Challenges in the Manufacturing Sector
Discuss About The Component Of Any Organization Is Workforce.
Heavyweight component of any organization is the workforce it is working with and this makes employees the biggest asset of any organization working in manufacturing sector. Production of good results for the business, meeting organization’s financial goals or achieving its goals is not possible without employees (Francis, 2014). Today many organizations of manufacturing sector recognize their employees’ importance while realizing the business success of their organization. An organization making good profit may have the strongest edge, in terms of funding, technology, market position, but importance of the respective roles and responsibilities of their strong workforce cannot be underestimated or neglected. Without the contribution of employees no organization can achieve its business goals or objectives especially in manufacturing sector (Haslinda, 2009). Today unwanted employee turnover is the most costly business issue companies are facing continuously in this sector. Besides the loss of costly knowledge of employee when employees leave the company, some extra efforts are required to re-organize company’s resources to meet the desired goal. Leaving of employees may cause increased work pressure, agony to the management; demotivation to the other employees, and sometimes in extreme cases organization may also fail in achieving its goals or objectives. In order to get a new replacement of the employee left the organization some extra efforts along with the substantial cost and resources too (Richard & Johnson, 2001).
In manufacturing industry organizations hire new employees and trained them to work with the advanced technology and improve their efficiency as well. After some time when these new employees get complete knowledge of operating with new technology and dealing with basic issues of manufacturing they seek for high payment, job satisfaction, efficiency enhancement training, motivation, and financial stability. And seeking for all these expectation they made a move and leave the company in order to join another one which is fulfilling all or some of their expectation. This is becoming the critical issue for organizations working in manufacturing sector (Tangthong, Trimetsoontorn, & Rojniruntikul, 2014).
This increasing issue in the industry is making human resource management to worry about the challenges of finding and retaining the employees in this tight labour market situation. In local context the voluntary turnover of employees has risen to 32% in Australian organizations. Many studies or researches have shown that there are many factors making employees unhappy and resulting in leaving the company. There are seven major factors or reasons for leaving the company by employees (Richard & Johnson, 2001). These reasons are as, low payment, unsatisfactory jobs, limited career development opportunities, lack or recognition, untrustworthy leadership, dysfunctional culture at work place, and poor management. All these factors are closely related to the HRM practices therefore a better understanding of the relation between HRM practices and employee retention will correct the decision making of leaders to achieve organization goals. It is crucial for organization to ensure that the resources of the organization are spent wisely and correctly to sustain a harmonious and safe workplace. Such work place environment encourages employee to stay employed in the same organization for a longer time period. In this way making such efforts will contribute in leading the business for making good profit and also helps in providing career development opportunities for the existing employees (Branham, 2012).
Factors Contributing to Employee Turnover
Employee retention in such situation refers to several practices and policies which encourage the employees to stay employed in the organization for a longer time period. Many studies conducted to understand the main reason of an employee’s leaving the organization has reported that employees leave the organization out of frustration and dissatisfaction with the job. This dissatisfaction is due to the continuous friction with their leaders or colleagues. In some of the cases lack of career growth, low salary package, and lack of motivation leads the employees to leave the company to look for a change (Cullinane, Bosak, Flood, & Demerouti, 2014). Therefore, management has to give its best to retain those employees who are important for the organization. For being employed in the same organization people need a feeling of their important contribution for the success of organization. This feeling motivates them to stay loyal for their organization and results in making them employed in the same organization for a longer time period. This feeling of contributing for the company creates a new feeling of being a part of the organization. Competitive salaries, incentive programmes, comprehensive benefits, and other similar initiatives need to be executed to improve the retention of employees within the organization. Besides all these, financial incentives and payment of the employees also enhance the satisfaction and commitment of employees with the organization (Cullinane, Bosak, Flood, & Demerouti, 2014).
