How Tecsia Lubricants Uses Strategic Human Resource Management To Prepare Its Internationalization Process
How Tecsia Lubricants uses Strategic Human Resource Management to prepare its Internationalization Process
The foundation of business firms or organizations is fundamentally rooted on an ultimate purpose to fulfill for the targeted markets, for the various components of the business, and the community at large. Accordingly, a business organization clearly defines and establishes its mission, conceptualizes the set of products or services to offer, and puts in place business procedures and policies to ensure that the products and services are linked to and received by the consumers. The entire process of purpose formulation, product development, and delivery mechanism entails the skills and knowledge of people – the company’s manpower. Human resources are the players and movers of a business firm. The humans in the business provide the ideas, expertise and skills towards the accomplishment of corporate objectives. Thus, it is critical for the company to have established systems of finding, maintaining and developing its workforce in order to survive in a turbulent environment. According to Sims (2002) the dramatic changes brought about by the twenty-first century to the business environment make it reasonably clear that effective and successful management of an organization's people or human resources is a key source of competitive advantage and can be the major determinant of long-term organizational performance (p.1).
2.0 THE COMPANY
Tecsia Lubricants Pte Ltd has been providing lubrication solutions to industrial market since 1975. With decades of corporate success establishment, Tecsia Lubricants has expanded their business globally through overseas intermediaries (See Appendix 1). However, Tecsia Lubricants has lesser control over the marketing mix variables of price and promotion in overseas market. Therefore, Tecsia Lubricants believes the importance of exercising control over distribution channel by establishing sales offices in the overseas.
Manpower is the main ingredient for Tecsia Lubricants global expansion strategy. The role of human resource department is to get the right ‘fit in order to align with the corporate strategy. However, the issues surfaced when the HR department realized that they do not have the standard procedures in recruitment as well as training and development in staffing process. The corporate current practices of recruitment are mostly are evaluated by the sales manager based on individual assumption.
The new employees need to be trained in their products but there are no systematic training procedures to educate them. Moreover, new staff readiness for overseas market are evaluated through their direct superior’s perception which might be inaccurate because of biasness. To top it all, the whole process of human strategy has been slowed down.
3.0 REVIEW OF RELATED LITERATURE
Strategic Human Resource Management (SHRM) (see Appendix 2) will be funnel down elaborating on staffing focusing on recruitment and selection because employee resourcing and selection may be one of the most critical elements of HRM practice in terms of contributing towards organization goals (Howes & Foley, 1993). Recruiting also involves searching for and obtaining qualified applicants for the organization to consider when filling job openings while selection is the process of obtaining and using information about job applications to determine who should be hired for long or short term positions (Jackson, Schuler & Werner, 2009). The next stage, selection, will cover the process of deciding between a group of one or more candidates who is most suitable for a particular role or organization profile. It extends from screening process up to deciding which successful candidates to make an offer of employment (Grimshaw, 2009).
Many employers perceived that having a well-defined recruitment process will enable them to employ the right candidates into organization. However, HRM activities are not only about selecting the right candidates but also involved getting the qualified interviewers. Fernández-Aráoz, Groysberg & Nohria (2009) stated that it is more important to choose the right assessors than to focus in the assessment technique as the worst interviewers may very well recommend a candidate who’s less qualified than one hired at random.
Training and development refers to the imparting of specific skills, abilities and knowledge to an employee. A formal definition of training & development is that it is any attempt to improve current or future employee performance by increasing an employee’s ability to perform through learning, usually by changing the employee’s attitude or increasing his or her skills and knowledge (Aswathappa, 2005). Garavan, Costine, and Heraty (1995), noted that training and development encompasses three main activities which are training, education, and development. Budhwar & Debrah, (2001) explained that training will be understood as any learning activity which is directed towards the acquisition of specific knowledge and skills for the purposes of an occupation or task. As for development, it will be seen as any learning activity which is directed towards needs rather than present needs, and which is concerned more with career growth than immediate performance. Thirdly, Education will be taken to mean any long-term learning activity aimed at preparing individuals for a variety of roles in society; as citizens, workers and members of family groups.
With each individual terms clearly defined, organizations can use the best approach to implement programs that support the organization objective. Thus, it will have a measurable impact on an organization performance regardless of the size or type of an industry or business.
However, the main shortfall for training and development of staff is the resources invested on the training and development programs. Some organizations such as SME might not have the time and financial to support the training and development process. Organization investment will be unsuccessful if the staff benefits from these programs resigned. Hence, retention programs have to be integrated into training and development programs.
Knowledge is viewed as a social creation emerging at the interface between people and information and especially within communities engaged in communication, knowledge creation, knowledge sharing and learning. From an operational perspective, Knowledge Management (KM) can be described as the systematic processes that an organization identifies, creates, captures, acquires, shares and leverages knowledge (Raub, & Sthapit 2001). KM efforts can help individuals and groups to share valuable organizational insights, to reduce redundant work, to avoid reinventing the wheel per se, to reduce training time for new employees, to retain intellectual capital as employees turnover in an organization, and to adapt to changing environments and markets Thompson & Walsham, 2004). By incorporating KM system into HRM, it must be understood that the HRM main function is to match the job profile with the skill set of the people to achieve the organization objectives. In conjunction with KM, it mainly focuses on maintaining the existing knowledge to create a competitive advantage by increasing organizational learning. KM also includes management of intellectual capital and intangible assets, while HRM is to manage the sources of these assets (Suresh, 2002).
In businesses that are venturing in International market, the issue of diversity and training and development should not be neglected. Actually, managing diversity is an organizational process by which human resources are identified, allocated, and expanded in ways that make them more efficient. Successful diversity initiatives allow an organization to improve its productivity. Another basic objective is to create self-renewing, self-correcting systems of employees who learn to organize themselves in various ways according to the nature of their tasks and their cultural conditioning. According to Henderson (1994), in order to be optimally effective, a diversity initiative must be (1) planned, (2) organization-wide, and (3) coordinated from the top through (4) planned activities and interventions.
