Human Resource Management

Human resource management is the strategic approach that explains the effective management of people in an organization. Explore the current trends in human resource management and their impact on organizations.

Running head: HUMAN RESOURCE MANAGEMENT
Human Resource Management
Name of the student
Name of the university
Author Note

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Human resource management is the strategic approach that explains the effective management of
people in an organization (Bratton & Gold, 2017). Human resource management is a discipline
that has seen major changes from in both its theory as well as its practice. To understand the
current trends in human resource management in this paper, “Fonterra” has been chosen for the
case study.
Fonterra is the multinational dairy company that has the largest share of export of the
New Zealand’s dairy products. It was founded in 2001, and presently it has more than 10,000
farmers working under it (Fonterra, 2018).
Response to question 1.1.a
Two current trends in human resource management are, use of Artificial intelligence (AI) in
human resource and flexible work arrangements.
Artificial intelligence (AI) in human resource can be used as an important tool due to its
certain advantages.AI in human resource management helps making decisions by analyzing the
data through algorithms. Machine learning and decision making helps to improve decision-
making quality. Flexible work arrangements on the other hand not only increases productivity, it
also develops the morale of the employees. Flexible work management is nothing but the flexible
time and work culture so that the employees have enough choice and options. It helps the
company to have more productivity when there are lesser work force available because flexible
work arrangement helps employees to perform function, which does not require any specific
skillsets.
Response to question 1.1.b

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There are certain advantages of using Artificial Intelligence. Firstly, it is that it is less
time consuming in nature. For example, drones can replace multiple tasks done by the farmers
on-foot. AI in human resource helps to find the right talent maximizes employee engagement,
research, solve problems, and most importantly help in automating the workflow (Albrecht et al.,
2015). On the other hand, a flexible work environment would mean that the employees have less
rigidity in diving works among them; productivity is high for the employees and the company.
Secondly, the importance of flexible work arrangements is greater work-life balance of the
employees and greater satisfaction of the employees with flexible time and work environment.
However, there are disadvantages of AI and flexible work arrangements, which are not to
be ignored. Firstly, AI is a very expensive installation. The software and hardware required for
the implementation are costly (Albrecht et al., 2015). Secondly, it might also lead to the loss of
jobs, unemployment and reduced job security. The disadvantage of flexible work arrangement is
less. However, the flexibility might hinder the productivity as it lacks specialized knowledge
about the matter. Secondly, flexible work management would require the company to have more
number of additional management processes to manage and monitor diverse activities.
Response to question 1.1.c
Fonterra has to develop flexible work arrangements for the farmers so that they could
adapt and adjust their works according to their needs. Flexible work management helps them to
divide the work among the other employees without fixed arrangements. It has to ensure that
there is flexible work arrangement because the farm is completely based on the farmers. It also
has the advantage of getting specialized knowledge about varieties of tasks. AI and automation
help to identify, analyze and arrange for the crops and reduce the usage of toxic herbicides
almost by 90 percent (Fonterra, 2018). AI and automation help to develop employees experience

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and reduce manual work in many ways. There are many organizations, which have already
developed these practices in their organizational structure, and these have been successful in
reaping positive outcomes.
Response to question 1.1.d
If these trends are implemented into any future business entity, it will have the benefit of
performance evaluation of the employees and it can easily transfer the task of skill development
and learning from manual to the machine (Strohmeier & Piazza, 2015). To implement AI in the
organization, it should start with collecting the data, making a hypothesis, testing that data and
finally putting the data into work. It can also install the “Talent Acquisition” software, which can
automatically scan, read and analyze the applicant by reducing the manual workload almost to
half. While if the trend of flexible work arrangement is implemented in the future business
entity, it will have greater productivity to the company because it does not restrict one particular
task fixed for one employee. To ensure flexibility in work, the company should relax its rigid
procedure of allocating specific task to specific people. It can also manage to have compressed
workweeks, which is a system of condensing one or more workweeks into fewer and longer
days.
Response to question 1.2.a
The issues of the human resource management in Fonterra are; the failure of the
protection of the interest of the dairy farmers. The company failed to maintain the interest of the
employee in giving them the assured returns for their production (The Standard, 2018). The
second issue associated with the working of Fonterra is major job cuts. The company slashed

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more than 750 jobs in the middle of the interest. Human resource management fails to protect the
interest of its employees (Stuff, 2018).
The reason behind the failure of the management of the employees was their poor
policies that could protect the company from the threat of inflation. It meant that the company
did not have sufficient mechanism to protect themselves from any kind of market-led threat.
Secondly, the company had to go for job cuts of so many employees due to the government
policies, which again signify that the company failed to adopt recruitment policies keeping in
mind the changes in the governmental policies. This reflect a poor management of the employees
of the organization, which requires a robust solution mechanism to develop and build a strong
human resource management system at the organization.
Response to question 1.2.b
The problems discussed above have to be dealt with care and a proper strategic plan has
to be adopted for dealing with this situation. The company should make a plan to ensure that the
employees are getting enough dividends and payoff for their efforts. The company should also
look after its profit margin at the domestic and the international market so that it does not suffer
from major loss. In case of the loss, it is the employees who are suffering; hence, their interest
has to be protected at any cost. Moreover, there has to be enough support to the employees in
terms of monetary insurance that when there are major job cuts, the employees can sustain on
their own for at least a shorter span of time. It should ensure better security to the employees and
timely return for their production dividend.
Response to question 2.1.a