Such practices are an important part of human resource management practices. Human resource management practices is defined as a complete set of different strategies and policies implemented by the organization in order to ensure the efficient and effective contribution of organization’s human resources to achieve the goals or objectives of the organization. Human resource management practices are recognised as the main source of revenue for the business, at organization level. This is considered because some human resource management practices like, strategic HRM, analysis and design of work, managing diversity and work-life balance, performance management, learning development and career management, motivation, rewards and compensations are some of the practices considered as the foundation strategies of an organization to get talented an skilled workforce (Francis, 2014). Such practices produce a workforce which significantly enhances the productivity and creativity of the organization. Strategic human resource management practices to enhance the important contribution of human resource management for the better performance of organization in terms of productivity, employee turnover, and financial turnover or revenue. As an integral of organization’s strategic processes, main focus of HRM is considering the HRM practices as an important source contributing to the increasing profitability opposing the cost of productivity. The strategic approach of human resource management seeks to provide competitive advantage to the organization proactively through the human resource management practices. From the resource based view or SHRM, organizations resources and humans ore then technical, physical and financial sources, can provide a competitive advantage to the organization. Consequently, SHRM ensures that HRM should work to enhance the competitive position of the organization by creating advance human skills, knowledge, and experience which contribute to increase the economic value of organization in the competitive market. Effectiveness of HRM is determined by the performance of HRM practices in achieving such goals (Richard & Johnson, 2001). Technical HRM effectiveness is determined by the performance of HRM practices but SHRM effectiveness contrasts building complexities to the human resource through creativeness and innovations like, flexible workforce, team based work designs, and empowerment of the employees through different activities.
Importance of Employee Retention
Analysis and design of the work is one of the major practices performed by the HRM in manufacturing industry to recruit new employees. Employee retention is necessary to provide a continuous supply of skilled and experience employees to the organization. This continuous supply sometimes requires new recruitment and for this practice HRM must analyse the job profile. Analysing the work is critical to understand the purpose of the recruitment. While recruiting new employees it is necessary to know about the roles and responsibilities given to the new recruits. For this HRM analyse the operation process of the work for which organization requires new employee (Divyalakshmi, Baskar, & Rao, 2017). After a complete understanding HRM design a proper plan to allocate the responsibilities to the new employees to make an efficient and effective impact on the organization growth with the new recruitments. Designing of the work also requires planning to understand the need and possible ways to make the best utilization of new recruitment to fulfil the needs.
In an organization employees come from different backgrounds, cultures, and environment which may create a misbalance in between their personal life and workplace behaviour. For such issues HRM must manage the diversity issues to maintain a harmonious environment at work place to balance the personal as well as work life of employees. In order to deal with such issues HRM provide some standards to be followed by each employee to respect their colleagues and maintain the harmony of the work-place. Workplace environment influences the efficiency and effectiveness of the employees therefore a favourable workplace environment for each employee is beneficial in improving his or her efficiency (Harvey & Allard, 2015). This efficiency enhancement off employees results in increasing the productivity of organization resulting in higher growth rate of the business in the competitive market.
In manufacturing industry the nature of manufacturing practices is inextricably associated with the precision and use of advanced technology. This use of advanced technology and need of precision demands for skilled and experienced employees to execute the manufacturing process in a right and efficient way to increase the productivity and lowering the cost of production to make a enough profit revenue for the organization. Getting this much skilled and experience labour is quite difficult in the current scenario of tight labour market (Hee & Jing, 2018). Therefore, human resource management manages to organise training and development programmes regularly to provide essential training to the employees. This training makes employees eligible to perform the desired manufacturing activities. These programmes create a feeling of care of feeling to the employees from their organization (Bridgstock, 2009). This feeling motivates employees to stay in the same organization for a longer time period. Training and development has its own importance for HRM practices especially in manufacturing industry. This is because of the special requirement of manufacturing industry for well-trained and skilled employees for the job. These practices are among the formal activities performed by the HRM and main motive of these practices id to help employees in acquiring the skills and experience desired to perform the current as well as future jobs (Danish & Usman, 2010). In other words the practice of providing training and development to the employees is designed to help them in improving their positive contribution to the organization in terms of their individual’s performance. These practices also defined as the process of providing a change in the attitude, skill, knowledge and behaviour of employees for the betterment of their individual performance in terms of efficiency and effectiveness (Fang & Gerhart, 2012).