When the workforce is successfully diversified, employers realize the optimum potentials of employees previously denied equal employment opportunities Leadership qualities related to cultural diversity are continually reassessed. Even so, the beliefs that managers and supervisors initially hold about diversity outcomes are greatly determined by their own cultural conditioning. Since a large number of interpersonal and intergroup problems are related in some way to job maladjustments, culturally successful organizations provide an environment conducive to identifying and utilizing different ways of doing things. For example, assertiveness, which characterizes traditional Anglo-American managers, is not the only way to accomplish organizational objectives. Many companies are utilizing diverse employee qualities that they believe can provide desirable job outcomes. Along with such redefinitions is a concurrent movement among employers to be more inclusive of cultural coping styles.
Diversity training programs are offered by a variety of consultants and trainers using a wide range of training media aimed at accomplishing a variety of objectives. Some diversity training goals include changing individual attitudes, eliminating subconscious stereotypes, increasing sensitivity to minority issues and diversity concerns, and informing on legal and policy issues A successful training and development course in diversity, therefore, has to (Henderson, 1994): (1) work with all employees who are affected by the changes; (2) create linkage with all employees who can influence the outcome of diversity initiatives; (3) establish specific, measurable goals; (4) change the quality of work group relationships from destructive intragroup competition toward collaboration and healthy intergroup competition by encouraging direct and open communication; and (5) build active feedback loops among all employees.
4.0 TECSIA LUBRICANTS’ DILEMMA AND SHRM’S ROLE
The current recession is recruitment bonanzas as unemployment rate hit all times high and candidates can be readily being employed. However, Tecsia Lubricants current human resource practices are on ad hoc and unstructured approach which leads to bad hiring. From the management dilemma, the question is formulated: How can Tecsia Lubricants enforces strategic human resource management which has the direct impact on corporate strategy – internationalization, in order to select the right candidates and increase their readiness to overseas market.
If Tecsia Lubricants continues their usual human resources practices, their internationalization strategy may be jeopardized. Time and money for recruitment and training will increase if they encounter bad hires or hiring the unsuitable staffs. Hence, corporate internationalization strategy may be put on hold if they have to repeat the recruitment process again.
Tecsia Lubricants is in the midst of a human resource management crisis. Basically, the company’s human resource issues fall under three categories: training and development, performance appraisal, and customer service. The first two problems are long-term in nature while the last is an immediate concern. Training and development, and performance appraisal are inherent components of the function of human resource management. According to Sims (2002), effective career development is integral to organizational human resource management functions and structures in order to establish a collaborative nature of all human resource management components (p. 221). In relation to this, Lawrence (2004) claimed that a performance appraisal program is relevant to professional development of staff mainly due to its functions of enhancing communication patterns, potently responding to performance issues, and improving employee morale.
Foremost, the Tecsia Lubricants’ situation requires the adoption of the so-called strategic human resource management approach. Strategic human resource management refers to the method of linking and aligning human resource management practices with organizational goals in order to foster an organizational culture that encourages flexibility, efficiency and creativity, and enhance business performance. It involves incorporating all the human resource functions of selection, training and rewarding employees in the formulation of business strategies (Chaturvedi 2005). Specifically, successful alignment and integration of human resource management with strategic planning can be done by involving the human resource management function in the company planning process, underscoring human resource activities that support organizational objectives, and building a solid human resource-management relationship (Strategic Human Resource Management: Aligning with the Mission 1999, p.1). The Tecsia Lubricants management has to understand that in order to tackle specific human resource management issues; the company has to be firm with and should constantly reinforce the mission. The present mission is to become a world leader in electronic learning programs to university students, a learning company, and to extend the market base. The mission is broad in context and taken literally, it would require continuous development of skills, knowledge and expertise within the company. After all, no company who aims to achieve a global presence operates with stagnant structures and minimally-skilled employees. Once Tecsia Lubricants has incorporated in its culture that its mission is a serious matter; the specific human resource problems can now be addressed.
The traditional psychology of employees towards employment is to obtain tangible rewards for their performance. However, the onset of modernization that calls for diversity of skills has altered this thinking. Today, employees bargain their performance for the extent of training and development that the company can provide to them which would permit them to maintain marketability. Therefore, the human resource management function which handles employee selection and training has to alter its mindset as well. Human resource management activities must now be designed to address the long-term interests of employees and their need for continuous professional growth (Sims 2002, p. 221). Tecsia Lubricants does not address this need. Presently, it does not provide immense chances for employees to realize their full potential. Training and development is focused on one department which limits the availability of skills to be learned by the staff. Thus, most of the employees opt to leave to find better employment despite an attractive remuneration package. The company has to alter its human resource mindset of focusing only on recruiting highly-trained employees while ignoring the necessity of internal professional development. It needs to supplement the effective compensation package with a strong framework for training and development in order to respond to the holistic needs of employees. One effective model identified today which supports strategic human resource management is a strategically aligned training and development model that aspires to foster preparedness and flexibility among the various levels of the organization. The model has four phases: Plan, Do, Check, and Act. The Plan phase as the first step involves the establishment of training and development as a strategic priority for the organization. This means the organization has to assess the components of its training and development program to identify those that support the business strategies, create policies that would elevate the training and development program into an organizational priority, and formulate plans as to how training and development can be transferred to job performance (Brown et. al. 1998, p. 20). For Tecsia Lubricants , this should be done through the collaboration of the Human Resource Director and other managers of the different divisions. There is a need to set a meeting for revisiting the corporate mission in order to extract the necessary elements that would define the training and development policies. Usually, the key element of organizational mission that helps define training and development policies revolve around statements on expected attitudes and behaviors that support learning (Brown et. al 1998, p. 20). The Tecsia Lubricants mission states that it aspires to become a learning company in the world. The management can build on this statement in formulating the training and development policies. The policies can include explicit statements of the significance of training and development for the employees, budget allocation, required number of hours or levels of participation in the program, and required level of training before or after promotion. Furthermore, transferring training and development into the job performance can be simply achieved through on-the-job training by incorporating learning into the daily performance of tasks (Brown et. al. 1998, p.20). The second phase is the “Do” phase. This requires the selection of specific training program contents from various alternatives. An organization has to pattern the content of its training programs with the company objectives, culture, values, and current and anticipated competency needs (Brown et. al. 1998, p.20). Tecsia Lubricant's immediate need is on leadership and management training. Organizations usually provide this training in short courses designed to render a realistic overview of managerial responsibility (Brown et. al. 1998, p.20). According to Clark (2005) leadership in organization helps employees to comprehend the company’s purpose and business strategy, assists them to understand how they can contribute to fulfillment of objectives, shares information and knowledge with employees, and predicts employee satisfaction and confidence in an organization. The effectiveness of leadership trainings in instilling strong leadership skills to Tecsia Lubricants ’s managers would prevent possible occurrences of a line manager criticizing an employee for a mistake because they would be oriented on the best ways to handle these things. The third phase, evaluation or “Check”, can be undertaken through several activities: measuring on-site reactions of participants to training and development, gauging learning through behavioral exercises during the training, observing employee performance after the training, interviewing supervisors, and examining the post-training performance appraisals. Finally, after the process of planning, executing and assessing the training and development program, the organization must be willing and ready to render modifications to the program based on the evaluation, and to start the process once more. Training and development is not a one-time deal. It should be continuous. Tecsia Lubricants should not stop at the four phases. There is a need for continuous (most effective is annual) review and update of training and development goals and processes in response to the changing strategic needs of the business units or organizational components (Brown et. al. 1998, p.20).
