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
FOREIGN TRADE UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION GROUP ASSIGNMENT REPORT Ciyang Garment Factory: Switching Salary System By Group 15 Module: Human Resource Management Class ID: QTRE403(GD2-HK2-2223).1 Lecturer: MSc Ngo Quy Nham Hanoi, June 2023 GROUP MEMBERS No Full Name Student ID Nguyễn Trần Diệu Anh 2011250203 Nguyễn Thị Hoàng Hà 2113250011 Lê Thùy Linh 2112250047 Lê Thành Trung 2113250052 Lại Thảo Vy 2012150102 TABLE OF CONTENTS I Introduction .2 About the company .2 Main characters Case Summary .3 II Case Analysis .3 Compensation 1.1 Problem .3 1.2 Cause 1.3 Impacts 1.4 Solutions Training and Development 2.1 Problem .7 2.2 Cause 2.3 Impacts 2.4 Solutions Performance Management .9 3.1 Problem .9 3.2 Cause 3.3 Impacts 10 3.4 Solutions 10 III IV Implementation (Action plan) 11 References 15 I Introduction Managing people - human resource management (HRM) plays a strategic role by coordinating HR practices with organizational activities and goals, helping a company build a productive workforce and succeed Therefore, a business has the urge to design and implement HRM strategies effectively for each period In this report, our team aims at identifying problems Ciyang Garment Factory has faced, especially in Covid 19 circumstances Consequently, we would analyze the context, 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 in accordance with our research on HRM theories as well as knowledge attained in practical cases About the company - Name: Ciyang Garment Factory (CY) Location: Zaozhuang City, Shandong Province, China Industry: Manufacturing Fabrication Formation and Development: Main characters Case Summary In 2020, the Covid 19 pandemic abruptly broke out, shocking small and medium-sized Chinese enterprises like Ciyang Garment Factory (CY) in Zaozhuang City, 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 Guangdong Province, 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 senior manufacturing workers with experience and those who had previously worked in the south, like Liu Ning II Case Analysis Compensation 1.1 Problem Li Qiang has established existing salary systems in CY, which are the Piecerate salary system (the old system) and the Floating salary system (the new one) 1.2 Cause 1.2.1 Lack of communication Li Qiang made no public announcement regarding the introduction of the new compensation system, leaving the existing employees to feel misled, and unjustly acknowledged The old workers also saw a great bias toward newcomers, with Li trying 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 ratio compared to the normal rate recorded The account receivables at the beginning of the year had not been fulfilled due to the 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 garment factory employees had no set salary and no motivation to enhance their productivity under the previous system Furthermore, this approach was incapable of adequately rewarding workers' intangible output (training workers) This is the downside of Ciyang'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 measured output However, developing an effective performance metric for labor with no physical 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 in determining 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 Document continues below Discover more from: Human Resources Trường Đại học… 196 documents Go to course Tutorial - for revision 55 Human Resources 100% (17) Chapter 05 - Human 46 resources… Human Resources 100% (2) HRM - NOTE 52 Human Resources 100% (1) Chapter 12 pay for 47 performance and… Human Resources 100% (1) Hrm-testbank74 chapter - chap2… Human Resources 100% (1) 19 Human Resource good Human Resources 100% (1) since several compensable factors such as job complexity, experience, working condition, 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 and professional lives It takes more than just receiving praise for one's efforts to feel valued 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 does not appreciate their efforts and performances Before the participating of Liu Ning’s team, the experienced workers keep training newbies and finishing their work as duties and did not expect a higher salary; nevertheless, once Liu Ning’s team joined and received much higher income compared to them though they need to charge more responsibilities, this made them feel unfair and undervalued 1.3.2 Absenteeism Early job satisfaction research has emphasized the underlying assumption that job dissatisfaction represents the primary cause of absenteeism (Steers, Porter & Bigley, 1996) Due to the uneven workload, poor performance management, and the coexistence of two distinct wage systems, veteran employees felt they were being treated unfairly and that their contributions weren't being sufficiently valued despite bearing more pressure and working overtime As a consequence, they collectively organized an absence from work to protest However, there had never been a similar incident in CY before If the situation could not be properly solved, it might lead to a larger scale of absenteeism in the future 1.3.3 Labor shortage When the demand for workers for a particular occupation is greater than the supply of workers who are qualified, available, and willing to that job, there is a labor shortage (A Doyle, 2022) In this case, The absence of numerous veteran workers 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 and future orders The restrictions imposed on transportation and travel made recruiting employees to replace them exceedingly difficult, along with the fact that its migrant workers were stranded in their home provinces and the newcomers tended to be "zeroexperienced." 