Reference no: EM133179806
Describe and identify 4 HR practices in the following case and discuss their effectiveness. LC org is based in WA and employs 2000 employees, these roles vary from trade, professional and management roles. Previously LC has enjoyed a monopoly position in the market but now faces keen competition following intervention of the ACCC. The market share has been steady at 65% but is now falling.
LC org has 4 business units that are structured around their products, three of the four are losing money. The executive has no care for the core concept of the business despite junior managers (most with MBA degrees) suggesting that it is a major point of concern. They have also suggested that some functions of LC be outsourced.
The workforce of LC has reduced its employees by more than 5000 mostly through voluntary redundancy. Many of the employees who have left the organisation are those who could least afford to be lost and as a consequence a large amount of corporate memory and intellectual capital has been lost. Additionally employee training has been cut down to cut costs.
The leadership of LC is predominantly in the hands of 7 white middle-aged males who have a long history of employment with LC. The HR manager Steve is the only exception and has recently been employed from the private sector. The 7 man executive group lacks private sector experience as the company chose to hire the executives from within the organisation with 3 of the 7 starting as cadets at LC. 5 of the 7 are engineers and the other 2 are accountants. The leadership style of LC can be described as transactional. The former CEO of LC was one of the former cadet engineers and was the definitive transactional leader. He had little time for HR. The new HR manager Steve has managed to restructure the HR department with the appointment of an advisor to each business unit to provide a voice for the employees in these units. Steve has attempted to highlight the importance of HR by showing how it improves productivity and performance to executive management but they paid little attention to this.
The senior and middle level leaders can be described as bureaucratic, conservative, risk averse and mechanistic in outlook. There has been no clear indication of what type of leader is needed for the future. There is a cohort of young and well educated middle managers who have the ideas and motivation to help turn the organisation around but have been blocked by their managers. As a consequence many have left the organisation and many are considering leaving. There is no succession planning. Additionally most of the managers are working extensive hours with no compensation or recognition.
The senior teams say that "their employees are their most valuable resource" but employees feel that they are their most expendable resource. There is a lack of trust and loyalty as employees wait for the next round of redundancies.
The culture of LC is bureaucratic although many employees in lower level positions see the need for a shift in the organisational culture of LC for it to survive. The leaders of LC argue that organisational change must be rooted in the culture but the union counter argues that management has already 'rooted' the culture. The need for customer-focused culture is highly apparent but nothing is being done to address this issue.
The current workforce of LC is long-serving with most having been at the organisation for 15-20 years. The prevailing culture within LC is very paternalistic and can be traced back to the previous management style of LC. Employees feel that the organisation owes them a living, pay day comes every Tuesday and always will. If management wants more, they'll have to pay for it. Senior management has no trust from employees and any respect they once had is gone. Flexibility is mentioned but not put into practice.
Performance reviews have not been a priority in the past and are seen by managers as a chore rather than a strategic analytical tool for aligning business objectives. The union has stated it will cooperate with management should salary increases be made an integral part of performance reviews.
The workforce and customer base are extremely diverse but senior management refuses to acknowledge or understand the concept of diversity management. The concept is seen as a "warm and fuzzy" HR fad.
The remuneration policy of LC is "one size fits all" with no correlation between pay and performance. Senior and middle managers can package their salaries and make use of salary-sacrificing strategies. Majority of their workforce is paid under an award that in its operation is extremely rigid and is a major barrier to introducing flexible work practices.
The relations between employer and union are highly sensitive. The union has also lost many of its members during the downsizing of LC and as such refuses management attempts to cut the workforce further.
A new commercial oriented board and CEO have been appointed by LC's shareholders and have come to the conclusion that things must change rapidly should they wish to turn LC around.
The new CEO Nima has identified the major changes within the external environment that need to be addressed. Nima has noticed that LC has only paid lip service to customer service and globalisation and HR. Nima is open to suggestions about the future of the 4 business units and to leadership. Nima feels that employees have mistaken 'transparent' leadership with 'invisible' leadership. Remuneration must also move to an 'earned' culture rather than an 'entitled' one.
Nima believes non core operations should be outsourced and that only a small number of well paid and highly developed full time employees be kept on the payroll. Any gaps in employment will be filled by casual and contractual staff. Full-time employees will be moved to individual contracts.
A HR consultant has also been employed to identify solutions to solve LC's HR-related issues.