5.0 The Purpose of the Study
The purpose of this study is to assist the management:
1) To identify the best approach in the recruitment and selection process.
2) To recommend a structured training and development program guideline
3) To propose solutions that will get the right ‘fit’ that align with the cooperate strategy
These objectives mentioned above help the human resource management to address the purpose of investigation. From the above mentioned, the statement is translated into a theoretical framework identifying the independent and dependent variables.
6.0 Theoretical Framework
In the presented schematic diagram (see fig. 1.0), the independent variables of staffing, training and development will directly influence Tecsia Lubricants success in internationalization. The correct staffs that are hired need to fit into the company strategy and objectives. Beside, training and development are needed to upgrade both the new and current staffs’ skills in each department to face new challenges ahead. Therefore, these two independent variables will directly affect the dependent variable which will determine the company success in internalization.
As knowledge is view as the basic of competitive advantage that attribute to an organization ability to create values in today’s knowledge economy, Knowledge management system as moderating variable will enhance the success of internationalization by improving an organization's intellectual assets — both explicit [recorded] and tacit [personal know-how] — and positive business results (Barclay & Murray, 1997). This is done by streamlining information flows, transforming business processes and structures, and shifting organizational mindsets to proactively manage explicit and tacit knowledge (KMS, 2009).
Fig.1.0: Theoretical framework of Tecsia Lubricants Internationalization process success
The information on Tecsia Lubricants Pte Ltd is based on the case studies and archival search of company record from Internet. Empirical research on strategy theories, models and framework are obtained from textbooks, Internet, library, database search and some real world examples.
7.1 The 7 steps of hiring process
With the recession ebbing, it is the employers’ market in terms of employment. Tecsia Lubricant’s will use Figure 1.0 below to analyze its recruitment and selection process using a step by step approach (See Appendix 3).
Fig.2.0: Hiring Top Executives: A comprehensive End-to-End Process
Extract from: Harvard Business Review, May 2009
The 1st step, anticipate the need; Tecsia Lubricants objective of expanding global is carrying out with the current recovery and they had already conducted ongoing, proactive of future needs since last year. They had to continually evaluate the current pool of potential talent and develop periodic forecasts of the company’s talent needs. The 2nd step, specify the job; Tecsia Lubricants is looking for candidates to work in the sales office in its distributor’s countries. Job analysis should specifically define to hunt for the relevant skills and experience.
The 3rd step, develop the pool; they are looking for external candidates as the current manpower is unable to support the expansion. External candidates include of outsiders, inside-outsiders and outside insiders which might consist of people on the periphery of the company. They can also consider tapping the locals from each individual different country. Internet is a must-use tool in this techno-savvy era to hasten the search for the correct ‘fit’ globally. The 4th step, assess the candidates; they do not have the qualified interviewers to access candidates and this is an indicative problem mention by Fernández-Aráoz, Groysberg and Nohria (2009) in the literature review. Interviewers should be trained in the correct interviewing techniques and engaged in rigorous behavioral event interviews. The 5th step, close the deal; Tecsia Lubricants must ensure that the compensation must be fair and job must be describe realistically to the candidates. This step not only involved the HR but also the hiring manager to personally show active support for the candidate’s interest.
The 6th step, integrate newcomer; new hire should not be assumed to be “plug and play”. Seniors staffs or even managers can be mentors to the new staffs and make sure that can blend well in the company. Training and development for new staffs will be given in this 6th step (see figure 2.0). The last step, audit and review; if new staffs cannot perform within the probation period, they will be asked to leave the company. This will lead to question if the current process is effective and thus reviewing of recruiting practices must be done regularly. Tecsia Lubricants must also identify and reward the excellent interviewers accordingly as well as holding accountable on the assessors for the quality of their evaluations.
7.2 The training and development process
Upon integrating the newcomers into the company, training and development must be given to them on learning specific skills, abilities and knowledge to perform the job scope. Tecsia Lubricants will use the figure 2.0 as shown below to analyze the current issues face.
Fig.3.0: The training and development cycle
Extract from: http://www.tv-consultants.com/train.html
Tecsia Lubricants needs to identify its current and future development needs which is to support its sales locally and in overseas. The current method used in the company had proven successful for its current staffs locally. However, in order to reach its objective, the methods need to be tailored by conducting in-depth needs assessment. Its current local training program generally consists of product knowledge, customer relationship management and SAP software training for all staffs. For each individual post, there will be also a specialized training tailored to them specifically.
The company will also offered relevant outside professional courses for each individual staffs. Upon attending the course or seminars, knowledge is being brought back to the company to share among others. This outsourcing training program will be applicable for Tecsia Lubricants to train up its interviewers. Feedback will be taken from individuals to access the success of the activities and if it is successful it will be made into one of the company training program for future staffs.
7.3 Knowledge Management System Tools
Tecsia Lubricant’s Knowledge management system (KMS) can be analyzed through figure 3.0 below. The application of KMS will help to hasten Tecsia Lubricants internationalization process.
