MBOC7053-Human Capital Management - Assignment 1

1. “Given Bandag Automotive’s size, and anything else you know about it, should we
reorganise the human resource management function, and if so, why and how?”

Bandag Automotive is recommended to reorganise the Human Resource management

functions for more than 300 employees. Despite sharing his dad's philosophy of
maintaining the organisational structure as basic as practicable, Jim's management style is
vastly different from his father's. In Bandag, there is no formal HR division to organise and
handle HR operations and challenges. The decision to cut costs by eliminating HR
functions seems to backfire on Jim.

Bandag failed in their strategic human resource management function (HRM) with a
decision of cost-cutting by implementing the reduction of benefits / annual leaves or
outsourcing all the payroll, standardising the external Human Resource management
systems, letting others manage the important matters such as 401k plans. This has made
Jim lose human contact with its workers. It had an inappropriate way of implementing the
company's strategy via cost-cutting to improve financial performance. As a research study
shows that a firm that seeks after entrepreneurially arranged objectives such as being more
profitable and competing more forcefully, the vital HR exercises consequently will turn to
stream necessary HR bolsters such as human capital, adequate training programs and a
competitive remuneration and compensation systems to the company to attain its objectives
within the long run (Zehir et al., 2016). Hence, the positive commitment to HR exercises
would increase firms' financial performance.

The recruiter's task is to fill the job openings as quickly as possible since staffing &
selection is being handled by a 3rd party company. They aren't motivated to create
Bandag's workforce for the long haul. Outsourcing fixes the issue of hiring, but not of
hiring the right person. With staffing and selection of employees falling within the firm's
internal HRM boundary, they eliminate the high turnover rate and employees' problems
faced (Seetharaman et al., 2018). And this allows Bandaq's managers to concentrate on
what they're doing most effective, and with internal talent acquisition team is an efficient
counsellor to the hiring managers.

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Due to a lack of monitoring of employee rights and privacy, Jim is being slapped with
threats and legal cases for his acts. As noted in the case, Gavin & Miriam had an issue with
FMLA and there are no formal policies of retrenchment of employees. HR's role in
employee and labour relations is of an utmost key to creating, discussing, and updating
human resources policies and procedures so that both management and workers are aware
of the standards and regulations. With HR in place, they could have mediated
disagreements between Jim and employees.

With HRM in place, Bandag could perform a proper and formal salary survey. Improper
evaluation by conducting informal salary surveys has led to many uncertainties as it's taken
from the internet or hearsay, but it's an attractive option from a costing point of view.
Whereas formal compensation survey support carries a cost and time commitment, it
conveys quality and esteem, particularly compared to casual sources (Li, 2021). As part of
HRM's total rewards function, Bandaq must build and improve its fundamental
compensation systems to be competitive with the support of HRM.

Apart from that, Bandaq misses the HRM function of risk management and worker
protection. It was seen from the scenario where Henry Jaques was complaining about
working conditions to his direct manager, but no action was taken. With HRM in place,
they could handle numerous workplace hazards to guarantee labour protections by
complying with regulatory obligations and being more responsive to workplace health and
safety issues. Bandaq is missing the HR also who will act as "a voice of the organisation
and/or the voice of the employees during any broader organisational issues about employee
welfare".

Incompliance with equal employment opportunity (EEO) laws and regulations affects all
other HR activities, e.g. Jim's action by not allowing a disabled worker (deaf) to become a
driver. There was no EEO policy established in Bandaq by the HR Dept for management to
adhere to. Based on federal regulations, "An employer that pledges to not discriminate
against employees based on race, colour, religion, sex, national origin, age, disability or
genetic information ". Jim may require the services of trained human resources specialists
to advise Bandaq on EEOC guidelines and other anti-discrimination legislation, such as
state and municipal statutes. Apart from legal consequences, it can also make the
workplace unfriendly, reduce efficiency, and raise absences among employees
(Wikaningrum et al., 2018).

