Effective Human Resource Management Strategies in Manufacturing

This report examines the critical role of human resource management (HRM) within the manufacturing sector, emphasizing the importance of employee retention in a competitive labor market. It highlights the significant costs associated with employee turnover and explores seven major factors contributing to employees leaving organizations, including low pay, lack of recognition, and poor management. The report delves into strategic HRM practices, such as work design, diversity management, training and development, and performance management, as key components to enhance productivity, employee satisfaction, and organizational success. It underscores the significance of creating a harmonious workplace environment, offering competitive salaries, and providing opportunities for career development. The report also discusses how effective HRM practices contribute to improved employee engagement, financial stability, and overall organizational goals in the manufacturing industry, where skilled labor is essential.

Running Head: MANAGING HUMAN RESOURCES
Managing Human Resources
May 29
2018
Manufacturing sector

MANAGING HUMAN RESOURCES 1
Heavyweight component of any organization is the workforce it is working with and
this makes employees the biggest asset of any organization working in manufacturing sector.
Production of good results for the business, meeting organization’s financial goals or
achieving its goals is not possible without employees (Francis, 2014). Today many
organizations of manufacturing sector recognize their employees’ importance while realizing
the business success of their organization. An organization making good profit may have the
strongest edge, in terms of funding, technology, market position, but importance of the
respective roles and responsibilities of their strong workforce cannot be underestimated or
neglected. Without the contribution of employees no organization can achieve its business
goals or objectives especially in manufacturing sector (Haslinda, 2009). Today unwanted
employee turnover is the most costly business issue companies are facing continuously in this
sector. Besides the loss of costly knowledge of employee when employees leave the
company, some extra efforts are required to re-organize company’s resources to meet the
desired goal. Leaving of employees may cause increased work pressure, agony to the
management; demotivation to the other employees, and sometimes in extreme cases
organization may also fail in achieving its goals or objectives. In order to get a new
replacement of the employee left the organization some extra efforts along with the
substantial cost and resources too (Richard & Johnson, 2001).
In manufacturing industry organizations hire new employees and trained them to work
with the advanced technology and improve their efficiency as well. After some time when
these new employees get complete knowledge of operating with new technology and dealing
with basic issues of manufacturing they seek for high payment, job satisfaction, efficiency
enhancement training, motivation, and financial stability. And seeking for all these
expectation they made a move and leave the company in order to join another one which is

MANAGING HUMAN RESOURCES 2
fulfilling all or some of their expectation. This is becoming the critical issue for organizations
working in manufacturing sector (Tangthong, Trimetsoontorn, & Rojniruntikul, 2014).
This increasing issue in the industry is making human resource management to worry
about the challenges of finding and retaining the employees in this tight labour market
situation. In local context the voluntary turnover of employees has risen to 32% in Australian
organizations. Many studies or researches have shown that there are many factors making
employees unhappy and resulting in leaving the company. There are seven major factors or
reasons for leaving the company by employees (Richard & Johnson, 2001). These reasons are
as, low payment, unsatisfactory jobs, limited career development opportunities, lack or
recognition, untrustworthy leadership, dysfunctional culture at work place, and poor
management. All these factors are closely related to the HRM practices therefore a better
understanding of the relation between HRM practices and employee retention will correct the
decision making of leaders to achieve organization goals. It is crucial for organization to
ensure that the resources of the organization are spent wisely and correctly to sustain a
harmonious and safe workplace. Such work place environment encourages employee to stay
employed in the same organization for a longer time period. In this way making such efforts
will contribute in leading the business for making good profit and also helps in providing
career development opportunities for the existing employees (Branham, 2012).
Employee retention in such situation refers to several practices and policies which
encourage the employees to stay employed in the organization for a longer time period. Many
studies conducted to understand the main reason of an employee’s leaving the organization
has reported that employees leave the organization out of frustration and dissatisfaction with
the job. This dissatisfaction is due to the continuous friction with their leaders or colleagues.
In some of the cases lack of career growth, low salary package, and lack of motivation leads
the employees to leave the company to look for a change (Cullinane, Bosak, Flood, &