Fig.4.0: The Knowledge Management Assessment Tool (KMAT) (See Appendix 4)
Extract from: http://rphrm.curtin.edu.au/2001/issue1/taxonomy.html
Each of the five sections of the tool – leadership, culture, technology, measurement and knowledge processes – encompasses a set of knowledge management practices (Raub & Sthapit, 2001). In this scenario, Tecsia Lubricants emphasis on the technology section which practices focus on how internet is used for recruitment. This will allow not only locals but also others from overseas to apply for the job as well. Regards to training, materials are kept inside the company servers for training purpose as well as for referencing purpose.
The various methods mentioned above, are based on theoretical findings and the results may not be 100% effective. They are meant to serve as a guide for the human resource personnel to modify and adapt in real life situations. Beside, the lack of real field experience in the actual recruitment process may also hinder the results and time will be needed for the personnel to progress.
9.0 THE IMPLEMENTATION OF SHRM AT TECSIA LUBRICANTS
Managing the human element of the firm basically manifests one of the largest functions of the organization. Operations both external and internal of the company tend to inevitably constitute the human workforce of the organization. It is for this reason that the company has installed several tools and systems that have helped in improving the performance of the company. Based on the gathered information at Tecsia Lubricants there is some issue on whether the company should maintain its use of the personnel management approach or should it acquire a more human resource management perspective in doing things. In order to clearly establish the better system appropriate for the company, then a discussion on the general description along with the benefits and pitfalls of the two systems is in order.
Personnel management is basically the predecessor of the modern human resource management. Lane & Wolf (1990, 16) claimed that this method is the “key administrative process” for organizations. This is the method that builds, sustain, and preserve the organization as a whole. The process deals with basically recruitment and selection, rewards and incentives, and punishment and sanctions in the organization. However, this type of management approach tends to be rather more appropriate for specific types of organizations. Budhwar & Debrah (2001, 20) indicated that personnel management systems tend to display compatibility only to government organizations. They described the process as a mere “bureaucratic device” that organizations used to deal with their workers.
This is indicative of the basic premise of the personnel management approach. It shows that the process is only applicable to organizations with rather strict hierarchies and rules. It is for this reason that human resource management technique has spawned. A shift towards a more compatible system for private firms has required amendments from the traditional personnel management techniques.
The strategic human resource management (SHRM) on the other hand places stress on some other aspect of the organization. Though it similarly has manifested attributes similar to personnel management techniques, there is a basic quality that takes the SHRM process to another level. According to the work of Jackson & Schuler (1995, 237) SHRM has the system that “attracts, develops, motivates, and retains.” In looking at that definition, it provides a general presentation on what distinguishes SHRM to personnel management: motivation. The SHRM system provides emphasis on stress by placing it as a part of the major objectives and rationales of the system. In SHRM, motivation of the employees is sustained in a rather dynamic manner particularly with reference to both internal (technology, organizational structure, organizational size, life cycle stages, business strategy) and external elements (legal and political, unionization, labor market, industry characteristics, national culture) affecting the organization. (Jackson & Schuler, 1995, 237)
9.1 Recruitment and Selection
The acquisition of a competent workforce provides Tecsia Lubricants utmost advantage. The organization will be able to benefit from this by properly implementing their recruitment and selection process. The following is an outline of the important components of the recruitment and selection process.
9.1.1 Creation of a job description
In order to acquire the most fitting person in the labor market, Tecsia Lubricants must specify the particular needs of the job. Specifically, it needs to establish the “duties, responsibilities, working conditions, and activities” that are required to those who will be hired for the job. (Miller, Pedersen, & Whisenant, 2005; 911) This is collectively known as the position’s job description.
9.1.2 Set standards relevant to the job
Another means of narrowing down the number of qualified applicants would be the creation of standards. In some studies, they call these standards job specifications. These include the “minimal levels of education, professional certification, special knowledge and skills, and experience.” (Miller, Pedersen, & Whisenant, 2005, 911) Basically, the applicants need to satisfy these set of requirements such that they get the position they want.
9.1.3 Look for qualified applicants
It is in this category that Tecsia Lubricants calls out for its need of manpower. This is where the organization seeks to “attract the right people for the applicant pool.” (Backhuas, 2004, 115) Some call this recruitment advertising. In this sense the organization could use of visuals and other thought-provoking campaigns to provide meaning to the company’s employee needs. (Blackman, 2006, 367)
9.1.4 Appraise the applicants using the standards formulated
Fairness and objectivity of the selection recruitment and selection process has similarly been emphasized in certain studies. Moreover, keeping the process unbiased will essentially protect the company from any legal action on discrimination. (Borman, Hanson, Hedge, 1997, 299) This also means that questions asked during the interview proper should be appropriate and related to the work required by the job.
9.1.5 Establish a system of documentation for all the selected and rejected employees
Documentation is important to the human resource department given that they are in charge of the recruitment and selection process. (Howes and Foley, 1993, 53) Keeping a record on those accepted and rejected will essentially work in favor of the organization. For instance, when a rejected applicant calls for legal action against the company, the organization has written evidence on how the applicant was treated and why he/she was not employed. In a similar way, the files of those who have been rejected could be used as future reference material if the company needs another set of applicants for a similar position.
9.2 Disciplinary Procedures
The problem of absenteeism and tardiness often falls to one basic solution for the company, discharge or termination of employment (Freedman, 1994; 134). On the issue of employee discipline, consistency is the key. The presence of tardiness and employee stealing present a rather grim view of the culture of the company. The presence of these occurrences points to the need for change in the organization.
Redundancy is basically the dismissal of an employee due to economic reasons. The existing literature indicates that employers will employ the actions of redundancy based on economic reasons. The following outlines the course of action that the company could undertake upon.
9.3.1 Choose a Selection Pool
In order start the process of selection rolling, the company needs to specify the set of employees doing a specific kind of job that they intend to render as redundant. This means that it is at this period that the management should point out the job description of the employees that they want to remove from the organization. Display of fair play should be established to cover them from unfair dismissal charges. The company could also use a prearranged selection method if there is thus stated in their manual or handbook.
9.3.2 Create a Selection Criteria
Those who will be considered redundant should share the same kind of work or at least similar type of work in Tecsia Lubricants. They, must however, keep it with reference with the existing redundancy protection laws. As stated in Ministry of Manpower (2009), the employee could be held redundant by the company if the company itself decides to end the actual purpose of the business in which he/she is based on. In simple terms, the company must only provide reasonable justifications on why they have rendered employees redundant.
