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Pirates Inc.
Human ResourceManagement
Pirates Inc.
Submitted to:
Mrs. Homayara Latifa AhmedAssistant Professor,
Institute of Business AdministrationUniversity of Dhaka
Submitted by:
Group 2Ahona Azad Choyti 59Ashhab Zaman Rafid 97Md. Saif Hassan 105Afsar Hossain Jamil 106Emranul Haque Shehab 111
Date of Submission: 22nd May 2012
1
Content
Items Page No
HRM Case: Pirates Inc. 03
Questions and Learning Objectives 05
Answer to Question No. 1 06
Answer to Question No. 2 08
Appendix A 10
Appendix B (References) 11
Appendix C 13
Pirates Inc.2
HRM Case: Pirates Inc.
Mr. Jack Sparrow has been an integral part of management at Pirates Inc. a themed
amusement park since its inception. His loyalty to the company is unquestionable, and his
contributions are many and well recorded. So, naturally when the company decided to
expand, the board of directors elected Mr. Sparrow to be the CEO of The Black Pearl© (5 star
hotel). The directors reasoned that market penetration should be handled by the most
experienced and loyal employee that they had.
Mr. Sparrow conducted his market research and decided to set up the hotel in Dhaka.
He bought a plot in Banani, constructed a 20-storied hotel with indoor swimming pool, gym,
24-hour restaurants, bars etc. Upon starting business, Mr. Sparrow was sure to employ a
professional Human Resource Manager with good credentials. After a recruitment process,
which he himself carried out, Mr. Sparrow employed Mr. Hector Barbossa as his Head of
Human Resource Management. He gave Mr. Barbossa full reign regarding his activities; he
only gave Mr. Barbossa one objective:
“It is important to me and our company that our employees are totally
satisfied with their working conditions. To our investors it is important that
The Black Pearl© makes a profit. So it is quintessential that our employees
are satisfied, productive and highly efficient. Keep them happy Hector” (Mr.
Jack Sparrow).
At the semi-annual management meeting Mr. Sparrow was shocked by the financial
figures that the company had generated in the 6 months of operation. His market research
showed that there would be a huge demand for such a hotel yet the profit margin was well
below what he expected, in fact it was lower than the worst-case scenario in his pro forma
sensitivity analysis. Mr. Sparrow knows for a fact that there is negligible loss of efficiency
regarding inputs whether it is raw materials, machineries or capital. He also knows that there
have been an adequate number of guests to the hotel to satisfy the profit margin
requirements. So, with his job and reputation at stake, Mr. Sparrow starts to investigate the
problem. His discoveries have led him to believe that the problem lies with the Human
Resources Department. He saw that the customers complained about room service and
general cleanliness and attitude of the staff. He also interviewed individual members himself
and he detected a general sense of discontent amongst the staff members. He immediately
confronted Mr. Barbossa, who appeared to be just as flabbergasted as he was. Mr. Barbossa
defended himself by saying:
“I went by the book, boss. I hired experienced people with good references
and an impressive resumé. I was careful to hire people who fitted the job
Pirates Inc.3
description and who gave a satisfactory interview and seemed to know
what was required of them. I have set up a traditional organogram of our
organization with a proper chain of command, and compensation and
benefit system based on said chain of command. The managers seem
satisfied and the staff knows what to do. I honestly don’t know what went
wrong.” (Mr. Hector Barbossa)
This placed Mr. Sparrow in a dilemma. He investigated further into the chain of
command and the general structure of the company. He found that the chain of command had
five tiers of managers ranging from floor manager all the way to Head of Housekeeping. Then
there were two more tiers between Head of Housekeeping and Head of Departments. These
heads of departments then directly reported to the General Manager and the CEO. These
managers were paid at the market rate, as per their post. The compensation and benefits and
promotion were handled by the heads of the department on a basis of experience and time
spent as a company employee. There seemed to be no obvious leak in the system, yet the
staff members were not performing and the company had a low profit margin.
So for the next term Mr. Sparrow asked Mr. Barbossa to come up with an action plan
that should boost the company performance in the long-run and make the company more
profitable. Mr. Sparrow went as far as stipulating that the company might be willing to incur
some losses for the time-being, if it meant that the company would perform better in the long-
run. Mr. Barbossa proposed that the following actions be taken for the benefit of the company.
