Guest’s model
David Guest developed his model and it is explained in Bratton et al (2003, pg 22) that if ‘an integrated set of HR practices is applied in a coherent fashion, superior individual and organisational performance will result’. This is demonstrated in Appendix 1.1 and shows how Guests model links general business strategies with HR strategies. It indicates that the design of human resource practices should lead to a set of human resource outcomes of high quality, high employee commitment and flexibility.
Jinnikins Jeans design their products to a high level of quality focusing on the detail of each design, however since the production of the business has moved overseas, Lionel, the production director, struggles with communicating to the factory employees, as they do not speak English. This has resulted in the product quality being affected and, in one case the wrong fabric was used for an order (Mathews, 2004). If there were a production director linked to the factory who was able to communicate and manage the production line further, the function would become more effective and the quality would be improved as a result. This would link with the business strategy of introducing a quality control programme.
High Employee Commitment should be achieved through the correct design of Jinnikins Jeans human resource practice. If they involved the employees with aspects of the business and informed them of decisions and gave them opportunities to express their views, employees would feel more involved in the business and feel more committed to the organisation. Due to the production line outsourcing overseas the production director now feels ‘uninvolved’, and as a result he is considering resigning from his post. Although adapting his role so that he had direct contact and control with the production stages of the business may increase costs initially, his commitment would increase as he would feel more valuable and may persuade him to stay with Jinnikins Jeans. It would also ensure more comprehensive management of this business function. The organisation John Lewis involve their employees by providing a monthly newsletter of the company’s performance over the month and future targets which they hope to meet. It also praises successful departments and branches making employees feel valuable, and enhances their commitment for the company (John Lewis, 2006).
Flexibility is a key human resource target as it encourages efficiency. Flexible organisations are market directed and therefore should be able to change their products or target audience in response to market changes whether it shrinks or expands. If demand shifts in the direction to where a new product appears and diminishes the demand for the old one (Barbro et al, 2000), as word processors have diminished the demand for typewriters companies must be prepared. Jinnikins Jeans must ensure that they have access to exactly the resources they need at the right time and place. If there is a new trend in sequined jeans then Jinnikins Jeans must ensure that they have the designers who can create these designs and the materials are ready to hand rather than having to wait for them for 4 weeks by which time the original design could be out of fashion.
Guest’s model and the Harvard system are similar as they both comprise of reward systems, however the Harvard model focuses more on the organisations stakeholders and concentrates on the outcomes for these people, whereas Guests model focuses more on organisational outcomes. They both adopt a soft human resource management approach which fits in with Jinnikins Jeans, where workers are seen as assets rather than costs to the firm and aim to build employee relations and encourage employee commitment and involvement (Storey, 2001).
Business Strategy
With the introduction of performance management to organisations in the 1990’s organisations now need to link the requirements of their business strategy to all employees. Jinnikins Jeans could address their business strategy of recruiting a new marketing director and ensuring they retain the new recruit by implementing an individual performance related pay scheme (Storey, 2001). Such schemes are ideal for addressing recruitment and retention problems. This may also discourage Lionel, the production director from approaching a head-hunter.
The cross-cultural communication channels (Bratton et al, 2003) between the main business site in Birmingham UK and the production factories overseas need to be improved. Jinnikins Jeans is operating in a globalised economy and the production department is culturally very diverse and different cultures prefer to communicate using different means. For example, in Japan, managers prefer oral communication whereas in North America, managers prefer written forms of communication. It is important for Jinnikins Jeans to identify the best form of communication to use when contacting the production team and their other stakeholders.
Jinnikins Jeans organise little training for their staff, which is why they are currently not operating efficiently. However this is not due to a lack of training programmes being in place, it is due to the human resource director not informing staff of the qualifications on offer and explaining their relevance in helping further their careers. Although organising training schemes is costly, especially compared to other forms of performance improvement such as changing the structure of employees roles or replacing staff it is also necessary and an ‘expected item of investment’ and a factor which Jinnikin Jeans cannot afford to not offer (Thompson, 2006).
