Human Resource Management in BMW - Report Example

Human Resource Management Ans The most important HR bundle of practices is that of wages-bonuses. BMW’s Oxford Plant successfully introduced a bonus for workers in achieving production targets. For example, when the production target of 200,000 was achieved, workers received an 18.4 percent pay deal. (SUN report, 2002). This two year pay deal provides 15 pounds a week in the first year and 10 in the second year, in addition to the introduction of a Company performance bonus of an extra 5 pounds a week if the Company achieves 100% of its production targets. (O’Brien, 2002: Dec 17). The introduction of the composite pay deal and performance bonus is the most important factor underlining BMW’s success. The performance bonus has been specifically linked to the generation of new ideas to harnass worker creativity. For instance workers are required to come up with three ideas to save 800 pounds each in order to qualify for an annual bonus of 260 pounds (Case). Vroom’s Expectancy Theory highlights the importance of rewards – including extrinsic rewards such as bonuses – in enhancing motivation of workers (Vroom, n.d). Linking increased pay and a bonus specifically geared to reward performance in terms of achieving production targets is conducive to improving employee performance. Moreover, harnassing worker creativity is also likely to provide the intrinsic rewards that help to achieve a high motivation and satisfaction quotient on the job according to Vroom’s theory. Workers will feel that they are making a useful contribution which helps to enhance motivation and interest on the job. The second most important feature of the HR package is the overhaul of the flexible working system. The HR practices in this aspect were such that they had to work their way around restrictive covenants and secure increased labor during peak production periods while paying salaries during off production periods. The rearrangement of the working schedule includes the following features: (a) scrapping of the contract in favor of a working time account (b) introducing a working time account (c) the facility to “bank” time during high production periods (d) overtime to be cashed later for extended holidays (Case). The system was started with every worker coming in with minus 200 hours each, however the reasons for the changes, as stated by Ernest Baumann, head of BMW’s Human resources Department is to “give associates a greater control over their time.”(O’Brien, 2002: Mar7). The flexible worker schedule and the facility to bank hours and control time themselves, provides greater worker flexibility to attend to their other businesses, providing much needed time away from the job at the plant for other activities. This helps to enhance worker satisfaction on the job. In assessing the success of various motivational strategies, Herzberg has argued that “employees were more likely to be motivated by factors such as achievement and the work itself rather than simply money” (Redman and Wilkinson, 2001 p. 101). Therefore, the independence and flexibility in time allocation and calculation is likely to have enhanced employee satisfaction and performance. It is important for HR Managers to pay attention not only to financial cutbacks and tightening up measures in enhancing productivity of the organization but also take into account employee well being and BMW has achieved this. The third successful aspect of the HR deal is the recruitment of temporary employees and improved worker autonomy. The BMW Plant has increased the number of workers from 2500 to 4500, in order to allow continuous production even on Sundays.(Case). While most of these are temporary, the Company has been smart enough to start examining the temporary labor force in order to recruit permanent employees. (BP Report, 2001). By selecting those employees who have contributed to the achievement of the volume and quality targets, the HR Department is improving its chances of selecting dedicated, talented workers thereby reducing the employee turnover plus the time involved in recruitment and hiring of employees and contributing to success. Moreover, factoring in worker input into Company decisions further aids in enhancing employee motivation and satisfaction.(BP report, 2003). By allowing greater autonomy to workers and increasing their say in Company decisions, employee engagement in Company goals is improved. Employees feel a greater sense of team work and participation which provides for their well being and satisfaction in those aspects that are not strictly related to money. Ans 2: David Ulrich proposes four different kinds of roles that HR can play in an organization. They are (a) “strategic partner” role, wherein existing strategy is molded into results (b) “change agent” role, wherein existing systems are revamped (c) “employee champion” or management of employee resources and (d) “administrative role” where the major focus is on improving existing administrative systems. (www.citehr.com). In the case of the BMW Mini Plant at