Unit 21 Human Resource Management Assignment ABC Milk World

Introduction

This Unit 21 Human Resource Management Assignment ABC Milk World provides an understanding of the human resource management role and function by keeping in mind the growth strategy, reward, development and relations for the business in an organisation. It also gives an overview of job evaluation and reward systems in an organisation.

Company overview

The company selected for discussion is “ABC Milk World”. ABC Milk World is the world’s largest milk shake company with worldwide outlets. It was first open in U.K. in 1999. The company is serving around 180 flavours, which are further used for millions of combinations. The company is franchising their brand in the future for its development. The assignment focuses on how recruitment and selection is done is ABC Milk World and how employees are terminated from the company. It also explains the methods used in ABC Milk World to monitor employee performance.

2 Task 1- role of HRM

2.1 Difference between personnel management and human resource management

Personnel management is the traditional approach of human resource and work force management in a company and it never used to incorporate Human resources as an asset of the company and a living entity which needs to be nurtured and motivated. On the other hand human resource management is the modern approach of managing work force, where various tangible and in tangible aspects of work force management are considered and they are treated like a living entity and strategies are formulated keeping them in consideration. In modern business environment human resource management is more appropriate approach because in modern service industry human resource is one asset of company that cannot be easily replicated by competition and it creates the sustainable competitive advantage over others.

Personnel management tend to focus on regulations and laws which are applicable on employee and employers like work hours, minimal wages, number of leaves approved, safety laws which are applicable in work place etc. which would ensure that both employees and employers are safe and do not have any legal entanglement. On the other hand human resource management is not just concerned about these aspects, they also consider career path of the employees, their performance evaluation and improvement in work performance. They also give sufficient importance to work culture, work environment, all round performance evaluation etc. and ensure that satisfaction level of employees would be of highest level while working in company. In essence it can be said that for personnel management approach people or employee of a company are mandatory input which is required for the output and they can be replaced in future with automation and technology. On the other hand for HRM approaches people are important and they are considered as resources for company, not labour raw material for company. In many companies personnel management was just reduced to time keeping and marking attendances and creating pay roll. On the other hand HRM strategies acted as a game changes and ensured that companies who care for their employees are preferred by the best of the talent (Brewster, et al. 2007).

2.2 functions of HRM in the contribution of organisational purpose like ABC Milk World

There are 6 major HR functions, which are identified for companies like ABC Milk World and their routine purposes. These functions are:

• Recruitment: This is the first HR function, which would be used by ABC Milk World for its expansion purpose. Since they are planning to enter various new markets in Middle East and Asian countries, they need to recruit a lot of employees.
• Safety: HRM will ensure that safety procedures and norms are followed in the company in all countries and there is minimal rate of injuries at work place. This would help in creating brand image of company and reduce their legal issues and challenges.
• Employee relations: HRM in ABC Milk World would also ensure that employer and employee have a healthy relation and there is no issue regarding work laws, ethics and even union related problems (Sparrow, 2009). This helps to build up trusts between them and enhances the sincere efforts of the employees towards the task assigned to them. If the relationship between both employee and employer is transparent then the objectives of the organization can be met in a fruitful manner and help to promote the growth of the organization.
• Compensation and Benefits: This would ensure that all employees in ABC Milk World are appropriately compensated for their work and wages act is followed at all times while a person is working in company. Compensation and benefits would be according to industry standards only and it would be ensured that for right talent compensation should not be a barrier.
• Compliance: Compliance with labour and employment laws is a critical HR function. Noncompliance can result in workplace complaints based on unfair employment practices, unsafe working conditions and general dissatisfaction with working conditions that can affect productivity and ultimately, profitability.
• Training and Development: Training and development needs for ABC Milk World are very important. Employees need training to create perfect blend and even help in suggesting combinations and making selections. This HR function is mandatorily needed in HRM strategy. This helps an organization to achieve its corporate objectives through the supply of skilled and learned employees and helps to meet the requirement of the HR.