He proposed to:
1. Increase the number of staff members per floor
Reason: Customers main complaint seemed to be about general cleanliness of the
staff. So if there were more staff members per floor this would enable each member
to spend more time and attention towards cleanliness.
2. Increase the number of Administration and Maintenance staff
Reason: This will mean that administration staff will be able to concentrate on a
smaller group of staff members this will make sure that staff members are always
performing at their level best. Henceforth this should increase customer satisfaction,
and thereby increase the company’s profit margin.
3. Increase the salary of all employees on a fixed line basis
Reason: This is basically a permanent bonus to the base line salary of all employees.
This should provide a greater incentive to work better and therefore ensure higher
performance from all employees throughout the company.
Pirates Inc.4
It is of vital importance that The Black Pearl© picks up its performance and increases its
profit margin before the annual general meeting, which is in 6 months’ time. Not only does it
have to perform better in the short-run, but also in the long run the company must become
profitable enough so that the investor’s continue to invest. Mr. Sparrow’s long-standing
reputation within this company hangs upon the success of The Black Pearl©.
*Note: Refer to Appendix A for source
Questions and Learning objectives
Question 1: Discuss Mr. Barbossa’s proposed HR action plan. Do you think it will benefit the company? Why or why not?
Learning objective 1.0: To understand the drawbacks of traditional HRM and how Strategic HRM makes a significant difference regarding company performance
Learning objective 1.1: To understand when Job Analysis and Job Evaluation is conducted and their purpose
Question 2: Mr. Sparrow is not convinced with Mr. Barbossa’s action plan. So he hired you as a HR consultant. What would you advise?
Learning Objective 2.0: Understand the implication of Job Analysis and Job Evaluation in an organization and the process of implementation of Job Analysis and Job Evaluation
Question 1: Discuss Mr. Barbossa’s proposed action plan. Do you think it will benefit the company? Why or why not?
Pirates Inc.5
In the context of the dissatisfactory performance of the company, when Mr. Barbossa was
asked to come up with some action plan he proposed the following solutions:
I. Increase the number of staff members per floor.
II. Increase the number of Administration and Maintenance staff.
III. Increase the salary of all employees on a fixed line basis.
Analyzing these proposed action plans, it can be seen that Mr. Barbossa made these
decisions on the basis of traditional human resource management strategy[2]. He thought that
if the numbers of staffs are increased per floor then more attention will be given to the
customers and an increased number of employees will be able to attend to customers by
giving each of them more time and focus. Secondly he thought to maintain and supervise
these increased number of employees by employing more administration and maintenance
staffs and henceforth there will be proper distribution of the workforce and also these new
administration and maintenance staff will be able to make sure that all the floor-staffs are
attending to the customers properly. In the third plan he thought that an increase in salary
would motivate the employees to self-driven work and better performance. And thus he only
concentrated mainly on the superficial traditional strategies[5].
But he could not go to the core of the problem, which is introduction of strategic human
resource management in the organization[2]. Here Strategic human resource management is
necessary because it focuses on human resource programs with long-term objectives. The
focus is on addressing and solving problems that affect people management programs in the
long run. In other words it can be said that strategic human resource management should be
introduced in the company to increase employee productivity by focusing on business
obstacles. Also strategic human resource management can be introduced for motivating the
employees[15]. But he could not identify the importance of strategic human resource
management and rather tried to bring changes on the basis of traditional human resource
management[2]. He just suggested increasing the number of staffs and salary of the
employees, which can only add to the attendance of the customers on time. But it will not
result in them improving their working performance in any way. Furthermore it is not evident
anywhere that the employees are not performing well and giving their cent percent due to the
lack of the salaries. So a raise in the salary will not necessarily increase employee dedication
and satisfaction, which leads to employee motivation. As a result whatever he proposed might
seem to be able to solve the problem for the time being, but in the long run it will not provide
any healthy solution. Hence it can be said that Mr. Barbossa’a proposed action plan would not
benefit the company.