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As a result, to compete effectively and retain and fulfil human resources in the business,
they need to have a systemized human resource management department to handle human
concerns in the business. HRM should not be one function among others of the CEO's
assistant. It should be at least a department to perform all the missing functions as
explained above. They can appoint 1 HR manager with four HR professionals to manage
the function of recruiting and training, performance management process (promotions,
counselling, removal of employees), SHE & employee relations, compensation and
benefits.

2. “What, if anything, would you do to change and/or improve upon the current HR
systems, forms, and practices that we now use?”

Bandaq's current HRM system uses standardised procedures that are bought from HR
supplies, which are not personalised to the company or employee or the working
environment. In the name of cost-saving, there is nothing unique about the organisation.
The organisation is too formal and lacks motivational practices among employees. When
standard procedures are being followed, it creates a gap between management and workers.
Okolie & Udom's research states that for regulations to be used to rectify or punish
wrongdoing in an organisation, executives must work to control integrity by implementing
standards in a systematic, fair, and flexible way (Okolie & Udom, 2019). For that, each HR
element must be thoroughly investigated by Bandaq HR management to avoid any
violation of any laws controlling labour rights, health codes, and safety regulations.

Bandaq also should adopt results-oriented compensation programs, which match workers'
incentives with the firm's earnings. Staff morale is low, even if the company's profitability
has risen, because they believe the company benefits at their expense and are worried about
their well-being. The findings from a study also suggest that there are statistically notable
correlations between employee competencies and organisational cultures, and it implies
pay strategies were associated with many kinds of firms' abilities and unique organisational
cultures (Kang & Lee, 2021).

It also found there is a lack of communication between managers and employees. This
could be due to outsourcing of hiring activities. Managers are allowed to evaluate and
communicate directly to the prospective employees when hiring is done internally. When
recruitment is handled externally, indirectly we are letting know that Bandaq won't take
time for upcoming employees. It needs committed employees who understand what the

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organisation wants of them, and explicit goals give that guidance. A study concludes that
effective organisational communications (vertical or horizontal) increase employees'
commitment and reduce turnover intention (Holzwarth et al., 2021).

The problem also lies in communication channels. Due to a lack of policies and guidelines,
for employees to follow or refer to, staff are facing dilemmas in communication. And, there
is no mode of feedback to management or no channel to raise concerns about the company.
This only can be improved via the establishment of communication policies for Bandaq.
Then, the leadership team also should make briefings during lunchtime, managers walking
around, team-building, etc to improvise the channel for employees to communicate their
dissatisfaction. As research indicates, this degree of participation or dedication to their job
assures that these individuals will remain with the firm in the long run (Panditya & Ray,
2018).

Another noticeable issue is a lack of empowerment and delegation. From the case, it seems
decisions of hiring and firing are still decided by Jim as there is no HR to manage this.
After Jim took over, employees were not given time to adapt to the changes in the
company. If Jim can communicate clearly to the controller and manager at each store about
the strategy for improvement, they could contribute to the action plan of the new strategy.
They also could hold formal meetings to collect ideas and see how the manager responds to
a new strategy. Research (Yin et al., 2019) discovered that empowerment techniques
improved firm productivity and mitigated the association between human asset
specialisation and performance. Furthermore, the results revealed that task cohesion
increased the influence of empowerment methods on performance outcomes.

The case study exemplifies employee dissatisfaction overall, actions such as the removal of
employees without warning, and no proper considerations and benefits for long-serving
employees set the tone low for the staff in Bandaq. A scholar relates that, "leaders need to
create opportunities for symmetrical communication, develop an atmosphere of trust, give
room for employee emotional responses, balance positive and negative aspects of the
change and serve as a role model" (Kraft et al., 2016). Therefore, with an open engagement
with the leadership team, setting up online forums or providing mentoring under
supervision would benefit the staff and improvise their performances. Jim should also urge
workers to submit comments and recommendations on how HR services may be enhanced
and what flaws they may have.

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It'll also assist leadership in understanding where their interpretations vary from those of
their workers, as well as what employment practices encourage or intimidate staff.
According to research (Kumari, 2019), engaged workers are more willing to exhibit
positive behaviour and attitudes at work. They are more devoted to the company and
participate more efficiently in its improvement.