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To enhance the sustainability end of Fonterra, two human resource management practices
are to be adopted (Armstrong et al., 2014). The first practice would be to ensure "employee
security." The second practice in this regard could be “selective hiring." It is found that the
company has a large number of employees, which are a hindrance to the effective working of the
company. In few situations, there is a need to limit the number of people being hired because the
company fails to maintain their interests. Secondly, employment security is an issue, which
cannot be compromised in any situations. Security assurance is the primary cause of job
satisfaction. Employees feel more satisfied when they have the assurance that their company will
protect their interest even in terms of adversities. However, if there are more chances of job loss,
employees would feel less committed to work.
Response to question 2.1.b
Employment security is the primary necessity of human resource management, which has
certain advantages. This not only helps the company to retain its employees, however it also
helps the company to build a harmonious relationship between the employees and the
company.The organization has to pay the price once the employees are laid off. It is argued that
the chances of frequent changes of jobs on the part of the employees is reduced largely once
employment security is ensured. (Nunoo et al., 2016).
While selective hiring has its advantages, the company can create value addition with a
lesser number of employees. If the number of people were restricted, only the skilled employees
would have a chance of being selected. This can contribute to greater productivity. Selective
hiring would also have the benefit of less job cut offs.it is found that number of job cuts take
place in companies where there is a large number of employees.

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Response to question 2.1.c
If Fonterra adopts these two human resource management practices, there would be
positive changes in its future functioning. For example, the company has more than 10,000
employees under its umbrella, which might be a hindrance to its working (Fonterra, 2018). The
interest of the employees is not being protected properly. This implies that if the number of
people who are hired is less, there are lesser chances of job cuts. If the company opts for
selective hiring, it would not only ensure better employment security for the farmers; it will also
help the company have specialized skills. However, the requirement for more employees has to
be met with higher job securities for them. More job security would create a higher level of job
satisfaction among employees that would contribute to higher productivity of the company.
Response to question 2.1.d
To ensure employee security and selective hiring, the company can adopt this plan. The
company should develop the habit of proper pay for the position and timely dividend for the
production. The company should ensure proper health benefits to the employees. This will have
two-way benefits. It will ensure trust among the employees about the company’s concern for
them. It will ensure that the employees feel that their interest are protected and they have a
secure job. Selective hiring could be ensured by offering few positions for employees. Selective
skill set are to be set as a criteria for recruitment so that any extra employment could be ignored.
Response to question 2.2
It is found that in the business environment, employees are skilled; however, their skill is not
utilized properly. There are two business strategies, which could be adopted to ensure proper
utilization of the skill of the employer. Firstly, tracking the current productivity is extremely

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important and making a proper plan is necessary. The company has to keep track of the monthly
and annual productivity of its employees and make adjustments in the planning process. Proper
management of mapping and tracking individual productivity of the employees will help to have
a detailed understanding of the skill underutilization. Planning based assessment will help the
company to focus on better utilization of skills of the employees.
Response to question 2.3
The survey that has been conducted shows that the company is going to have less
employees in the next year because of retirement of number of them. Moreover, employing new
candidates in indeed difficult in the competitive environment. In case of the Fonterra, had
already high employee attrition due to various factors. This can be divided into two factors. One
is internal, and one is external. The company took a drastic measure when it laid off 750
employees (Otago Daily Times Online News, 2018). To ensure employee retention of the
company, it can adopt the employee retention proposition (EVP). This EVP measure is an
integrated technique, which includes all benefits and rewards required for employee retention
(Jha & Jha, 2015). Firstly, the company can opt for salary and benefit method. The company has
to adopt benefit and incentives that are competitive. It has to ensure more benefits than other
dairy companies of New Zealand do so that it works as a motivational factor for the employees.
However, in case of the retirement issue, the old employees could be given extension for an extra
period. It can give extension on a contractual basis, which will help the company not only to
retain its earlier employees; it will reduce the burden of employing more employees. For the
new employee recruitment, the company has to use monetary benefits to them, which has to be
more than other dairy companies are. Money and incentives help create a positive mindset of