9.3.3 Alternative to redundancy
An alternative to redundancy would be lay-offs. In the instance where an employee is laid off by the company, Tecsia Lubricants provide pay for two instances as indicated in Ministry of Manpower (2009). One scenario presents that the employer must ensure that the employee works half of the entire number of prescribed working days within four consecutive weeks of his/her employment. Another scenario is that if he/she exceeds over a third of the entire accepted working days within the length of twenty six consecutive weeks. This means that he employer needs to compensate the laid-off employee apart from the severance pay indicated by the Employment Ordinance.
Apparently dismissal would be the only means available for the HR manager to deal with the cutbacks. In Singapore, Ministry of Manpower (2009) indicated that an employee is considered dismissed when he/she undergoes organizational imperatives such as lay-offs and if he/she is considered redundant. However, it must be impressed that the state requires the company to show transparency and provide an unbiased process in dealing with the redundancy process or with the laying-off of employees. Nevertheless, these laid-off employees or those rendered redundant by the company may still have recourse on court and other tribunals if they feel they are unfairly dismissed.
9.4 Diversity Management Training Strategy
For businesses that are venturing in International market like Tecsia, diversity problems with respect to training and development of employees should be considered to attain business success. In order to defeat workplace diversity problems, the assets as well as the correct strategies must be established for the organization’s growth and success.
- Teach the organization’s workforce as a whole. The organizational leaders should basically be the ones responsible for this suggestion. Workers must be oriented regarding the importance of giving respect to their colleagues that come from various races and ethnicities. Trainings and seminars on varied cultural outlines and programs must be included in the orientation process as well. Meetings and gatherings must be consistently done within the organization through the initiatives of the management in order to teach each worker regarding the potential setbacks of mishandling cultural workplace diversity. Also, these meetings will enable questions concerning cultural variances to be issued and met.
- Cultural Workplace Diversity Education. As the organization’s manpower transforms into becoming varied in cultures, inner dilemmas within the work setting can probably take place. In order to prevent this, workers must be taught together regarding the cultural diversity in the workplace. The correct behavior and traits must be implemented by the organizational leaders. Evaluation and the necessary punishment must be issued to workers that frequently disobey the policies concerning cultural workplace diversity, and this must be relayed properly and comprehensively to the workers as well (Sonnenschein, 1999).
- Foundation of Organizational Departments. An organizational department answers cultural workplace diversity issues which can be handled and provided solutions. The managers of this department must be fair and understanding all the time. Leaders and employees in this department must function in cooperation with the management for the handling of huge cultural workplace diversity issues.
- Correct Approach of the Organizational Leaders. The organizational leaders, same to the department must be well-versed and knowledgeable of the ongoing cultural workplace diversity issues in the company. They must be taught on how to manage cultural workplace diversity issues through seminars and meetings. Biased and unfair judgment must not be implemented within the organization in any manner. Proper punishments to violating organizational leaders must also be formulated.
- Improvement of cultural workplace diversity management. The management must be knowledgeable of culturally varied issues in the workplace as well. In controlling problems and misunderstandings, the supreme knowledge of the management leads to excellent and fair choices and policies.
- Implementation of various cultural workplace diversity management programs. Companies and organizations must implement various cultural workplace diversity management programs. The inclusion of different workers coming from various races and ethnicities in the management programs must be done. These will not only enhance cultural workplace diversity awareness and understanding among the workers, but more significantly, these programs will motivate cooperation and comprehension of other races and ethnicities.
Collection and analysis of data on diversity issues within the organization is essential. Such data collection would include traditional equal opportunity profile data, analysis of attitudes and perceptions of employees, and data which highlights the career expectations of different cultural groups. Jackson & Schuler (1998) note that recent evidence indicates an “ethnic drift” within organizations, with minorities disproportionately likely to end up in certain departments within the organization.
Research on diversity helps the organization to identify key problems and issues in the organization. Research data also helps the organization monitor the effectiveness of diversity programs and assess progress (Thayer, 2002).
Diversity management training should be highly evaluated by every company pretending to hire multicultural personnel and in such way compete globally since it is the approach and effective practice that will enable to increase group cohesiveness and mutual understanding among diverse workforce. Thus, one of the most effective ways to motivate management and employees towards the desired culture of diversity is to train them. Training provided by he company includes information not only about the jobs and skills but also about the issues related to racial, ethnic, gender and other workplace conflicts. Diversity training will help the managers of the company to learn value individual differences, cross-cultural understanding, and examining and confronting stereotypes. Trainers should reflect the learning principles i.e. Participation, Repetition, Relevance, Transference and feedback while designing a training program. Cross training will help the employees of the company to acquire the skills in the other departments and thus enhances their possibilities of further development in their career. Company can evaluate these training programs by conducting performance appraisals to check effectiveness of such programs. Training will provide the support and encouragement to the company’s staff to further develop their careers and increase their contribution to the organization through the enhancement of their skills and abilities.
The provision of training and education in managing and valuing diversity is an aspect of organizational diversity strategy. Awareness training and skill building training assist in this process. Awareness training focuses on creating an understanding of the importance and meaning of diversity. It is also meant to increase participants’ self awareness on diversity related issues such as stereotyping and cross-cultural insensitivity. Skill building training educates employees on specific cultural differences and how to respond to differences in the workplace. These two types of training are often combined.
In addition, if behavior is the outcome of most concern, legal awareness with a functional viewpoint may be the program most likely to yield positive results for the organization. By informing employees of the law and the consequences of breaking the law, the training may provide sufficient incentive for employees to engage in appropriate behaviors. Such training would not necessarily be enough to change employees’ attitudes about diversity. Diversity training programs that fully engage target individuals and promote open acknowledgment of multiple viewpoints are more likely to elicit a change in views and a positive response compared to those that do not (Nemetz & Christensen, 1996).
Training and development programs need to be integrated with the organization’s diversity management strategy. Diversity training should not be seen as a solution in itself (Cox, 1994).
