Comparative and International Human Resource Management - Case Study Example

When BMW took over Mini plant, there was scepticism about their intention. After the company long history of being identified with British and its culture. However, the BMW was determined to change things around and revamp the company that was initially with zero growth and low sales. This commitment was seen on the amount of money the BMW invested in the revamping the company. First they had to replace the production machinery with new one similar to those used in Germany plant. Then they had to restructure the human resource by striking new deals with the workers. This deal is the one that really worked out for the BMW in turning around the company fortunes. The company saw the strategic decision of involving workers in the factory as the key in improving the performance of the company. The workers were encouraged to come up with ideas of improving the company performance. This saw the group, who work mainly on roofs for the new version of the iconic car being rewarded for coming up with the best money-saving idea. The workers suggested a change in the design of the Mini that saw BMW saving up to 6M. The BMW Company utilised the Industrial relation approach which involved establishing healthy relationship between the employees and the management. BMW used trade union to strike ground breaking deals that resulted in improved performance on the side of the organisation. It is my sincerely advice to BMW company to use the principle of industrial relation as it prepare to consolidate its production and cost reduction stage this would facilitate smooth implementation of its future plans. Comparative and International Human Resource Introduction Strategic human resource management (SHRM) involves linking the human resource functions with the strategic goals of the organisation. Human resource managers need to maintain good relationships within the organisation so as to improve performance and maintain talented employees. How BMW Enhanced Organizational Performance Through the Implementation of Human Resource Systems and Practices BMW used what is known as Continuous Improvement (CI) strategy to enhance organisational performance. CI emphasise the importance of customer focus, internal customer-supplier relationships, process management and control, empowered work teams and visionary leadership. BMW used all of these strategies in establishing processes for strategic or business planning, organisational and job re-design, cultural change and performance management (Hammond, 2001). BMW is an icon of a company that can use staff-company relations to improve firm production. BMW was determining to give the Mini firm a new face lift. This involved among other things involving the workforce whom the BMW absorbed from the old Mini firm. According to Werner Rothfuss, director of corporate communications at the plant, BMW is committed to the staff engagement in the running of the company. The BMW developed good staff- management relations. This is seen where the company engage the union in the dialogue so as to strike the new deals. Many Companies would shy away from this kind of engagement. However BMW believe that in order to succeed it has to pay whatever the price so as to improve the relationship with its employees. As the report exemplify, "...Union acquiescence was bought by promising a minimum bonus of 130, even if targets are missed, and one of the largest wage rises in the industry." (BMW Report). The organisational skills in communicating these changes the best way possible was mandatory in order to avoid workers unrest or resentment. This seems to be the area of expertise for MBW. The BMW was able to convince the workforce to strike a new working deal with workers union. The BMW hammered a new pay deal that reduced the evening entertainment hours for workers and make them more involved and creative in revamping the company. This way the company was able to cut cost and harness creativity on the part of the employees. BMW believe that 'Employees can make a difference' (BMW Report) Another HRM practice employed by BMW is the use of rewards to make the workers more productive and boost their morale. BMW developed a scheme of rewarding employees who come up with a successful idea that would reduce the production cost-each idea was well rewarded. This scheme saw the company saving up to 6m from 10,339 ideas from the staff (BMW Report). One of the landmark suggestions from staff of MBW was halving of the number of soundproofing foam blocks without any adverse effect to the design of Minis leading to annual saving of 115,000. Another 6,400 was saved by changing the fixings on the cross-braces below the windscreen. This was followed by 4,500 which was saved by changing the paper used for the body shop's report cards from A3 to A4. In addition the way in which BMW introduced changes in the company without counter resentment from the workers is worth noting. Also striking, is how workers were able to accept the new arrangement despite the less generous contract deals where the company introduced banking hours instead of over time pay and smoking rules which were not there before. The fact that the workers later on came to appreciate these measures, is clear indication of the best human resource practice by BMW. On the other hand BMW improved the working conditions of its workers. BMW introduced a more conducive assembly line that is quiet and clean this innovation is more comfortable for workers who are forced to stand all day long. Moreover BMW ripped off the old rover buildings and replaced them with lawns and car parks in a 50m clean up. This is more encouraging and boosts the morale of the workers as they feel that the company is concerned about their welfare and safety. Above all, the company innovative approach is more pronounced here and need to be praised. The best human resource practice involves strategising of the best innovations that result in the success of the company. BMW, ideas of overhaul structural change both technical, mechanical and manpower strategy was one of the boldest move made by BMW. The success of the innovations acted as a morale boosting catalyst to the company's staff that saw themselves as being part of the company success. The phenomenological market response is the climax of this " workers say; they can be proud of what they are producing - a powerful little car that has cachet, rather than the dowdy old Rover 800 they built until 1998" (BMW Report) The BMW Key Usage of Industrial Relation Strategy The industrial relations principle of human resource is the key to BMW success in this endeavour. The industrial relation is seen in the manner in which BMW was able to introduce drastic changes in the new look Mini firm without provoking workers unrest and resentment. On the hand, the workers were wiling to implement these changes despite the fact that some of the proposed restructuring ideas affected them in some way. The success of innovative strategic management ideas introduced by BMW may account for lack of workers resentment when the draconian smocking rules were introduced that restricted smocking to certain areas. The workers were happy and impressed with their work. Job satisfaction comes especially when the workers sees the positive outcome of their work. "... 