Instructor’s Manual — Part 11 1

PART 1

Human Resources Management in Perspective:

Environment and Legal Issues

The HRM Function/Environment

1.CASE: THE NEW DIRECTOR OF HUMAN RESOURCES

I. OVERVIEW:

This case describes the creation of a human resource department in a young, rapidly growing company. The human resource director, Joyce Newcombe, faces a number of issues in developing and implementing human resource policies for the company's five plants. The major issues include: the role of human resource management in organizations, interface between human resource and line managers, integration of human resource policies with business goals and strategies, organization structure, and termination procedures. This case serves as an excellent pre-measure of the level of knowledge that the student brings to the course or as a post-test of the student's knowledge at the completion of the course.

II. OBJECTIVES:

  1. To introduce students to the various roles of human resource management in organizations.
  2. To illustrate potential areas of conflict between human resource and line managers.
  3. To demonstrate the linkage between human resource policies and programs and organizational goals and strategies.

III. DISCUSSION:

This case works well as a way of introducing students to the role of human resource management in organizations. The major issue facing Newcombe is how to assure consistency in the implementation of the company's human resource philosophy and policies throughout its plants. The problem will become compounded in the future as Mount Ridge expands geographically. To effectively analyze the case, the students should view both the short-term and long-term dimensions of the problem. In the short-term Newcombe must determine how to respond to the call from Johnson. The Johnson incident underscores the problem of getting line managers to embrace and implement top management's "human resource goals." It is clear from the president's statements that the company views employees as valuable assets critical to company goal attainment. Braxton's actions and handling of Johnson's request for pay increases and promotions indicates that perhaps the company's philosophy has not been effectively communicated to plant management. While it appears that Johnson is quite qualified and can perform the equipment operator's job, Braxton's behavior ultimately results in the company losing a good worker. Also it is not clear that Braxton made any efforts to talk with either corporate personnel or the manager of plant operations about Johnson's requests. Since the company was growing so rapidly, students argue that there may have been opportunities for Johnson at one of the new plants under construction.

Braxton may have indicated an incorrect reason on the termination report because he did not want to be blamed for the employee's resignation.

Newcombe has several alternatives to consider in handling the short-term issue. Some of the possible alternatives include: disciplining Braxton for "falsifying personnel records" if she can substantiate Johnson's allegations; offering Johnson a job as an equipment operator in one of the new plants under construction; or ask the manager of plant operations to meet with Braxton to reiterate how the company wants to manage its employees. For the long-term issues, the company must develop ways to assure that its human resource policies and programs are implemented effectively throughout its entire operations. In addition to involving line managers in training meetings and stressing the importance of fair and consistent implementation of the company's policies, there is also a need to restructure the company to better facilitate the relationship between the plant managers and human resources. The company should consider the addition of a human resource generalist at corporate headquarters to handle human resource needs at the current plant operations. This individual would have to work closely with both the vice president of corporate human resources and the manager of plant operations to assure that he/she has the requisite authority to be effective. The company's alternatives for restructuring are somewhat constrained by the small size of each plant. It may not be cost effective to have a human resource manager at each plant (each plant has 45 employees). Students should also discuss the implications of future growth plans on the structure of human resource operations at Mount Ridge.

IV. ANSWERS TO CASE QUESTIONS:

  1. Discuss the relationship between the corporate human resources structure and operations at the plant level. What impact, if any, did it have on the present situation?

As presently designed the organization structure of Mount Ridge may have contributed to the evident lack of communication between corporate human resources and plant management. The plant managers report directly to the manager of plant operations and even though Newcombe is at the vice president level, her position is not in the "direct chain of command". As currently structured it may be viewed more as a "staff" function reporting to the executive vice president. In order for the design to work, there would have to be strong communication flow between Newcombe and the manager of plant operations. Additionally, at the time of the incident, a great deal of Newcombe's time may have been consumed by managing the human resource needs at corporate headquarters resulting in a good deal of autonomy for the plant managers in handling human resource matters. Top management needs to clarify the role of human resources in the organization and train managers in implementing human resource policies in their plants. The company should consider restructuring the human resource operations. One proposal might be to create a new position to assist Newcombe in overseeing personnel operations at the plants. This individual would be in a position to make regular visits to each plant and update and train managers on the firm's policies and programs, etc. The final structure should allow human resources to fulfill its three basic roles in organizations: (1) offering advice and service to line managers (advisory role); (2) ensuring that human resource policies and practices are consistent and fair across the organization (control role); and (3) develop policies/programs to support organization objectives and strategies (policy formulation role).

