Changes in Personnel Management in Fastening Technology Limited

Fastening technology was established by Alan Brown a brilliant engineer who also designed his own manufacturing processes and the company had been successful for years(Carol& Mason 2009: pg 2-3). In a nick of time the business had changed. Global engineering Inc bought the business in other to expand the business to not only producing metal fasteners but also producing plastic as well as metal fittings due to the increase in demand in the automotive and white goods market(Carol& Mason 2009: pg 3). As the business progressed within a short period, similar business were bought in France, Spain, Italy and Holland as a strategy to dominate the fasteners market. However at the time the business was making profit due to the high demand for fastening solution, their came economic recession which made the demand for fastening solution drop drastically.

Fastening Technology responded slowly to the change in demand as the company still practiced the old culture during Alan Browns days. Ford is the biggest customer of Fastening Technology Limited who demands for a decrease in the prices of goods and an increase in the quality of products from FTL. However the business was turned around as a new General manager was employed to carry on the task(Mason 2009: pg3). SECTION ONE: 2.0 THE MOVEMENT FROM PERSONNEL MANAGEMENT TO HUMAN RESOURCE MANAGEMENT In the early years of fastening technology showed they had gradually moved from personnel management to human resource management. However it is of great importance to look at both PM and HRM as there has been a lot of controversies on both terms between scholars who have different view about the concept of both human resources management and personnel management (Bratton and Gold 2007). According to Dessler (2005) states that Human Resource Management is the process of acquiring training, appraising and compensating employees and attending to their labour relations, health and safety and fairness concerns of the employees in a company, which is a process of viewing employees as an asset and not cost using SOFT human resource management approach. Human resource management according to Mc Court et al (2008) is the way an organisation manages its staffs and helps them to develop, which is also viewing employees as assets to the company. Graham et al (1998) in his words states that human resource management concerns the human side of the management of enterprises and employees relations with the firms and its purpose is to ensure employees of a company are used in such a way the employees obtain the greatest possible benefits from their abilities and the employees obtain both material and psychological reward from their work.

Another HRM definition was postulated in (Bratton and Gold 2007:pg 7) as a strategy approach to managing employment relations which emphasizes that leveraging people capabilities is critical to achieving competitive advantage, this being achieved through a distinctive set of integrated employment policies, programs and practices as a result help people individually or as a group in an organisation to achieving their set goals or objectives. However personnel management is the duty of the line managers tackling administrative issues, coordinating management and also attending to the needs and concerns of the employees (Cornelius 2001). The difference between PM and HRM is philosophical, PM is the duty of administrative department on issues of payroll and employment rules and regulation while HRM is responsible for managing a work force as a whole, helping employees to work effectively in other to achieve the set goals and objectives (Wisegeek 2010 At the early years of Alan Browns reign, the founder of fastening technology, he adopted HRM approach, viewing people as asset with the promise of immediate availability of housing in London and had skilful employees who were very loyal to the owner(psychological contract)(Mason 2009:pg3) which is the SOFT HRM approach stated in Bratton and Gold(2007) as the process of communicating and motivating employees to working towards the strategic goal and objectives of an organisation. On the other hand HARD Human Resource Management sees employees as cost to be reduces and also focusing on flexible techniques their by reducing investment in training and development of employees (Breadwell & Claydon 2010), which was the approach the new managing director took by offering early retirement to old staffs and also using redundancy packages(Mason2009:pg4). Human resource strategy is improving organisational effectiveness with the use of polices thereby improving knowledge, creating talents with a clear vision of the business in other to effect its competitiveness (Purcell et al2003 in Armstrong 2006). This was made possible when the newly appointed human resource manager(Alistair) worked closely with the managing director as they both had similar vision for the progress of the business, thereby improving the HR functions by training employees in FTL and rewarding them.

