(Tiểu luận) group assignment reportciyang garment factory switching salary system

However, developing an effective performance metric for labor with nophysical output e.g., training is difficult.. Before the participating of Liu Ning’steam, the experienced workers kee

FACULTY OF BUSINESS ADMINISTRATION

No Full Name Student ID

I Introduction 2

1 About the company 2

2 Main characters 2

3 Case Summary 3

II Case Analysis 3

1 Compensation 3

1.1 Problem 3

1.2 Cause 4

1.3 Impacts 4

1.4 Solutions 5

2 Training and Development 7

2.1 Problem 7

2.2 Cause 7

2.3 Impacts 7

2.4 Solutions 8

3 Performance Management 9

3.1 Problem 9

3.2 Cause 9

3.3 Impacts 10

3.4 Solutions 10

III Implementation (Action plan) 11

IV References 15

Managing people - human resource management (HRM) plays a strategic role bycoordinating HR practices with organizational activities and goals, helping a companybuild a productive workforce and succeed Therefore, a business has the urge to designand implement HRM strategies effectively for each period.

In this report, our team aims at identifying problems Ciyang Garment Factoryhas faced, especially in Covid 19 circumstances Consequently, we would analyze thecontext, point out the main causes of such matters, and impacts on the operation.Eventually, solutions would be stated and an implementation plan shall be proposed inaccordance with our research on HRM theories as well as knowledge attained inpractical cases

1 About the company

- Name: Ciyang Garment Factory (CY)

- Location: Zaozhuang City, Shandong Province, China

- Industry: Manufacturing Fabrication

- Formation and Development:

In 2020, the Covid 19 pandemic abruptly broke out, shocking small andmedium-sized Chinese enterprises like Ciyang Garment Factory (CY) in ZaozhuangCity, Shandong Province.

The outbreak prevented many migrant workers from reporting to work on time,and Li Qiang was worried about not following orders and possibly being sued.Skilled clothing producer Liu Ning, who had been employed in GuangdongProvince, was forced to stay at home in Zaozhuang as a result of the epidemic.The acute labor problem in CY was temporarily resolved by Liu Ning's entrance,but the 'absenteeism incident' was caused by the pay gap between seniormanufacturing workers with experience and those who had previously worked in thesouth, like Liu Ning

1 Compensation

1.1 Problem

Li Qiang has established 2 existing salary systems in CY, which are the rate salary system (the old system) and the Floating salary system (the new one).1.2 Cause

Piece-1.2.1 Lack of communication

Li Qiang made no public announcement regarding the introduction of the newcompensation system, leaving the existing employees to feel misled, and unjustlyacknowledged The old workers also saw a great bias toward newcomers, with Litrying his best to offer conveniences such as a special pickup bus, a great free lunch,and a lunch break to Liu Ning’s team

1.2.2 CY’s financial situation

The labor cost at CY constitutes 60% of the total profit, which was a high ratiocompared to the normal rate recorded

The account receivables at the beginning of the year had not been fulfilled due tothe great effect of the epidemic

1.2.3 The obsolescence of CY’s Piece-rate salary system

CY's previous piece-rate salary system was considered outmoded since garmentfactory employees had no set salary and no motivation to enhance their productivityunder the previous system Furthermore, this approach was incapable of adequatelyrewarding workers' intangible output (training workers) This is the downside ofCiyang's incentive pay system, which is a pure piece-work rate This form of incentive

is best suited for extremely regular, standardized occupations with easily measuredoutput However, developing an effective performance metric for labor with nophysical output (e.g., training) is difficult (Noe and colleagues, 2022)

1.2.4 Job evaluation

Job evaluation is a systematic and well-organized process that helps indetermining the value/worth of a job with other jobs in an organization (R Pant,2022) In CY, Li and Wang Zhen haven’t used a comprehensive job evaluation system

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since several compensable factors such as job complexity, experience, workingcondition, and education were not adequately considered.

