Question:
Discuss About The Shortage Of Capital Within The Organization?
It is difficult for various organizations to maintain their sustainability in the market and due to the shortage of capital within the organization; the human resource department generally makes redundancy approaches, which will help in reducing the costs of the organization. In this case, Wordsmiths is a retailer for selling books in the market who has acquired the company named Mainly bookstores that is going through a period of loss and is unable to maintain their sustainability in the market (Taylor, 2017). Even though Wordsmiths is making an acquisition, the company will have to curtail their operational cost, which will help in turning the company in to a profitable position. This is the very reason that the human resource manager of the company Gemma has made a proposition that suggest that the organization will have to reduce the number of full time employees so that they minimize the human resource cost of the company. However, there are some legal issues, which will have to be addressed so the company does not have to face any discrepancies. Gemma will have to determine the valid reason for terminating the employees and provide them with a valid reason, which will ensure that the company does not have to face legal forms. The contracts of each of the employees will have to be checked so that all the procedures can be fulfilled in a correct way. The employees will have to be provided with a notice period so that the employees will have the time to find a new job if they require (Golden, 2015). The clause within the contract set for the employees will determine what will be their status after the termination and whether they will be forced to serve their notice periods or will they provide with the payment for the notice period of they are working. The employees experience and their tenure will determine the compensation they will receive and it vary with their respective positions. There are lot of claims that can be made on dismissal of employees so Gemma will have to be prepared for every possibility and make sure that no employee can make any valid claims. Unlawful discrimination and the unfair dismissal are few examples, which can be made during the redundancy process. Thus, Gemma will have to be prepared for these legal reforms so the company can face these claims at that particular time (Sims & Sauser Jr, 2014).
The suggestion given by Alan has two perspectives and has its share of pros and cons. It will be easier for the company to terminated employees who are on the verge of their retirement so the complications will be less. However, the company will have to keep some of their experience employees who will have to provide guidance to the new employees. The new employees will need knowledge about the work they will be doing so the companies will have to make sure that they have experienced employees to look after important operations of the organization (Johnstone, 2016). Thus, it can be said that the suggestion proposed by Alan is not fully feasible for the company and Gemma will have to establish different criteria for terminating their employees.
Gemma will have to make use of the human resource information management system for the selecting the candidates for termination. The HRIMS system will include the data about the activities of the employees in the past few years. Gemma will have to focus on the production report and the efficiency of the employees. This will help to determine which employees should be done away and which are the employees that are making positive contribution to the workforce of the organization (Islam & Al Mamun, 2016). Gemma will have to make sure to check the attendance of each of the employees to find out the employees who are more dedicated to their work and can still contribute to the productivity of the organization. Thus, the data should consist of thorough data of each of the employees in the past couple of years, which will help to analyze the underperformers in the organization. The HRIMS data should consist of templates where the data can be easily analyzed to reduce the complexity of the procedure.
The quality of the data that has been produced is the main aspect and should consist of both quantitative and qualitative data, which will help, in analyzing all the aspects of the employee dynamics. Quality Assurance and Quality control are the two important factors that the system should maintain. The system Gemma will be using should be accurate, precise, relevant, consistent and complete. The data will have to be accurate otherwise, the proper judgement cannot be made; The data will have to precise as it will ensure that the data is consist for all the employees which will help in making a fair judgment and avoid controversies (Pridmore & White, 2017). The dataset will have to be restricted so that only a few can access the data, as it is important to maintain security of the company. The data will have to be transparent so the management can justify the termination of the employees. The report should include data on the performance, behaviour and tenure. This will help find the candidates who are not suitable for working in this type of company. Gemma will have to big use of Big data and data mining to collect all the data in one place to analyze the data using different Business intelligence tools. These tools will include statistical techniques, which will help in grouping the underperformers in the organization. Gemma would have to set some criteria for the choosing the candidates for the termination and depending upon that the system will provide results of the list of candidates who are not maintaining their level of production and quality in the work they do. Cluster analysis is an useful techniques which can make clusters of employees who are not meeting their targets and is not suitable for working in this organization (Al-Dmour, Love, and Al-Debei, 2015).
Human Resources of an organization play an important role in process of acquisition. Purce (2014) stated that not only the HR tends to be proactive but they are also liable to bridge the workforce management with the aligned organizational objectives of the two companies. In this context, Gemma has to take decision that is best suited for HR and includes five major activities- creation of new policies in order to provide guidance to all the employees, assessing the performance of all the employees so that the bets can be retained, retention of the key employees, selection of the employees and downsizing, development of compensation strategies and formulating comprehensive employee benefits program (Vazirani, 2012). The major requirement according to that case study illustrated that Wordsmith desire to reduce the number of staffs from fulltime to casual employee from Mainly Books, developing the technological aspects of the organization, designing new job roles and outsourcing the payroll management.