However in the early years of Alan Brown, trainees left for other companies after the training was completed as HR strategy was not effective at the time (Mason2009:pg5). Human resource planning solidifies Human Resource Management effectiveness in an organisation which is what Raymond (2005) states that HR planning identifies what must be done in regards HRM, required by an organisation to meet the strategic business objectives. It is also designed to facilitate the achievement of business objectives by integrating various processes such as selection, employee performance and appraisal, reward, training and development (HRM journal Vol5). This policies were slightly effective in the early years of FTL as the new managing director had a strategy of selecting the right people for the correct job title, incorporating training into the work system and linking the reward system to jobs their by developing and contributing to the overall goal and objective of FTL(Mason 2009 pg4-5). 2.1 CONCLUSION It is of clear evidence that FTL adopted more of Human Resource Management approach to personnel management. Looking at the strategy the General manager applied in reorganising the company and the success it achieved in the space of three years thereby receiving the Ford Q1 award which meant they had surpassed fords expectations. The use of redundancy package, employing the right people for the job description, training and rewarding employees are all Human Resource Management strategy. However, the HR approach and application of policies was slightly effective in the days of the newly appointed General Manager.

The HR planning in relations to performance management, recruitment, development and reward was not that effective 2.2 RECOMMENDATION For FTL to gain an advantage over its rivals within the industry, FTL has to correct its employee relations policy by introducing a trade union that would help to build the voice of employees in attaining success and improving performance. Furthermore, FTL needs to systematically organised its training plans and also evaluate the benefits of training so as to train employees to work effectively at their various job levels thereby enhancing the competitiveness and also meeting the business plan. 3.0 HUMAN RESOURCE MANAGEMENT POLICIES TO PEOPLE MANAGEMENT IN FASTENING TECHNOLOGY LIMITED Different scholars have given various concepts of Human Resource Management and Human Resource strategy in relations to managing people. Armstrong(2006) has defined HRM strategy as the process of creating programs to improve organisational performance thereby developing policies in employee relations, employment relationship, performance management, HR planning, reward and remuneration and development. Price(2004) generalised HRM as employees and employers high commitment and high performance in a work place thereby focusing on customers satisfaction in the quality of goods and services (total quality management) which is the relationship between high performance and human relation, viewing employees as resources. 3.1 Employee relations/Communication Several scholars have given different understanding to the term employee relations. Armstrong (2006) defines it as A¿A½the areas of human resource management that involves relationship with employees-directly and/or through collective agreements where trade unions are recognisedA¿A½ and also settling of dispute and regulating employment through the use of collective bargaining.

This definition emphasizes that employee relations is the positive interaction of two persons either between employees or between employer and employee, while collective bargaining on the other hand emphasizes the relationship between employer and employee through the use of a trade union or employee representatives in work councils which according to Boxall (2008) argues that employee relations is working closely with employee representatives, thereby valuing their ideas, providing them with valid information in the management of change. However, Price (2004) argues that employee relations is more than unionized collective bargaining which consists of all the employment relations and also consisting of the power relationship between individual employees and their employers. This definition holds the view that employee relations is shifting from the strong view of collective bargaining to individual involvement. Employee relations are a set of philosophy which is related to A¿A½employee voiceA¿A½ and psychological contract rather than the functions of the human resources management or their defined set of activities (CIPD, 2010). Employee relations is very important to achieving performance through the use of employee involvement which is a two way communication between employees and employers which creates high trust and high commitment in relations to employee attitude (ethics) and communication (Bratton & Gold, 2007). Therefore based on the definitions given above it is of clear view that in Fastening Technology Limited employee relations was not too effective.