1.3 Impacts

1.3.1 Job dissatisfaction

Every human has a deep-seated desire to be valued in both our personal andprofessional lives It takes more than just receiving praise for one's efforts to feelvalued at work People want to feel valued as coworkers and employees However,veteran workers, in this case, feel dissatisfied due to the fact that the company doesnot appreciate their efforts and performances Before the participating of Liu Ning’steam, the experienced workers keep training newbies and finishing their work asduties and did not expect a higher salary; nevertheless, once Liu Ning’s team joinedand received much higher income compared to them though they need to charge moreresponsibilities, this made them feel unfair and undervalued

1.3.2 Absenteeism

Early job satisfaction research has emphasized the underlying assumption thatjob dissatisfaction represents the primary cause of absenteeism (Steers, Porter &Bigley, 4 1996) Due to the uneven workload, poor performance management, and thecoexistence of two distinct wage systems, veteran employees felt they were beingtreated unfairly and that their contributions weren't being sufficiently valued despitebearing more pressure and working overtime As a consequence, they collectivelyorganized an absence from work to protest However, there had never been a similarincident in CY before If the situation could not be properly solved, it might lead to alarger scale of absenteeism in the future

1.3.3 Labor shortage

When the demand for workers for a particular occupation is greater than thesupply of workers who are qualified, available, and willing to do that job, there is alabor shortage (A Doyle, 2022) In this case, The absence of numerous veteranworkers also contributed to a labor shortage at a time when CY was in desperate need

of personnel, particularly experienced and skilled ones, to execute both delayed andfuture orders The restrictions imposed on transportation and travel made recruitingemployees to replace them exceedingly difficult, along with the fact that its migrant

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workers were stranded in their home provinces and the newcomers tended to be experienced."

"zero-1.4 Solutions

The organization's job structure and pay levels are policies of the organizationrather than the amount a particular employee earns; therefore, CY should adjust itsproblems with the aim of having the most effective compensation system

1.4.1 Negotiate with both veterans and Liu Ning’s team

Step 1: Convince the veteran worker back to work

Li needed to convince the workers because it was the second day and the companywas forced to quit according to company regulations

Step 2: Analyze the cost/benefits if they decide to return

There are many disadvantages when they quit their jobs such as loss of senioritysalary, and risk of unemployment due to the impact of the covid epidemic On thecontrary, if they choose to stay and can renegotiate the terms of their pay and expresstheir needs

Step 3: Issue an official announcement to introduce a new salary policy

Due to poor communication, scheduling a meeting to discuss a mutually agreeablesolution is a need Li can explain thoroughly how to apply the new salary policy soevery employee can understand how to measure their performance and identify goals

at work

1.4.2 Apply the floating salary system to the whole

CY should apply the floating salary system based on the 3P Salary to ensurefairness, personal development, and organizational capacity improvement within thecompany 3P salary is a remuneration model for employees based on a combination ofsalary payments according to 3 basic factors: job position, personal capacity, and workresults In addition to the fixed salary, employees are also entitled to an effective salaryaccording to the achieved work performance (Dill, 1997; Johnstone, 2004)

Person: The pay for personal salary of employees depends on what they achieve

in three competencies, which include KSAO (Knowledge - Skills - Abilities - Others),qualifications, and experience Their capability must be associated with jobrequirements to significantly contribute to organizational goals

employee's job completion level and the production and business efficiency of theenterprise.

Position: Several factors that should be highly evaluated when calculating the

salary based on position include requirements, complexity, accountability, andworking condition The ratio between those factors can be modified depending on thespecific requirement of each business

However, since CY is in a difficult financial condition due to COVID-19, thefactory should still implement this solution in the long run at any cost Applying a newsalary system not only creates fairness but also solves the current absenteeism ofveteran workers Together with new objectives for the upcoming journey, it will makepositive impacts on the productivity of each individual and the whole company aswell, thereby lowering the ratio of the labor cost over the total profit to an acceptablenumber and stable the financial situation of the company in the long term

2 Training and Development

2.1 Problem

CY's current training and development programs might not be effectivelypreparing the workers The new workers recruited to the teams often lacked priorexperience and despite the efforts of the experienced workers who worked overtime tomentor the new workers and ensure their own tasks, the factory's productivity did notreach its pre-pandemic levels