Oxford, the HR department has functioned most strongly in the role of a “change agent” because it has revamped many of the existing systems at the plant, notably by (a) throwing out the traditional contract and introducing a flexible time accounting system, as a result of which the Company is in a position to make payments when work is needed and avoid slack period payments while allowing employees greater time flexibility. (b) It has also changed the car that is produced from the old dowdy Rover to the smart little Mini, thus boosting employee morale. As a result of this change, the entire plant machinery had to be revamped and changed, so that older equipment geared towards production of the Rover was removed and equipment for the mini models introduces in its place, with attendant changes in refurbishing the plant through additional investments. (c ) The HR Department has also introduced changes in the pay and bonus systems, by throwing old the earlier restrictive covenants that bound the Company to high overtime payments during the peak production season and payment of wages during slack periods. This produced initial resentment, however in the long run it has proved beneficial. The HR Department has introduced specific performance oriented bonuses and invited employee participation in corporate decisions. Most notably, it has tapped into employee creativity by soliciting employee ideas and all these measures have promoted employee motivation. (d) It has also introduced numerous smaller changes in the worker practices in the plant, such as for example prohibiting smoking and the introduction of a voluntary employee suggestion scheme, which are also beneficial. The HR role is also notable as an “employee champion”. It has provided employees the flexibility in banking their work hours in a time account and opting for early retirement on the basis of this. Additionally, it has introduced performance oriented bonuses geared towards achieving targeted production levels while maintaining quality. It has harnessed employee creativity by requiring a minimum of three cost savings ideas in order to qualify for annual bonuses, thereby providing scope for additional savings in production costs and to foster employee engagement in the Company and its decision making. Lastly, it has also hired several more employees, although several are part time, thereby further aiding achievement of production targets, while also opening up a pool of qualified applicants. These applicants can be less expensively recruited and then promoted into permanent positions with the result that low turnover employee rates are introduced, to save time and effort on training and retaining employees and thereby improving productivity. From the standpoint of the “administrative role”, the HR Department has improved the working of the plant by setting production targets and changing the payment methods. However, it must be noted that in the case of BMW at Oxford, the “administrative role” is only a minor one since most of the improvements have been brought about by the “change agent” and “employee champion” roles of the Hr Department. The “strategic partner” role is also relevant only to a minor extent, in that the goals and objectives of the organization have been changed by introducing a new car for manufacture and including employees on the team of decision makers. Therefore, Ulrich’s model is the most applicable in terms of two major roles of the HR Department while the other roles are subsidiary, although they also provide some input. Ans 3: The website: http://www.redgoldfish.co.uk/jsviewjob.asp?jid=127169§ors= 14®ion=0, is an advertisement for an HR Manager placed by Big Fish Recruitment Ltd. The qualifications that have been sought for this post are as follows: (a) a CIPD (Chartered Institute for Personnel and development, UK) degree (b) post graduate experience of 2-3 years (c) knowledge of employment law (d) knowledge of HR systems, recruitment and selection techniques (e) approachable and open nature. Applying Ulrich’s model to this job, it may be noted that it is primarily one where the “administrative” role of the HR manager will be involved, since he/she will be expected to ensure that hiring and firing practices at the firm are in conformity with UK law. Therefore, it is not only the people skills of the person concerned that are important but also the legal expertise and administrative skills in recruitment and HR practices. This employee will be expected to ensure that the practices at the firm are such that will not render it liable for lawsuits. At the same time, the concerned person will also be expected to ensure that HR standards are implemented within the firm, thereby ensuring high employee productivity and motivation. There is also another aspect involved in this job, which is the role of “strategic partner” By requiring a friendly, approachable nature and a high level of skill in getting along with people, the job essentially involves being the public relations face of the Company and helping it to further its strategic