  1. How should Joyce Newcombe have handled this situation?

Newcombe should have to assure Johnson that she would have his personnel records corrected and that she would meet with Braxton to review his case. If Johnson had a good record, she could have asked him to consider a position in another plant facility. She also needed to explain to Braxton the importance of maintaining accurate personnel records.

  1. What, if any, disciplinary action should have been taken against the plant’s superintendent?

Disciplinary action may have been "counterproductive." However, Newcombe should have investigated the allegations made by Johnson. If these allegations were true, then an oral warning might have been appropriate. In any case, Newcombe should have met with the manager of plant operations and all plant superintendents and supervisors to emphasize the need to follow human resource policies and to consult with corporate on any employee problems or issues related to the implementation of company human resource policies.

  1. If Johnson's allegations were true, what were the legal ramifications of Braxton's behavior?

The falsification of an employee's reasons for leaving a job may violate requirements under federal and state unemployment insurance regulations. Individuals may be disqualified from receiving unemployment insurance benefits if he/she left the last job voluntarily without good cause attributable to the employer. Perhaps this was Braxton's motive for indicating that "Johnson had left to take another job." The notice of termination form completed by Braxton even stresses the importance of factual information -- "the exact reasons for termination are extremely important."

  1. What human resource issues will Newcombe likely face as the company expands to the Northeast? How might this expansion affect the structure of the organization and its personnel department?

Newcombe will face several issues as the company expands. Present human resource policies and procedures will have to be evaluated to assess their appropriateness for a new region of the country. For example, different state laws and regulations may affect areas like salary administration and benefits differently. Additionally, the external environment of the northeast may be quite different from that of the southeast. Wage rates will have to be made competitive with region requirements and also the pressure from labor unions will be greater in the northeast. As the company expands in the northeast the structure of the human resource operations may have to change again to include a human resource generalist to handle the northeast regions.

2.CASE: THE HUMAN RESOURCE FUNCTION OF HARRISON BROTHERS CORPORATION

I. OVERVIEW:

This case consists of a description of the human resource function of a large department store. It centers on an interview with the human resource manager at its largest store, Westpark. The manager describes how the major human resource management functions are designed and implemented in the store. The case allows students to focus on the interface between business strategies and human resource strategy. The case is particularly useful in talking about the inherent problems of employee recruitment and retention in the retail industry. The case also allows students to discuss the changing role of human resources in organizations. This case provides an excellent format for discussing the changing role of human resources management in organizations. The case can be used as part of a final examination to test students' comprehensive knowledge of human resources management.

II. OBJECTIVES:

  1. The major objective of this case is to introduce students to the roles and functions of human resource departments.

III. DISCUSSION:

The major issue in the case revolves around McCain's view of her role and its appropriateness given Harrison's strategic goals. You should point out to students that McCain is only indicative of a general problem within the company. The company is definitely targeting the middle-class, fashion conscious customer and need sales staff to effectively service the type of customer it wants to attract. To carry out its strategy, Harrison will need selling professionals who can offer personalized customer service. McCain and other human resource managers are presently operating in a reactive mode spending most of their time on maintaining day-to-day human resource operations. For example, McCain has little time for innovation or for developing policies to move the human resource operation forward. She seems to be unaware of the interdependent relationships among the various human resource functions. Her answer to the recruitment problem seems to be to do more recruiting. She needs to examine how practices in salary, training, and performance evaluation may contribute to turnover. While we have no detailed job descriptions for the two human resource assistants, the ratio of human resource staff to number of employees seems to be adequate. What is needed is better delegation on the part of McCain to the staff in her department. From her comments in the case, she seems to be relying on a high-task oriented style. For example, she states, “...I like to observe their (employees) work habits regularly." She needs to delegate some of her duties (especially those relating to recruiting and staffing) to the human resource assistants. McCain is presently spending a good deal of her workweek on interviewing job applicants. The results of the survey presented in Exhibit 1.5 indicate significant differences in the perceptions of human resource managers compared to store managers about the role and responsibilities of human resources in the organization. HR managers are not aware of her role in meeting the needs of the business and managing change. It suggests they still hold a very traditional view of the role of human resource professionals in organizations. In addition, to prescribing changes in the overall role of human resources in the company, students should suggest specific changes needed in each of the major functional areas discussed in the case (see question number 5 below). See student answer to this case on page vii of this manual.