2.2 Cause

CY’s current problems seem to be due to 2 main factors

2.2.1 Unclear task analysis

It appears that CY lacked a clear understanding and documentation of jobrequirements, which hinders the design of effective training programs The theory ofFine & Cronshaw (1999) also emphasized the need for a comprehensiveunderstanding of job tasks to develop targeted training content

2.2.2 Limited training resources

Since the training for newbies was assigned to the old staff only who still had toperform their own tasks, there seems to be a shortage of trainers and standardizedtraining frameworks, which negatively affected the training outcomes and productivity

2.3.2 Strained work environment for existing workers

The limited training resources placed a burden on former employees who mustmentor new workers and ensure their own tasks This directly caused lowerproductivity and the long working hours of the old staff Moreover, excessiveworkload and insufficient resources can lead to burnout among the former workers,and an overall strained work environment (Bakker & Demerouti, 2017)

2.4 Solutions

According to Desmone, Werner and Harris (2002) and Instructional SystemsDesign Theory (Dick & Carey, 1978), there are four stages involved in the trainingand development process These are training needs assessment, designing of thetraining, implementation, and monitoring & evaluation of the training In the case of

CY, we suggest CY should implement several solutions in terms of training needsassessment and designing of training to improve the effectiveness of their training anddevelopment programs, enhance productivity levels, and reduce strain on existingworkers

2.4.1 Training needs assessment

Training needs assessment determines if training is necessary (Noe, 2013) Itinvolves employee, organizational, and task analysis In CY, task analysis would bethe most concern It identifies job duties, skills, and knowledge required for each role

We suggest that CY should conduct a combination of interviews, observations, and

reviewing job descriptions and performance metrics The goal is to identify criticaltasks and competencies, forming the basis for developing focused training.

2.4.2 Design of the training and development

Training and development design concerns the factors or activities included inthe training program (Noe, 2013) Training design deals with identifying theobjectives, lesson plan, teaching materials, trainers, methods and schedule to beadopted to deliver the training program

With the information and problems of CY’s case, there are 3 areas that wesuggest CY can improve

a Trainers

We suggest that CY should have a separate group of trainers who could be fromthe old staff or Liu Ning’s teams as high-performing employees These trainers should

be only responsible for training activities and do not need to be involved in production

in order to reduce the workload for them and ensure the quality of training programs

3 Performance Management

3.1 Problem

CY's performance management system is unable to effectively measure workers'contributions to the organization's goal The veteran workers worked overtime to

complete the work in hand while mentoring the new workers but their efforts are notappreciated.

3.2 Cause

There are several criteria for effective performance management: Fit withstrategy, Validity, Reliability, Acceptability, and Specific feedback Based on thoseelements, we can see the significant impacts that the incomplete performancemanagement of CY affect the morality and productivity of its workers as below:3.2.1 Low validity

CY measures employees by their outputs but not by their efforts or hours ofworking whilst veteran workers have to coach the new workers, thereby affecting theirproduction efficiency This limited performance appraisal is unlikely to provide a fullpicture of employees' contributions to the company

3.3.2 Reduce Efficiency

The veteran workers, who were required to spend a lot of time and energy tocoach the new workers, feel unfair and unmotivated as their dedication for newemployees was not significantly recognized by the company Without directinstruction and prompt direction from the seniors, the "zero-experienced" newbieswould struggle to operate the manufacturing lines or make mistakes As a result, theirmorality towards assignments will reduce, which affects their production efficiencyand work motivation

3.4 Solutions

Performance management can be defined as a systematic process for improvingorganizational performance by developing the performance of individuals and teams(Armstrong, 2006) Total quality management differs from traditional performancemeasurement in that it assesses both individual performance and the system withinwhich the individual works (Noe, 2010) With total quality management, theperformance measurement of the Ciyang garment factory combines measurements ofattributes and results This is the best solution for CY to accurately measureemployees’ performances While measuring the attributes of employees, we suggest amixed-standard scale for the Ciyang factory is: