Human Resource Management - Fifers Bakery and McCain Foods SA - Essay Example

A Comparative Analysis of Human Resource Management Practices of Fifers Bakery and McCain Foods SA (Pty) Ltd. Executive Summary This article is a comparative analysis of the human resource management practice of two South African companies – Fifers Bakery and McCain Foods SA (Pty) Ltd. The two companies are leaders in the food processing industry. Fifers Bakery is a producer of artisan baked products while McCain Foods SA (Pty) Ltd. is part of the global operations of food processor giant McCain Foods. The aim of the article is to identify human resource management practice of Fifers Bakery that would require attention to help the organization develop its operations. The focus is on the following areas: 1) induction of employees; 2) staff development; and 3) performance appraisal. The SWOT analysis is used as a tool to identify strengths, weaknesses, opportunities and threats in the human resource management practices of the companies. Among the weaknesses of Fifers Bakery is that recruitment is undertaken by the plant managers themselves. There is no formal induction program for new hires. Supervisors and employees view job expectations differently. The weaknesses of Fifers Bakery in human resource management are anchored upon the absence of a human resource department. A Comparative Analysis of Human Resource Management Practices Of Fifers Bakery and McCain Foods SA (Pty) Ltd. This article is a comparative analysis of the human resource management practice of two South African companies – Fifers Bakery and McCain Foods SA (Pty) Ltd. The two companies are leaders in the food processing industry. Fifers Bakery was established by Eddie Hind in 1992. It is now owned by Foodcorp Proprietary Limited after its purchase of First Lifestyle. The companys production facilities are extensive with a variety of equipment and 6000 square meters of factory space provides ample capacity for the production of more than 180 product lines, particularly specialized breads, cakes and “artisan” baked products. McCain Foods SA (Pty) Ltd began operations in South Africa in 2000. The company has approximately 1,150 employees nationwide and has its headquarters in Bedfordview, Johannesburg, South Africa. It has four production facilities in South Africa. It is part of McCain Foods Limited which is based in Florenceville, New Brunswick, Canada. It is the world’s largest producer of French fries and other oven-ready frozen foods. Theoretical Framework Human resource management is a management function directed at the provision and deployment of a business enterprise’s human resource needs. It falls within the domain of staffing the enterprise. Guest’s normative model is to be used in comparing the personnel management practices of Fifers Bakery and McCain Foods SA (Pty) Ltd. According to Guest (1987; as cited in Legge, 2005), the formulation of human resource policies should attain four main human resource outcomes. First outcome is the integration of human resources into the company’s strategic plans. Second, the development and strengthening of personnel commitment to the company. Third, establishment of organizational adaptability and job flexibility. Fourth, attainment of quality in various operational dimensions such as performance, standards and public image, among others. The attainment of these human resource outcomes are expected to yield organizational outcomes measurable in such metrices as high job performance, better problem solving, greater innovation and improved cost effectiveness. It should also result in lower employee turnover, lesser absenteeism and grievances. The model is captured in Table 1 below. Table 1. A theory of HRM HRM policies Human resource outcomes Organizational outcomes Organization / job design High job performance Management of change Strategic integration High problem solving, change, innovation Recruitment, selection/socialization Commitment Appraisal, training, development Flexibility/adaptability High cost effectiveness Reward systems and communication Quality Low turnover, absenteeism, and grievances Leadership/culture/strategy Analytical Tool This comparative analysis focuses on the practices of Fifers Bakery in employee induction, staff development and performance appraisal. These practices will be compared to those of McCain Foods SA. A SWOT matrix will be used to compare the practices of the two companies. SWOT Analysis is a strategic planning tool for evaluating the strengths, weaknesses, opportunities and threats involved in a business enterprise or project. It is a simple framework for generating strategic alternatives. The SWOT Analysis is useful when there is limited time to address complex strategic situations because it concentrates on issues that potentially have the most impact. Nevertheless, the SWOT framework has a tendency to oversimplify the situation. (NetMBA website, 2007) Information on the human resource management practice of McCain Foods SA is taken from secondary sources such as the company’s reports and manuals. Data on Fifers