160,000 Mini's, 40,000 more than planned, as British and US drivers raced to buy the stylish new car - and chose the more expensive, and more profitable, Cooper and Cooper-S models. (BMW Report) BMW held dialogue with workers union that saw the entertainment hours of the workers and overtime pay scrapped. The BMW was in turn required by the union to increase the wages and improve working conditions of its staff. Above all, there was a baseline bonus even when the workers failed to meet agreed targets. The over time worked was banked to be taken up for an extended long holidays. At first this was not well taken by the workers but as time went by, the workers came to appreciate the advantage of extended holiday's hours. In addition, BMW changed the working culture in this firm. Most prominent one is the utilization of the concept of voluntarism. According to Beardwell voluntarism sees the trade unions as agent of economic change rather than being representative of workers plight. The engagement of unions in dialogue to bring change to the firm makes the workers and unions part of the change and improve the workers- employer's relations (Beardwell, 1996). BMW apart from striking a deal with workers union it went ahead to introduce a 'voluntary suggestion scheme' where employees were rewarded for any idea that would lead to improved performance and cost reduction. This scheme saw BMW saving up to 6m annually. In a nutshell the brain behind BMW success in Mini investment was the strategic use of best industrial relations that saw workers being more involved in decision making and firm operations. (Beardwell et al, 2004) Human Resource Advice to BMW for Effective Strategy in Managing Consolidation Stage As BMW prepare to stabilise their production by cutting the cost of production. They have to bear in mind that they cannot do this on their own. Cutting down of cost will involve at some instances reducing the workforce. This will be very sensitive decision to make for the BMW. It will cost them a lot of money since they have to generously reward the employees they will lay off. In this approach, BMW should invite the workers union to decide on the best way to reduce cost and how best to implement this without provoking workers. This strategy will involve among other thing selection of those to be laid off. The selection criteria should be left for union to decide. However, performance based criteria is what I would recommend in this endeavour. The compensation scheme for laid off workers should be implemented inline with the union suggestions. This way the BMW Company would enhance the relationship with their employee and boost morale for those workers left behind. The other issue BMW want to contain is the scraping of Sunday shift, at the same time making up for the missed cars by increased productivity during the week. BMW can achieve this by engaging the workers more and more on voluntary suggestion scheme on how to improve production output without compromising quality. This approach have been successful before and it is my sincerely belief that it will still be successful in this consolidation stage. In order for BMW to achieve an effective consolidation stage without disruption and watering down the gains they have made so far, it have to make the employees more involved in the decision making at this crucial stage. This would ensure that employees do not feel short changed especially after their contribution in the success story of BMW in Oxford. As Mr Moss union representative, noted I would like to see the camaraderie back and the characters that used to be hereIf people are happy, they are more efficient. If they are unhappy they are not going to bother looking at suggestions. When they are happy they are more involved. (BMW Report) The above BMW story has shown how significant industrial relations is in organisation performance. BMW particularly used this approach with diligence thereby turning around the Mini plant. Industrial relation used by BMW is based on the motivation theory, especially the content approach. The contented approach assumes that, workers are motivated by the desire to fulfil inner needs. Applicable in BMW strategy is relatedness; the desire to develop and achieve interpersonal relations and the achievement need; that people thrive on pursuing and attaining goals (Gemmy, "Motivation"). Built on this, BMW was able to integrate its employee into the decision making by use of voluntary suggestion scheme. Employee relationship make them feel a strongly bond toward the organisation; this motivates them to commit their time and efforts to the success of the organisation. This is achieved through regular feedback, dialogue with superiors and also the existence of improvement opportunities. ( David & Rosenfeld, 1990) This type of relationship exist between co-workers, and between workers and supervisors, they help employees to listen to others, understanding of acceptance, team building, understanding of workers life issues, avoiding discrimination and in conflict resolution. BMW therefore, is a very good model of how company should engage its employee in the day to day running of the company for effective goal achievement and business growth. References Allan N. and F Ernest. (1957); Ford: Expansion and Challenge, 1915-1933. New York, Charles Scribners' Sons. Beardwell I, (ed), (1996), Contemporary Industrial Relations: A Critical Analysis, Oxford University Press. 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