In the whole case it can be seen that there is no sign of job analysis and job evaluation
done in the company[11]. In this century it is very important to conduct a job analysis for
successfully running a business. But Pirates Inc. is expecting to make high-levels of profit
without doing any kind of job analysis and job evaluation of the company. When the company
started to make losses, Mr. Barbossa was supposed to propose to conduct job analysis, but
he failed to consider its significance and identified few steps superficially which will not benefit
Pirates Inc.6
the company in any way. Other then identifying those steps if he had advised to the high
officials and Mr. Jack Sparrow the importance of job analysis in the company, his purpose
would have been served and the company would have been benefitted.
It is evident that the main problem in the case lies in the lacking of job analysis and job
evaluation[2]. The customers are not satisfied with the performance of the employees and of
the organization and they frequently complain about it. This is leading to loss of the company
and also customers and employee dissatisfaction[16]. In order to solve these problems, a
successful job analysis is needed to be done by the company, along with identifying and
explaining job description, job specification, etc[13]. By this formal process the content of the
job in terms of activities involved and attributes needed to perform the work and major job
requirements has to be identified[14]. It will also provide information to the organization about
how many employees are required for the job and which employees is best fit for the
organizations. Thus what Mr. Barbossa proposed in his first and second step will only be
successful after a proper job analysis is being conducted. Again one of the main purposes of
conducting job analysis is to prepare job description and job specification, which in turn helps
to hire the right quality of workforce into an organization. Thus when hiring more employees in
the organization for proper maintenance it is very important to keep in consideration the job
description and job specification of their respective jobs. Otherwise only the number of
employees will increase bringing no significant change in the quality of the performance. The
third step, which Mr. Barbossa proposed; to raise the salary of the employees, also has no
basis because in any successful organization it is very absurd to specify or raise salary
without determining and describing the job description. For positive results the company
should first go for describing the job of the employees and the range and level of duties that
they will perform and then decide on the salary scale[8]. Otherwise, without knowing the nature
and type of the job, an increase in salary would be inappropriate.
In conclusion, it can be said that whatever Mr. Barbossa had proposed can only be
implemented if he can recognize and understand the significant difference between traditional
human resource management and strategic human resource management[2]. He must
understand the significance of strategic human resource management to run a business
successfully on a daily basis and that it is the key to success to satisfy both the employees
and the customers. At the same time his plan will benefit the company if and only if a
successful job analysis and job evaluation is done in the company. So without any further
delay he should propose to Mr. Jack sparrow to introduce strategic human resource
management in the company and conduct a job analysis on a first priority basis. Otherwise
whatever Mr. Barbossa had proposed would not bring any significant advantage to the
company and the company will continue to do make losses.
Pirates Inc.7
Question 2: Mr. Sparrow is not convinced with Mr. Barbossa’s action plan. So he hired
you as a HR consultant. What would you advise the company?
Mr. Sparrow came to us with the projected profits of The Black Pearl© and its semi-
annual performance reports. He tasked us with the job of improving his HR department to
ensure that the company starts performing at its full potential and hopefully make profits. As a
HR consultancy firm, our first task was to analyze the company’s current situation so that we
could advise them accordingly. We found out that Mr. Barbossa, the company’s current Head
of Human Resources is running the firm as per traditional human resource management
systems[2]. However, this has resulted in a severe lack of employee motivation and general
confusion amongst staff, which has led to customer dissatisfaction. We believe that this is the
reason behind the poor performance of the company. We advise that before the company
takes any drastic steps, the organization must conduct a Job Analysis and a Job Evaluation [13]
[8]. Using data generated from Job Analysis methods, we should be able to construct a Job
Description and Job Specification, which should in-turn help us improve staff coordination and
work-standards which will then improve company performance[13]. Then we will conduct a Job
Evaluation, which will help us determine an internally equitable and externally competitive
compensation and benefits system, which will ensure that the employees are being rewarded
according to the amount and value of work that they do.