MANAGING HUMAN RESOURCES 3
Demerouti, 2014). Therefore, management has to give its best to retain those employees who
are important for the organization. For being employed in the same organization people need
a feeling of their important contribution for the success of organization. This feeling
motivates them to stay loyal for their organization and results in making them employed in
the same organization for a longer time period. This feeling of contributing for the company
creates a new feeling of being a part of the organization. Competitive salaries, incentive
programmes, comprehensive benefits, and other similar initiatives need to be executed to
improve the retention of employees within the organization. Besides all these, financial
incentives and payment of the employees also enhance the satisfaction and commitment of
employees with the organization (Cullinane, Bosak, Flood, & Demerouti, 2014).
Such practices are an important part of human resource management practices. Human
resource management practices is defined as a complete set of different strategies and
policies implemented by the organization in order to ensure the efficient and effective
contribution of organization’s human resources to achieve the goals or objectives of the
organization. Human resource management practices are recognised as the main source of
revenue for the business, at organization level. This is considered because some human
resource management practices like, strategic HRM, analysis and design of work, managing
diversity and work-life balance, performance management, learning development and career
management, motivation, rewards and compensations are some of the practices considered as
the foundation strategies of an organization to get talented an skilled workforce (Francis,
2014). Such practices produce a workforce which significantly enhances the productivity and
creativity of the organization. Strategic human resource management practices to enhance the
important contribution of human resource management for the better performance of
organization in terms of productivity, employee turnover, and financial turnover or revenue.
As an integral of organization’s strategic processes, main focus of HRM is considering the

MANAGING HUMAN RESOURCES 4
HRM practices as an important source contributing to the increasing profitability opposing
the cost of productivity. The strategic approach of human resource management seeks to
provide competitive advantage to the organization proactively through the human resource
management practices. From the resource based view or SHRM, organizations resources and
humans ore then technical, physical and financial sources, can provide a competitive
advantage to the organization. Consequently, SHRM ensures that HRM should work to
enhance the competitive position of the organization by creating advance human skills,
knowledge, and experience which contribute to increase the economic value of organization
in the competitive market. Effectiveness of HRM is determined by the performance of HRM
practices in achieving such goals (Richard & Johnson, 2001). Technical HRM effectiveness
is determined by the performance of HRM practices but SHRM effectiveness contrasts
building complexities to the human resource through creativeness and innovations like,
flexible workforce, team based work designs, and empowerment of the employees through
different activities.
Analysis and design of the work is one of the major practices performed by the HRM in
manufacturing industry to recruit new employees. Employee retention is necessary to provide
a continuous supply of skilled and experience employees to the organization. This continuous
supply sometimes requires new recruitment and for this practice HRM must analyse the job
profile. Analysing the work is critical to understand the purpose of the recruitment. While
recruiting new employees it is necessary to know about the roles and responsibilities given to
the new recruits. For this HRM analyse the operation process of the work for which
organization requires new employee (Divyalakshmi, Baskar, & Rao, 2017). After a complete
understanding HRM design a proper plan to allocate the responsibilities to the new
employees to make an efficient and effective impact on the organization growth with the new

MANAGING HUMAN RESOURCES 5
recruitments. Designing of the work also requires planning to understand the need and
possible ways to make the best utilization of new recruitment to fulfil the needs.
In an organization employees come from different backgrounds, cultures, and
environment which may create a misbalance in between their personal life and workplace
behaviour. For such issues HRM must manage the diversity issues to maintain a harmonious
environment at work place to balance the personal as well as work life of employees. In order
to deal with such issues HRM provide some standards to be followed by each employee to
respect their colleagues and maintain the harmony of the work-place. Workplace environment
influences the efficiency and effectiveness of the employees therefore a favourable workplace
environment for each employee is beneficial in improving his or her efficiency (Harvey &
Allard, 2015). This efficiency enhancement off employees results in increasing the
productivity of organization resulting in higher growth rate of the business in the competitive
market.
In manufacturing industry the nature of manufacturing practices is inextricably
associated with the precision and use of advanced technology. This use of advanced
technology and need of precision demands for skilled and experienced employees to execute
the manufacturing process in a right and efficient way to increase the productivity and
lowering the cost of production to make a enough profit revenue for the organization. Getting
this much skilled and experience labour is quite difficult in the current scenario of tight
labour market (Hee & Jing, 2018). Therefore, human resource management manages to
organise training and development programmes regularly to provide essential training to the
employees. This training makes employees eligible to perform the desired manufacturing
activities. These programmes create a feeling of care of feeling to the employees from their
organization (Bridgstock, 2009). This feeling motivates employees to stay in the same
organization for a longer time period. Training and development has its own importance for