IV. ANSWERS TO CASE QUESTIONS:

  1. How does McCain view her role as human resource manager?

Based on her comments she seems to view her role as basically one of providing service to line managers. She spends a great deal of her time on recruiting and staffing and is too involved in administering discipline. Today with the growing awareness of the strategic importance of human resources to organizational outcomes, more and more human resource professionals realize the importance of developing and exploring innovative solutions to human resource problems and issues. McCain asserts that "there is a lot more we need to do here in human resources, but we are constrained by cost considerations and the realities of the retail industry." She seems to be unaware of how to overcome this situation. The comments by the line manager also indicate that perhaps the human resource department is over-involved in day-to-day operations (especially the discipline process).

  1. What is Harrison’s business strategy?

Harrison seems to have a two-pronged business strategy. Emphasis appears to be on a quality strategy and a cost efficiency strategy. Management is correct to view the quality of their sales associates and buyers as key to implementing their business strategy.

  1. What is the structure and staffing of HR?

Right now the company appears to have a very traditional, functional human resource structure. Much of the emphasis is on what could be labeled as transactional human resource activities. Very little attention is being paid to managing change or strategic human resource management. Another indicator of the traditional mode of human resources is the housing of payroll within the human resource department.

  1. Analyze the data in Exhibit 1.5. What are its implications?

The data reveal a gap in the perceptions of the role of human resources at Harrison Brothers. Store managers expect human resources to have knowledge of the business and to be an active player in managing change. The human resource managers gave th9s very low importance in how they viewed their responsibilities. This implies that human resources in the company are not providing store managers with what they need to run their stores and to meet the company’s strategic goals. The survey also explains McCain’s restricted understanding of her role in the company.

  1. Given the organization's size and strategic goals, evaluate the development of the human resource function at Harrison Brothers. What problems do you see? How could its major functions be improved?

Basically, all of the functions described seem to be carried out in a reactive fashion. It does not appear that Harrison has made any efforts to explore ways to better align its human resource policies/activities with its long-term goals.

Recruiting and Staffing: The human resource department is currently relying on newspaper ads and word-of-mouth as their major recruiting sources. Given the high turnover at Harrison and the perception of retail as an unattractive job site, efforts should be made to explore creative ways to attract the needed staff. Additionally, efforts should be made to evaluate the effectiveness of each source. McCain indicates that they rely solely upon the interview in making hiring decisions and place little weight on education and references. It is not clear whether or not Harrison's has completed a job analysis to determine the requisite skills, abilities, and knowledge needed for each position. The selection criteria used should depend on the results of the job analysis. She might also investigate the use of aptitude tests to predict an applicant's sales performance.

Training: The length of the training program is not clear from the description provided. However, one gets the impression that the training focuses on the technical aspects of being a salesperson (e. g. handling the cash register) with minimal attention on sales techniques and customer interaction. The training function focuses primarily on getting the employee ready to perform the present job. Harrison's needs to extend its view of training to include employee development. Training and development should be a proactive on-going effort to increase employee productivity and to advance career development. Research has indicated that offering career information and education to employees can contribute to job satisfaction and job performance. Several retail organizations have been working on ways to improve the attractiveness of sales positions. As Harrison's continues to grow, management might consider developing career paths for the sales staff. For example, the organization structure could be changed to include four levels of sales positions: sales assistant, sales associate, senior sales associate and sales consultant. This would help to attract employees who want a career in sales versus those who are seeking employment "while they are in-between jobs." These promotional lines could be tied into a sales development program with training that emphasizes interpersonal skills and fashion consciousness.