We advise that to start off with, the company should observe employees to
understand what each job is and what it requires. Observation should help construct a job
specification in terms of technical skill and competency required to perform the job
satisfactorily, i.e. just by observation an HR supervisor should be able to determine the level
of technical skill and competency needed to clean a room, wait-on customers at the hotel
restaurant or serve drinks at the hotel bar[2]. The observation process should also help the HR
department to come up with a job definition that clearly states the purpose of the job. On top
of this, observation will also be used to delineate jobs into tasks, so that the expectations from
employees are clear to the employee themselves. So according to us the first and most
important task of the HR department is to come up with a job specification, job definition and
job delineation based on observation of jobs.
While conducting the observation processes, we will also carryout a small
questionnaire to the employees. This will enable the HR department to establish job identities
with respect to the jobs being performed, i.e. a simple questionnaire with no more than 5
questions asking each employee to identify their job title, job department, job function (in their
opinion) and job evaluator (the manager that the member reports to), should suffice. This will
allow the HR department to construct clear, concise job identities for each class of jobs. [2] The
observation processes will provide enough data for job specifications and coupled with the
questionnaire we should have data regarding job identification, job definition and job
delineation all of which will be combined to form the job description. For our initial stage of
Pirates Inc.8
investigation, we have only used generic methods of job specification and job description so
that we can provide quick-relief for the major areas of concern regarding HR.
For our second stage of investigation, we will use some specific methods to further
develop our job analysis. We will use McCormick’s Position Analysis Questionnaire (PAQ)
model to further develop our job specification, job delineation, job definition and job
identification[12]. The PAQ model includes approximately 195 items that determine necessary
information input, mental processes, work output, interpersonal relationships, job context and
other job characteristics[17]. This should help the HR department to identify and solve all
compatibility issues between employee characteristics and job characteristics.
Furthermore, we will also conduct a Task Inventory Analysis (TIA) to clearly identify
discrete tasks, this should provide us with a clear job delineation so that the employees know
exactly what and how much is expected from them[19]. On top of this, the TIA should help the
company maintain work standards, which should ensure continued customer satisfaction. TIA
will also provide us with inferences about KSA (Knowledge, Skills and Abilities) requirements
and the weighting of the required KSAs[14].
To conclude the second stage of our investigation, we will conduct a Functional Job
Analysis (FJA), developed by the United States Department of Labor[3]. By the time we have
finished the PAQ and TIA, the necessity of training should become clear to us. So we will
conduct the FJA to mainly focus on the training requirements of the employees [18]. This should
fulfill all the job analysis requirements of the organization.
After the job analysis has been conducted successfully, we will conduct a Job
Evaluation. The purpose of our job evaluation is for the company to become internally
equitable and externally competitive[2]. Since Mr. Barbossa has already set-up a
compensation structure, we opted to conduct the job analysis first so that issues regarding
customer satisfaction could be addressed immediately. The other reason for doing job
evaluation after job analysis is because we believe that the data generated from job analysis
will help the job evaluation is more comprehensive. For our job evaluation we will use the Hay
Method to account for knowledge, problem solving, accountability and working conditions[8].
The Hay method basically divides the job into input, process and output, which is then scored
as score A, B and C respectively: Score A judges depth, breadth and interpersonal skills,
Score B judges problem complexity and available guidelines/information and Score C judges
discretionary authority and real-time importance of job[2]. These scores are then amalgamated
into a total score, which then forms the basis of compensation and benefits along with
relevant data from job analysis. We believe that this will increase employee satisfaction and
employee motivation by making the company provide the proper amount of compensation,
where it is due. This is how the company will become internally equitable. This will also help
the organization be externally competitive by eliminating extra, unnecessary compensation
that adds no value to the company, its outputs or its performance.
This concludes our opening investigation of The Black Pearl© as its HR consultants.
After we have all the data from job analysis and job evaluation, we will be in a position to
advise the company regarding its future policies. At this initial stage we believe that we have
sufficient data to implement strategic HRM policies, which should make the company
profitable before its annual review by the board of directors from Pirates Inc.
Pirates Inc.9
Appendix A
Interview with Mr. Mahir Haroon(25% stakeholder of a new hotel to be constructed)
Q1. What Compensation system do you plan to apply? Why?
Q2. How do you plan to motivate the employees to self-driven work?
Q3. What will they do with wastage of perishables? Do you have a wastage management plan?
Q4. On what basis will the performance of employees be evaluated? What are your methods of performance appraisal and key performance indicators?