3. “Do you think that the employee whom Jim fired for creating what the manager
called a poisonous relationship has a legitimate claim against us, and if so, why
and what should we do about it?”

I think the employee has a lawful claim based on the mental illness he is having and the
case study didn't provide any clear proof that the employee made the whole environment
poisonous. Because it is not exact, it cannot be related to the reason for which he was
dismissed. According to the case study, Jim fired him for unrelated reasons. Henry was
cited to be "poisonous behaviour", but he had been bringing up working conditions and
disputing with co-workers. If Jim ignored the case, it can lead to a crippled workplace, a
lack of confidence and low morale. Other staff will be puzzled about what they need to
accomplish if one of the employees frequently defies the manager's direction.

From another viewpoint, Henry is sincere about the safety and health environment (SHE)
of the workplace, which merely shows he is concerned about his work. The scenario raises
another question, how could Bandaq's working conditions excel if there is no HR
department or executives to deal with HR related matters.
Jim also had made the decision of firing him based on the advice or hearsay of the store
manager. Jim also didn't attempt to meet the employee to hear his part of the story or
interview the relevant witnesses in the workplace to assure there is admissible evidence for
his removal. There was no other paper evidence apart from his last performance appraisal,
where this concern was raised. There is no evidence of any follow-up action from the
employer to improvise the situation or warning letters issued to him before dismissal. As
per Malaysia Employment Act 1955 Section 14 subsection (1) states;
“An employer may, on the grounds of misconduct inconsistent with the fulfilment of the
express or implied conditions of his service, after due inquiry --
(a) dismiss without notice the employee;
(b) downgrade the employee; or

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(c) impose any other lesser punishment as he deems just and fit, and where a punishment of
suspension without wages is imposed, it shall not exceed a period of two weeks.”
However, Jim failed to meet the legal requirement where there was no inquiry made before
dismissal was made.

In the case of Ludchen v. Stelcrete Industries Ltd., 2013 ONSC 7495, the court ruled
against Stelcrete when it chose to fire its employee based on hearsay rather than
eye-witness testimony. The same could be applied to Bandaq, because Jim terminated
Henry based on store manager feedback, without any admissible evidence. In the similar
case of Jacques v. Dimarzio, Inc. (Nos. 03-9080, 03-9109) (2004), Jacques (mentally
impaired) was terminated after her working relations became poisonous after regularly
complained about working conditions. The US Court of Appeal ruled that under the
Americans with Disabilities Act (ADA) plaintiff shall be awarded back pay and punitive
damages.

Those cases' outcomes do not provide any advantage to Bandaq if the employee goes for a
tribunal.Therefore, it is reasonable for Jim to investigate the claim made by the store
manager before firing Henry. If the case goes to the tribunal, both parties are on the losing
end; Jim loses his reputation and Henry will pay it with money. Bandaq also can offer
Henry some counselling for his impairment and provide him with the required support for
him to communicate better in the workplace. Management also should make note that
arguments from employees are not bad, but just need to be handled productively. In this
case, Jim and the store manager had an opinion from the ground level about their working
environments, which they can try to resolve.

4. “Is it true that we really had to put Gavin back into an equivalent position, or was
it adequate to just bring him back into a job at the same salary, bonuses, and
benefits as he had before his leave?”

As given in the case of study, under the US Family & Medical Leave Act (FMLA)
requirement, a staff be reinstated to "an equivalent position with equivalent
employment benefits, pay, and other terms and conditions of employment". Bandag did
violate the FMLA rules by removing him from his position or supervisory role after his
return. So Bandag should keep him by offering him a position with the same degree of
power and responsibility, not just in terms of income and remuneration.

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As recorded in a federal court in Minnesota, the judge permitted a plaintiff to press
ahead with her claims that her company violated her rights under the Family and
Medical Leave Act (FMLA) when it changed her job duties and working hours after
she returned from leave, although the employee's job title, salary, and benefits remained
the same (Mitchell v. Dutchman Mfg., 389 F.3d 746 (7th Cir.)). Courts have
consistently held that a similar stance includes not only the same salary and benefits. In
general, it's been perceived to encompass all the role's reputation or obligation.

