United Mutual Insurance Company - failure in management
United Mutual Insurance Company worked in the insurance business. They are facing 25% turnover among the clerical and secretarial staff and productivity is lower than the insurance industry national standards. The high turnover and low productivity are caused by reasons beyond the control of supervision. Furthermore most of clerical and secretarial are not clear about their duties and responsibilities creating ambiguity and conflict. The Office manager, Gary Best wants training for the supervisors. But supervisors are so overworked already that they will baulk in training. And also there is a problem in setting up the training time. There are two major issues within this company which caused the problem above.
Management failure is considered as the main issues of the company. According to Raymond one of the three highest ranking managers there have been serious problem in the top managements, they need better Human Resource practices, not only expecting it from the supervisors. And also the top management is insensitive to people and lower level management that is sensitive. Gary best the office manager wants to give training for the supervisors and expect them to accept almost any working condition.
Low wages also considered as another issue that caused the dropped of productivity. This issue is related to the previous issue which is management failure. The worker wages are low and the managers expected them to work in long hours and there are no job securities for them. If the wages are low and no job securities, they do not make more effort in their works.
The last part is discussed about the Critical evaluation for those two major issues. Also include the recommendation for improvement the productivity of the company.
Two major issues
Failure in Management
This problem has to be taken seriously. The office manager does not seem to care about the worker feeling. The Office manager want the supervisor to be retrain into a rigorous team leadership training program. The training is not suitable in time. Improvement needed in Human Resources practices and team leadership for the top management not only the supervisor. If the top management is insensitive to the worker, it is impossible for the lower management level to be sensitive.
Management is the main things that affect the over all performance of the company, if the management works efficiently and hit the target directly, that is when the company’s performance reach the good level. Getting the managements to work together is important. Supervisors are overworked already and they will fall behind their work in order to accomplish the training that provided by the top level management. Retraining for the supervisors can likely reduce the level of productivity and they will feel that they are being taken advantage. For a company like United Mutual the manager should understanding better HR practices. Training is a good thing but in this case it could be a bad effect for the productivity of the company. Besides it takes time and energy, the office manager itself who want to trains the supervisors has bad team leadership since the office manager does not sensitive with the worker, especially supervisor.
This is a preview of the whole essay
Payment of wages
This issue also considered as a big issue with in this company. The workers who receive low wages are expected to work longer by the manager. Furthermore the company does not guarantee the job security. In this case the office manager does not seem to understand the worker. This issue really affects the performance because if the workers do not perform well, the company’s performance also would not be good in any ways. Managers must revise where the system went wrong to fix this problem. There must be a way out to fix this problem, because the workers are the main part of the company, without the workers the company would be nothing. Workers must be encouraged to contribute more efforts in their works. Same actions must be taken to fulfill the workers wants to improve the desired level performance of the company. If the company does not encourage the worker, it will make the United Mutual to unlikely compete in the market.
Understanding the issue better
There are several models and theories that related two big issues as explained above that could be used to create better understanding of the cases, they are as follows:
Human resources management refers to the policies and practices needed to carry out the people or personnel, aspects of a management position, including recruiting, training, rewarding and appraising (Dessler, Griffiths, Lloyd-Walker & Williams, 1999, p.4).
Human resource management is consists of planning, organizing, staffing, leading and controlling. In the case of United Mutual Company, Human resources management system does not seem to works well. Every manager should know about equal opportunity and affirmative action; employee health and safety; and Grievances and employee relations (Dessler, Griffiths, Lloyd-Walker & Williams, 1999, p.5). In this company the office manager does not care about the grievances and employee relations. Gary Best, the office manager wants the supervisor to be retrained. The time for retraining is unsuitable for the supervisor. The company face 25% turnover among the clerical and secretarial staff. This is clearly caused by the human resources management that the managers do not have the knowledge of in that matter. Human resources management is important to all managers. Managers should be aware about the cause of the turnover. In this company the cause of the turnover can be the employees think that their salaries are unfair and inequitable relative to others in the organization. Low productivity will occurs as a result from high turnover. Managers must take actions to prevent the distraction affect the efficiency of workers. Higher wages for the worker could be one of the solutions.
All of those are related to management failure in the company. In United Mutual Company there two level of management Top level managements and Lower level managements. Gary Best and the other three managers are included in top level managements. Supervisors are in the lower managements. These both level of management is related to each other. If the higher manager do not show what they have should done, we can not expect that the lower manager to do better. HRM is the leadership of a firm’s people to ensure productive and profitable outcomes for the firm and quality material and personal satisfactions for its employee (M. Newnham, 2002, p.B2). In United Mutual Gary Best want the supervisor to get workers to accept almost any working conditions. But he did not seem to have a good leadership skills and HR practices.