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people and greater commitment to work. It can adapt for future growth plans and development of
the employees for those who are retiring and those who are going to be employed. These
opportunity scopes of the employees would encourage them to work with a better commitment to
their work with a higher interest in jobs (refer to Appendix A). The reasons behind this plan are
to boost the morale of the employees. A future-oriented growth plan will help the employees to
enjoy their work. This will add a competitive edge to the company and help them retain the
employee for a longer period.
Response to question 3.1
There are certain challenges that the company faces in achieving its goals and organizational
objectives. The company faces setbacks if its productivity and earning mostly in exports. The
company faces major economic challenges in its profit margins while functioning in its domestic
and international markets. The dairy products have a volatile environment both in New Zealand
and in the global market (Otago Daily Times Online News, 2018).The company also failed to
protect the interest of its employees by protecting them from the domestic labor laws and
governmental changes. A large number of employees were laid off due to some structural
changes in the domestic laws of the country. The biggest problem of Fonterra within the context
of New Zealand is its domestic laws (NZ Herald, 2018). The company loses out profit due to the
existing laws that the government has. Hence, the economic environment and labor laws of the
country work as a hindrance to its growth and development. However, there is also cultural and
social change within the context of New Zealand’s dairy farmers. The number of sharemilker-
operated firms is reducing in number in case of Fonterra. People are opting for diverse jobs other
than dairy farming (Radio New Zealand, 2018). This cultural and social change is working as a
hindrance to the fulfillment of the organizational objectives. Regarding the external

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technological environment, robotics and automation have taken a central stage. Companies are
failing to achieve the organizational goals which are not able to adapt to the advanced
technology within their business functioning.
Response to question 3.2
For an organization to succeed, it is extremely important for the organization to comprehend the
needs of the employees and to regularly motivate them to work towards the goal and objectives
of the company. One of the most important strategies that are available for understanding and
motivating the employees is the organization should employ the strategy of training and
development (Cloutier et al., 2015). The employees of Fonterra are often demotivated by factors
such as irregular payment structure and the erratic dismissal of employees (Fonterra, 2018). The
organization must engage in constructive activities to analyze the needs and progress of the
concerned employees. Training the employees and considering their valuable feedbacks can help
in improving their skills and assist in understanding their needs. Training and development
activities organized by companies can motivate the employees to work for the benefit of the
company. This strategy can help the employees in realizing the vision and objectives of the
companies. Training and development activities organized by the companies can always act as a
motivational force because it paves the way for increased employee commitment towards the
greater goal of their parent company (Cloutier et al., 2015).
Another strategy that helps in understanding the needs and helps in adding to the
motivational factor of the employees is the cultivation of the factor of emotional intelligence
among the persons who play a major role in the functioning of the company. Recent studies have
projected the fact that managers possessing emotional intelligence can easily access and
comprehend the requirements of the employees under him (Njoroge & Yazdanifard,). These

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persons who possess and cultivate emotional intelligence can gauge the various factors that can
help in motivating the employees to work for the desired objectives of the parent company.
Higher emotional intelligence among the managers or authorities can ensure proper
channelization of feedbacks to the workers, which in turn, will assist them in improving their
performance by contributing towards the goals of the company (Njoroge & Yazdanifard). Social
and emotional intelligence of the managers and employees can help the company and the
employees in valuing and respecting each other’s opinion, thereby motivating the employees to
voice their opinion, and contribute towards the desired goal of the parent company. Combining
social and emotional intelligence can ensure higher contribution and proper functioning within
the team works. Further, this can also pave the way for the surge in confidence and motivation of
the employees who feel their greater participation in every activity.
Response to question 3.3
As discussed earlier, the factor of offering regular and proper feedback in the form of
appraisals can ensure a rigorous check on the performance of the employees and assist them in
improving their performance (Udurawana, 2014). The feedbacks should ensure a mix of positive
and negative attributes. It is necessary to provide regular and unbiased feedbacks to ensure
proper participation. In case of the less productivity of the company, it should have a prior plan
for dealing with situations like this. The employees should be informed beforehand in case of
any unforeseen situations like this. In case of the cultural change and farmers opting out other
profession, the company must ensure that there are enough payoffs and dividend for the
production. This might be a reason why the farmers face less commitment to work and opt for
other profession.

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Collating the social and emotional intelligence can ensure a proper evaluation of the
performance of the workers. By harboring emotional intelligence, managers can ensure that they
are in touch with every need and performance of the employees. This will help the employees to
stay motivated throughout the process. This is another method of understanding the psychology
and mindset of the employees towards their work, which can be used in ensuring a better
commitment to work and proper utilization of their skills. Lastly, in technological issues, if the
company installs the automation and robotics, many of the tasks could be done without the
manual labor and energy being drained. The will reduce the laborious task of the farmers and
employ the same on the other important issues.

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Appendix A
Figure 1: EVP model
Source: (Created by the author)
People
people's
engagement
Work
Innovation &
work life
balance
opportunity
Develoment
&career
opportunities
Organization
Customer
prestige &
diversity
Reward
Compensation
& benefits

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