Apart from the law requirements to retain Gavin, he also holds a lot of experience in
managing Bandaq's store for two years and he was employed for the last ten years. This
makes him a valuable and key employee in the firm. Long-term staff members are
dedicated to the firm and they signify employee satisfaction and a stable work
environment. Long service individuals have seen many transformations in the
organisation and, as a result, know how it works and what doesn't. They build a strong
knowledge base to accomplish the task day after day (Irabor & Okolie, 2019), which
leads to increased profitability because few or no errors occur.

He could be a coach for new managers and sales executives, which indirectly reduces
training costs for Bandaq. As Bandaq is in the service sector, retaining skilled staff can
ensure that their customers return time and time. As predicted by the Evolution of Work
report, "those customer relationships will expand beyond in-person interactions and be
facilitated by technology, allowing employees to interact with customers wherever they
are" (The Economist Intelligence Unit, 2019).

Since Jim has financial performance goal insights, he should start compensation
packages that drive company performance. Apart from comparing the payscale of one
position to other similar roles at other firms (Groysberg et al., 2021), the firm can
introduce performance-driven long term incentive types. This is to support
pay-for-performance culture. The system should be able to use business rules to
calculate proposed incentive awards based on performance metrics. This will motivate
the long term employee like Gavin to stay longer and boost the performance of other
employees.

Apart from it, to attract and retain skilled talent, it is now presumed that more than a
competitive salary is required in future (Singh, 2019). Employees expect more and are
more likely to seek possibilities that include flexible working hours and leave

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 provisions such as parental leave, training and development opportunities to improve or
acquire new skills, and career path development. The research concluded that increased
benefits added more value to employee retention and job satisfaction (Jamal Ali &
Anwar, 2021).

Employers can provide even more purposeful family support by providing perks such
as flexible stipends for child-care or elder care, allowing employees to use at least some
of their paid time off (PTO) while on family medical leave (FMLA), incorporating an
employee assistance program (EAP) that gives employees free or low-cost access to
resources like education, crisis intervention services, low-interest loans, and family or
personal counselling.

5. Miriam, the controller, is basically claiming that the company is retaliating against
her for being pregnant, and that the fact that we raised performance issues was
just a smokescreen. Do you think the EEOC and/or courts would agree with her,
and, in any case, what should we do now?

The case doesn't specify whether Miriam had a background of poor performance, but it
appears that she did not. If she was fired without any prior notice about her
performance, the EEOC and the courts are likely to concur with her claim of unfair
dismissal based on the timing of her dismissal following her leave and demand for a
flexible work schedule.

It is Jim's responsibility if Miriam forged the documents. As stated in the case, he

should have directly engaged the legal procedures. Due to the HR department's
unavailability in the firm leads to the inability to ensure compliance with equal
employment opportunity (EEO) laws and regulations, all other HR functions have
contributed more to the event.

As the case states Jim Bandag decision to fire Miriam neither without any warning
letters nor investigations on forging the documents, could become a weak link to
defend the case against Miriam. However, the company abided by the terms of the
pregnancy program. Miriam is also unable to demonstrate that she was fired as a result
of her pregnancy per the Pregnancy Discrimination Act (PDA). She can only prove Jim
was unsupportive and request compensation for the job she lost for unfair dismissal.

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The Employment Tribunal does want to be certain that the dismissal choice was
justified and decided after a thorough inquiry. The employer should be prepared to
produce documentation on the performance issues that led to her termination as a
defence against this claim. However, to defend the organisation against future claims, it
is critical to design and follows a progressive disciplinary system.

This case shows the gap and requirement for Bandaq to have an HR department to
develop a progressive discipline policy to address behavioural and performance issues.
John Collins has concluded that this policy lowers the risk of poor performance
engagements and reduces legal liability for employers in his research (Collins, 2018).
The goal of progressive discipline is to give employees a fair attempt to repair and
resolve problems while simultaneously giving them fair warning about the
repercussions of failing to do so.

