ASB4904: Applied Business Project - Human Resource Management - Assessment Answer

Applied Business Project Assignment

Case Scenario

The aim of this module is to examine themes and developments in the field of contemporary Human Resources Management (HRM), grounded in both theory and practice. It seeks to be relevant to managers and employees facing the changing practical nature of the world of work.

Human resource management (HRM) is about people and the organization of work, the manner in which firms seek to manage and deploy employees in order to realize corporate strategies, and the day to day interactions between employers and employees. HRM came to the fore as a supposedly distinctive approach to people management in the mid-1980s. A key contemporary theme concerns the aim of strategic HRM: which is the horizontal integrationof all areas of people management practice, and to bring this vertically in line with overall organizational strategic objectives (vertical integration). A key issue in this regard is the extent to which horizontally and vertically integrated ‘bundles’ of strategic HRM practices are present in different organizations in reality. In practice, the extent of horizontal and vertical integration of people management practices will differ from one organizational context to the next, especially in highly uncertain economic times. Many firms compete on the basis of low cost and still adopt a relatively unsophisticated approach to people management.

Further, critical analysis of HRM recognizes that employees may not constitute a passive commodity to be used, redeployed and disposed of at will by their employers. Employees may have interests that differ from their employer and may react and respond to managerial interventions in various ways, and these responses have to be taken into account in managing people. Consequently, critical analysis of HRM points to the fact that employment relations may be characterized by conflict and cooperation between employers and workers. In relation to this, another key theme is how HR managers often face competing organizational pressures: notably, developing employees as a valuable resource to be trained and developed, while also reducing labour costs, control employee performance, intensify work, issue redundancy notices. HRM is also discussed in its wider organizational, national and international contexts. A key theme here is issues relating to globalization; for instance whether there has been convergence or divergence of HRM practices across organizations, sectors and countries.

Assignment Task

Session 1: Introduction to HRM

• Module outline
• Introduction to HRM and its historical emergence.
• Introducing the four main HRM functions: resourcing the organisation, developing the individual, the employment relationship, and managing and rewarding performance.
• The role of HR specialists.
• The context of HRM.
• Case study example and interactive discussions.

Session 2: Contemporary theories and models of Strategic HRM

• What is Strategy and Strategic HRM?
• Different theories and models of HRM (best fit, best practice, resource-based view).
• Critical analysis of HRM theories and models.
• Interactive discussions.

Session 3: Resourcing the organisation and developing the individual human resource

• HRM and the external and internal labour market.
• Recruitment and selection.
• Human Resource Development (HRD).
• Case study example and interactive discussions.

Session 4: The Employment Relationship

• The employment relationship and the employment contract
• Employment law
• Conflict and cooperation
• Key current themes in employment relations.
• Managing and rewarding performance.
• Interactive discussions.

Session 5: Globalization and International HRM

• Globalization
• Varieties of capitalism
• The divergence v convergence debate
• International HRM
• Multinational companies
• Case study example and interactive discussions.

Introduction

During the recession that took place in the United States from the 2007 led to the creation of significant uncertainty to most of the organizations in the country. The recession affected most of the global multinationals like Coca-Cola Company. The effects of the recession were experiencing right from the businesses that were carried out in the country as well as the laborers from credit markets tightening, and a collapse of the country’s financial markets that has made many investors to do some analysis on whether it is safe to invest in the country (Beardwell and Claydon, 2010). The recession led to an increase in corporate spending as well as an expansion of the country’s gross domestic product. A good deal of companies was affected that made them to be hesitant in hiring new employees and this continued until they experienced some several seasons of an improved economy after the recession (Colling and Terry, 2010). Despite the challenges that emerged during the great recession, Coca-Cola as a Company had to come up with the best strategies for its employees to make sure that its production was not affected.

Additionally, the recession led to higher rates of unemployment in the country at that particular time, but it has been going down over the years. Again, a great number of organizations cut the costs that they were spending on their employees, wage rates declined, benefits offered to the employees also declined, and investing in the process of recruiting new employees went down significantly (Beardwell and Claydon, 2010). Consequently, a great number of organizations cut the costs that they spend on organizing for employee training as well as in the development of employees until a point in time when their financial status improved.