For instance the lack of trade union in FTL made it difficult for employees to speak, express their ideas and also take part in the decisions of the company to reach the ultimate goal and objectives ( Mason 2009:pg 6). However, despite the establishment of a work council, it was of clear view that employees did not buy the idea, viewing from the survey carried out with 47% of the information coming from grapevine, showing that majority of the employees viewed the establishment of the council as a waste of time because issues on individual pay and development were shoved aside during the meetings (Mason 2009;pg 16). Although team briefing was later introduced which started off well but later lost its balance as managers were late in completing their briefing thereby leaving team members unhappy as regards the responses from the briefing (Mason 2009:pg 16) which breaches the psychological contract because the expectation of both the employee and employer form a psychological contract. Psychological contract is an assumption that is held between members of organisation which is either formal or informal thereby giving employees a sense of belonging, responsibility and recognition ( Cornelius, 2001). However a little section of the employee relations problem was solved by the newly appointed managing director(Phil) working closely with the human resource manager(Catherine) to improve the relationship between the team managers and also developing an international team working culture to support the new global structure. 3.2 Employment Relationship Employment relationship according to Beardwell (2010) is a process of socio economic exchange, meaning that employers and employees are obliged by a signed contract. The economic, cultural and psychological components of employment relationship are built in the contract of employment thereby subjecting other processes such as efficiency and motivation ( Beardwell 2010:pg 385). Employment relationship according to Bratton & Gold (2003) is the economic, legal, social and psychological dynamic interlocking reciprocal relations that exist between both management and employers. Employment relationship consists of beliefs of both an employee and an employer on what they expect of one another(reciprocity) which can be expressed in terms of psychological contract (Armstrong 2010). Price (2001) also states that employment relationship is a formal and A¿A½informalA¿A½ relationship between the employing organisation and an employee and the informal relationship in the concept is the psychological contract. Therefore it is of clear view that employment relationship was not too effective in FTL as regards the legal (laws & rules), economic (salary reward), social (voice) and psychological (metaphor recognition) elements in employment relationship policy.

The issue of pay/salary regarding the graduate engineers thereby putting pressure on management to increase their salary with the provision of evidence that employees working in the similar businesses earn higher pay (Mason 2009:15). Another defect in the employment relationship policy in FTL was the lack of A¿A½voiceA¿A½ as stated earlier in employee relations in regards the late feed backs from team briefing and also the diversion from pay related issues in the meeting held by the work council(Mason 2009:pg 16). Furthermore, employees were not pleased with the management style of the present managing director(Steve) and thereby went through the human resource manager(Catherine) to help influence decisions and give feedback on some actions the managing director took (Mason 2009:pg 15). However in the process of this the human resource manager started to feel uncomfortable with the approach of the managers who were all male thereby viewing her as a A¿A½mother figureA¿A½ on whom they could unburden their problems which made her feel her professional stand and status was destroyed by the managers attitude which is a breach of the psychological contract (Mason 2009: pg 15). Psychological contract is concerned with the mutual understanding which brings about an exchange between employers and employees which in return brings about high performance (Redman 2001). It is also an informal contract that holds the assumption between employer and employee (Cornelius 2001) Furthermore a breach of the A¿A½psychologicalA¿A½ contract in FTL was as a result of when the human resource manager found out other colleagues in similar businesses all had company cars and many earned higher salary which made her feel she was not given what she deserved at her professional level (benefits) and also the pay difference issue between the quality manager (Phil) and Downley which made them feel undermined as female managers (Mason 2009:pg16). Another breach of the psychological contract in FTL was the unfulfilled promise of training for employees by managers at the last appraisal leaving employees no choice but to confront the Human resource manager (Catherine) as they felt their mutual terms of exchange that exists between employee and employer had been breached (Mason 2009:pg 8) The non effective A¿A½legalA¿A½ element of employment relationship in FTL was the working hour rules of employees taking on overtime shifts as some employees worked through for seven days when the overtime was available which created stress related illness observed by the HR manager, noticing the effect on the performance of employees (Mason 2009: pg 18). 3.3 HR PLANNING IN RELATIONS TO RESOURCING Human Resource planning in relations to resourcing is another HRM policy adopted by FTL. It is the process of securing a working environment combining it with the right skills, knowledge and experts and also maintaining the appropriate staffing levels (Cornelius 2001). Recruitment and selection is a component part of HR planning (Dessler 2005:pg ). Recruitment is creating awareness for job vacancy thereby screening and selecting the people that best qualify for the job vacancy to increase overall performance( Torrington et al 2008). Selection on the other hand is having a clear view of determining the best applicant to impact on the performance of the business( Dessler 2005). However HR planning is the connection between the strategic business plan and strategic human resource management( storey 2001). Therefore viewing all this processes in the light of FTL, it is seen that FTL lacked all the techniques and methods of recruiting, selecting and resourcing because HR planning was not carried out properly. There was no link of the HRM strategy to the business plan and no clarification of the human resource management needs in the future for the business (Mason2009: pg 17). FTL had problems with selection as newly appointed managers found their positions very difficult to manage.