Jinnikins Jeans must control the performance of their employees with disciplinary action for when employees work inappropriately and to ensure that all employees reach their potential. However, although this is planned in the business strategy the human resource plan does not support this. They must re-assess their disciplinary procedure otherwise they could face legal action for unfair dismissal against certain members of staff, which currently is the situation with a pending case against them concerning a member of staff being bullied. The human resource strategy decisions are to be made at the human resource directors own discretion, however Etty, the present Human resource director, who is thought to be under skilled has made costly decisions resulting in a pending tribunal case against her for acting arbitrarily. If they enforce a formal disciplinary procedure, which is fair, they will avoid the risk of inconsistent ad hoc decisions (Bratton et, 2003).
Recommendations
I think that in order for the human resource strategy to move more in line with the business strategy Jinnikins Jeans need to integrate some ‘hard’ human resource management strategies to support their current softer approach strategies such as placing more emphasis on efficiency and focusing on financial issues. They need to recruit a new marketing director and preferably find a replacement for Lionel the production director. They should supply their staff from external means so as to find the highest qualified staff for the positions rather than recruiting from their family/friend network. Trevor and George need to delegate more of the decision making to their subordinates, especially those on the management team as they currently take that responsibility away from their members of staff resulting in decision making taking a long time and employees feeling unimportant. The production director’s post must be moved to overseas so that the production system can be monitored and managed correctly and to support this, new communication channels must be devised to avoid risk of misunderstanding. Current staff should be informed of training opportunities every 3 months with meetings with the human resource director. With these suggestions put in place I feel that the performance of Jinnikins Jeans would increase considerably.
Question 2
Consider the linkage between performance management and reward policies and practices, drawing on past and current data presented in the case study.
Performance management & reward policies
Performance management aims to achieve sustainable improvements in the business performance and like Jinnikins Jeans will strive to increase individual motivation and commitment to organisational goals (Bratton et al, 2003).
Reward policies refer ‘ to all of the monetary, non monetary and psychological payments that an organisation provides for its employees in exchange for the work they perform’ as explained in Bratton et al (2003, pg 276). They are the tools for achieving efficient performance management, retaining capable employees and motivating employees to perform to their best ability. Jinnikins Jeans reward policy offers employees a substantial salary, which is above the markets average, and the yearly bonuses are appealing to all staff (Mathews, 2004) however staff feel that they are not receiving sufficient appreciation for their work. It is important for Jinnikins Jeans to find out what attracts, retains and engages their members of staff so they can explore how best they can meet these needs while meeting legal requirements. It is crucial that when offering an employee an incentive, that Jinnikins Jeans try to ensure they align their practices to the needs of the business and employees, and devise a reward package so that they support, rather than contradict, one another.
There are rewards in the form of physical schemes such as bonuses and company cars but psychological rewards are just as effective at promoting motivation. Therefore Jinnikins Jeans must ensure that they make working as pleasant as possible for the staff and that they actually enjoy working for them. Simple measures such as George and Trevor being friendly towards all members of staff helps to achieve a friendly environment to work in a increases motivation and performance within the workforce.
Human resource management issues
Jinnikins Jeans should introduce a performance related pay scheme, especially within the design department. This will provide an entrepreneurial type of behaviour (Bratton et al, 2003) within the organisation and increase motivation encouraging the team to work more efficiently and consequently speed up the design stage as currently this is extremely time consuming resulting in high costs. It will aid Trevor and George in identifying who is not working efficiently which will ease the business strategy aim of reducing the workforce.
Similar organisations within the market
It is vital to ensure similarity with similar external organisations so as to remain competitive with them. The clothing company Gap operate in the same market as Jinnikins Jeans. Their reward schemes are effective in meeting their performance management goals and are successful at motivating their workforce. Their rewards include employee discount, a bonus and incentives scheme consisting of various programmes that reward eligible employees for individual performance and supporting company goals. They also offer tangible rewards such as private medical insurance and life insurance (Gap, 2006). Jinnikins Jeans should consider incorporating similar reward schemes into their company otherwise their staff might be tempted to change to companies where they can achieve these rewards. As it is a relatively small company and there are strong links between the departments multi-source feedback, otherwise known as 360 degree appraisal would be appropriate (Bratton et al, 2003) as it would allow employees to receive feedback from different sources, including peers and subordinate staff as well as from George and Trevor. This type of feedback is likely to result in improvement in performance.