1.4 Solutions The organization's job structure and pay levels are policies of the organization rather than the amount a particular employee earns; therefore, CY should adjust its problems 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 company was 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 seniority salary, and risk of unemployment due to the impact of the covid epidemic On the contrary, if they choose to stay and can renegotiate the terms of their pay and express their needs Step 3: Issue an official announcement to introduce a new salary policy Due to poor communication, scheduling a meeting to discuss a mutually agreeable solution is a need Li can explain thoroughly how to apply the new salary policy so every 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 ensure fairness, personal development, and organizational capacity improvement within the company 3P salary is a remuneration model for employees based on a combination of salary payments according to basic factors: job position, personal capacity, and work results In addition to the fixed salary, employees are also entitled to an effective salary according 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 job requirements to significantly contribute to organizational goals Performance: Performance-based pay means paying a salary according to each employee's job completion level and the production and business efficiency of the enterprise Position: Several factors that should be highly evaluated when calculating the salary based on position include requirements, complexity, accountability, and working condition The ratio between those factors can be modified depending on the specific requirement of each business However, since CY is in a difficult financial condition due to COVID-19, the factory should still implement this solution in the long run at any cost Applying a new salary system not only creates fairness but also solves the current absenteeism of veteran workers Together with new objectives for the upcoming journey, it will make positive impacts on the productivity of each individual and the whole company as well, thereby lowering the ratio of the labor cost over the total profit to an acceptable number and stable the financial situation of the company in the long term Training and Development 2.1 Problem CY's current training and development programs might not be effectively preparing the workers The new workers recruited to the teams often lacked prior experience and despite the efforts of the experienced workers who worked overtime to mentor the new workers and ensure their own tasks, the factory's productivity did not reach its pre-pandemic levels 2.2 Cause CY’s current problems seem to be due to main factors 2.2.1 Unclear task analysis It appears that CY lacked a clear understanding and documentation of job requirements, which hinders the design of effective training programs The theory of Fine & Cronshaw (1999) also emphasized the need for a comprehensive understanding 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 to perform their own tasks, there seems to be a shortage of trainers and standardized training frameworks, which negatively affected the training outcomes and productivity in production 2.3 Impacts 2.3.1 Decreased productivity According to the Goal Setting Theory (Locke & Latham, 1990), inadequate training and unclear task analysis can prevent employees from setting and achieving clear goals, leading to decreased productivity This can have long-term consequences, including ongoing productivity issues and the potential for errors and inefficiencies in work processes, hindering the company's competitiveness 2.3.2 Strained work environment for existing workers The limited training resources placed a burden on former employees who must mentor new workers and ensure their own tasks This directly caused lower productivity and the long working hours of the old staff Moreover, excessive workload 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 Systems Design Theory (Dick & Carey, 1978), there are four stages involved in the training and development process These are training needs assessment, designing of the training, implementation, and monitoring & evaluation of the training In the case of CY, we suggest CY should