Follow-up consists of monitoring change, evaluating the results and ultimately institutionalizing the changes as part of the organization's regular on-going processes. Like other management efforts, there is a need for accountability and control for work on diversity. Accountability for overseeing the change process might initially be assigned to a diversity task force, or if available, to a diversity manager. Ultimately, however, accountability for preserving the changes must be established with every manager.
At that great attention is paid to the measurement of results. “Therefore it is important to use a mixture of quantitative, qualitative, and process measures when tracking diversity progress” (Smith, n.d.). According to Harvard Business School Associate Professor David A. Thomas (n.d.), “Diversity teaching involves questioning our institutions and policies, our definitions of truth and equity, our self-image and our professional role” (cited in Smith, n.d.).
Training programs should support diversity recruitment efforts, and provide assistance for the establishment of a network and training and educational opportunities that cross organizational lines. In addition, they should also provide coaching and mentoring experiences and host forums to enhance information exchange and communication. Training courses also enhances awareness of diversity issues for all employees that aim to prevent gender-based and other forms of discrimination as well as harassment.
Overall, the diversity management process should be applied to the evaluation of the following situations:
- What changes are occurring in the environment your company does business in, and how important are they?
- What do you need to do to succeed in your organizational mission, and what is interfering with your achieving success?
To cope with these it is necessary to analyze the diversity mixture and then check for diversity tension, review action options. Herein, the task is to dispassionately review what is being done to address your primary problems and decide how well that approach is working (Thomas, 1996).
Following is a sample training and development course in diversity which organizations could undertake in response to the issue of diversity.
The course would begin with a presentation of facts and figures (for example, projected demographic changes in the workforce) intended to increase awareness of the importance of diversity issues to the organization's bottom line. This information is presented in a lecture format, so there is very little active processing on the part of trainees. Although presentation of this information may be a valuable piece of the overall diversity training program, it should be a very small part of it. It is important not only to educate and inform trainees about inappropriate behaviors in the workplace and the negative consequences of bias and discrimination but also to foster the development of skills necessary to break bad habits and change often unconscious and unintended prejudice. The actual course would involve the video-aided activity, which is often a very effective method for having trainees observe workplace situations in which diversity conflicts arise or bias and discrimination exist. The videos would show scenes where a diversity issue is handled poorly. The tape is stopped so the group can discuss the situation, and the scene is then replayed to show how behavior can be changed to support diversity and foster positive diverse interactions at work.
Another activity would be the use of critical incidents. This training tool consists of a number of real-life scenarios involving cross-cultural interactions that lead to misunderstandings because of cultural differences between two people. Trainees are then given several alternative behavioral choices and explanations or feedback about why an alternative is preferred or not. Lastly, a unique but very effective diversity development activity which would be included in the course is the use of professional actors portraying characters in a short scene involving a diversity issue in the workplace. Afterwards, the actors remain in character and trainees have an opportunity to ask questions of each of them—about their motives, what they were thinking and feeling, and how they would have liked the situation to be different.
Next, trainees practice communication skills in small groups, where they take turns performing dialogues with one of the actors, who plays a supporting role. The actor improvises responses to each trainee based on how well that person is using effective communication skills. Finally, the actor steps out of character to provide coaching feedback to improve the trainees' skill level. This highly interactive and entertaining approach to diversity training presents a non-threatening way for participants to see themselves and their coworkers, through the characters portrayed by the actors. Diversity Alive is multidimensional because it involves raising awareness of diversity issues in the workplace, seeks to educate employees about appropriate behaviors in the workplace, and provides an opportunity to practice and refine new skills and strategies for dealing with diversity issues.
9.5 Knowledge Management
Contemporary corporate management specifically, the Tecsia had been increasingly aware of the future benefits of organizing ideas to in order to have a competitive advantage over others. All its elements, such as the ideas, advanced technology, modern machinery as well as the human minds, have been pooled altogether to form a scientific scheme now commonly known as Knowledge Management.
As stated in the literature review section, Knowledge Management is the collection of processes that govern the creation, dissemination, and utilization of knowledge. In one form or another, knowledge management has been around for a very long time. Practitioners have included philosophers, priests, teachers, politicians, scribes, librarians, etc.
In business terms, knowledge management is a discipline best described as a continuing process that focuses on the creation of business performance improvements--centered on people and not technology (Han, 2001). In Tecsia, their current technology enhances the feasibility of transferring knowledge between people, knowledge management in the organization includes creating and sharing knowledge as an organizational asset to drive the business. Scarborough (1999), on the other hand, did not center his definition on any aspect. Scarborough (1999) defined knowledge management as comprising of any process or practice of creating, acquiring, capturing, sharing and using knowledge, wherever it resides, to enhance the learning and performing in organizations. Moreover, the value proposition of knowledge management states that there are fundamental business reasons and expected benefits for pursuing this process approach. There are gains the organization can achieve by using knowledge management to measure results, such as creating an Intranet and knowledge repositories (Han, 2001).
In the past, knowledge management among organizations/companies is being practiced through organizational libraries, formal training and education programs, mentoring and apprenticeship systems (Senge, 1994). These are evidences proving the fact that organizations have been doing different means to manage knowledge and provide for its transfer among the workforce. Since then several developments concerning the approach to knowledge management has been developed in which Tecsia needs to adopt. These approaches are a product of a considerable number and time of researches done.
Over the years, the extensive research on knowledge management identified a lot of different approaches to the practice of knowledge management. In fact these researches were able to determine which particular approach is compatible for a specific organization (Senge, 1994). This proves the fact that the actual way that knowledge management is implemented in Tecsia varies widely according to the types of organization, its industry and culture. Some of the most common approaches to knowledge management includes; approach through innovation, quality control, knowledge technology, human resource management, intellectual capital, strategic approach, network approach, learning organization approach, and Information and Communication Technology approach which are now apparent in different departments of Tecsia.
Knowledge management can be approached from the perspective of innovation. This perspective has an emphasis on research and development and marketing (Stonehouse, Pemberton & Barber, 2001). More specifically the approach manages knowledge related to the acquirement of new products and services. The approach through innovation is particularly applicable to the recently popular software industry. For this industry, it is very important that new innovations are acquired as well as preserved in the organization since there is a very strict competition among companies in this industry. Furthermore, the modern consumers are increasingly demanding for innovative products and services necessary for the modern world.
