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Human Resource Management

ASSIGNMENT 1

Case Study I
The HRM Function/Environment

The New Director of Human Resource


12th September, 2016

Submitted To:
Course Instructor: Mr. Jayendra Rimal

Submitted By:Mohit Maheshwari


EMBA Fall 2015- Semester II

Case Study I- The New Director of Human Resources

Q1. Discuss the relationship between corporate human resources structure and operations at
the plant level. What impacts if any, did that relationship have on the situation described by
Newcombe?
After investigation of Mount Ridge Engineerings corporate human resource structure and plant
operation procedures, in my opinion currently the relationships between human resource
policies and actual plant operations are very weak. Although we can say that the human
resource department has established a fairly complete set of procedures and policies, the
actual implementation of the policies at plant level operations do not seem to be thorough
enough, no employee implement those rules. Especially, the staffing function is very weak.
There is no proper linkage between corporate HR structure and operations at the plant level. In
other word there is no chain of command kind of linkage between them. It seems that
operations office can do the HR functions by themselves like hire and fire which is in fact
corporate HR departments sole function. Even in the termination form there is only
Employees signature and Plant supervisors signature i.e. no control of the corporate HR
department at all. The leave reason seems to be written by the supervisor not the employee,
this is not logical. In fact, forcing a person for signing on the blank form of termination notice is
completely illegal and against labor act (if the allegation of Johnson is true), this may create a
big legal problem in future.
Here are the examples which show the fuzzy relationship between corporate human resource
structure and operations at the plant level:
What Johnson had done was out of his job description or employee handbook: Johnson would
like to have a promotion due to know a good deal about the equipment operators job. But
seems the standard promotion channel was not set up or Braxton didnt follow the system
when doing evaluation. Hence Johnson did lots but still couldnt get the promotion from
Braxton.
Johnson didnt follow personnel regulations when hes absent: As Johnson was not satisfied
with the annual evaluation, hence, he was absent without notifying his boss.
Braxton took advantage of his authority to terminate Johnson. Because on the termination
letter his signature was enough to terminate him (while making Johnson to sign on the blank
form, as per allegation).

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Case Study I- The New Director of Human Resources

There are several causes for this situation:


Rapid expansion preventing proper dissemination of human resource policies.
Lack of comprehensive human resource training program.
Lack of proper human resource related internal controls.
Retention culture has not yet developed (to hire a new staff is more expensive than to retain
the old staff).
Due to the above fuzzy relationship between corporate HR structure and operations at plant it
has created a long term negative impact on the whole organization itself. As described by
Newcombe, one of their biggest problems has been getting management-especially plant
management to understand the legal and governmental regulations affecting HR procedures.
Over the years there have been situations where supervisors have not followed company
policy.
An example of this adverse impact is Johnsons case. Though Newcombe had already developed
many benefit packages of human resource as company policies at the beginning, seems nobody
followed. Such as, Johnson didnt notify his supervisor when hes absent, Braxton added the
incorrect reason through the termination form for Johnsons leave, and the job Johnson did was
out of employee handbook.
One of the important goals of the company is to remain nonunion. But if the situation get more
bad shape there may be chance of discrimination, deprivation and finally the company can get
unionized. If the situation gets continued, the company can even get warning or punishment
from department of labor, which will adversely affect the competitive advantage.

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Case Study I- The New Director of Human Resources

Q2. How should Newcombe have handled this situation?


Being the vice president of human resources unit, it is Newcombes duty to respond to
Johnsons queries. Newcombe can take following corrective measures to contain the situation:
First of all, Newcombe has to remain impartial towards both parties. She has to call Braxton for
clarifications regarding Johnsons allegations. She should also hear out Johnsons side as well.
This will give her a clear picture about the conflict between Johnson and Braxton. Of course,
she doesnt want the Labor Department to interfere in her company.
If Johnsons claim is right, then she might have to take corrective actions against Braxton, or
maybe, promote Johnson to equipment room operator and transfer him to other plants, which
is the major cause of dissatisfaction.
Also, she can set a training program for plant supervisors for better human resource practices
and company policies since conducting a training program is cheaper than setting up a separate
human resource department.
Since Johnson stayed in leave without providing any notification, she has to take some action
against him as well.
She can also redesign employee termination form and conditions in the company policies as
firing an employee for un-notified leave for a day seem too harsh. This also includes reviewing
employee handbook as well.
Alternatively, she can issue a memorandum citing that employees file an application for
promotions and pay rises to the human resources directly, along with the recommendation
from the plant supervisor. She can also set up a communication channel in the company so that
the employees can directly file in their complaints at the plants.
She can setup an audit and supervising mechanism to monitor whether the company policies
are properly implemented at the plant or not.

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Case Study I- The New Director of Human Resources

Q3. What, if any, disciplinary action should have been taken against the plant superintendent
(Braxton) at the time of the incident?
Firstly, Newcombe should investigate about the situation. She should interview both conflicting
parties and other people in the plant. This provides Braxtons relationship with other employees.
The company can take following disciplinary actions against Braxton:
If majority of employees cite same level of dissatisfaction and concern, and the allegations made
by Johnson over Braxton are true, and Braxton is a valued employee of the company, then the
company could warn Braxton for future, conduct a coaching session or train him and make him
more aware about the legal and governmental regulations affecting human resource policies.
Another option would be to transfer Braxton to another plant citing as disciplinary actions
against him.
In the most severe case, the company can fire Braxton if he opposes to any of the alternatives
provided by the company.