implement several solutions in terms of training needs assessment and designing of training to improve the effectiveness of their training and development programs, enhance productivity levels, and reduce strain on existing workers 2.4.1 Training needs assessment Training needs assessment determines if training is necessary (Noe, 2013) It involves employee, organizational, and task analysis In CY, task analysis would be the 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 critical tasks 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 in the training program (Noe, 2013) Training design deals with identifying the objectives, lesson plan, teaching materials, trainers, methods and schedule to be adopted to deliver the training program With the information and problems of CY’s case, there are areas that we suggest CY can improve a Trainers We suggest that CY should have a separate group of trainers who could be from the old staff or Liu Ning’s teams as high-performing employees These trainers should be only responsible for training activities and not need to be involved in production in order to reduce the workload for them and ensure the quality of training programs b Training Materials Training materials should be developed based on a clear task analysis and designed to effectively convey the necessary skills and knowledge to new workers CY can make these materials through presentations, videos, or interactive exercises c Training Methods Training methods refer to the specific approaches used to deliver the training content to new workers Since the new workers needed training relating to the tasks in the production process, we suggest CY should adopt mainly the on-the-job training method, which allows trainees to learn while performing their actual tasks Trainers can provide guidance, demonstrate the tasks, and supervise the new workers as they practice and gain hands-on experience 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 not appreciated 3.2 Cause There are several criteria for effective performance management: Fit with strategy, Validity, Reliability, Acceptability, and Specific feedback Based on those elements, we can see the significant impacts that the incomplete performance management 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 of working whilst veteran workers have to coach the new workers, thereby affecting their production efficiency This limited performance appraisal is unlikely to provide a full picture of employees' contributions to the company 3.2.2 Unacceptability There are veteran workers at CY who believe that the measure is unfair because they need to bear more pressure but obtain less pay 3.3 Impacts 3.3.1 Job dissatisfaction Employees are more committed and satisfied with their organizations when they perceive distributive and procedural justice (Cohen-Charash and Spector, 2001) Due to the unclear performance management system, workers in CY, especially veterans, become dissatisfied with their income and the factory as well because there is a fact that they have to be responsible more but earn less 3.3.2 Reduce Efficiency The veteran workers, who were required to spend a lot of time and energy to coach the new workers, feel unfair and unmotivated as their dedication for new employees was not significantly recognized by the company Without direct instruction and prompt direction from the seniors, the "zero-experienced" newbies would struggle to operate the manufacturing lines or make mistakes As a result, their morality towards assignments will reduce, which affects their production efficiency and work motivation 3.4 Solutions Performance management can be defined as a systematic process for improving organizational performance by developing the performance of individuals and teams (Armstrong, 2006) Total quality management differs from traditional performance measurement in that it assesses both individual performance and the system within which the individual works (Noe, 2010) With total quality management, the performance measurement of the Ciyang garment factory combines measurements of attributes and results This is the best solution for CY to accurately measure employees’ performances While measuring the attributes of employees, we suggest a mixed-standard scale for the Ciyang factory is: In terms of measuring the results of employees, we suggest Management by Objectives for CY, that measures by key rey result area, objectives, % Complete, and actual performance III Implementation (Action plan) Stage 1: Convince veteran workers to come back Duration: Within day (to avoid them being automatically fired by the factory due to the labor policy) Action: ● Li should look for their sharings and feedback on their current salary, workload, and expectation for the future ● Li should also tell them the consequences of being absent from work in the context of covid-19, which could create a financial burden for them ● Li and Wang Zhen then may convince them to get back to work by offering a temporary salary