Bakery is from my own personal knowledge as an employee. Classification and evaluation of the practices as either a strength, weakness, opportunity or threat is based on the theoretical construct of each human resource management function understudy. This approach also facilitates the identification of areas for improvement in the Fifers Bakery practice. Results and Discussion 1. Inducting New Employees Vacancies in enterprises are filled up either through internal or external recruitment. And so, attracting the right people with appropriate qualifications to apply for the vacant positions is an important step in selecting and hiring employees. Zottoli and Wanus (1998) showed in a study that higher productivity rates were attained by internally sourced employees. Rupert (1989), and Aamodt and Carr (1998), saw no difference in performance. They, however, found that longer tenure was related to internal sourcing of employees. Preferring current employees over external candidates for vacant positions is a factor in improving employee morale. Nevertheless, the need for new blood rationalizes hiring from outside the company. Ideally, therefore, organizations attempt to strike an effective balance between sourcing applicants internally and externally. (Johnson, 1997) Internal sourcing includes rehiring former employees, referrals by current personnel, promotion and lateral transfer from one department to another. External sourcing go through such channels as recruitment agencies, placement entities, headhunters and ads that target prospective applicants from outside the company. Recruitment and selection of the right person for the job is the start of managing personnel performance. Recruitment of employees considered to be capable for the job, however, does not ensure that they will perform satisfactorily. Among the many management interventions to be utilized is the conduct of induction programs. This may be as simple as a new employee orientation or as comprehensive as a new hire training program. Induction programs are significant in helping new employees hit the ground running. It is vital for retaining the new hires, and then speedily and comfortably settling them into the job. It is about the basics that are taken for granted by seasoned employees such shifts, holidays, leave policies and others. New hires need to understand the organization’s goals, cultures, values and philosophy; personnel practices, and the job theyre required to do. Induction is the time to establish clear foundations and clarify expectations in terms of ethics, integrity, and corporate social responsibility. It is an occasion for reinforcing the new employee’s decision to work for the company. Inducting new employees can not be underestimated because it marks the beginning of the employer-employee relationship. (HR Team website. 2007) McCain Foods attract job applicants internally and externally. Current employees are informed of any vacancies in the company through internal advertisements posted on a local and global intranet website. Ad placement in local newspapers is directed at the external labor market. Recruitment agencies and local universities are also a source of applicants. Furthermore, the company has a graduate trainee program to attract prospective employees. References of McCain Food’s applicants are verified prior to being slated for formal job interviews. The panel interview is the preferred method for applicants to senior staff positions. Prior to the interview, all short-listed candidates undergo psychometric testing. Each newly-hired employee is introduced to the organization through electronic mail that includes a brief biography. The new appointee meets with the human resource manager on the first day of work whenever possible. Furthermore, a copy of the Code of Conduct and the company’s human resource policies and procedures is given to the new hire on the first day. The company has a formal induction program for the graduate management trainees that involve spending time with managers in specified functions. Fifers Bakery does not have a Human Resource Department, hence, recruitment is done by managers in need of new employees. Senior and junior managers are sourced through a recruitment agency while factory workers are taken in through a labour broker. In terms of inducting employees, the McCain Foods practice is an area of strength while it is a weakness for Fifers Bakery. 