Thus, in this case, quantitative methods should be focused more as every organization intends to attain higher profitability. Thus, all the performance and productivity of each employee are assessed properly and discussion with the managers should also be considered so that capabilities of every individual can be obtained. This approach allows the organization to retain their key employee, who can endure the transition period. According to the case study, Wordsmith planned to terminate those people, who are close to their retirement. However, in this case, business ethics should be followed and the people should be assured of getting compensation or an assurance to get new job roles and opportunities after acquisition. Meanwhile, training session can also be conducted so that the employees also leader about new approaches so that they can survive the transition period. In addition to that, rather than outsourcing the online business functions, Wordsmith can formulate in-house IT team in order to save financial resources that they planned to invest for outsourcing. Hoch and Dulebohn (2013) stated that in-house teams provides a benefit that all the operation can be customized and designed to obtain the business objectives that is to handle the online operations. However, after the acquisition, Wordsmith should not adopt the concept of outsourcing. Dulebohn and Johnson (2013) stated that the business leaders already see the potential to add value through a larger/combined entity. And they are capable of handling all the necessary business operation of the organization. In such case, quantitative method should be used again that can compare the difference in the payroll system of the two organizations. The prime advantage of the quantitative approach is that is does not include any biasness in the decision and allow the managing authorities to select an effective decision for the company. Thus, the HR of Wordsmith should have to evaluate the duplicacy in the system and application for human resources, sales and marketing, finance and customer relationship management. Teerikangas (2012) portrays that this business operation can be successfully accomplished by the in-house IT department. HR can hire some professionals or experts during the transition period for aligning the platforms of the two different systems of the two companies.
The advantage of outsourcing operational and administrative function can be witnessed through the ease in focusing on the main business objectives (Massini & Miozzo, 2012). However, in this case, selling and publishing books is the major function of Wordsmith. Another advantage is in some case, outsourcing save cost of operation and labor. The third party also assesses all the market risk and demands based on which Wordsmith can perform their key job roles. Taken for instance, outsourcing of payroll system not only allows the system to be accomplished timely but it will be the liability of the third party to utilize all the attest technology so that they can deliver a quality work. Thus, it can be said that outsourcing frees an organization from investments in technology.
Tho (2012) depicted that outsourcing results in loss of managerial control. It might be the case that the other company does not have the required tools through which data of prior company can be manipulated. This result in misalignment of understanding and can lead to conflict that on the other hand impacts the business relations and overall productivity. Thus orgniaztion with same business beliefs, ethics and aims should be chosen before making contract for outsourcing (Mukherjee et al., 2013) highlight another disadvantage that is not all the details are mentioned in the contacts. Thus, it can be said that Wordsmith may be affected by the hidden conditions from third party. This on the other hand results in hiring a lawyer to review all the contacts signed with third party. In addition to that, outsourcing the operational and administrative function also leads in threat to security and confidentiality of the organizational data (Fapohunda, 2013). Payroll system contains all the crucial data of the staffs and sharing these details with another company may affect the security and confidentiality especially when some conflict arises.
Thus, in this case, rather than outsourcing, Gemma should recommend to hire some finance experts or professional having knowledge in handling financial data. This will save the organization from quality issues and responsibility for financial well-being of the third party. In addition to that, latest technology should e incorporate in case, some business operation mend to be outsourced. Latest technology like cloud services allow both the companies to manipulate same datasheet and in this way transparency can be maintained. Additionally, communication system should be enhanced so that real-time conversation can be made. Gemma should suggest a managing authority to supervise all the business activity during the acquisition period so that any adversity can be overcome. Gemma should also suggest of provide training on the business function that they have planned to outsources to those employees, who are targeted being terminated. In this way, new talent can be found and retain during the acquisition period.
Reference
Al-Dmour, R.H., Love, S. and Al-Debei, M.M., 2015. Measuring the effectiveness of HRIS practice in business organisations: a study in the context of a developing country. International Journal of Business Innovation and Research, 9(5), pp.507-525.
Dulebohn, J. H., & Johnson, R. D. (2013). Human resource metrics and decision support: A classification framework. Human Resource Management Review, 23(1), 71-83.
Fapohunda, T. M. (2013). Towards successful outsourcing of human resource functions. International Journal of Human Resource Studies, 3(3), 39.
Golden, J. M. (2015). Redundancy: When Law Repeats Itself. Tex. L. Rev., 94, 629.
Hoch, J. E., & Dulebohn, J. H. (2013). Shared leadership in enterprise resource planning and human resource management system implementation. Human Resource Management Review, 23(1), 114-125.
Islam, M. S., & Al Mamun, M. A. (2016). Perception of Management on Outcomes of Human Resource Information System (HRIS). International Journal of Business and Social Research, 6(2), 29-37.
Johnstone, R. (2016). Using legal research methods in human resource management research. In Handbook of Qualitative Research Methods on Human Resource Management: Innnovative Techniques (pp. 61-73). Edward Elgar.
Massini, S., & Miozzo, M. (2012). Outsourcing and offshoring of business services: challenges to theory, management and geography of innovation. Regional Studies, 46(9), 1219-1242.
Mukherjee, D., Gaur, A. S., & Datta, A. (2013). Creating value through offshore outsourcing: An integrative framework. Journal of International Management, 19(4), 377-389.
Pridmore, J., & White, S. (2017). Integrating Technology into a Management of Human Resources Course.
Purce, J. (2014). The impact of corporate strategy on human resource management. New Perspectives on Human Resource Management (Routledge Revivals), 67.
Sims, R. R., & Sauser Jr, W. I. (2014). AN INTRODUCTION TO LEGAL ISSUES IN HUMAN RESOURCES MANAGEMENT. Legal and Regulatory Issues in Human Resources Management, 1.
Taylor, S. (2017). Contemporary issues in human resource management. Kogan Page Publishers.
Teerikangas, S. (2012). Dynamics of acquired firm pre-acquisition employee reactions. Journal of management, 38(2), 599-639.
Tho, I. (2012). Managing the risks of IT outsourcing. Routledge.
Vazirani, N. (2012). Mergers and Acquisitions Performance Evaluation-A Literature Review. SIES Journal of Management, 8(2).
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