You are to write a comprehensive HR report to the Group CEO of your company, detailing the above human capital issues, policies and practices currently being used in your organisation or another organisation you are familiar with. You have to critically review current practices and strategies and then propose and recommend the necessary HR strategies, policies programmes and practices to be implemented for the company covering those areas.
Managing the employees in an organization is as difficult as managing the competitors present in the external market (Bratton and Gold 2012). It is the duty of the organization and the senior management to deal with the problems of the organization and think about the welfare of the employees (Buller and McEvoy 2012). It has been seen that out of the entire population that is looking for a job in Malaysia, 53 percent of the population is doing so with respect to achieving better salary in the next organization (Hays.com.my 2016). According to the survey presented in Hays.com.my, it has been found that even if the employees are well settled in a job, 48% out of them are ready to hear about a new job opening if they are being called for any job offer.
People often look for change with the hope of getting better remuneration and incentives and to experience new challenges. While some individuals in Malaysia, are looking for a change as they are not comfortable with the culture and style of management prevalent in their current organization, contrarily others feel that there is a lack of progress, development and training within their organization that is causing their stagnation. Moreover, some employees are also of the opinion that there is an absence of work –life balance and are concerned about job security.
The present report will look into the human resource management practices and related problems of Fraser & Neave Holdings Bhd located in Malaysia. The mentioned organization is famous for its food and beverages business and has been included in the Bursa Malaysia’s Main Board (Fn.com.my 2016). The organization has been operating in locations like Brunei, Indochina, Malaysia, and Thailand. The company has been able to spread its business in forty countries and has been the best company in Malaysia. It has more than 3000 employees and has seen listed among the top graduate employers in Malaysia. David Chalmers Neave and John Fraser founded it in the year 1883. Currently, it has its annual turnover of RM4 billion.
The report will evaluate the problems of change management, motivational issues, leadership styles and the cross-cultural issues prevalent in the organization. All the above-stated issues have been affecting the employees in the organization and hence, they are not able to perform well in the organization. The report will be presented to the CEO of the organization, so that the problems with respect to the employees may be understood and necessary steps could be taken. The recommendations are presented for the CEO to help him decide the best possible method to solve the issues.
The following section presents some of the problems that had been identified at Fraser & Neave Holdings Bhd are:
Issues with hiring process
Fraser & Neave Holdings Bhd has experienced some organizational changes with the development of the organization. During expansion of the company in the international market, new employees are needed for the company to enhance productivity of the company. The hiring process that has been taken into consideration is the external hiring process. As a result, there was unrest among the employees in the organization. The existing employees in the organization do not like the change. This is because of the following two reasons. Firstly, they are against the fact that some of the external employees have been recruited in the organization in place of internal promotions (Hendry 2012). Secondly, they are not ready to work with the candidates of international origin due to cultural dissimilarities (Jiang et al. 2012). Moreover, the old employees in the organization were looking for promotions when they heard about the new positions that had been declared in the organizations.
The grievance of the existing employees is that they have not got the opportunity of promotions, where as the new employees have been recruited in the senior post. Therefore, they see less opportunity of career growth in the organization. As a result, the rate of labor turnover has been high in this company for few years. Increasing labor turnover has a negative impact on the company in terms of both profitability and reputation. When the employees are not able to get the desired role and recognition, they start thinking of leaving the organization and find opportunities in some other organization (Budhwar and Debrah 2013). Market information suggests that almost 30% of the people who are looking for a job in Malaysia are mainly looking for the job because they are not getting proper promotions in the company where they are working.
To stay ahead in the competition, Fraser & Neave Holdings Bhd took the help of market-oriented organizational culture. The market-oriented organizational culture helped the organization obtain external exposure, and the managers were able to focus on the external issues (Budhwar and Debrah 2013). The focus on the market-oriented organizational culture helped the managers to obtain control over the market, thereby achieving a stable position in the external market. The organization felt that once new hires were recruited the organization would be able to work effectively.
Due to the market-oriented culture, the internal stability has become weak for the organization. It gradually eliminated the term innovation from the company. The employees were unable to suggest anything new in the organization as they lost the freedom to act (Ulrich 2013). The main motto behind market-oriented organizational culture is to get the job done and this was not proving fruitful for the organization. The older employees who were eager to give new ideas were not able to incorporate new ideas and they felt frustrated working in the company. Eventually, the employee turnover rate increased.