goals by providing the interface for communication with employees. The HR Manager will therefore be expected to contribute to the Company as a strategic partner, in determining how best performances can be improved. This particular employee for this particular job is not so concerned with the change agent” role, since he/she is not being brought in to suggest or make changes, rather the role is geared more towards promoting and enhancing relations across the firm. There are several qualities that an HR Manager must possess – he/she will require a wide range of skills. Armstrong and Baron have summarized the vital role of the HR Department in an organization as follows: A further key role for the HR function is to play a major part in the creation of environment which enables people to make the best use of their capacities and to realize their potential to the benefit of both the organization and themselves.” (p 124) In order to ensure that a HR Manager is able to function at his/her best for the welfare of employees, the following skills may be required: (a) Psychology: a knowledge of human behavior and what motivates human beings at the workplace. Porter et al (2003) have pointed out that due to the sharp rise in information technology and increasing mechanization of operations in most organizations, human resources have been overlooked and downsized. Therefore, an HR professional must be aware of this aspect, possess the ability to gauge people accurately and be skilled in labor relations and negotiation. (b) Knowledge of technology and administrative tools: A large portion of an HR manager’s work comprises recruitment of employees and a professional must be well equipped with knowledge on hiring practices, employee benefits and compensation, Government rules and company regulations. A HR Employee must also possess a basic knowledge of the law, especially in relation to employment contracts. He/she must be well versed with the tools of technology that may be used for research, knowledge, and maintaining the database at the organization. A knowledge of financial and accounting principles is also essential, including economic principles and financial analysis and reporting of data. (c ) A HR employee must also possess communicative and listening skills, time management and critical thinking skills, the ability to speak and negotiate well and people management skills References: * Armstrong, M and Baron, A (2002) Strategic HRM: The Key to Improved Business Performance. London: CIPD * Case report How BMW put the Mini back on track * Dave Ulrich’s four part functional model [online] available at: www.citehr.com/dave- ulrichs-4part-functional-model-vt1582.html * O’Brien, James, 2002. Mini success secures big staff pay deal UK: The Birmingham Post, Dec 17, 2002 at pp 18 * O’Brien, James, 2002. Workforce: BMW looks to overhaul flexible working system UK: The Birmingham Post, Mar 7, 2002 at pp 26 * Porter, C., Hollenbeck, J. R., Ilgen, D. R., Ellis, A. P. J., West, B. J., & Moon, H. (2003). Backing up behaviors in teams: The role of personality and legitimacy of need. Journal of Applied Psychology, 88(3), 391-403. * Redman, Tom and Wilkinson, Adrian, 2001. The Informed Student Guide to HRM Thomson Learning. * THE SUN News report, 2002. 18% rise at mini plant UK: The Sun, Dec 17, 2002 at pp 2. * THE BIRMINGHAM POST News Report, 2001. BMW lines up mini workers UK: The Birmingham Post, October 26, 2001 at p 29 * THE BIRMINGHAM POST News Report, 2003. Workers vote to wind up Midland Gears Company. UK: The Birmingham Post, April 19, 2003 at pp 15 * Vroom, Victor, No Date: “Expectancy theory” [Online] available at: www.valuebasedmanagement.net/ methods_vroom_expectancy_theory.html Summary Of Job Position: HR Manager required for Dover Company   Job Title: HR Manager required for Dover Company Salary: 27000k plus bens Type: Permanent Company: Big Fish Recruitment Ltd     Sectors: Human Resources Jobs, Training & Recruitment Job Location: Kent - Dover Job Description: Great opportunity for HR Personnel - my client, a leading Dover Company, is looking for an HR Manager. You must be CIPD qualified with at least 2/3 years post graduate experience. Your responsibilities will include: employment legislation/employee relations, contracts of employment, recruitment, HR systems and management information, staff reviews, compliance management and health & safety. You must have a broad knowledge of employment law, recruitment and selection techniques, together with an approachable and open nature to ensure excellent staff relations across the organisation. Salary £27000k plus benefits. Contact Claire at Big Fish Recruitment NOW for more info on this excellent opportunity. To apply for this job please use the Apply Now section under these details, we prefer to receive applications online through this system. In addition your CV will be checked for viruses and will be stored for your future use.     Job Deadline: 30th January 2006 Apply Now:  Please Login to your Account or Register if you are a new member to apply for this job.   Read More