An approach through quality control is basically aimed at the improvement of the quality of the products of a particular organization by means of quality safeguarding systems (Senge, 1994). This approach is applicable to organizations involved in the manufacturing industry like Tecsia. The learning organization approach as well as the organizational approach is more general compared to the approach from the perspective of quality control. These two focuses on the whole organization, in other words knowledge management is aimed at organizational development.
The internationalization of Singaporean corporations has grown at a faster pace than the internationalization of many organizations’ SHRM efforts and staff. Broadly defined, HRM with the idea of internationalization is the process of procuring, allocating, and effectively utilizing human resources in a multinational corporation. HRM managers in MNCs like Tecsia Lubricants must achieve two somewhat conflicting strategic objectives. First, they must integrate SHRM policies and practices across a number of subsidiaries in different countries so that overall corporate objectives can be achieved. At the same time, the approach to SHRM must be sufficiently flexible to allow for significant differences in the types of HRM policies and practices that are most effective in different business and cultural settings. This problem of balancing integration (control and coordination from headquarters) and differentiation (flexibility in policies and practices at the local subsidiary level) has long been acknowledged as a common dilemma facing SHRM and other functional managers in multinational corporations.
The company was the only major computer manufacturer which remained profitable during the recession. Underpinning the strategy of Tecsia Lubricants emphasizes clearly stated and agreed overall objectives but gives people the freedom to work towards these goals in ways they determine best for their own areas of responsibility. Other pillars of the SHRM include an emphasis on selecting individuals on the basis of their creativity and their enthusiasm, and the need for cooperation between organizational levels. A sophisticated performance management process and clear organizational values, together with a single status culture, has brought strong identification with the company on the part of employees. The organization has traditionally had a decentralized structure, but with the growth of the computer business, a more centralized approach was taken to reflect the systems nature of the business.
It is possible for an organization to be managing its people in a strategic manner but for the HR function to be fulfilling a role other than that of architect or strategist in the way that the HRM models envisage. In 'Strategic HRM' people management as a source of competitive advantage is integrated within mainstream management thought such that the presence of a powerful and lobbying HR director and function may be less important. It is less important because line and senior managers are capable of incorporating HR processes into their thought processes in an informed way, and as such do not require prompting or influencing by HR specialists. Tecsia Lubricants should provide a fine example of this practice. The HR function at divisional level within Tecsia Lubricants is expected to provide a good platform service more akin to excellent personnel management than to HRM, and to act as an internal consultant to general managers when required. However, HR is not seen as being in the driving seat of people management within Tecsia Lubricants. Tecsia Lubricants should carefully constructs their employment practices to individualize employee’s relations with the company.
Based on the discussions above, it is found out that knowledge and information is a key organizational source and its effective management is tantamount to organizational success. It is similarly important as people, finances and material assets. Looking through the case of Tecsia Lubricants, it is accepted to state that knowledge and information is a core business issue. The knowledge management scan conducted revealed four (4) strong and three (3) weak performing aspects. Among the strong aspects of Tecsia Lubricants are knowledge pull, subjectivity, transferability, and self-reinforcement. On the contrary, the weak areas are embeddedness, perishability, and spontaneity. Given the necessary recommendations, these poor-scoring areas are expected to improve if such suggestions are managed successfully.
Through effective knowledge and information management, organization like Tecsia Lubricants can add value to the products and services delivered to customers, reduce risks in the business operation, reduce the costs of business development and product/service delivery, and encourage improvement in internal business processes and external product/service implementation. A learning organization should recognize the importance of effective use of knowledge and how to store and reuse it. With appropriate knowledge management, the organization can effectively leverage its intellectual assets. The worthwhile knowledge can help to improve customer service, business efficiency and greater organizational productivity and performance.
The results of the analysis carried out on organizational learning and knowledge management indicated very significant effects, even amidst the threats of unrest. Therefore, we could conclude that organizational learning and knowledge management could still be expected to improve faster than average.
The review of the capabilities and resources of knowledge management to handle organizational learning challenges revealed very little inconsistencies regarding its strategies. This is coherent with its traditional inside-out approach. However, the need to reconcile both the inside-out and outside-in approaches becomes imperative now for Tecsia Lubricants.
The analysis among the organizational environment as well as the capabilities of knowledge management programs revealed certain gaps, most of which are biased towards the organizational environment. However, these gaps paved the way towards determining a number of recommended strategic options to secure the competitiveness of knowledge management to sustain organizational learning. Also, organizations all over the world including Tecsia Lubricants have to find a balance between adherence to knowledge management and to the changing forces of the learning environment in order to implement such strategic options.
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13.1 Appendix 1: Brief introduction of Tecsia Lubricants Pte Ltd
Founded in 1976 and established in Singapore for more than thirty years, Tecsia Lubricants provide lubrication solutions locally and overseas for both products and services. Its product range includes synthetic lubricants for various applications such as compressors, bearings, gears, chains, hydraulics and electronics equipment. Being the master distributor for well-known brands such as Anderol Company, Royal Lubricants, Brugarolas and Tacbecon in Malaysia, Thailand, Indonesia, Taiwan, China and India, Tecsia Lubricants also provide technical consultancy or full-fledge turnkey service in various industries.
In 2005, Tecsia Lubricants set up an office in Bangkok, Thailand to support its local markets as well as Indochina industries. With its first overseas branch operating successfully, Tecsia Lubricants will continue its second phase of expansion into the Middle East.
(Retrieved August 01, 2009, from http://www.tecsialube.com/)
13.2 Appendix 2: Strategic Human Resource Management
Definitions of SHRM
One of the first steps in theory development is to choose the elements whose relationships with each other are the focus of the theory's attention (Dubin, 1976). This entails defining the various constructs of interest to the theory and is one of the most important, yet overlooked, tasks in the research process (Schwab, 1980). In fact, Schwab stated that much confusion in organizational research has been created because the focal construct has not been clearly defined. Thus, it is important for the purpose of this article to define and distinguish between the constructs of HRM and SHRM.