Due to having numerous human resource management problems in Fraser & Neave Holdings Bhd, the employees have been de motivated due to several factors. The main reason behind lack of motivation in Fraser & Neave Holdings Bhd is the absence of proper benefits and rewards being awarded to the employees of the organization. They felt demotivated, as they are not getting the proper recognition in the organization. The employees were constantly working in fear of being punished by the senior management due to practice of autocratic leadership style in the management. Thus, lack of motivation was responsible for reduced productivity of the employees (Marler and Fisher 2013).
The existing practice of the autocratic leadership in Fraser & Neave Holdings Bhd aggravates the cultural problem in the origination. It has been already mentioned that the employees are working under the strict supervision, and hence it can be inferred that they were following a certain kind of leadership that is not suitable for the organization (Hendry 2012). There is a need to change the leadership styles as well. The organization had been following the transactional leadership style.
The company has been facing some cultural issues for several years. Different branch of the organization has employees from different background and cultures. Cultural difference exists due to differences in language, religion and ethnic practices. It has been seen that many of the existing employees have been reluctant to accept new employees with different cultural background. Such cultural practices influence the organizational behavior among the co-workers (Marler and Fisher 2013). It reduces the scope of collaboration. Therefore, the dissatisfaction among the employees of Fraser & Neave Holdings Bhd has been increased. Moreover, co-ordination among the employees improves the performance of the team member through sharing ideas and knowledge. This co-ordination has been observed to be lacking among the employees of Fraser & Neave Holdings Bhd.
Policies regarding planning, training and talent retention
Fraser & Neave Holdings Bhd has taken numerous policies to address the above-discussed issues. The company now gives priority to the strengthening human resource and increases competencies among the employees. As the company had problem regarding leadership, the higher authority has revised the organizational structure and recruitment policy for the management position (Ulrich 2013). Under the corporate human resource management strategy, this company has implemented total performance management system. The three main important components of Training Performance Management System are performance appraisal and training of the employees, performance assessment and succession planning. This initiation has been taken to help the employees enhance their job skill. Improved skill increases job satisfaction and motivates the employees to engage themselves more in the work force.
An extensive human resource planning system has been incorporated in the organization on the suggestion of the consultant. The working hour has become more flexible as compared to the what it was before. For effective HR management system, training is required for every individual across the organizational hierarchy The Company organize an F&N Group Management Development Program for improvement of HRM system. Fraser & Neave Holdings Bhd gives priority to the home-grown leadership in the thought that home grown leader can better understand the internal problem of the organization.
In order to improve the skill and competencies among the employees, the company organizes several training program such as sponsored course, professional certificate course, graduate and executive development course. In order to fulfill the plan, they have collaborated with the different Universities such as Harvard University, Nanyang Technological University.
Talent retention is important concern of this company. In order to do that, the company has arranged grooming sessions for the employees for the improvement of their communication skills, organizational behavior, interpersonal skills and competencies. This grooming session is helpful to mitigate the cultural adjustment problem in the organization (Banfield and Kay 2012). Grooming helps the old employees to adjust with the new technology. Employee job satisfaction and reward system motivates the employees significantly and increases the probability of retention of the employees. Thus, skilled employees are assets for the company as they have more experience and require less training. On the contrary, recruitment of new employee needs training, which incurs additional cost.
Recommended policy and program for change management
As the Kurt Lewin’s model of change brought certain human capital issues in the organization, the Kotter’s change management model can be introduced in the organization. The Kotter’s change management model works in a systematic mode and helps the employees and the employees to settle down gradually.
Figure 1: Kotter’s change management model
(Source: Banfield and Kay 2012)
It can be seen that the eight step model will be helpful for Fraser & Neave Holdings Bhd because it will help the employer to make the employees understand that the change is important for the organization. Moreover, changes cannot be brought in an organization in one day (Muethel, Gehrlein and Hoegl 2012). The employees should be able to understand the need for the change(Kim 2012). The strategic vision will help the employees to see the bright future. Additionally, the organization needs to identify employees who are positive about the change. The organization needs to form a volunteer team comprising of such employees who will help the management remove the barriers for change. Moreover, the short-term achievement should be given importance so that the employees feel positive about the changes (Mendenhall and Osland 2012). The final steps are sustaining the change and finally installing the change.
The organization should also give the old employees a chance before starting the external recruitment (Nica 2012). The old employees who are interested in the new position could be asked to submit an application for the new post. If they are willing to apply for the post, an interview will be taken to find if they are eligible for the post. If they are able to pass the interview, no external employees will be considered for the post (Hong et al. 2012). In this way, the old employees will be satisfied that they are not being deprived of any opportunity within the organization, and they will be able to welcome the new employees in the organizations. Once the employees are able to test their ability, they will not have any problem if the management hires any external employee for any position in the organization (Truss, Mankin and Kelliher 2012).
