be seen that the staff are not hanging around and not doing any job.
  • Training and development: training and development programs should be implemented in ACC to raise awareness. They should be taken into account whether all the employees are trained properly or not. Training and development will help the employees to know what the company requires now and in future so that they can plan their own self directed learning programmes. This was another problem faced by new women employees. So a springboard program should be implemented to assist women employees to prepare for management and supervisory positions by empowering them to take active control of their lives and career objectives. Cross training can also be implemented to see that the employees can handle the entire problem without any stress.
  • Recruitment and selection: ACC should develop a good recruitment and selection procedure as these deals with selecting right person in the right job. Selection techniques such as psychological testing are most likely to produce useful results. The selection policies and practices should be introduced to ensure equal employment opportunities within the company. All the vacant positions should be advertised and all staff should be allowed to have access to opportunities for promotion, at least one suitably qualified woman employee must be included on the shortlist for all the management positions.
  • Reward management: Another best practice that should be brought in ACC is the reward management they should see that all the employees are rewarded equally and fairly. The reward management and recognition systems should be used in ACC to have a direct impact on motivation.
  • Job atmosphere: ACC should create a good work atmosphere and also it should provide a rest room and also first aid facility for the employees as the number of workplace accidents is on the rise on the machine operators. (Armstrong 2006, p.165).
  • Recreation facilities: Recreational facilities will help employees to keep away from stress works. As we see that most of the employees in ACC face stress so they should develop various recreational programs that might decrease stress work. ACC should develop recreational programs such as taking employees for trips, programs etc…
  • Career Development Program: Every individual is worried about his/her career. ACC should implement a career development program as we see most of the employees are looking for better career.
  • Performance Based Bonus: Another important that should bring in ACC is the performance linked bonus, by appraising the employees they can recognise the hard work done by each employee in the organization.
  • Open Communication: ACC should develop a open communication culture that may enforces loyalty among employees. Open communication helps to inform all the employees about the issues and duties and also to keep the information up to date.

HR approaches need to be taken in the longer term to ensure ongoing strategic competitive advantage

  • Proper hiring: It is necessary that people within right skills and methods are selected. Every employee should be assigned work according to his capabilities, aptitude and interest. The new employees should be properly induced in the organization so as to develop right attitudes towards the company and job.
  • Good working conditions: Proper sanitation, drinking water, canteen and first aid can help in minimizing the level of attrition in an organization by making work environment pleasant.
  • Safety program: Adequate safety measures should be provided to minimize industrial accidents and reduce fear of injury among employees.
  • Incentives: Special bonus, cash prices and preference in promotion to regular employees encourage workers to be regular in organization.
  • Effective supervision: Supervision can considerably reduce attrition by earning confidence and commitment of workers. Managers should show sincere interest in workers and treat them as human beings.
  • Proper leave provision: Provision should be made wherein every worker can avail few days leave during the year.
  • Employee counselling: Guidance and counselling help employees to eliminate bad habits like drinking and gambling. Education and training can be used to develop a sense of responsibility and commitment.

Conclusion

Every employee is the heart and soul of every business and they are the mechanism that helps to run a business. Organizations increasingly compete with each other on the basis of effective people and management and development of tapping the ideas of workers and organizing their work in more effective ways. Organization should understand that employees are the biggest asset. Effective and efficient utilization of people will increase productivity of an organization.

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People are best motivated when their self interests are served. Employee retention involves taking measures to motivate and attract the employees to remain in the organization for the maximum period of time. Companies are facing a lot of problem in employee retention these days. Even if the employees are loyal towards the work the organization may need gives neither value nor give importance to the work they have done, this makes them bored and unhappy. It is true that everyone is looking for better prospects and the present organization so they go on searching for a job when they feel happy and satisfied.

In a competitive market environment, talented employees are valuable asset. These employees in turn, try to make the best of their career opportunities. Therefore, an organization that shows concern for the employees’ future by providing them the best opportunities can attract and retain talented people. As the number of people who seek challenging jobs, greater responsibility and better opportunities increases, career planning becomes all the more essential.

Moreover, employees seek jobs that are compatible with personal and family interests and commitments. Career development results in lower employee turnover by matching aspirations with organizations needs.

References

Armstrong, M 2006, A handbook of human resource management practice, Kogan Page Publisher. Web.

Black, S 2002, Correctional employee stress & strain, Questia. Web.

Itzin, C & Newman, J 1995, Gender, culture and organizational change: putting theory into practice, Routledge.

Larkan, k 2007, The talent war: how to find and retain the best people for your company, Marshall Cavendish. Web.

O’Neil Edited, G, Kramar, R & O’Neill, G L 1998, Australian human resources management: current issues in management practice, Allen & Unwin. Web.

Taylor, S 2002, The employee retention handbook: chartered institute of personnel and development, CIPD Publishing.

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