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Case Study I- The New Director of Human Resources

Q4. If Johnsons allegations were true, what are the legal ramifications of Braxtons behavior?
If Johnsons allegation were true, it will probably put the company in an illegal situation. Making
Johnson to sign on a blank sheet of termination notice and making a wrong statement (by
choosing justification as voluntary quit to make another job), which in fact is supposed to be
selected as Dissatisfied pay, can be regarded as crime and against labor law. It is very clearly
written in the Notice of Termination that exact reasons of termination should be filled up
whatever it may be. So, if this issue goes to the media and labor union of other competitors
company, it can create big trouble to Mount Ridge. Now they dont have union, but to get their
right, staff can make union with a lot of demand. Braxton may sentence to jail and fired off
from the company. The companys fame may get tarnished which may damage the overall
performance and financial situation as well, in the worst case.
So, its better if the company negotiate with Johnson so that he wont go to Department of
Labor. Moreover, I think it is also good for the company to retain such employee who is
laborious and intelligent. With rewards and necessary trainings he can prove himself to be a
valuable asset to the company itself.

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Case Study I- The New Director of Human Resources

Q5. Describe Mount Ridges business strategy. What is the relationship between its business
strategy and its human resource practices?
Cost Leadership is the Mount Ridges Business Strategy. In order to make the plants very
efficient and cost effective, Mount Ridge has chosen a new technology which generates
electricity as well as steam, known as cogeneration. It chooses its plant sites in vicinity nearby
industrial plants, which utilizes steam and sell electricity to the local utility. Starting with a
single plant in Kentucky it had planned & financed to build seven new plants over next five to
eight years of which 5 plants already ready. In addition to this Mt. Ridge has also planned to
build an additional 2 to 3 plants in the Northeast where the demand for cogeneration plant is
very strong. Their basic business strategy is to catch the market where they have more
competitive advantage, where demand is more but electricity price is high.
In order to meet its business strategy Mt. Ridge has also followed some HR practices like
developing job descriptions, a salary program, benefit packages for both corporate and plant
personnel, supervisors manual and other basic personnel policies. Starting with just 5
personnel, it has recruited additional 34 people at corporate head quarter and 183 new
employees in the plants. The company has also forecasted to build their human resource as
approximately 650 to serve its total nine plants by the end of next 2 to 3 years. The companys
policy is to make their organization union free. In order to reinvest the companys profit into
future plant expansion, Mt. Ridge doesnt have any profit-sharing plan but in order to motivate
its the relationship between internal staff enjoyable, productive and loyal, every year they run
employee appreciation dinner program at every plant where president and other corporate
officers also attend at the party. Because, the companys founder/president himself values a
sound relationship with its employees. He believes that productivity and loyalty can be
harvested from employees by maintaining a good relationship. But it seems the same message
has not been properly passed or practiced throughout the organization.
In addition to above, from the case, we may understand that the companys strategy is to
centralize HR function. However, now the relationship between HRD and other departments
are not very close. Even in the Johnson case, the plant supervisor may decide by his own
without noticing HRD. Moreover, he did not put a correct reason of Johnsons resignation and
probably will put the company in an illegal situation. We learned that the organization structure
is quite loose. If most employees do not have a clear picture of the companys basic policy and
regulation, through the companys expanding, they will hire more and more employees and
then similar cases will happen again. HRD should provide a combination of administrative
expertise and act as a strategic partner within their company.

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Case Study I- The New Director of Human Resources

Q6. What strategic human resource issues will Newcombe likely face as the company expands
to the Northeast? How might this expansion affect the structure of the organization and its
human resource department?
With increasing number of plant and employees, the vice president of human resource
department is more likely to face various strategic human resources issues.
As there is a demand of plants in different states of Northeast, Newcombe is likely to face
various human resource issues. It has been estimated that employees will increase to 650 over
next two or three years. Newcombe is likely to face issues like: Recruiting and Selection of
employees, Job Analysis and Establishing Chain of command, it is very challenging to identify
right people for the right position and place.
Company had the primary focus on staying nonunion, but when the number of employees
increases expectation of each individuals employee will also become high. To fulfill their selfinterest of individual they form the union to pressure on management which is more difficult to
stop.
Apart from the federal law, each state has different rules and regulations in United States.
When the company wants to expand its plants in different states, it also should follow rules and
regulations of each state. It could be difficult to manage human resource according to the rules
and regulation of particular state.
As the demand of cogeneration plants is strong in different states, business will obviously be
high in near future. Along with business expansion, number of employees also increases and is
expected to increase to 650 employees over next two to three years. Increasing the number of
plants and number of staffs, definitely the organization structure becomes larger. To manage
more employees human resources department also should be large enough to address issues
of all employees. Structure of the organization need to be revised and different positions
should be created too. As employees are biggest asset, issues related to them should not be
undermined. So, human resource department should plan and operate effectively to address
issues of employees.
There will be need of effective communication system from plant to the corporate office. If it is
not implemented there will be gap on communication between plant employees and corporate
human resource department and high probability of information modification is possible as
mentioned in Johnsons case.

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Case Study I- The New Director of Human Resources

Every company policies and information should be accessible to the employees; every
employee must know it and should follow accordingly.
There is need of timely revision of employee handbook and supervisor manuals as needed.
There might be need of regional human resource department; it might increase cost of
company.
And thus I would recommend that Newcombe should slightly change the structure of
organization, update HR Policy and properly implement it from plants to corporate head
quarter.

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