Reward policies have been undertaken by the organization to encourage performance improvement of the employees. Improved performance increases job satisfaction of the employees. If job satisfaction increases, the employees can contribute significantly to achieve objectives and the goals of the organization. Safe working environment, employee referral and performance appraisal are required for job satisfaction. Fraser & Neave Holdings Bhd can implement programs such as employee referral award, employee of the month award, attendance award, award for decent behavior within work place, efficiency service award.
Along with the reward policy, other staff welfare programs can be arranged. They could include facilities like cash bonus, extra paid vacation, insurance policy, gift certificates, housing allowances, verbal recognition and annual tours, which can enhance the involvement of the employees in the work place.
It can be seen that the employees were not happy working in the organization because the manager mainly aimed at the proper execution of the task rather than thinking about the employees and the ways the employees can contribute to the organization (Renwick, Redman and Maguire 2013). Thus, it was suggested that Fraser & Neave Holdings Bhd should take into consideration the adhocracy-oriented organizational culture and the hierarchy-oriented organizational culture. The motto of adhocracy-oriented organizational culture is doing the things first, and the motto of hierarchy-oriented organizational culture is to do the things right (Alfes et al. 2013). The proper combination of the adhocracy and hierarchy-oriented organizational culture will help the employees thrive and incorporate innovation in the organization (Nickson 2013). The adhocracy-oriented organizational culture encourages the employees so that they take up risk while working in the company. In addition to this, it gives the employees many opportunities to innovate and ask them for their ideas. Hierarchy-oriented organizational culture does not only mean that there should be a distinction between the employees based on the designation of the employees. Hierarchy-oriented organizational culture means it helps in enhancing the efficiency of the employees (Kehoe and Wright 2013). The senior employees guide the junior employees. The senior management does not order the junior department, but they look forward to working together (Aswathappa 2013). As a result, it brings an internal stability in the organization and the organization will be able to perform well in the external market.
It can be recommended to Fraser & Neave Holdings Bhd that following the X and Y theory of motivation could help them take the right decision with respect to dealing with the employees. As per the X theory, the employees are under strict supervision, and the employees are forced to do work (Stredwick 2013). They avoid taking any responsibility, and they need to supervise at every step of their work. The employees have no ambition to work better or are motivated to perform well in the organization (Morgeson et al. 2013). On the other hand, the Y theory suggests that the employees are motivated, and they are always enthusiastic to take up new responsibility at the workplace (Antonioli, Mancinelli and Mazzanti 2013). They innovate new ways of solving the problems, and they are always ready to take up new challenges in the workplace.
The new policy that could be suggested for Fraser & Neave Holdings Bhd is to follow the Y theory and motivate the employees based on intrinsic and extrinsic motivation. At times, money cannot work as the ultimate source of motivation, and the employees need to feel connected with the organization where they are working (Purce 2014). Intrinsic motivation will help the employees feel that they are important for the organization (Warner 2013). The managers should include the junior employees in the decision-making sessions and ask for their feedback when there is any new inclusion in the organization. Even though the senior management is taking the final decision for the organization, yet the junior employees should be involved whenever the organization is going to take any decision, the employees should know about it beforehand (Storey 2014).
The extrinsic motivation will be in the form of the benefits and the compensation to the employees (Jackson, Schuler and Jiang 2014). The employees should get the incentives on time. Giving the incentives on time is also another way of showing the work of the employees is being recognized by the management (Bratton and Gold 2012). The benefits will act as the extrinsic motivation, and they will work harder to get more benefits in future. However, it should not happen that the extrinsic motivation of the employees gives rise to any unhealthy competition among the employees. The employees should not create a sense of greed among the employees (Buller and McEvoy 2012). Hence, the management should also see that the employees are getting the benefits as per their work in the area where they have excelled and not in any other area.