MANAGING HUMAN RESOURCES 6
HRM practices especially in manufacturing industry. This is because of the special
requirement of manufacturing industry for well-trained and skilled employees for the job.
These practices are among the formal activities performed by the HRM and main motive of
these practices id to help employees in acquiring the skills and experience desired to perform
the current as well as future jobs (Danish & Usman, 2010). In other words the practice of
providing training and development to the employees is designed to help them in improving
their positive contribution to the organization in terms of their individual’s performance.
These practices also defined as the process of providing a change in the attitude, skill,
knowledge and behaviour of employees for the betterment of their individual performance in
terms of efficiency and effectiveness (Fang & Gerhart, 2012).
This practice of training and development also assess the performance improvement of
employees. This assessment of performance improvement helps HRM in performance
management practice. In manufacturing industry the performance management requires to
perform the performance appraisal of the employees. Performance appraisal is the process
identifying the measures, evaluating, improving, encouraging and rewarding employees for
their improving performance (Gedikli, Watson, Semkina, & Voughn, 2017). This process of
performance management is undertaken by the organizations around the world to improve the
effectiveness and efficiency of their employees to increase the productivity of business. In
manufacturing industry this practice of performance management is more important than
other practices as the continuous enhancement in the work efficiency of employees is desired
to get a better business performance to sustain in the competitive market. This practice
evaluates the continuous improvement in the employee efficiency and also ensures the
motivation to do so (Gruman & Saks, 2011).
The performance management encourages employees by rewarding them for their
better performance. Along with these rewards most of the organizations are providing

MANAGING HUMAN RESOURCES 7
compensations to their employees working in manufacturing companies on the basis of their
improved performance. This practice of providing rewards and compensation to the
employees is good for their motivation for performance improvement as well as loyalty to the
organization (Peregrino de Brito & Barbosa de Oliveira, 2016). Rewards and compensations
provide financial strength to the employees this creates a feeling of financial satisfaction from
the job. Along with their financial satisfaction employees have a feeling of recognising their
contribution to the organization. This felling or getting recognised by the organization is an
influencing factor to stay employed in the same organization.in this way organization ensures
the retention of their skilled and experienced employees for a much longer time period. Since
performance appraisal or performance required for the management, evaluation of
performance effectiveness is much needed for the same. In this manner, to evaluate the
performance effectiveness five different factors influencing the performance effectiveness are
identified as, nature of the appraisal, implementation process, communication effectiveness
within the organization system, use of appraisal data, and perception of the individual
employee towards the system of organization for the appraisal practice. Such practices play
an important role in motivating employees which is much needed for the employee retention
(Shpak, 2018).
While practicing these activities organizations provide learning, development, and
career opportunities to the employees in order to practice employee retention. Learning and
development is practiced for the enhancement of employee’s performance while providing
career opportunities motivate employees to stay in the organization to get such opportunities.
Employees leaving the organization for a change and career growth will stay for a longer
time period to get such motivating opportunities (Shrivastava, 2016). Today in manufacturing
industry career opportunity is one of the critical issues responsible the dissatisfaction from
the job and in most of the cases employees leaves the company to get new career opportunity.

MANAGING HUMAN RESOURCES 8
Such motivations and practices of the HRM are needed to be performed regularly to
retain their best employees (Schermerhorn, et al., 2014). Performing such practices not only
retain their employees but also improve the productivity and business of the organization. In
this manner organizations manage their HRM practices to enhance their employee retention
issues. Researches also suggest that the above discussed practices of HRM are most critical
ones for employee retention practices by any organization (Siddique, 2004). Motivation,
compensation, training and development, providing career opportunities are best practices
HRM of an organization can perform to maximize the employee retention of the employees.
Manufacturing industry especially deals with the maximum employee turnover around the
world that makes it of more concern for the management to retain their existing skilled and
experienced employees (Shrivastava, 2016).
The above discussion is made to develop a better understanding of different HRM
practices performed by HRM of organization in manufacturing industry. This discussion
suggests that HRM must perform some essential practices in order to retain their employees
for a longer time period. Regarding different individual practices of HRM for employee
retention and their processes are described to understand the role and influence of these
practices in manufacturing industry. This discussion concludes that the significant influence
of HRM practices for employee retention is mainly associated with the employee’s
satisfaction for his/her different expectation. Therefore, organizations can control the high
employee turnover in Australia by performing above mentioned HRM practices. These
practices are different from the technical HRM practices. In Technical HRM practices only
basic practices are performed to recruit and manage the human resources available to the
organization. HR managers also need to know the key factors suitable for employee retention
and this discussion make it easy to understand such practices. The motivation of employees
and their job satisfaction has been promoted as the best solution for employee retention. In

MANAGING HUMAN RESOURCES 9
manufacturing industry most crucial problem of employee retention can easily be solved after
the complete understanding made by the discussion.

MANAGING HUMAN RESOURCES 10
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