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Every business enterprise aims at making profits by minimising operational costs. Although expenditure is inevitable, every business enterprise, regardless of its size, applies every possible strategy available to ensure maximum returns. Employee training and development is one of the key aspects that most companies factor into their expenditure in the determination of their priority expenses and long-term business development.
Although the choice of strategy mainly depends on the available resources to a company, it may also be a result of the choice of human resource management models. Some companies prefer to hire individuals with the skills that suit the job description while others choose to employ individuals with basic knowledge of the job and conduct private training in order to customise the employees’ skill set to suit their purpose.
While both methods work, they possess different advantages and disadvantages, as well as impacts on the companies and employees. This paper explores a case study of two different companies and provides a concise analysis of their choice of managerial models. It also includes a discussion on some of the lessons that managers can learn from the case study mainly with regard to inter-related human resource policies and practices.
Case study analysis
Total Customer Services (TCS), an outsourced group of housing benefits caseworkers, applies the use of contracts that encourage and enforce specialisation among workers. In essence, the management format involves the distribution of specific duties for each worker. The company strictly stipulates the duties in a contract, which means that workers lack any mandate beyond their stipulated duties and only apply the use of specific skills in the accomplishment of such duties.
The contracts also require employees to exercise a huge degree of disclosure to management regarding their actions. The main advantage this arrangement has for the workers is that they can perfect the skill they apply at work, which makes their work easier with time (Leitch 2006). Another advantage is that the disclosure policies allow the management team to detect problems as soon as they arise, thus solving them before they do damage to the business.
However, this management model has several disadvantages. First, the restrictive manner in which the management governs the employees means that the employees lose their autonomy and are unable to make critical decisions in time, as they have to consult the management as the contract stipulates (Goleman 1998). Subsequently, the company suffers undue delays in solving trivial problems that would be better suited to the employees in charge.
For instance, one of the caseworkers mentions that one of their obligations as caseworkers under TCS’s management was to fill out paper work and pass the forms to the local authority for approval instead of providing approval when necessary. A logical assessment of such a situation would indicate that the council lost a lot of valuable time that it would otherwise apply in improving its operations and raising its performance levels.
Another disadvantage related to lack of autonomy is the lack of innovative solutions to problems. By providing that the employees should not operate outside their contractual duties, the contract and in extension the company, bars the employees from providing different perspectives on issues, which is an advantage they possess owing to their extensive experience dealing with one particular issue.
In the case study, a worker in the company indicates that caseworkers have the advantage of dealing with the same case over a long period and thus know their clients’ names, addresses, and their needs. This aspect is a taxing oversight for the company as it fails to exploit its work force to its full potential. The second major disadvantage of the TCS contract system is that it fosters the decline of valuable skill among the employees (Keep & Mayhew 2010).
By giving specific tasks to specific people, the company hinders the improvement of other skills that employees may possess that would benefit the company. Looking at the issue from a financial perspective, the company fails to make potential savings on expenditure available through encouraging the application of multiple skills by its workers. It would take fewer workers to accomplish numerous tasks if each worker had the ability to perform two or more different tasks at the company.
It would also solve problems that result from understaffing from time to time. In turn, the company would benefit from savings in salaries and wages providing funding other projects (Evans & Lindsay 2004). The local authority applied the use of TCS to outsource employees as a measure to counter its underperformance in the housing benefit department.
However, substandard training of recruits is one of the vices caseworkers state to hinder the improvement of the company’s performance. It would thus benefit the company to save more money through employment of fewer workers use of savings from salaries and wages to improve training standards.
The second company in the case study that serves comparative purposes is Scotchem, a large pigment manufacturing company in London. Scotchem’s management takes a different and liberal approach to employee management. Although the company also applies the use of contracts as part of the employment requirement, it strives at maintaining the autonomy of its employees, thus creating a friendlier environment conducive for innovation and overall development for the company.