The effects of the recession made it difficult for the human resources manager of the organization to carry out his operations effectively in the organization. Some of the activities that affected the human resources department operations included the uncertainty in the operations of the business that makes it difficult for the human resources manager to predict the demand as well as the supply of labor in the organization (Colling and Terry, 2010). On reducing the budget for recruiting employees in the organization, the managers who were involved in the process of recruiting employees happened to have a real struggle in effectively executing their mandate in the organization.

Having small budgets made for purposes of employee training and development contributed significantly towards making it hard for the HRM department to get the best employees for the organization. Most importantly, a great deal of employers was faced with the dilemma of how they could most effectively and ethically compensate for the services that they were given by their employees (Boxall and Purcell, 2015). As such, this paper will assess the impact of the 2008 global financial and economic crisis on HRM practices in the Coca-Cola Company. The paper will first look at the impacts of recession on the employees at Coca-Cola Company that are linked to its HRM practices and then look at the impacts of the recession to the organization as a whole.

The impacts of the Recession on the organization's employees and the linked HRM impacts

The 2008 economic recession in the United States had a lot of impact on the American workforce as it led to an increase in the rate of unemployment in the country thus leaving a big number looking for new jobs. The other effect that the recession had on individual employees included that of lowering the net worth of individual workers that significantly led to a decline in the employee motivation thus affecting the output of the organization (Boxall and Purcell, 2015). Experiencing these challenges in the organization greatly impacts on Coca-Cola’s human resource effectiveness in a number of ways while carrying out its activities.

Human Resource Planning

Experiencing some incidences of economic uncertainty greatly influences human resource planning in an organization and the soft drink industry was not an exception during the great recession. During this particular period, the HRM department of the Coca-Cola Company was not in a position to predict the available labor supply to the organization accurately for the sole purpose of meeting its employment requirements (Bratton and Gold, 2012). As such, the recession played a key role in determining the availability of the employees at their respective places of work within the various departments of the organization. On the other hand, employees from other organizations opted to search for a second job in the company for purposes of increasing their monthly wages that significantly affected the first employer’s pool of employees (Colling and Terry, 2010). The employee pool in the Coca-Cola Company increased, thus making it hard for the HRM department to get the best employees that were presenting themselves to the organization.

The systems of work and job design

The job characteristics approach has given a suggestion that, a person or organization that employs workers need to design their jobs in such a way that job characteristics will greatly improve the character of the employees as well as improving on the outcome of the workplace just like Coca-Cola employed different strategies to keep its employees intact. Despite the process of identifying the best employees in an organization as well as identifying their needs like the amount of wage to be offered to them, the whole process is usually made harder during economic hardship times (Boxall and Purcell, 2015). During the recession, different people tend to face financial hardships from the declined net worth, a family members' loss of job, or to the extreme, financial challenges that are faced by their friends dependency leading to pressure in the organization to increase their employees wages and salaries (Williams, 2014).

The result of this is that, the organization tends to stress a good deal of their time in deciding on the effective ways to compensate their employees rather than focusing on the job relevance, and balancing the hours spent at work by the employees (Bratton and Gold, 2012). As a result, the design of the jobs offered in the organizational changes significantly and this affects the performance of the human resource department. The HRM department of the Company had to devise the best strategies of keeping their employees in the organization by finding the best insurance cover schemes for their employees. This significantly affected the operations of the HRM department as it had to redirect some of its efforts and resources to these strategies.

Staffing

If the state of recession in an organization persists, then it significantly affects the process of recruiting employees as well as selecting the most qualified employees in the organizations. When the rate of unemployment is high in a given region, the external labor pool of the employer happens to be large, thus being presented with both the benefits as well as the difficulties of such a situation (Colling and Terry, 2010). One of the advantages of having a large pool of labor is that of having a high likelihood to get highly trained and highly experienced employees that will help the organization increase its productivity. On the other hand, the human resource department is challenged in trying to come up with the best way to filter the best qualified job applicants from the large numbers of applicants (Delbridge, Hauptmeier, and Sengupta, 2011).

During the recruitment process, a question arises that relates to the education of the potential workers of the organization and how it impacts on the ability of the HRM department to match the qualifications of the employees with the appropriate individuals (Frege and Kelly, 2013). In times of economic hardships, most of the employees tend to continue with their education a decision that adds to the labor pool a number of qualified personnel and consequently affects the process of staffing by the HRM department in most of the organizations. The recession made the company to receive a large pool of employee applications that in turn challenged the Human Resource Department as it was very hard for it to choose the best of the applicants to work for the organization and cope with the high demands of the organization.