For instance, the newly appointed general manager (Phil) new he lacked the experience of fulfilling the role of a general manager which meant that the management of FTL was as stake. Also the quality manager at that time was replaced by an apprentice who was finding his new role very stressful. Another defect was the short term role Mary Downley played as human resource manager. she was not trained and experienced enough to take the role of human resource manger while Catherine was way (Mason 2009:pg 10). Furthermore the HR manager(Catherine) was having difficulties in recruiting people that qualified for the appropriate positions which as a result of the accident caused by the over enthusiatic forklift driver thereby living recruitment and selection practices unsophisticated in FTL (Mason 2009:pg 17). Although the HR manager tried to improve recruitment and selection practices in FTL, her colleagues often shoved related issues aside as they saw recruitment and selection as a low priority (Mason 2009: pg 17). As a result of all this lapses in FTL, it is evident that business failed as selecting and recruiting the right employees to carry out the job requirements was not well administered in other for the company to increase profit and performance and in turn reduce risk. FTL also lacked resourcing and outsourcing processes as the general manager at the time transferred valued employees to other branches and still was incompetent of organising the business to improve production and maximize profit (Mason 2009:pg 11). 3.4 Learning and Development Learning is continuous training and development of employees to increase drive, stimuli ,response and re-enforcement so as to meet the continuous changes in the work place as regards innovation and new developments (Graham 1998). According to Harrison (2002) learning enables an individual or employees to develop in an organisation which is a continual process that comes in four different styles which are the A¿A½activistA¿A½, the A¿A½reflectorA¿A½, the A¿A½theoristA¿A½ and the A¿A½pragmatistA¿A½. Activist in a work place are those that learn by practicing what they have been thought on the job, a reflector is one that observes what others are doing and in turn utilises the ideas, while a theorist learns with conceptual frameworks thereby building and developing great ideas and finally a pragmatist is one that learns to accept any method to solve a problem not minding if there is a method or approach to solving the problem. However learning would not increase the performance of an organisation only if the organisation impacts knowledge on its employees by training them to work effectively within their job descriptions (Harrison 2005). However Harrison (2005) also states that development is a long term process of using an organised learning procedure to improve an employeeA¿A½s job performance and personality. In FTL there were a lot of defects to learning and development in regards training employees to fit the right job description/ position.