system for the next months, which could provide them with additional wages (Mentoring salary, loyalty reward, ) and more benefits such as pick-up bus, a great free lunch, and a lunch break Expected outcome: ● In short, Li can successfully persuade those veteran workers to return and quickly regain motivation and productivity Stage 2: Make an official announcement to all existing employees Action: Right after successfully convincing veteran workers to return, Li has to make an official announcement about the temporary salary system to every CY’s existing employees to ensure that they are all on the same page Expected outcome: ● Make sure that every member of CY perceives the current payment situation of the factory ● Stabilize the labor system and commit to the timely delivery of goods for ongoing orders Stage 3: Examine and come up with the one and most suitable salary system for Ciyang Duration: The next months Actions: Li should review the current pay system and timely execute job evaluation based on the 3P salary model ● Person: Determine the personal salary of employees depending on three competencies (KSAO (Knowledge - Skills - Abilities - Others), qualifications, and experience ● Performance: Performance-based pay salary ● Position: Evaluate their salary based on compensable factors: requirements, complexity, accountability, and working condition Expected outcome: Li and Wang Zhen successfully implement the following salary system for CY Stage 4: Conduct a training and development program; establish a performance management system for CY Duration: The next months Action: Training & development program: CY should assess training needs assessment to identify critical tasks and competencies ● Trainers: ○ Liu Ning ○ Technicians from Guangzhou Foxconn Garment Factory ● Learner: The ‘zero-experienced’ and experienced workers ● Training Content: ○ Session 1: How to use two assembly lines at the highest speed? ○ Session 2: How to use advanced electronic assembly lines and quality inspection systems? ● Training Methods: On-the-job training method ● Training Materials: Presentations, videos, and interactive exercises Performance management system ● Method: Total Quality Management (combination of attributes and result management) ● Result management: ● Attribute management: Two traits are being assessed including productivity and initiative with levels of performance which are High - Medium - Low Stage 5: Set up the Human Resources department and continuously scale up with new advanced technologies Duration: The next months, especially when some restrictions during the Covid-19 pandemic will be loosened Action: CY should set up an HR department after the covid-19 pandemic to scale up their business with professionalism and an additional number of skilled workers Li Qiang must assemble a qualified team of HR specialists and personnel to be directly responsible for HR responsibilities such as recruitment and selection, job design, training and development, compensation and benefits (particularly crucial in this situation) In the long term, Ciyang might progressively integrate technology to not only leverage the skill set of CY’s workers but also raise productivity and shorten delivery time IV References Noe R., Hollenbeck., Gerhart B., Wright P (2020) Fundamentals of Human Resource Management 8th Edition New York: McGraw-Hill Education Armstrong M (2006) Performance Management: Key Strategies and Practical Guidelines, Kogan Page, London Beverley Ann Josia, 2005, “The relationship between job satisfaction and absenteeism”, MsC thesis, University of the Western Cape Liliana Chitnis, 2019, JazzHR Blog, blog, viewed 11 June 2023 Usha Valli Somasundaram & Toby Marshall Egan, 2004, Training and Development: An Examination of Definitions and Dependent Variables, Texas A & M University HR Helpboard (2020) Training and Development [online] Available https://www.hrhelpboard.com/training-development.htm (Accessed: 11 June 2023) at: Aborampah Amoah-Mensah & Patrick Darkwa, “Training and Development process and employees’ performance in the “chop bar” industry”, Journal of Research and Development, Vol 3, No 1, 2016, pp 34 – 40 Rahul Pant (2022) What is Job Evaluation in HRM? [online] Available at: https://edukedar.com/job-evaluation/ (Accessed 11 June 2023) Alison Doyle (2022) What Is a Labor Shortage? [online] Available at: https://www.thebalancemoney.com/what-is-a-labor-shortage-5209862 (Accessed 11 June 2023) Expertis Adult & Consult (2023) Guidelines for building a 3P salary payment system [online] Available at: https://en.expertis.vn/kb/kb-tien-luong/kien-thuc-quan-ly-tienluong-cho-giam-doc/mo-hinh-luong-3p/ (Accessed: 12 June 2023) More from: Human Resources Trường Đại học… 196 documents Go to course Tutorial - for revision 55 46 Human Resources 100% (17) Chapter 05 - Human resources… Human Resources 100% (2) HRM - NOTE 52 47 Human Resources 100% (1) Chapter 12 pay for performance and… Human Resources 100% (1) More from: Diệu Anh Nguyễ… 28 Trường Đại học Ngoạ…