Human Resource Management Practices
This practice of training and development also assess the performance improvement of employees. This assessment of performance improvement helps HRM in performance management practice. In manufacturing industry the performance management requires to perform the performance appraisal of the employees. Performance appraisal is the process identifying the measures, evaluating, improving, encouraging and rewarding employees for their improving performance (Gedikli, Watson, Semkina, & Voughn, 2017). This process of performance management is undertaken by the organizations around the world to improve the effectiveness and efficiency of their employees to increase the productivity of business. In manufacturing industry this practice of performance management is more important than other practices as the continuous enhancement in the work efficiency of employees is desired to get a better business performance to sustain in the competitive market. This practice evaluates the continuous improvement in the employee efficiency and also ensures the motivation to do so (Gruman & Saks, 2011).
The performance management encourages employees by rewarding them for their better performance. Along with these rewards most of the organizations are providing compensations to their employees working in manufacturing companies on the basis of their improved performance. This practice of providing rewards and compensation to the employees is good for their motivation for performance improvement as well as loyalty to the organization (Peregrino de Brito & Barbosa de Oliveira, 2016). Rewards and compensations provide financial strength to the employees this creates a feeling of financial satisfaction from the job. Along with their financial satisfaction employees have a feeling of recognising their contribution to the organization. This felling or getting recognised by the organization is an influencing factor to stay employed in the same organization.in this way organization ensures the retention of their skilled and experienced employees for a much longer time period. Since performance appraisal or performance required for the management, evaluation of performance effectiveness is much needed for the same. In this manner, to evaluate the performance effectiveness five different factors influencing the performance effectiveness are identified as, nature of the appraisal, implementation process, communication effectiveness within the organization system, use of appraisal data, and perception of the individual employee towards the system of organization for the appraisal practice. Such practices play an important role in motivating employees which is much needed for the employee retention (Shpak, 2018).
While practicing these activities organizations provide learning, development, and career opportunities to the employees in order to practice employee retention. Learning and development is practiced for the enhancement of employee’s performance while providing career opportunities motivate employees to stay in the organization to get such opportunities. Employees leaving the organization for a change and career growth will stay for a longer time period to get such motivating opportunities (Shrivastava, 2016). Today in manufacturing industry career opportunity is one of the critical issues responsible the dissatisfaction from the job and in most of the cases employees leaves the company to get new career opportunity.
Analysis and Design of Work
Such motivations and practices of the HRM are needed to be performed regularly to retain their best employees (Schermerhorn, et al., 2014). Performing such practices not only retain their employees but also improve the productivity and business of the organization. In this manner organizations manage their HRM practices to enhance their employee retention issues. Researches also suggest that the above discussed practices of HRM are most critical ones for employee retention practices by any organization (Siddique, 2004). Motivation, compensation, training and development, providing career opportunities are best practices HRM of an organization can perform to maximize the employee retention of the employees. Manufacturing industry especially deals with the maximum employee turnover around the world that makes it of more concern for the management to retain their existing skilled and experienced employees (Shrivastava, 2016).
The above discussion is made to develop a better understanding of different HRM practices performed by HRM of organization in manufacturing industry. This discussion suggests that HRM must perform some essential practices in order to retain their employees for a longer time period. Regarding different individual practices of HRM for employee retention and their processes are described to understand the role and influence of these practices in manufacturing industry. This discussion concludes that the significant influence of HRM practices for employee retention is mainly associated with the employee’s satisfaction for his/her different expectation. Therefore, organizations can control the high employee turnover in Australia by performing above mentioned HRM practices. These practices are different from the technical HRM practices. In Technical HRM practices only basic practices are performed to recruit and manage the human resources available to the organization. HR managers also need to know the key factors suitable for employee retention and this discussion make it easy to understand such practices. The motivation of employees and their job satisfaction has been promoted as the best solution for employee retention. In manufacturing industry most crucial problem of employee retention can easily be solved after the complete understanding made by the discussion.
References
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