In order to make this distinction, it is important to understand the evolution of the field of HRM (Butler, Ferris, & Napier, 1991). The field consists of the various practices used to manage people in organizations, and these practices commonly have been grouped into subdisciplines of selection, training, appraisal, and rewards (Fombrum, Tichy, & Devanna, 1984), generally reflecting the identifiable functions of the HR department in organizations.
The importance of recognising the functional differentiation within the HR field rests in the fact that the field has not evolved with great levels of integration across the various functions. Rather, each of the various HRM functions have evolved in relative isolation from one another, with little coordination across the disciplines. Thus, for example, researchers in the area of performance appraisal have become extremely adept at studying the various techniques that maximize the accuracy and effectiveness of the appraisal process, yet very little research attention has been devoted to understanding the relationship between appraisal systems and selection programs. In other words, each function has evolved through technical innovations generated primarily from a micro-perspective that focuses only on the particular function. It is the sum of the technical knowledge within each of these functions that we refer to as the field of HRM.
(Retrieved August 8, 2009, from http://findarticles.com/p/articles/mi_m4256/is_n2_v18/ai_12720961/pg_2/)
13.3 Appendix 3: Hiring Top Executives: A Comprehensive End-to-End Process
-Hiring only when you have an opening
-Having an ad hoc succession plan
-Overlooking the skills your organization will need in the future
-Indulging in irrational optimism about attrition, succession depth, and recruiting yields
-Conducting ongoing, proactive analysis of future needs
-Continually evaluating the pool of potential talent
-Developing rigorous periodic forecasts of the company’s talent needs
-Linking your talent plan to your strategic plan
-Incorporating input from HR professionals into the strategic-planning process
-Relying on generic competency models
-Looking primarily for charisma, general ability, and track record
-Defining the specific demands of the job
-Specifying which skills and experience are relevant
-Identifying the team the candidate will need to work with or recruit
-Considering how company culture and context affect the role
-Ensuring a close dialogue between HR and top management
-Building up-front consensus among key decision makers about job requirements
Develop the Pool
-Taking a scattershot, ad hoc approach to finding candidates
-Limiting the pool
-Looking for only external candidates or only internal candidates
-Developing a large pool
-Including insiders, outsiders, inside-outsiders, and outside-insiders
-Considering people on the periphery of the organization (employees in remote offices, consultants, suppliers, customers)
-Tapping your networks and involving the right external partners
-Asking candidates’ peers for nominations
-Transcending organizational silos
-Encouraging open discussion at the top about when and how to conduct external talent searches
Assess the candidates
-Settling on the first adequate choice
-Looking endlessly for the perfect choice
-Going with your gut only
-Using the wrong interviewers
-Including too many unreliable filters and bureaucratic steps
-Employing unstructured or generic interviews
-Conducting inadequate (or no) reference checks
-Using a small number of high-caliber, well-trained, properly motivated interviewers
-Employing rigorous behavioral event interviews
-Conducting detailed reference checks
-Including top stakeholders in candidate assessment
-Educating and training senior line managers in interview techniques
-Ensuring the right level of involvement of both HR and the relevant line managers
Close the Deal
-Assuming money is everything
-Showing too little commitment to the candidate’s success
-Discussing only the positives of the job
-Failing to involve C-level in discussions
-Demonstrating active support for the candidate’s interests
-Describing the job realistically
-Involving the hiring manager personally, not just HR, in closing the deal
-Ensuring that compensation is fair to other employees
-Involving C-level for top positions
-Ensuring commitment of top managers to closing the deal
-Ensuring compensation equity
Integrate the Newcomer
-Assuming the new hire is “plug and play”
-Providing inadequate support and mentoring
Using veteran top performers as mentors
-Making sure the newcomer checks in regularly with boss, mentor, and HR, even when no problems have arisen
-Providing adequate ramp-up time
Audit and Review
-Hanging on to bad hires
-Failing to review hiring practices and institutionalise the best ones
-Removing bad hires within the first year
-Regularly reviewing recruiting practices
-Identifying and rewarding excellent interviewers
-Holding all assessors accountable for the quality of their evaluations
-Institutionalizing audit and review
-Being willing to admit mistakes, learn, and move on
(Fernández-Aráoz, C., Groysberg, B., & Nohria, N. (2009). The definitive guide to recruiting in good times and bad. Harvard Business Review. Retrieved August 23, 2009 from HBR.org)
13.4 Appendix 4: The Knowledge Management Assessment Tool (KMAT)
The KMAT represents a collaborative and qualitative benchmarking tool, designed to help organizations make an initial high-level assessment of how well they manage knowledge. Completing the KMAT can direct organizations toward areas that require more attention and help identify knowledge management practices in which they excel. The tool is based on an organizational knowledge management model that illustrates how four so-called enablers (leadership, culture, technology and measurement) can be used to foster the development of organizational knowledge through a typical knowledge management process. The model, which is illustrated in Figure 1, places the major knowledge management activities and enablers together in a dynamic system.
The KMAT – An example of the benchmarking focus
Each of the five sections of the tool – leadership, culture, technology, measurement and knowledge processes – encompasses a set of knowledge management practices. Organizations can have their performance rated and benchmarked with those of other organizations for each of 24 practices.
Leadership – Leadership practices encompass broad issues of strategy and how the organization defines its business and uses its knowledge assets to reinforce its core competencies. This assumes that knowledge management needs to be linked directly to the way the organization is managed.
Technology – Technology practices focus on how the organization equips its members for seamless communication with one another. It also encompasses the systems used to collect, store and disseminate information.
Culture – Culture practices reflect how the organization views and facilitates both learning and innovation, including how it encourages employees to build the organizational knowledge base in ways that enhance value for the customer.
Measurement - Measurement practices include not only how the organization quantifies its knowledge capital, but also how resources are allocated to fuel its growth.
Knowledge Management Processes – The knowledge management process layer encompasses the action steps the company uses to identify the knowledge it needs and the manner in which it collects, adapts and transfers that knowledge across the organization.
Three types of comparison reports can be generated using the KMAT. External benchmarking compares an organization with the overall (multi-industry) KMAT database or a smaller customised group. Internal benchmarking compares an individual or division within an organization with a group of their peers who have also responded to the KMAT.
(Retrieved August 25, 2009, http://rphrm.curtin.edu.au/2001/issue1/taxonomy.html)