Case Study Analysis: HRM Issues and Solutions (BUSN2038)

This case study analyzes a Human Resource Management (HRM) scenario, addressing various organizational challenges. It begins by identifying and illustrating five key HRM issues and problems within the organization, including high employee turnover, ineffective leadership, strained employee-employer relations, lack of training, and a flawed performance-remuneration system. A SWOT analysis is then performed, outlining strengths, weaknesses, opportunities, and threats. The analysis highlights the impact of organizational culture, leadership, and HR practices. The study further evaluates the effectiveness of proposed changes by the new CEO, such as a shift in organizational culture, a redesigned remuneration system, outsourcing non-core operations, and the recruitment of an HR consultant. Finally, the document offers recommendations for addressing the identified issues, emphasizing the need for a performance-based remuneration system, transformational leadership, employee retention strategies, and an employee feedback forum. The study provides specific examples and insights into improving HRM practices within the organization.

Human Resource Management
HUMAN RESOURCE
MANAGEMENT – 1000133
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Human Resource Management
Question 1  Describe and illustrate 5 main issues and HRM problems in Part A,
‘Historical context’.
Answer 1  The Organisation has been one of the top companies in Australia since its
foundations and has been able to successfully achieve a market share of 90%. Some recent
changes in the internal and external environment factors have created a lot of problems for
the company, which can be attributed to some of the issues and HRM problems that are
discussed below:
First of all, the company has been experiencing a loss of its talented employees as a result of
high labour turnover ratios. The company has lost those employees of late, which it could not
have afforded to lose. Furthermore, the company itself has been making a number of
employee positions redundant in order to remain profitable and effective. This has created a
deficit of talent and intellectual capital in the organisation, which is also resulting in
workforce shortage. The reduction of the workforce of the company from 5000 to less than
2000 has created a troublesome situation where the company is not being able to sustain its
productivity and efficiency (Aldatmaz, et al., 2018).
Secondly, leadership in the organisation is also not as effective as it should have been. The
leaders in the organisation are middle aged to older males who are enjoying lifetime
opportunities in the company while most of them don’t even have the experience of working
in the private sector. They have been following a transactional leadership style where
compliance is preferred more over participation. The leaders of the company have been
promoting a bureaucratic, risk-averse and the conservative environment in the workplace,
which leaves no scope for innovation or employee engagement and empowerment. As a
result, employee morale and motivation has been affected (Dartey-Baah, 2015).
Thirdly, the relationship between the employees and the employers have suffered a setback
over a period of time. Even though the management has tried its best to convince the
employees that they are the most valuable asset of the company, but their frequent
downsizing initiatives have made the employees feel that they are the most expendable
resource. As a result of the spoiled relations, the employee union has also started to create
problems for the organisation to run smoothly (Hannis Ansah, et al., 2018).
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Fourthly, as a part of the cost-cutting strategies, the company has been removing training and
development programs for the employees. The management has also been failing to offer
succession planning and career development opportunities to the employees. Both the factors
have been having a negative effect on the workforce and the employees have become more
likely to quit because of the absence of growth opportunities.
Lastly, there is a considerable lack of a relationship between performance and remuneration.
The company has been following a policy of ‘one size fits all’ when it comes to remuneration
as there are no criteria that have been used to identify performance-related pay for the
employees. Senior and middle-level managers of the company have been given the power to
decide their own salaries and also make use of salary sacrificing strategies whenever they feel
like (Cohen, 2017).
The issues discussed above are all related to the field of human resource management and
collectively, they have been having a negative impact on the workforce, which has created a
number of problems for the organisation.
Question 2  Perform a SWOT analysis on Parts A & B and identify, describe and
illustrate up to 5 strengths, 5 weaknesses, 5 opportunities and 5 weaknesses
Answer 2  A SWOT analysis of Part A & Part B is given below:
Strength:
Organisational commitment  managers at all levels are working very for long hours even
though they are not being given any recognition for it, which is a major strength for any
business organisation.
Political factors  Political support from the government is a definitive strength for the
growth of the business.
Diverse customer base and workforce  The company enjoys a diverse workforce and
customer base which can maximise its innovation, productivity and sales as well.
Well-educated lower-level middle managers  the company possesses talented managers
who have the capability to turn things around with their competency and ideas
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Readiness to change  as evident from the case study, a major part of the company’s
workforce has recognized the need for the organisation to change
Weakness:
Middle-aged to older males who have life-long employment  the company has offered
lifetime employment to some of the employees, which can limit their ability to perform and
work harder for the achievement of higher sets of needs.
Lack of staff  the workforce has been reduced from more than 5000 employees to 2000
employees, which might make it difficult for the company to function properly.
Employee training and development  the company is not implementing training and
development programs, which will make it difficult to increase the overall competency of the
company.
Trust and loyalty have largely gone  the employees have lost their trust in the management
and might show cynicism, which can be detrimental for the company.
The predominant culture is bureaucratic  the culture in the organisation is highly
bureaucratic that would not accept any kind of changes.
Opportunity:
A change in the leadership  a change in the leadership usually brings in a number of
additional changes, which can provide the company with a chance to develop itself.
Remuneration  a change in the remuneration system is most likely evident and would
enhance employee productivity and performance
Outsourcing  outsourcing of non-core functions will allow the company to lay greater
stress on its core-functions and become more efficient in the industry
Performance management  a performance management system will improve the workplace
environment and make it more competitive
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HR planning  the recruitment of a new HR consultant will allow the company to reinvent
its HR policies, which will be helpful in improving employee-employer relations.