2.3 Roles and responsibilities of line managers in HRM.

Responsibility and role of Line managers in Human resource management of the company is that they are required to directly over see the bottom level employees and ensures that their day to day activities are in coordination with the HR policies and practices of the company. They are also required to provide on the job training to new employees, give them technical advice and ensure that their activities remain cost effective while working. Monitoring work place safety environment and keeping a close tab on productivity of employees is also a responsibility of line managers (Budhwar, et al. 2009). Various responsibilities of line managers in HRM is listed below:

1. Performance Appraisals: The HR designs these appraisals but the line managers implement them. It helps to access the behaviour and work done by an employee in the entire year. Appraisal is usually in the form of feedback given in one to one meeting between the employee and the line manger.
2. Communication: The responsibility of line manager is to make sure that the employees working under them have full knowledge of the job assigned to them. There should be regular meetings in order to communicate the changing needs of the company to the employees. These meetings can be conducted to discuss various activities, progress and problems. These kinds of communication methods are important to share knowledge and resolve mutual problems.
3. Shift rotation: The employees of organization are always reluctant about the job rotation. It is the responsibility of the line managers to shift employees from one department to another by proper planning by matching the skills of the job required and the skills possessed by the employee.

3 Task 2- ABC Milk World growth strategy.

3.1 Reasons why HR planning is important

HR planning is defined as the process that identifies the best-fit employee for an organisation. This process helps in estimating the number of employees required for an organisation to meet the demand. The main objective of HR planning process are calculating the amount of labour required, observing the present supply of labour, and maintaining the balance between the demand and supply of the labours (Wilton, 2011).

Importance of hr planning

HR planning is a process in which the information gathered allows the mangers, supervisors and employees to work together in a planned manner. The gathered information is used to achieve the objectives of the organisation. HR planning is used for an organisation to move and succeed in this competitive world. HR planning ensures that the manpower is being used optimally within the organisation. HR has many tasks to do ensuring that right people are working for right job at the right time. The HR helps in recruitment processes, deciding the pay salaries of the employees and making arrangements for the trainings to increase their knowledge for better efficiency of work.

Problems with HR planning

If HR planning is not done adequately then it results in many problems such as the organisation will suffer big financial losses, the empty staff post will take time to get filled, which will further involve the present employees to work overtime without being paid for the extra efforts. HR planning should be highly managed as it hampers the most important factor that is the cost involved. Cost is important area of an organization’s budget and appropriate planning results in providing the provision cost of HR (HOOK, 2002).

3.2 HR Planning process

Human Resource Planning is a process, which aims at expansion, consumption and retention of an employee in an organization. It is the process that identifies resources required for current and future needs. It involves the right number and kind of people working at the right time, at the right place to do a right job. There are 4 main stages in HR planning process. They are:

Figure 1- Stages in HR Planning process.

(Source: V.S.P. Rao, Human Resource Management: Text and Cases, Excel Books, New Delhi, 2002)

ABC Milk World is using the HR Planning process in the following ways:

• Lower Investment of money: The Company is selling its franchise so less money is invested in the business, as the franchise owners will have to invest their own money.
• Quick development: As the brand is becoming popular day-by-day so the business decision  will grow very quickly in the coming time.
• Mass Marketing: The capital for advertising and marketing is taken from each franchise owner, which allows for a large scale advertising campaigns and hence, will increase the brand name among the customers.
• Purchasing Power: Bulk buying from the suppliers will result in good discounts and will lead to a higher profit for all the franchise owners.

ABC Milk World aims to sell best milkshakes, with a variety of flavours to make milkshakes as a perfect drink to the customers.

3.3 Recruitment and selection

Recruitment is defined as a process of searching a candidate who is willing to work in an organization. In this process the candidate who has applied for the job fills the application form and sends it to the respective organization.

Selection is defined as a process of electing a candidate for a specific job opening in an organization. The organization tells the type of individual required for a according to type of job. Recruitment and selection is regularly offered as a programmed based on reason activity.

Recruitment and selection is a process of expressing desire for a job, defining the need of the position, promoting the position and selecting the right person for the job. The recruitment and selection process is used to hire employees with skills matching to any particular job opening. It also helps to involve people with good qualities and ready to work attitude with an organisation (Dale, 2004).

Comparison of recruitment and selection in Barclays and ABC Milk World

4.0 Task 3

4.1 Motivational theories and link with reward system

Motivation in operations management is defined as a way in which managers promote productivity in their employees. There are various theories of motivation, and ways in which they are applied to the workplace.

Expectancy Theory: This theory focuses on the link between effort and rewards. If an employee is performing well and is putting extra efforts in his/her work then they should be awarded for the same. The employees who are not given recognition of the work they have done feel demotivated.