For instance the newly appointed managing director(Steve) lacked leadership skills as he was not trained and fit for the position he was promoted to (Mason 2009: pg 6). Also the general manager (Phil) at the time worked with the short replacement HR manager(Mary), as she lacked experience to help solve HR problems which was due to the fact that she was not trained to fit for the job position which emanated lapses (Mason 2009:pg 10). Furthermore, the newly appointed quality manager who was formerly an apprentice was finding the new job role stressful as he was not trained to fit for the new job he was appointed. The finance director (bill) was also struggling with his job as he was not contributing well to the business which is as a result of lacking the skills to perform properly within their job descriptions (Mason 2009: pg 10). However, even though they saw training as a high priority in FTL, it was not systematically organised and planned by managers (Mason 2009:pg 8). Based on this it is of clear notion that FTL lacked the learning and development processes of increasing knowledge, enhancing competency among employees and increasing the business performance (Pilbeam et al 2006). The sum of A¿A½25,000 was invested in training as the managers saw the urgent need to train and develop employees thereby impacting knowledge among employees at different levels such as from sales to production, dispatch and customer service which resulted into a positive and worthwhile decision by managers (Mason2009:pg 13). In this regard FTL sees its employees as assets to be invested on and not cost as mentioned earlier in section 1 . 3.5 Performance Management Another pertinent policy of human resource management to managing people in FTL is performance management. Armstrong and Barron (1998) cited in Millmore et al (2007 pg:) defined performance management as A¿A½a strategic and integrated approach to delivering sustained success to organisations by improving the performance of people who work in them and by developing the capabilities of team and individual contributorA¿A½. However in performance management, there are key components such as performance appraisals and performance related pay (staff performance), which is interwoven with the strategic goals of an organisation (Millmore 2007). Performance appraisals is the grading process of an individualA¿A½s performance thereby giving feedbacks through promotion or more training if need be. According to (Corbridge 1998:pg 200) performance management A¿A½is an holistic process which requires the definition of organisational aims, the development of team and individual objectives, effective systems for measurement and assessment, reward system that provide incentives, feedback that is constructive and support for employees to develop and acquire the skills needed to contribute fully to organisational successA¿A½. Viewing from the above definitions it is of clear view that performance management was also not too effective in FTL. Although In the early days of the managing director (Anders) performance management was effective as he brought in Hay MSL to carry out a job evaluation by linking the reward system to the job grades and also introducing individual performance and company performance and also initiating reward policy (Mason 2009:pg 5). Furthermore the new Human resource manager (Catherine) saw the need for performance management, as it a process of getting positive and improved outcome from FTL through coordinating activities through a systematic approach thereby achieving the organisational goal that cuts across different job functions, individual performance and work teams (Cornelius 2001). Employees at FTL viewed the appraisal system as a A¿A½waste of timeA¿A½ and the objective setting for shop floor staffs had little chance to influence the achievements (Mason 2009:pg 14). Furthermore FTL tried to improve on performance management by bringing in outside consultants to review the appraisal scheme and also introduce a competency based approach, but there was no solid decision on how to link the competency framework to the system (Mason 2009:pg 14). Another defect with performance management in FTL was employees working overtime leading to stress related illnesses, thereby reducing the performance of workers and also creating a clear view of the inability of performance management in FTL (Mason 2009:pg 18).(Beardwell et al 2001:pg 538) argues that an A¿A½effective performance management ensures that employees and employers understand each otherA¿A½s expectation and how corporate strategy impacts on their own contextA¿A½. 3.6 Reward and Remuneration Reward relates to all areas of employment package such as salary(base pay) and benefits (health insurance, pension) and also the psychological contracts such as training and development, employment security in which an organisation builds its competiveness and also the process of recruiting and retaining employees of the required potentials (Cornelius 2001). On the other hand remuneration strategy is the process of gaining optimum satisfaction in return of the base pay, learning and development, employment security and benefits (Torrington 2008). More so, Bratton and Gold (2003:pg 278) defines reward as A¿A½ the monetary, non monetary and psychological payments that an organisation provides for its employees in exchange for the work they performA¿A½. Reward in employment relationship is divided into two which are the A¿A½extrinsicA¿A½ and the A¿A½intrinsicA¿A½ reward. Extrinsic reward is pay related which satisfies employees from the output of the job related to the pay, while Intrinsic reward is related to the psychological satisfaction an employee gets in return of the job carried out. Therefore it can be deduced that FTL practiced both intrinsic and extrinsic reward at different points in time.

The managing director (Anders) was able to link the reward system to job grades, whereby senior managers could earn additional 20% on their salary, semi skilled staffs could earn an additional 5% while professional engineers could earn 16% on their initial salary (extrinsic) (Mason 2009:pg5). While Human resource manager (Catherine) at the time, changed the remuneration package, thereby including private health care, permanent health insurance and also pension to final salary of employees (Intrinsic) (Mason 2009:pg14). 3.7 CONCLUSION

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