The leaders at Fraser & Neave Holdings Bhd need to follow the transformational leadership. The transformational leadership style believes in working with the employees rather than ordering the employees (Flamholtz 2012). A transformational leader feels that positive change among the employees and in the organization helps the organization to grow. Thus, even if the organization has any set-aside rules and objectives to be followed, a transformational leadership might look forward to changing the objective if there is any need for change in the objectives. A transformational leader is always ready to change the organizational culture by making use of new ideas in the organization. Transformational leadership believes that the employees will get motivated if they are given the power to act and proper training. When on one hand, the transformational leadership aims at the growth of the employees; on the other hand, they teach the employees that the employee should think about the growth of the organization (Ehnert and Harry 2012). The employees learn the meaning of teamwork and work and help the fellow employees while learning new techniques. The leader understands that the growth of the career of the employees is important along with the growth of the organization. As a result, a transformational leader gives new challenges to the employees so that they learn to get out of the problems. Once they are able to get out of the problem, they learn new techniques and are able to solve the issues themselves. The leader asks for special training for the employees, as it will help in the development of the employees.
It has been suggested that the senior management should first select a language while communicating with the employees in the organization (Banfield and Kay 2012). The employees will not be allowed to talk in their mother tongue with the employees who know the similar language. The common language will help the employees feel that they are part of a single entity rather than giving the sense that they belong to different entities (Kim 2012). Some strict actions should be taken to solve the issues, and the employees would be fined if they were found communicating in their mother tongue (Muethel, Gehrlein and Hoegl 2012). In addition to this, the teams should be built not by dividing the employees as per their background but giving them as per their knowledge and work area. The senior manager should keep in mind that none of the employees of similar background or culture stays together. Even if they stay, they should not form any sub-groups. The best way to make the employees work with each other is clear communication. Once the employees of different background works with each other, they will understand the problems of other employees (Mendenhall and Osland 2012). Eventually, they will start helping each other, rather than resisting themselves from forming the group with employees from different backgrounds. The employees will then learn to solve the issues themselves, rather than to get into conflict who the co-workers (Nica 2012). In this way, the internal problems of the organization will be solved, as the employees will work together for the enhancement of the business of the organization.
Use of computer increases the effectiveness of the human resource management system of the Fraser & Neave Holdings Bhd. Additionally the use of internet also reduces the pressure of paper work and utilizes the working hour effectively. Computer with internet helps to do a laborious task easily within a short time. Therefore, the saved time can be utilized for doing other tasks. Computer technology enhances the system of human resource management. Fraser & Neave Holdings Bhd can use enterprise resource planning in HRM and HRM payroll management system. The ERP software is very helpful to deal with total payroll system of the employees. It contains data regarding employees basic salaries, payment, leave, insurance benefits, taxes, provident funds if any, pension, gratuity, and medical (Ehnert and Harry 2012). ERP system helps in recruitment process. The software can record all the pre recruitment and post recruitment records of the employees. This software can select the right candidate for the organization based on their experience, qualification and skills. Therefore, it can be recommended to use computer in the organization and use of ERP software in the system. The Internet is extremely helpful in information management in the organization, while the intranet is useful for sharing information among different department and different branch of the company.
Conclusion
After going through the problems of Fraser & Neave Holdings Bhd (F&NHB), it can be concluded that it is the duty of the senior management to deal with the employees in the organization. The problems that were found in Fraser & Neave Holdings Bhd are problems with change management, motivation of the employees, leadership styles and cross-cultural issues. It has been mentioned that the people in Malaysia are leaving jobs mainly because they were not able to get the proper recognition in the workplaces. In addition to this, the problems with the benefits and compensations exist in many organizations in Malaysia. The similar problems exist in Fraser & Neave Holdings Bhdas well. If Fraser & Neave Holdings Bhd is recruiting a new member for the organizations, their actions should be justified to the old employees because they are serving the companies for a longer time. Thus, the Kurt Lewin’s change management model was asked to replace with the Kotter’s change management model. Kotter’s model will be helpful to make them understand the need for the change and will help them to accept the change. The problems with the leadership style and motivation go hand in hand. The employees in the organization are demotivated because of the pressure of the work they are facing due to the changes. It has been seen that Fraser & Neave Holdings Bhd is following a carrot and stick theory to make the employees work, and the leaders are following transactional leadership. The organization believes in keeping a strict check on the employees and hence, the employees were not able to work freely in the organization. Hence, it was recommended that leaders of the group should follow transformational leadership and the employees should be motivated with the help of intrinsic and extrinsic motivation for the employees. The employees should be involved in the decision-making of the organization, and they should be given the timely incentives and the benefits so that they gain interest with respect to working for the organization. Finally, being present in the market of Malaysia, there are employees from different origins. The organization suffered from cross-cultural problems. Hence, it was recommended that there should be one language of communication within the organization, and the team should be divided by keeping members from different origins in one group rather than keeping members of a single origin in one group. In this way, they will be able to understand the problems of the employees of different origin and will try and solve the cross-cultural issues.
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