Equity Theory:  This theory explains that an employee is best motivated when they are treated equally within an organization. For instance: Two employees are given the same job and they are performing equally well. So they obviously expect equal pay and equal rewards. If there is lack of equity, it can result to demotivation in an employee.

Equity theory says that it is not the actual reward that motivates, but the perception, and the perception is based not on the reward in isolation, but in comparison with the efforts that went into getting it, and the rewards and efforts of others.
Motivation is a method used to explain behaviour. A motive is a reason for doing any particular task. People who are motivated have a defined set of goals and objectives to achieve. The employers motivate the employees by giving rewards and incentives. The rewards given to the employees make them more focussed towards achievement of their goals. There are two types of motivation-Extrinsic motivation and intrinsic motivation and reward system is also of two types- Financial and non-financial reward system. All of them are interrelated to each other in the following manner.

Motivational theories and their implications

4.2 job evaluations and pay

Job evaluation is defined as the analysis of a particular job with other jobs in an organisation. It is used to compare different jobs and helps to develop a balanced structure of pays. It determines how much an employee should be paid for a particular job in terms of internal and external competitiveness (Armstrong, 2010).

Process of job evaluation

Reward systems

Rewards are the bonuses given to the employees to boost up there spirits to work. Rewards make an employee more dedicated to achieve its goals and objectives, which is essential for the overall growth of an organisation (Lawler 1995). A reward system contains the policies and the processes followed by the organization to give reward to their employee. Rewards are of two types:

• Financial reward
• Non-Financial reward

Both financial and non-financial awards are effective in an organization in their own way, but financial rewards are more effective as it motivates an employee in terms of total increase in the salary. Non-financial rewards are just used to motivate the behaviour of an employee. The aim of the employee is to make more and more money rather than to improve the economy of the company. So they feel happier when they are given financial awards (Marwan, 2012).

Monitoring employee performance

Methods of monitoring employee performance

There are various methods to monitor the performance of the employee like quality, quantity, effectiveness of cost, time needed to complete any task, creativity, sticking to the company policy, absenteeism, grooming, gossip and other personal factors. Two out of all them are explained below.

• Absenteeism: This factor is the most important factor in monitoring the performance of an employee. If an employee is absent from their work then obviously they are not working which finally affects the growth of an organisation. This also affects the work of other employees.
• Violation of the policy: Violating the rules and regulations of the company is also a major parameter to test the employee performance. This indicates that the employee is not focused to do the task assigned.

There are a number of parameters, which are used to monitor the performance of the employee. Few of the methods can be combined with each other to assess the employee. It is important to categorize the indicators with respect to the goals of the company.

Method ABC Milk World is using for monitoring employee performance

The methods ABC Milk World should use to monitor the performance of their employees should be creativeness and personal appearance. Creativeness can be used for the different ways of presenting shakes and mixing of flavours. If the shake looks appealing and is having a rich taste then more and more customers will prefer buying that particular shake. Also, Personal appearance plays a great role in monitoring performance if the person is well groomed and looks neat and clean then customers have the feeling of hygienic environment and they are satisfied with the services the company is selling.

5.0 Task 4- employee exit process within ABC Milk World

5.1 Reasons for termination

Contractual termination

The term contractual termination is referred to the compensation provided by an on going plan to an individual that have disconnected their relationship of employment with the company. A termination section in contracts gives right to terminate an individual in many circumstances.

Reasons for ending a contract

When a contract comes to an end, the company and individuals involves do not have any further commitments with each other. There are many ways in which a contract can come to an end in organizations like ABC Milk World or Barclays. They are listed below.

1. Agreement to end:  Both the employee and the employer agrees to end the contract by contractually agreeing with each other.
2. Performance: If all the parties as per the agreement complete the contract then performance is counted as a reason for ending it.
3. Breach of contract: It refers to the inability to complete a particular condition and hence result in ending of contract.
4. Frustration: This happens when the intentions to fulfil the terms of agreement has been frustrated by the events beyond the control of the party.
5. Illegality:  This happens when the carrying out of contract becomes illegal.
6. Mistake: A contract can end if the agreement is on the basis of mistakes.
7. Unequal agreement: A contract can end if the process of making the agreement is improper and unequal.
8. Pressured agreements:  This can end the contract if a person has only entered into agreements because of threats and pressure.