2. Performance Appraisal Organizations have realized that supervisors only see aspects of an employee’s behavior. As a result, performance appraisals have veered away from supervisor rating. Multiple sources, or 360-degree feedback, of appraisal are utilized to obtain more accurate view of the employee’s performance. (Gruner, 1997) Aside from supervisors, relevant information on personnel behavior and conduct may be taken from peers, subordinates, customers and the employee himself/herself through self-appraisal. Supervisor ratings of employees, however, are still valuable. Supervisors are still in the best position to evaluate the employee’s contribution to the organization’s overall success. Supervisors see the end results of an employee’s performance even though they are unable to monitor 100% of the employee’s behavior. Co-workers are in a better situated to observe an employee’s behavior. Few organizations, however, use peer appraisal. Ratings have been found to be lenient when used for evaluation but stricter when used to provide feedback to the employee. High performing employees are strict in their evaluation of peers as compared to low performers. (Saavedra and Kwun, 1993) Nevertheless, peer ratings are fairly reliable when made by peers who are similar to, and acquainted with, the person being rated. (Mumford, 1983) Organizations value customer feedback on their service and employees. The feedback may be collected informally through the complaints filed or compliments given to a manager about an employee. Customer feedback may also be formally solicited through satisfaction surveys after a customer interaction with an employee. Self-appraisal, like peer rating, suffer from leniency. (Meyer, 1980) It appears to be most accurate when used for research or review interviews rather than for salary increases, or promotions. (Williams and Levy, 1992) Subordinates can give a very different view on a supervisor’s behavior. Walker (1997) said that there are indications that subordinate feedback can enhance the poorly performing manager’s performance. Truthful subordinate ratings, however, are difficult to obtain because of the fear of a backlash. Surely, performance appraisal is used for decision-making on raises and promotion. Its most important value however lies in providing feedback to the employee so that further training can be given. McCain Foods has a performance excellence program to evaluate performance formally twice a year. The key performance areas are categorized in terms of the company’s global strategies. The performance program is linked to an incentive reward scheme for senior management. For the junior staff, the program is merely to evaluate progress and assist with any development concerns. The performance review is to ensure that a detailed development intervention is created to assist with the growth of the individual. (McCain, Growing Together Plan, 2006) At Fifers Bakery, the supervisor evaluates the performance of subordinates. Four common sources of information frequently used by managers are personal observation, statistical reports, oral reports and written reports. Job expectations and performance standards are, however, unclear. Often, Expectations of the supervisor and the subordinates regarding the job may be at variance. Very few supervisors have the skill to constructively convey to an employee how to improve his performance. Poor communication keeps employees in the dark about what is expected from them. In terms of performance appraisal, the McCain Foods system and practice is a strength for the company. At Fifers Bakery, the fact that supervisors evaluate subordinates is also a strength for the company. There is however an opportunity to institute a better performance appraisal process and system. At this point, the lack of a human resource department becomes glaring. While a company may resort to managers directly hiring the personnel they need, this is a stop gap measure. In terms of evaluating performance, there is a clear need for a group or personnel to focus on developing and implementing the appraisal system. 3. Staff Development According to Heathfield (2007), conducting appropriate employee training and education at the right time results in increased productivity, knowledge, loyalty and contribution. In general, education is mind preparation while training is the systematic development of the attitude, knowledge and skills required to perform a given task or job adequately. Development, on the other hand, is the growth of the individual in terms of ability, understanding and awareness. (Accel Team website, 2007) There are several options for the education, training and development of personnel. This may be undertaken externally (through a third party) or internally (organized by the company). Choices range from seminars to book clubs to mentoring programs. It is important, however, to note that the training function is no longer a catalog of classes. Even the best of generic classes may not meet the needs of various people and job functions. Customized content and program is the recommended approach. McCain Foods spend approximately 2.5% of their payroll cost on employee training and development. (McCain Management Reporting, 2007) Further education is encouraged through a bursary program or monetary grant that is available to all employees. New in-house function specific programs have been started such as the training course for the finance staff that was developed by the finance department. There may be areas for improvement in the McCain Foods practice but it is the strength of the company that there is a training program. Sad to say, staff development is a weakness of Fifers Bakery. It has no clear system for developing its personnel aside from learning from the