Training and development

The state of having an increase in the general unemployment rates in a region tends to present employees with distinct questions regarding employee training as well as the provision of important career development chances (Gilmore and Williams, 2013). As a result of having difficulties in the process of obtaining the most qualified, the process of training employees is usually delayed until the whole process of getting new employees is carried out (Frege and Kelly, 2013). Additionally, as a result of employees not willing to leave their current jobs due as a result of the market conditions, the HRM departments are faced with the task of coming up with effective training programs that will cover a large portion of the employees thus affecting its capabilities as it will get strained over time. Coca-Cola as a company had to cut some of its costs in different sectors to cope up with the increasing demand for employees and for purposes of training its employees. The end result of this was in the quality of training and development that was carried out to the employees of the organization by the Human resource development of the Coca-Cola Company.

Compensation

During recession periods, different organizations may find it hard to develop appropriate employee compensation programs. The appropriation would effectively provide the workers with the much-needed equitable compensation levels as well as having an incentive to effectively perform in the organization. From the perspective of an economist, it may be extra hard for the HRM personnel to identify an appropriate market comparison for wage rates during the times when the labor demand and supply is volatile (Frege and Kelly, 2013). Additionally, the human resource management team of the organization is usually faced with an ethical dilemma in trying to come up with the most appropriate compensation rates for their employees. The end result of this is that, most of the employees end up earning less than they deserve and the end result usually opts to leave the job thus increasing the unemployment rates in a given region (Gilmore and Williams, 2013). To keep its employees, the Coca-Cola Company through the HR department had to cross check its employees' wages to make sure that it will help them in the highly changing global economy.

Management of performance

The factors that happen to impact the job design of the company, employee training, and development, as well as compensation process play a big role in affecting the performance of the business during recession times (Delbridge, Hauptmeier, and Sengupta, 2011). When the needs of employees in an organization increases and gets more volatile, their motivations on the other side tend to change, thus making the employers change their employee performance assessment techniques. The recession also affects the receptiveness of the employee performance feedback on the other hand and the company had to deal with this first hand before it got out of hand.

Retention

Despite the recession incident decreasing the likelihood of an employer to lose its employees to its key competitors or even to the attraction of retirement, it also presents to the employer with the distinct issue of having a large pool of qualified workers applying for jobs in the organization. Additionally, a great number of employees tend to prefer staying in the organization than leaving thus making the organization to over retain its employees (Gilmore and Williams, 2013). The effect of over retaining employees in an organization is that of an organization having an overflow of experienced employees. Despite the process of retaining employees being important to the organization, it greatly restricts the capability of the organization to bring in new employees who might have better ideas of running things in the organization (Williams, 2014). The process also makes an organization to miss high-potential workers as a result of the managers being unable to get any new employees since the capacity of the organization to get new employees is filled to capacity. The HR department at Coca-Cola was tasked with the process of making sure that all its high quality employees did not leave the organization to go and make things work for those organizations of the same nature that were collapsing. As such, appropriate measures were needed to help the organization to retain its employees and this shifted the attention of the HRM department greatly.

Impacts of the recession on the organization and the related effect on HRM

When the economic conditions of an organization are poor, human resource managers are always faced with challenges in carrying out their operations. The common challenge that an organization is faced with is that of cutting the cost of operations in trying to maintain its profitability as well as improving its cash flow (Williams, 2013). Some of the impacts of recession on the organization and the HRM activities of the Coca-Cola Company include the following

Planning

One of the key effects of the recession is that of making the company to find it difficult in trying to predict both its labor supply and demand. Relating to labor supply, using predictive probability analysis is usually rendered unreliable to most of the organizations. It is important to note that this happens in the times of downward recession trajectory (Gilmore and Williams, 2013). In relation to labor demands, employers are usually faced with the challenge of balancing between their short-term needs as well as filling the gaps of the company with its projected long-term staffing needs. The human resource department of the Coca-Cola Company had to come up with the best strategies to staff the organization with the best qualified personnel for purposes of keeping its production and penetrating into the market. The HRM department had to invest heavily in making sure that the recruitment process in the organization was effectively executed.

