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This essay investigates the literature available on human resource management and develops a human resource management plan for Schuster and Flywheel Plc. According to the literature used for this essay, large organizations, like Schuster and Flywheel Plc, are often faced with various management issues; large employee base is always the major contributor coupled with diseconomies of scale as the company approaches its optimum level of production. As observed in this organization, the issue of a large number of employees with low productivity strains the effective running of the organization. As the HR manager, my responsibility is to come up with a strategy that would enable the organization, to fully utilize the potential of the employees so as to maximize the production (Brews, & Tucci 2004).
The company structure has to be altered if the changes made have to be effective. The company employs a top down approach to management, whereby all decisions are made at the head office and relayed down the hierarchy to the operational level. This means that decision making is hugely centralized, and, therefore, time consuming and bureaucratic. Organizational structure can be said to be the way people and tasks in an organization are organized so as to meet a common goal efficiently. Delegation of duties along the hierarchy is the basis for the formation of a structure in a large company. Procedures, therefore, have to be clearly stipulated in assigning responsibilities for the functions to be carried out by each group, these are the issues that determine the structure of a given organization (Brews, &Tucci 2004).
The structure that best suits an organization is often determined by factors that include; the work done by the organization, the number of employees who are employed by the organization and thus its size, how dispersed its facilities are and how diversified the products of a company are. In changing the structure of Schuster and Flywheel Plc, the production work has to be divided into specific tasks that are called the division of labour. Related tasks are then grouped together, since they will require almost the same expertise and thus will result in departmentalization. This, thus, eliminates redundancy and, therefore, cuts on the cost of hiring employees. At this stage, the number of employees required, to effectively run the organization, are decided on and the number of people who are expected to be run by one person or the span of control in the company that is, the number of employees, who will be expected to report to a single manager. Decision making criteria also has to be decided upon, to clearly stipulate who is expected to make which decisions. The distribution of such authority thus has to be determined, and the channels, through which the messages are relayed, also have to be laid down (Morten, & Nohria 2004).
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The current structure of Schuster and Flywheel Plc is majorly the traditional bureaucratic structure, which often tends to increase specialization, as the company increases in size. Departmentalization is majorly reliant on functions. The span of control is particularly large at the headquarters, and this may lower the productivity of subdivisions. Decision making is majorly vested on the high ranking officials high up in the structure. The employees are rarely involved in decision making, and the final decision is often issued from the top management. The structure, though emphasizing on efficiency, invention, and innovativeness, is always limiting to the company since employees are often so narrowly specialized that they are not in a position to appreciate other functions that can be very important to the organization. In this case, the overall goals of the organization are often sacrificed for those of the particular department, which may lead to uncoordinated growth in the organization. Coordination across departments is, therefore, a daunting task especially when the organization starts to grow lager (Brews, &Tucci 2004).
The recommended measure to be taken by the company has both positive and negative aspects to both the company and employees, who are likely to be affected by the decisions. For instance, reducing the workforce by about 35% would have several positive and negative implications for the company and the retrenched employees. The reduction would mean reduced costs on the side of the company, so that the cost of the employee wages and salaries will be lower, since fewer employees would have to be paid. This would ease on funds and thus emphasis can be laid on other sectors of the economy. It has been observed that, wages and salaries consume a huge portion of revenue raised by the company; this is further worsened when there are very many employees who are employed, others even falling redundant as in the case of Schuster and Flywheel Plc. Fewer employees are easier to control due to smaller span of control, hence, there is easy coordination of activities, monitoring is also simplified; and hence, productivity will be higher in terms of volume and quality. This is, thus, very advantageous to the organization since the profit margins are likely to be higher (Morten, & Nohria 2004).
The layoffs should be done on the basis of those jobs that are not required any more by the company; the employees who are underperforming or those who violate the policies of the company should also be dismissed. If the company is to move forward smoothly, the process should be strategic, and goals to be achieved must have been set prior to its implementation. Enormous resources will be required thereafter, to manage the change that has taken place; the implementation of the strategy itself will cost the company. Downsizing may also have negative implications on the company, it also impacts on the employees who remain the management team and owners, and this can be physically or emotionally. Often, the staff that remains has lower confidence in the company, they gradually develop to become very risk averse for fear of retrenchment. Questions about the future of the company always cross their minds, they also see several limitations in the progression of their careers and most often miss reliable sources of information (Brews, &Tucci 2004).
The management of the company will also be affected in relation with the costs required for the restructuring operations, which are often substantial; trainings have to be done for the remaining employees to be conversant with their new positions and performing tasks involved. The decision may also be so tough on the management team, since some of them may be emotionally attached to some of the employees, and this can be stressful. After the downsizing, the company has to perform only those actions that will restore confidence in the employees who remain; they should be able to rebuild the trust damaged and attract everybody’s commitment to the overall mission of the company. These actions may include; keeping communication channels open, so that the management is open to questioning by the employees and is in a position to answer all the questions without holding any information back (Morten, & Nohria 2004).