HRM is usually called normative approach. Normative approach is a description of what HRM should be. It usually adopts a ‘unitary’ stance- that the realization of employees’ hopes and ambitions is compatible (perhaps identical) with hopes and goals of the organizations (Dessler, Griffiths, Beverley & Llyod-Walker. 2004, p.22). If the employees goal different from the organizations, there will be an internal conflict within the organizations. It is most often teams of committed employees who help distinguish between firms that succeed and those that do not (Schneider and Bowen, 1993, p.39). In order to make the worker to have the same goals as the organizations, the worker must be pleased with what they’ve got and feel that they part of the organizations. In the United Mutual, the workers feel unhappy about the wages and they can not guarantee the job security. They feel that they deserved better than what they have got. This will result in high turnover. The managers wants them to work longer than what they should. This will lead to reducing the level of productivity. If the United Mutual wants to keep them, the company should give their desired wages.
There is another problem related to the issue of payment wages. The low payment wages will affect the good or skilled employee quits from the organization. It is important to retain the good and skilled employee. The company will face difficulty if the good employee quits. The company will need to recruit new candidates. Usually, no-one knows as much about the job as the people actually doing it, so soliciting employee inputs is wise (Freeman, 1993, p32-4). To recruit new staffs, the company face a big amount of disadvantages that include time consuming, cost and will affects the productivity of the company.
Critical Evaluation and recommendation for improvement
United Mutual Insurance Company performance has decreased due to internal problem of the company. The performance of the company must be evaluated to improve the performance. The company must have a Human Resource Manager. In the United Mutual case HR manager can be recruiting from outside or one of the existing managers can perform as HR manager.
Firstly the company must conduct an organizational analysis. Organizational analysis is conducted to determine the fit between an organization’s internal environment and its stated goals and objectives (Dessler, Griffiths, Beverley & Llyod-Walker, 2004, p.304). The analysis should identify organizational goals, resources, climate and environmental constraints (Dessler, Griffiths, Beverley & Llyod-Walker, 2004, p.304). Afterwards the company must have the Human Resource Planning that is prepared by Human Resources Manager. Human Resources planning are the systematic and continuing process of analyzing an organization’s human resource needs under changing conditions to ensure that the right number of people and the right types of people are available at the right time for the organizations (Dessler, Griffiths, Beverley & Llyod-Walker, 2004, p.105). To perform HR planning, first the company must do SWOT analysis. SWOT analysis means a planning tool for developing strategies by connecting internal strengths and weaknesses with external opportunities and threats. After conducting SWOT analysis they can conduct job analysis.
Job analysis must be taken to collect all the information about the workers and all related information to be used to design the solution. Job analysis is the process of identifying the tasks, responsibilities and context of a role and the knowledge, skills and abilities required to perform them (HR Monthly, 2000, p.24-6). The information that has been collected is useful to design the solution. The company may need to boost employee motivation. The attempts to make jobs more interesting and by doing so to boost employee motivation called job enrichment. Which as stated in the United Mutual case that a supervisor must have job enrichment. But in this case not only the supervisor need to have job enrichment, the top management also needs it. To perform job enrichment they need to redesign the jobs and based on the information from the analysis what is need to be improved. Based on the information that had been collected, HR managers would be able to create a decision to improve the performance of the company.
To handle the management failure issues, the top management must learn how to behave as a good leadership and understand their employee. If the Top management performs well, it is not difficult for the lower management to perform as well as the top management. If the top management needs training then conduct training. HR and particularly, training and development play central roles in developing employees’ and managers’ skills and expertise in each of these areas (Solomon, 1994, p.56-66). Training is a way of improving the ability. The objective of training is organizational outcome objective, means that the outcomes of the organization can expect from changed job behaviour of trainees as a result of the learning (Hales, 1986, p.87-92). After the training for top management then the training for supervisor could be conduct but in the suitable time in which will make them as they did not take advantage of. For example the company could pay extra for the supervisors that attend the training session. In the training provided will include the importance of a good team leadership. By improving the management system, will reduce the employee turnover and retain them in the company.
It is also important to keep all the valuable member of the company. In the United Mutual company there is 25% turnover among clerical and secretarial staff, this is because of the wages that paid is low. The company is nothing without the employee. Research has shown that the best employers are more profitable and that good leaders trust and assist their employees to develop and grow within the organization and they properly reward them (Nenham, 2002, p.2). Moreover the company must try to retain the entire potential and skilled worker to remain in the company. To retain the worker, the company must provide a suitable wages for them. Management must respond at what employees need to keep them motivate and give all their efforts to their works (Watanabe, 2003, p.111).
United Mutual internal problem must be fixed as soon as it can. Human resource manager must be capable to respond to the workforce problem and taking right action to produce the right solution. For every action and decision that is going to taken, manager must think of the impact of the taken action. Payments of wages for the worker need to be evaluated and changed to improve the employee’s motivation so it can improve the productivity to higher level. If all the conditions that mentioned above are fixed United Mutual more likely could increase its productivity level regardless to other issue that may arise after the establishment of the new actions.
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