To avoid litigation, it is recommended to provide Miriam or similar employees with

flexible working or reduced working hours. Some evidence from research suggests that
"flexible working can support women to remain in the workforce after the birth of their
first child. There is more indication that mothers who use flextime and have access to
remote-working are less likely to reduce their working hours after childbirth" (Chung &
van der Horst, 2017). With an HR department in function, Bandaq can apply a strategic
HRM function to introduce flexible work arrangements that help sustain work
productivity.

"Family-friendly policies" need to be extended further beyond pregnancy and maternity

entitlements to recognize the real problems of work-parenting life balance in the
context of effective diversity management. Firms can assist moms in continuing to
breastfeed by offering a range of strategies and provisions, such as flexible leave
options and, where available, telecommuting possibilities. As scholars recommended
that by keeping pregnant and new parents on board, the company increases the variety
of its workforce, which benefits ingenuity, creativity, and the capacity to connect to a
wider range of customers (Wilson et al., 2006).

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6. “In the previous 10 years, we’ve had only one equal employment complaint, and
now in the last few years we’ve had four or five. What should I do about it?
Why?”

Jim's new management style is contributing to Bandaq's current litigation issues. In

comparison to his dad's paternal approach to management, Jim has been an
authoritarian leader. Jim had missed Bandaqs original cultures during revamps toward
cost-cutting. With a paternalistic approach from his dad, they were highly loyal as
employees were prioritised and decisions were made with the employee's best interest
first. However, Jim's leadership caused a lack of motivational practices among
employees and did not have an immediate approach to employee problem-solving.

Jim does not fully comply with HR regulations and laws (e.g. ADA, PDA, FMLA,
etc.). With authoritarian moves from Jim to ensure profit-oriented management. He is
more abrupt and failed to open up with employees and he was looking at them as
figures in his financial report. The decision he made to decrease all the costs without
evaluating the impact on employees, had led to a huge failure. Based on his actions, it
is evident that trying to save money at all costs isn't always the most effective way to
increase your profits.

All the employees' issues have become a stumbling block for management, which
identifies the missing Human Resource Department (HRD) in Bandaq. In today's
competitive business world, management, motivation and employee satisfaction are key
to success. Therefore, to be more competitive and keep the people in your organisation
happy, you need to have a systematic and structured human resource management
department that can manage human issues in your organisation.

The firm will be able to prevent future litigation exposure by placing on HR policies
and processes. Jim still can improve the financial performance based on the
employee-centred. With HR professionals in the team, they can begin preparing HR
policies that are aligned with the company's new strategy. It's demonstrated that
companies whose business and HRM policies are aligned have significantly higher
overall firm performance scores in comparison to those which are not aligned (Olson et
al., 2018).

Apart from aiding the company's strategic plan, good HR practices will encourage
equal treatment of employees, as well as fairness and openness. Also, it assists

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management in making consistent, uniform and predictable judgements. HR issues will
inevitably develop, and dealing with them will take time and energy away from your
other business tasks. With good HR policies and HRD in place, those concerns are
eliminated. Furthermore, engaging a certified HR expert will guarantee that choices are
taken with costly litigation in mind.

It is recommended that Jim opt for transactional leadership, which nurtures and
motivates the employees. Leaders who employ this approach concentrate on specific
tasks with incentives and penalties to inspire their staff. Transactional leadership has
been proven to be most effective in instances when challenges are straightforward and
clearly stated, according to research (Rajbanshi, 2020).

The HR team will play a major role in reducing the gap between managers and
employees. By introducing small celebrations of achievements or birthday parties the
tone restarted. They also can set up an online forum so that all employees can discuss
and gather input about all types of issues related to Bandaq. They also can utilise the
senior employees to provide mentoring while supervising, to reduce the gap between
the management team and workforce and create a positive environment in all the stores.

The HR management team is required to improvise the communication channel using

formal and informal methods (e.g. newsletters, quality circles, lunchtime at pantries
etc). Whilst, having formal meetings with store managers to see how they respond with
new strategies, will improve the action plan for new strategies.

(3400 words)

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