Assessment and appraisal schemes
Assessment and appraisal schemes clarify expectations of employees and help determine areas of improvement. They also lead to rewards such as promotion opportunities. Jinnikins Jeans currently appraise and provide feedback for their staff informally when the staff socialise in the pub after work, but it would increase motivation further is they were to provide formal appraisals, as staff would consider them more important. By keeping records of these appraisals it will become apparent who maintains a good standard of work and who may deserve promotion or a pay increase.
Redundancy programme
The performance management must ensure that staff are working efficiently, and if as is the case with Jinnikins Jeans some staff are no longer needed then a redundancy programme must be enforced. Currently within Jinnikins Jeans it would be hard for the human resources department to take this action, as there are no guidelines in place, which could result in tribunal action. Jinnikins Jeans business strategy aims to reduce overall management costs to 5% from 18.5% mainly buy reducing the wage bill (Mathews, 2004). This supports the new managerial ideas that job losses are essential to improving productivity (Rubery et al, 2003). It is important for the human resource strategy to aim to recruit enough suitable personnel to allow the business strategy targets to be met. Jinnikins Jeans flexible employment policies and practices have prevented redundancies in the past, however it is time that they re-assessed their man power plan as their current employment costs are too high and they are not using their existing staff to their best potential. Lionel, the production director feels ‘ marginalized and uninvolved’ and Dan ‘wonders if he is really up to the job’ (Mathews, 2004) which supports the idea that the positions within the company needs to be re-assessed. However, as the company currently stands making staff redundant could result in tribunal action, as they have not enforced the necessary redundancy guidelines. The human resource department, headed by Etty must devise a redundancy plan, which will enable them to make staff redundant fairly and legally.
Recommendations
I feel that Jinnikins Jeans need to improve the relationship between their performance management and reward policies. By improving their reward schemes they would notice improvements in their performance management. Firstly, the appraisal system must be revised so that it is carried out in a more formal manner using 360-degree appraisal systems. They must also introduce an individual performance related pay scheme so employees get rewarded for their efforts and will increase motivation within the workforce. I also feel that regular meetings on the companies performance for the whole workforce team would be very beneficial as it would make employees feel more involved. It would be a chance for all employees to raise their views and for individuals to receive recognition verbally. To support these meetings a monthly newsletter should be printed to highlight their performance and future targets. They must include these changes in their business strategy. Jinnikins Jeans must devise a redundancy procedure to avoid legal action taken against them. I feel that they should use this and make the production director, Lionel redundant and create a new production director post overseas where the factories are situated. This would ensure improvements with the companies performance, as the production line would be operating more effectively. For future consideration they should recruit outside of their family friend network to ensure a higher skilled workforce. These changes should be included in a revised business strategy.
References
Barbro,I.A, Wilson,T.L (2000) The flexible firm and the flexible co-worker. Journal of workplace Learning. MCB UP Ltd Vol.12. Iss. 4 pg 165-170.
Cakar,F, Bititci,U. S, MacBryde, J (2003) A business process approach to human resource management. Business Process Management Journal. MCB UP Ltd. Vol 9, Iss 2 Pg 190-207
Gap (2006) Retrieved on 20th November 2006 from:
Mathews, S.C.P. (2004) Unpublished Case Study’ Jinnkins Jeans’, Oxford Brookes University
Porteous, J (2002) Bullying at work – the legal position Mangerial Law Barmarick Publications vol 44, Issue 4 pg 77-90
Rubery, J, Grimshaw, D. (2003) The Organisation of Employment. Palgrave
Storey, J (Ed.) (2001) Human Resource Management: A critical Text. Thompson Business Press
Thompson (2006) Training evaluation: making it happen. London
Bibliography
Croners: Employment Law Reference Book
Harrison, R. (2002) Learning & Development, CIPD Publications.
Marchington, M, Wilkinson, A. (2004) People Management and Development: Human resource management at work, CIPD Publications
Redman, T, Wilkinson, A. (2001), Contemporary Human Resource Management. Pearson Education
Torrington, D, Hall, L, Taylor, S. (2002) Human Resource Management. Prentice Hall.
Appendix
1.1 The Guest model of human resource management
1.2 Harvard model of human resource management (1984)