Q5. How do you plan to train them to handle emergency situations?
Q6. How will you increase production without increasing employee number/working hours, efficiency plans?
Q7. What measures do you plan to take for employee satisfaction?
Q8. What are your recruitment methods?
Q9. How do you plan to organize your human resources? No. Of managers or team leader (vs. employees)?
Q10. What kind of departmentalization do you plan to implement? Why?
Q11. What are your proposed employee benefits?
*Note: Refer to Appendix B-5
Pirates Inc.10
Appendix B
References:
1. “Contents of Position Analysis Questionnaire.” Human Resources. N.p., n.d. Web. 21 May
2012. <http://www.humanresources.hrvinet.com/ contents-of-position-analysis-
questionnaire/>.
2. Fisher, Cynthia D., Lyle F. Schoenfeldt, and James B. Shaw. Human Resource
Management. New Delhi: Biztantra, 2009. Print.
3. “Functional Job Analysis.” Human Resources. N.p., n.d. Web. 21 May 2012.
<http://www.humanresources.hrvinet.com/ functional-job-analysis-fja-model/>.
4. “Functional Job Analysis Questions.” Human Resources. N.p., n.d. Web. 21 May 2012.
<http://www.humanresources.hrvinet.com/ functional-job-analysis-questions/>.
5. Haroon, Mahir. Personal interview. 15 May 2012.
6. “Hay Evaluation Method.” Waterloo Human Resources. University of Waterloo, n.d. Web.
21 May 2012. <http://www.hr.uwaterloo.ca/ staff/ hay_evaluation.html>.
7. “Hay Guide Chart.” Wikipedia. N.p., n.d. Web. 21 May 2012. <http://en.wikipedia.org/ wiki/
Hay_Guide_Chart>.
8. Hay System of Job Evaluation. The Hay Group. N. pag. PDF file.
9. “Hay vs. Mercer Job Evaluation Methodology.” LinkedIn. N.p., n.d. Web. 21 May 2012.
<http://www.linkedin.com/ answers/ hiring-human-resources/ compensation-benefits/
HRH_CMP/ 117532-1618173>.
10. “HR Ogranizational Structure and Organization Chart.” HRM Advice. N.p., 2008. Web. 21
May 2012. <http://hrmadvice.com/ hrmadvice/ hr-organizational-structure.html>.
11. “HR Planning.” Explore HR Management. N.p., n.d. Web. 21 May 2012.
<http://www.explorehr.org/ category/ HR_Planning/ HR_Planning.html>.
12. Hurst, Carol L. Position Analysis Questionnaire. Arizona State University, 2008. PDF file.
13. “Job Analysis Method.” Human Resources. N.p., n.d. Web. 21 May 2012.
<http://www.humanresources.hrvinet.com/ 18-methods-of-job-analysis/>.
Pirates Inc.11
14. “Knowledge, Skills and Abilities.” Human Resources. N.p., n.d. Web. 21 May 2012.
<http://www.humanresources.hrvinet.com/ what-is-knowledge-skills-and-abilities-ksa-
model/>.
15. “Performance Appraisal.” Exploring HR Management. N.p., n.d. Web. 21 May 2012.
<http://www.explorehr.org/ category/ Performance_Appraisal/
Performance_Management.html>.
16. “Performance Appraisal Rating Factors.” Human Resources. The University of Arizona, 3
Feb. 1998. Web. 21 May 2012. <http://www.hr.arizona.edu/ 05_prf/ ratingfactors.php>.
17. “Position Analysis Questionnaire.” Human Resources. N.p., n.d. Web. 21 May 2012.
<http://www.humanresources.hrvinet.com/ position-analysis-questionnaire-paq-
model/>.
18. “Process of Functional Job Analysis.” Human Resources. N.p., n.d. Web. 21 May 2012.
<http://www.humanresources.hrvinet.com/ process-of-functional-job-analysis/>.
19. “Task Inventory.” Human Resources. N.p., n.d. Web. 21 May 2012.
<http://www.humanresources.hrvinet.com/ task-inventory-method/>.
Pirates Inc.12
Appendix C
Pirates Inc.13