Job design and work systems

Recession leads to a company having problems in designing its job system as well as its design. The changes come as a result of the organization cutting its operational costs that leads to a change in the jobs provided by the organization as well as the work systems of the organization (Harvey and Turnbull, 2010). The changes that happen in the organization usually have a number of effects of its operations that includes an increase of risk in the ability of the workers to possess their skills as well as their knowledge for completing their assigned tasks. The other effect is that of having the employees’ role in the organization, increasing thus increasing their workloads (Heyes, Lewis, and Clark, 2012). The effect of this in the organization is that the process may increase the probability of the organization to increase the wages of the employees that significantly affects its ability to maintain its employees (Williams, 2013).

Staffing

Despite there being a low number of workers as job openings to manage in the region affected by the recession, the work of human resource managers is always very hard during this period (Heyes, Lewis, and Clark, 2012). Reducing the number of employees during recession gives the employers a new challenge in trying to effectively carry out the process of staffing during the desired timeframe. During the recession, the budget for HR is usually cute, and this affects the ability of the organization to pay external recruiters to carry out their activities in the organization (Harvey and Turnbull, 2010). The recession also affected the ability of the Coca-Cola Company to hire competitive employees in the organization thus affecting the staffing process.

Training and development

One of the effects of recession is that of cutting down the cost of employee training as well as the employee development programs of any given organization. The main reason why organizations resort to this move is always to retain more employees while trying to make them as motivated as they can by avoiding employee termination (Heyes, Lewis, and Clark, 2012). In most cases, even the organizations that perceive the process of training as being important usually find hard to have large allocations towards training and ends up limiting their training and development budget thus a process that makes the organizations less productive and decreases the morale of the employees. During a recession, the Coca-Cola Company was tempted to reduce its workforce in its different outlets across the world and the implication of the process could have been an increase in the workload of the remaining employees, thus making them to question if it is important to carry out their employee training (Lansley, 2012).

Compensation

Any organization that is challenged by the need to control its cost is always challenged in determining its appropriate employee compensation strategy. The result of this is that he organization needs to learn the appropriate ways of controlling its payroll to make sure that it compensates its employees appropriately (Harvey and Turnbull, 2010). In most cases, the rate of wages tends to go down during recession thus making a big number of employees to leave their jobs and affect the operations of the businesses, but the HRM department of the Coca-Cola Company had to come up with appropriate strategies to solve this issue thus diverting its efforts to employee compensation (Kramar and Syed, 2012).

Retention

Economic recession significantly affects the ability of an employer to retain his or her employees in different ways. One of the ways in which this is affected is that an organization through the human resource department has to reduce its employees as a way of reducing its costs (Lansley, 2012). Most importantly, it is very important to note that a succession plan for the organization is important for purposes of making sure that the organization will end up retaining its high-quality talent. There is thus a need for the organization to revise its retention plan for purposes of making sure that the retention plan is executed perfectly, and the result is a practice that is not always easy for the HRM department (Thompson, 2013).

Organizational mediation of the recession effects

There are a number of recommendations that may be given to the human resource department of the Coca-Cola Company as a way of overcoming these challenges. Some of the recommendations of the human resource development are that of maintaining a long-term focus on its activities by taking its activities as an investment portfolio (Kramar and Syed, 2012). Additionally, the organization should focus on employing high-potential employees of the company to succeed significantly. Additionally, the company is supposed to have a highly functional HR planning that will involve succession, identifying the talent gaps and maintaining diversity in the organization (Lansley, 2012). In this, the organization is supposed to put its focus and place greater priority to the development of effective succession plans that will make sure that the process of employee retention is executed perfectly thus overcoming the challenge of employee retention (Martinez Lucio, 2014).

On the issue of work systems and job design, the organization is supposed to focus on downsizing, skills alignment and outsourcing practices. To solve its staffing issues, the organization is supposed to greatly focus on strategic hiring as well as focusing on developing new recruiting skills that will make its recruitment process easy and effective thus solving most of the dilemmas associated with staffing (Lapavitsas, 2011). Relating to the issue of training as well as development, the organization is supposed to employ engagement as well as the organization shifting its management by making it highly flexible. The organization should also come up with a distinctive rewarding approach to solve its compensation issues (Lansley, 2012). Finally, implementing an innovative training as well as a development strategy that will make the whole process effective can solve the issue of employee retention in the organization.

Conclusion

It is highly important for Coca-Cola as a company to follow the above-mentioned strategies that will enable it to overcome most of the issues that are linked to the recession impacts. Addressing the issues will definitely affect the performance of the organization that will in turn lead to high performance of the organization. If the organization follows the given recommendations, then dealing with the effects that the recession brought will be very easy.