There are various reasons for the termination of an employee within an organisation like Barclays or ABC Milk World The employee may be terminated because of taking leaves without approvals, violating the company policies, he/she is not able to justify their jobs, not competent to achieve the goals and objectives, providing false identity, leaking any confidential information of the organisation. An employee might also resign if they have the desire to contest the elections. If an employee requests relieving certificates the organisation must provide it. The unused leave encashment should be done when the employee is resigning from the organisation. But if the employee is violating any of the above-mentioned points then the organisation have full rights for the termination of all the dues of the employee without notifying the employee (Price, 2007).

5.2 Exit procedures

Employee exit is the process used in an organization to terminate its employees in a systematic and professional manner. It applies to employees who have resigned and those that have been terminated by the company. In order to cleanly end the relationship with the employee the organization needs to make various considerations. The company holds all the rights in order to extend the period of employment that serves as the primary focus of the exit procedure.

Exit Interviews

An exit interview provides a number of positive possible outcomes for a company going heading towards the future. These include:

• Showing other employees that the company they are working with is a caring organization
• These interviews help to provide proper HR practices and are necessary for professional management of the employees.
• These types of interviews helps to learn information about improving employee retention, as well as how to improve recruitment new employees.
• Exit interview helps in retaining a valuable employee who otherwise would have left due to a misunderstanding.

Employment exit procedure for ABC Milk World

5.3 impact of the legal and regulatory framework on hrm and employment termination arrangements

Employment rules and regulations are used for maintaining a work balance between the employee and the employer. The legal and regulatory framework deals with concerns like company policy, safety in the organisation, entry and exit procedures, deciding the salaries for employees as per the title assigned to them in the organisation. Some of the laws are as follows:

• National minimum wage act 1998: The national minimum wage (NMW) is the hourly rate below which adult workers in most sectors of the British economy must not be paid. Full entitlement applies to workers aged 21 and over, while a lower minimum rate applies to 18 to 20 year-olds.
• Equal pay act 1970: The 1970 Equal Pay Act makes it illegal for employers to discriminate between men and women in terms of their pay and conditions where they are doing either: 

1. The same or similar work
2. Work rated as equivalent in a job evaluation study by the employer?
3. Work of equal value

• Employment right act 1996: It focuses on the legal employment rights of workers and employees. If these employment rights are breached, the Employment Rights Act 1996 gives the Employment Tribunals powers to order compensation to workers and employees.
• Trade union and labour relations act 1992: The effect of the act is listed below:

1. Define trade unions and state they are the subjects of legal duties
2. Protect the right of workers to organise into, or leave, a union without suffering discrimination or detriment
3. Protect the right of workers in a union to take action, including strike action and industrial action short of a strike, to support and defend their interests, when reasonable notice is given, and when that action is "in contemplation or furtherance of a trade dispute".

• Disability discrimination act 1996: The Act widens the definition of disabled persons to include those registered as disabled and those discriminated against because of ‘sever’ deformities such as scars and skin disease and progressive conditions such as HIV and multiple sclerosis.

All the employees working in the organisation whether full time or part times are protected under these laws. It is the duty of the organisation to make their employee aware of the legal framework operating in the organisation. All the laws should be standardized and uniform for everyone working in the organisation. Every organisation recruits employees from various fields and having different profiles. So it is necessary that the framework should be regulated and applied by the department of human resource (Torrington, 2008).

Conclusion

The major role of HR manager is to handle all the responsibilities of the organisation. They provide guidance to compensation specialists. The major functions of human resource management are recruiting, selection, safety, employee relations, compensations, training and development. HR planning is a process in which the information gathered allows the employee and the employer to work in a balanced way. All the employees have to go through the entry and exit level procedures. There are various rules and regulations made by the HR department. All the employees have to abide by the rules for smooth running of the organisation. Many rewards are given to boost the enthusiasm of the employee. The rewards given to the employees make them more focussed towards achievement of their goals. ABC Milk World have a large plan of expansion, which they are achieving through franchising. The brand is working with a low cost and high margin of profit. The concept of ABC Milk World increases the business at the local level. More than 25% of the menu is customized. That’s why the tag line of the company says, “live forever and never have the same milkshake twice.” (Banfield, 2008).

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