Threats:
Downsizing  continuous downsizing will result in the shortage of workforce and make day-
to-day work difficult
Employee turnover  employee turnover will result in loss of resources, like talent, intellect,
etc. and will also spoil the image of the company as an employer
Employer-employee relations  the strained relations between employees and employers
would make it difficult for the company to carry out its operations and processes smoothly
and the company might also experience frequent strikes and conflicts in the workplace
ACCC decisions  ACCC has started implementing policies that are taking away the
competitive advantage of the company
Resistance to change  the bureaucratic culture in the workplace might make it difficult for
the management to workplace changes
Question 3  To what extent do you believe the changes introduced in Part B will
alleviate the issues and problems identified in the case? Explain your answer. 8 marks.
As part of your answer, describe and illustrate the strategy at the corporate (1 mark)
and business-unit level (1 mark) that Sally Yee refers to.
Answer 3  The former CEO of the company has been moved on and has been succeeded by
Sally Yee. In light of the recent events, Sally Yee has made it evident that the company is
required to undergo a major change in order to remain competitive. The changes introduced
by new the CEO will be helpful in alleviating the issues and problems identified above in the
following ways:
First of all, Sally Yee wants to target the organisational culture by shifting the focus of the
organisation to customer service and growth. She has also laid stress upon the creation of
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better leadership values in the company. At the corporate level, this change will help in
addressing the negative aspects of the organisational culture, such as bureaucracy, resistance
to change, risk-taking and more open in outlook. The creation of a better organisational
culture will help the company in starting an improvement process that would pave the way
for future improvement and development (Elsmore, 2017).
Secondly, the decision taken by Sally Yee to redesign the remuneration system will help in
establishing better employee-employer relations. The CEO is planning to implement a
remuneration system where the employees would have to earn a higher remuneration rather
than getting it as an entitlement. At the corporate level, the new remuneration system will
help in attracting and retaining a larger pool of talented and developed employees and at the
unit level, it will improve employee satisfaction level (Shields, et al., 2015).
Thirdly, the decision to outsource the non-core operations and lay a greater focus on core
operations will help the company in achieving higher productivity and efficiency.
Outsourcing the non-core operations will help the company in not just cutting down cost, but
also in improving the quality of non-core operations (Dinu, 2015). Further, it will free up
more resources for core operations and would allow the company to offer better services and
products to its customers.
Fourthly, the recruitment of an HR consultant to draft a People Plan for the next two years
will be of a great importance in dealing with the issues and problems discussed above. The
HR consultant will be able to identify the human resource problems being faced by the
company in a better way and design adequate strategies to deal with them. Ultimately, the
company will be able to develop better relations with its employees and establish a better
image in the market as an employer (Collings, et al., 2018).
Question 4  As a consultant to this Organisation, what changes and/or HR practices
would you introduce to address the issues and problems in the case? Illustrate your
answer with specific examples.
Answer 4  As a consultant to the organisation, the following changes and HR practices are
recommended to address problems and issues being faced in the field of human resource
management:
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First of all, the company needs a new remuneration system that would be related to the
performance levels of the individual. The connectivity of pay with performance will foster a
competitive environment in the workplace and will also help in keeping the staff motivated.
The new remuneration system will also provide the company with a change from its
traditional remuneration system which was mostly based upon one size fits all policy. By
making the remuneration system more competitive, the company will also be able to attract
and retain a larger pool of talented and developed employees (Kondo, et al., 2018).
Secondly, the culture of the workplace needs to undergo a major change that would put an
end to transactional leadership style and promote transformational and participative
leadership values. Transformational leadership will help the organisation in bringing about
the desired changes more easily in the workplace while a participative leadership value will
allow the leaders to be more open with their followers and value their opinion and inputs.
Ultimately, it would bring about an improvement in the communication system of the
organisation and the employees too would feel more comfortable while working under such
leaders (Iqbal, et al., 2015).
Thirdly, the management needs to start taking employee turnover rates more seriously and
implement adequate strategies to ensure retention of the employees. While remuneration can
be one strategy to increase employee retention, training and development of employees can
add up and have dramatic results. Training and development programs will be helpful in
developing employee competencies and skills, which would open up new career opportunities
for them (Hanaysha, 2016). They would be able to perform better in their job and would
show higher engagement and commitment levels. Further, succession planning in addition to
training and development programs will help the company in retaining its employees in the
long run and prevent loss of talent and resources (Deery & Jago, 2015).
Fourthly, the management needs to start an employee feedback forum to gather data related
to employee well-being issues. As the management is already having strained relations with
the employee union, it cannot afford to neglect employee wellbeing any further as it would
lead to workplace conflicts and would create barriers to the smooth operation of the
company. Employee feedback forums will provide the employees with a platform to share
their problems with senior level management and voice their opinions on how the workplace
conditions can be improved (Guest, 2017). This information can be used by the management
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to bring about improvements in the work conditions of the employees and ultimately
establish better employee-employer relations.
Fifthly, the organisation needs to give up on offering lifetime job opportunities to its
employees as they have become used to it and have developed an expectation that the
organisation owes them a living in exchange of the time that they have invested in the
company. The organisation needs to clarify the job term and make sure that the employees
are retired when they reach their retirement age. It should also be ensured that
underperforming employees, irrespective of the time that they have spent in the company,
also fall under the scanner for termination if they show no improvement.
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