mistakes made on the job. In the long run, this is costly as compared to maintaining a full-time human resource management staff. Conclusion and Recommendations for Fifers Bakery The biggest challenge for Fifers Bakery is the absence of a human resource department that would address the personnel management concerns afflicting the company. It is operating at a large scale undertaking many activities that it doesnt have the time to concentrate on things pertaining to employees. So for this reason there is a need for a human resources department. The basic reason of this department is to work hand in hand with the employer as well as the employee. It has to manage within the minimum cost the benefits and requirements of the employees. As there are certain needs of humans which are unpredictable so an HR department must be active enough to participate in the changes. The functions of this department are generally divided as follows: (1) Training and Development; (2) Labor Relations; (3) Strategic Human Resources Concerns; and (4) Global Human Resources Concerns. The Training and Development group focuses on improving staff quality to meet the requirements of the job. Labor relations focuses on managing the needs of employees, including the provision of benefits and addressing grievances. Strategic Human Resource Group deals with the hiring and firing of employees. The Global Human Resource Group handles the company’s global set up including the deployment of current personnel to new operations. (Small Business Bible website. 2007) Overcoming the human resource management challenge faced by Fifers Bakery only starts with the establishment of a human resource department. The task at hand includes improving, if not changing, the company’s human resource management practices. Employee job descriptions and performance standards should be periodically reviewed by management and the supervisors. Communication should be clear of what is expected from the employees. This could help the supervisor and subordinate to overcome any variance in expectations. The employees should be periodically trained and developmental plans should be laid out. Most of the performance appraisal revolves around feedback and documentation. Where development efforts are encouraged, a plan should be developed to describe what is to be done, by when and what the supervisor will commit to aid in the improvement or enhancement effort. This would create a learning environment among the employees and motivate the employees work against the performance standards. References Aamodt, M. &. Carr, L. (1988). Relationship between recruitment source and behavior. Proceedings of the Annual Meeting of the International Management Association of Assessment, 143-146 Accel Team. 2007. Human Resource Management Function 7: Employee education, training and development. Accessed on October 20, 2007 from http://www.accel-team.com/human_resources/hrm_07.html Cederbloom, D. (1989). Peer and supervisor evaluations: An underused promotion method used for law enforcement. Proceedings of the 13th Annual Meeting of the International Personnel Management Association Assessment Council. Guest, David E. (1987). Human resource management and industrial relations. Journal of Management Studies, 24(5), 503-21. Gruner, S. (1997). Feedback from everyone: Are 360-degree performance reviews a silly fad – or a smart management tool? Inc., 19(2), 102-103 Heathfield, Susan. 2007. Training: Your investment in people development and retention. Accessed on October 20, 2007 from http://humanresources.about.com/od/educationgeneral/a/training_invest.htm Johnson, C. (1997). Multiple career paths help retain talent. HR Magazine, 42(10), 59-64. Legge, K. (2005). Human resource management: Rhetorics and realities. Anniversary edition. Basingstoke: MacMillan. McCain Code of Conduct, 2005 McCain Growing Together Plan, 2006 McCain HR manual, 2006 McCain Management Reporting, 2007 Mumford, M. (1983). Social comparison theory and the evaluation of peer evaluations: A review and some applied implications. Personnel Psychology, 36, 867-881 NetMBA. 2007. SWOT Analysis. Accessed on October 20, 2007 from http://www.netmba.com/strategy/swot/ Saavedra, R. & Kwun, S. (1993). Peer evaluation in self-managing work groups. Journal of Applied Psychology, 78(3), 450-462 Small Business Bible. 2007. What is a human resource department?. Accessed on October 20, 2007 from http://www.smallbusinessbible.org/what_humanresources_department.html Walker, A. (1997). Upward feedback: Incremental improvement in managers’ performance over five years. Poster presented at the 12th Annual Conference of the Society for Industrial and Organizational Psychology, St. Louis, MO. Williams, J. & Levy, P. (1992). The effects of perceived system knowledge on the agreement between self-ratings and superior ratings. Personnel Psychology, 45, 835-847. Zottoli, M. A, & Wanous, J. P. (1998). A meta-analysis of recruitment source effects on turnover and performance. Proceedings of the Annual Meeting of the Sodety for Industrial and Organizational Psychology, Dallas, TX. Read More