Unlike TCS, Scotchem has created a system under which employees interact with suppliers and consumers on a personal level. In essence, the company thrives on relationships and their resultant loyalty. The system at Scotchem forms the definition of a collaborative organisation (Morgan 2012).
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One of the main advantages with this model is that the employees retain some degree of autonomy. Autonomy is an important ingredient in providing innovative solutions for the company as well as improvement of products and ensuring that the company retains its competitive edge.
Lack of excessive restrictions on employees enables them to explore numerous options, thus providing objective insight on the accomplishment of their roles. Allowing employees to interact with customers ensures that the company produces products that offer consumer satisfaction without compromising the company’s need to keep expenditure levels low.
Secondly, fostering relationships within and outside the company enables easy flow of useful information that would otherwise not be accessible for the company (Buckingham & Coffman 1999). For instance, by using one supplier over a long period, the company has built trust, which has in turn enabled the supplier recommend the use of quality material at reasonable prices.
Not only does such a relationship ensure that the company produces quality products through financially sound means, it is a great contributor to consumer satisfaction and builds the company’s reputation.
The third advantage of the liberal nature of Scotchem’s management system is that the management enjoys a time advantage, which provides more room for the company improvement (Covey, Roger & Merill 1994). By reducing the company’s human resource management role to supervision, the system allows the management more time to deal with, solve company problems, and strategise on any necessary improvements.
The fact that TSC’s model requires managers and supervisors to play an active role everyday denies them the opportunity to observe keenly and correct errors in service delivery and consumer satisfaction issues. Scotchem’s human resource management department plays a supportive role by enabling workers to feel a sense of ownership in the overall success of the business.
Another advantage worth noting is that Scotchem provides its workers with more permanent contracts, thus creating a sense of job security, which is a crucial component in the determination of employees’ behaviour at work. Employees with better job security tend to work harder resulting in improved productivity for the company (Carre et al. 2012).
Permanence also enables employees to improve their skills and learn from others, hence improving the overall quality of their work (Porter & Tanner, 2011). It also ensures that the company benefits from its employee-training program as workers get to apply their skills to the company’s benefit, which is a vital factor in determining the quality of training that companies give employees. It is very probable for Scotchem to give better quality training than TCS considering TCS’s employee turnover.
Lastly, the collaborative nature of Scotchem’s model allows for teamwork, which is essential in the achievement of the company’s goals. By working as a team, the employees consolidate their efforts towards a common goal, thus reducing instances of rivalry among employees that usually results from unhealthy competition among co-workers (Mintzberg 2008).
It also ensures that both the management and employees maintain their focus on attaining the company’s goals regardless of whether the means to that end appear in their employment contracts.
The only possible foreseeable disadvantage with the liberal method is that empowering employees enough to explore solutions outside the company may lead to leakage of information such as trade secrets, especially in cases where the employee feels short-changed. However, the model’s advantages far outweigh its disadvantages, thus making it a better option in comparison to the TSC’s model.
Lessons from case study
The main lesson that the case study imparts is that the application of a liberal approach to governance such as the one by the Scotchem Company ensures some level of employee autonomy, which has more advantages than disadvantages to the overall development of the company. Employee autonomy fosters the formation of networks, innovation, and teamwork.
Secondly, although training employees makes them better suited to their tasks in a company, high employee turnover erodes the benefits employees have to offer the company through the application of their skills. In the end, the company suffers loses both in finances and skills. In addition, multi-skilled employees provide better value to the company as it reduces the need to employ numerous individuals to perform even the most trivial tasks.
This aspect saves the company money for other projects such as improvement of training programs. Thirdly, the supportive management method that comes with collaborative managements provides time for company managers to observe the company and make diagnostic strategies for the improvement of a company’s gain.
Human resource managers should also implement policies that provide practicality, such as allowing employees the opportunity to make emergency decisions that relate to their duties as long as they do not jeopardise a company’s success in achieving its goals.
Every company has a right to select a management method suitable to the achievement of its overall goals. However, it is important for the management to consider the welfare of the employees, especially with regard to training and retention of autonomy in the performance of duties.
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