The management should also be ready to accept the change around the company, and thus, be able to sort out all the problems that affect the employees, so that they can concentrate on their work. The company should also retain some of the activities as they used to be done in the past, such as the staff meetings, this would make them feel that not much have changed. Management should explain to the employees the motives of downsizing and the purpose it was meant to serve, for example, cutting on costs and reducing wastage so that employees can still have a company to work for. The mission and visions of the company also will have to be revisited and reinforced, and a good time should be spent on discussing, rallying, and training employees. In order to boost their morale once again, the management should aim to implement reward and recognition ideas, maintain a very positive and optimistic general outlook, and show them that managers still have a lot of confidence in them (Brews, &Tucci 2004).
The planned closure of West Midland plant, which has the highest number of employees and houses the headquarters of the company, will help in reducing the number of branches that have to be managed. Due to the rapid expansion of this company, management has proved to be a problem, and coordination of the many branches has always been an uphill task. If this branch is closed, the management will be able to better concentrate in efficient management of the other remaining branches. This will also cut on management costs, and the number of employees to be paid will reduce. However, this may also have negative implications on the company itself: there will be revenue loss since the revenue that was being obtained from the plant will not be realized, and hence, would also imply a cut in production. This may allow more competitors to infiltrate into the market to supply the deficit experienced in the market, and this could be detrimental to the company (Morten, & Nohria 2004).
There will also be massive loss of employment to employees, who are not absorbed by other plants. The company will also be forced to compensate the employees who have been laid off, which could be a lot of money. The closure would also lead to narrower diversification that would leave the company exposed to more risks in the market, and hence, may be disastrous.
Investments in new machinery will be very important when it comes to increasing productivity. New machinery that employs the latest technology in production will better suit the company, since it will uphold efficiency of the production lines. It will be more effective in production, will reduce wastage of raw material, and consume less power as compared to the older machinery, which might have been outdated and no longer efficient. Increased production realized with new machinery will bring higher profit margins, which can be used to diversify or expand later as the company grows. The investment will also mean that the company will be more capital intensive, as opposed to being labour intensive, as it is today. This will turn to be cheaper to the company in the long run, since only few employees will be required to run the machineries (Brews, &Tucci 2004).
This, thus, also suggests more layoffs, as the company tends towards capital intensiveness. In order to implement this, however, the company must be ready to have the necessary capital for the purchases, installation of new machinery, and training of the staff on how to operate it. This would also cost some huge sums of money, which the company should be ready to raise. Training of the employees can either be done by the company itself or professionals in the field, who are well conversant with the machines. They can be hired at the expense of the dismissal of unskilled staff members.
The HR system should also be restructured in such a way that, the managers at the smaller plants have to be experienced professionals, who are able to make the right decisions regarding their dockets. In the current system, the HRs have not been fully vetted and proved to be the best individuals to run the positions. If possible, the positions should be thoroughly scrutinized so that the employees selected are those who are very skilful and able to run the business effectively (Morten & Nohria, 2004).
If that is successful, the right decisions will be made with little directions from the top management, and hence, providing them with more time to concentrate on finding the most effective way for service delivery. The qualifications for the human resource position should also be revisited and standards should be raised so that the best employees are hired. With the decentralization of the company, the branches are perceived to work independently, and, therefore, those that are trusted with decision making have to be professionals who are highly qualified and experienced.
The demerit that comes with this proposal is the economic implication, since these professionals are likely to demand higher wages for them to offer their services. This may raise the total cost of production, and hence, higher prices of the products (Brews, &Tucci 2004).
Increase in the hours of work is a strategy that will see the company register high production levels which would ensure high profit margins. This will be particularly important, since the company has been on the downward trend for some time, and the step can help start the turn around. The company will also require increased supply of raw materials to help run its higher production level. The management should, therefore, be certain of the availability of these materials. The demerit of 24/7 operation is the cost implication, more employees have to be hired to work in shift, and this would mean higher wages. The machinery that the company has may also not be adequate enough to handle the increased production (Morten, & Nohria 2004).
The pay system should also be changed, so that it is based on appraisals. The number of hours one works should be precisely noted, and per hour payment should be computed. This would encourage hard work among employees, and hence, will be beneficial to the company. It would also change the tendency of employees to lazy around when not being monitored. The task accomplished principle of payment thus is the best way to ensure that employees give their full commitment to the task assigned (Morten, & Nohria 2004).
In conclusion, this HR Management plan will be sufficient to enable efficient and effective production for Schuster and Flywheel Plc. It will ensure increased profit margins and better production methods through employment of the latest technology. The employees will also have a better welfare and more commitment to the company.
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