(Tiểu luận) human resource managementtopic managing the salary system ofciyang garment factory

FOREIGN TRADE UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION HUMAN RESOURCE MANAGEMENT TOPIC: MANAGING THE SALARY SYSTEM OF CIYANG GARMENT FACTORY Lecturer: Mr Ngô Quý Nhâm Class ID: QTRE403(GD1-HK1-2223).1 Group Vũ Thảo Anh Hồng Nhật Duy Ngơ Ngun Hạnh Nguyễn Tùng Lâm Nguyễn Thị Hằng Nga 2012250015 2012250027 2012250031 2014250700 2012250048 Hanoi, October 6th, 2022 TABLE OF CONTENTS I INTRODUCTION Company background Human resources issue II CASE ANALYSIS Problems and causes Impacts on business performance III SOLUTIONS .8ar Solution 1: Zero-experienced workers Solution 2: The labor cost at CY was high Solution 3: Uneven productivity Solution 4: Pay difference Solution 5: Absenteeism incident IV IMPLEMENTATION 10 The third day of the absenteeism 10 The next three months 10 The next six months 12 One year from now on 13 V CONCLUSION 13 VI REFERENCE 14 - Ciyang Garment Factory was founded in 2005 by Li - CY firstly hired a group of 13 workers and soon became the key staff of the company - During 2006–2010, CY hired many new workers, and total profit had been increasing continuously - Li invested a lot in new equipment and asked for assistance from experts after many returned orders - The company increase revenue and successfully delivered to H&M, Guess, and Disney - The progress wasn’t smooth sailing, with growth came competition - Garment factories required a large number of skilled and ordinary workers during peak season Competition for workers heated up during the Chinese New Year, as factories needed to recruit large numbers of workers in advance Sudden outbreak of the COVID-19 epidemic in 2020 caught small and mediumsized Chinese enterprises off guard, such as Ciyang Garment Factory (CY) in Zaozhuang City, Shandong Province Many migrant workers could not come to work on time because of the outbreak, and Li Qiang-the founder and general manager of CYfelt uneasy about defaulting on orders and worried about future lawsuits The experienced garment maker Liu Ning, who had been working in Dongguan, Guangdong Province, was also stranded at home in Zaozhuang because of the epidemic After meeting with Li, the two reached a cooperation agreement Liu Ning's arrival temporarily solved the urgent labour shortage of CY; however, the pay difference between the veteran senior workers in the factory and those who had worked in the south, such as Liu Ning, became the catalyst of the 'absenteeism incident' Because of the human resource management problems caused by this incident, Li was once again caught in a dilemma This case examines Li, the director of the factory, and Liu Ning, a skilled technician, to demonstrate the difficulties faced by small- and medium-sized private manufacturing enterprises in China under the impact of COVID3 19 With the conflict between the two salary systems as the background, this case discusses how Li deals with the crisis and the future development plan of CY The Covid-19 pandemic and the new salary system made Li and his company face with several problems mentioning below: Problems Details Causes The Covid-19 pandemic and the restrictions between cities and regions led to a huge shortage of skilled and The total number of workers on Zero experience worker ordinary workers Moreover, the competition the assembly line was over between garment factories 200, including many “zeroduring the peak season experienced” workers made Li difficult in hiring proficient workers but hiring the temporary workers with poor skills The The labor cost at CY was high labor cost at relatively The lack of labor led to the CY reduction in work constituted for 60% of the total efficiency Therefore, the profit Moreover, the account quality of the company and receivables at the beginning of products can not be the year had not been fulfilled assured Consequently, the yet rework rate and reject rate would be at a high level When Liu Ning’s team was By having mastered in divided into assembly lines many of the processes and and used a conveyor belt, they skills required for garment set the two lines to the highest production, Liu and her speed The efficiency of Liu team who followed Liu Ning’s team shocked Li, the Ning to come to the South conveyor belt never slowed or to work had advanced and Uneven productivity stopped, and the transition well organized training in between shifts was seamless working On contrast, in However, comparing to the CY, some of veteran veteran team, even the mid- workers had no experience gear speed can make them in garment production, which can cause the inefficiency in their work Moreover, the skilled struggle After Liu Ning’s team joined, workers had to coach the the daily outputs of each newbie and complete their assembly line were two or three orders at the same time so times higher than those by they cannot as good as veteran worker Pay difference The veteran before worker team The cause of this problem thought that it was unfair of is due to Li adopting and CY to use the floating salary applying the new salary system to pay Liu Ning’s team system for Liu Ning’s team as it caused a huge gap in but not changing the old payment between the two piece-rate system for the systems at the end of the veteran worker According month They had to both coach to the old salary system, the the newbies and complete the salary of each worker was factory’s orders, however, they determined by the workload obtain less pay than before In and unit price of each contrast, Liu Ning and her team garment accessory part were satisfied with the However, Liu Ning supposed that this system could not effective in improving the worker’s productivity Therefore, Liu Ning had a new floating salary system, which caused a big difference in payment the salary paid for two teams Moreover, in the new salary system, they can have rewards for high rank or their special skills while the old one did not The pay difference between the veteran senior workers come to work, including the in the factory and those senior team leader Zhang, who who had worked in the was never absent from work south such as Liu Ning and They collectively organised an her colleagues led to the absence from work to protest catalyst of the 'absenteeism the switching salary system incident' Several old machinists did not Absenteeism incident - Impact of COVID 19 epidemic on: + Employment Pattern: Li has to hire temporary workers including skilled and ordinary workers from neighboring cities to fill the gap due to a labor shortage to cope with the upcoming peak season Although the temporary Document continues below Discover more quản trị nguồn from: nhân lực Trường Đại học… 162 documents Go to course Giao trinh quan tri 131 nhan luc 7792 quản trị nguồn… 100% (21) TIỂU LUẬN ĐÀO TẠO 27 VÀ PHÁT TRIỂN… quản trị nguồn… 95% (20) CÔNG TÁC TUYỂN 26 DỤNG TẠI CÔNG TY… quản trị nguồn… 100% (8) Phân tích hệ thống 25 106 đãi ngộ tập đoà… quản trị nguồn… 100% (7) Tổng hợp đề trắc nghiệm tự luận Qtnnl quản trị nguồn… 100% (2) Tiểu luận Qtnnl thực workers possessed relatively poor skills, they could complete simple tasks trạng Tuyển dụng… after short-term training, thereby alleviating 25labor shortage However, the temporary workers were unable to travel for work owing quản trị to the COVID19 pandemic => shortage of labor nguồn… 100% (2) + Working process of experienced workers: Due to difficulties in recruiting new employees from other cities, the total number of workers on the assembly line includes many “zero-experienced'' new local workers The older, experienced workers worked overtime to complete the work in hand while mentoring the new workers The veteran workers were required to spend a lot of time and energy to coach the new workers => affecting their production efficiency - Impacts of Liu Ning and her team joining Ciyang on: + Company's salary system: Liu Ning expressed her desire that Ciyang could calculate the salary using the same salary system as her old factory for her and her team of workers Li finally decided to accept Liu Ning's request despite Ciyang's financial difficulties: The labor cost at CY was already high (constituting 60% of the total profit) and the account receivables at the beginning of the year had not been fulfilled yet => Ciyang has introduced a new floating pay system for these experienced new workers + Productivity: With the efficient operation of Liu Ning's team, Ciyang had the order successfully completed five days ahead of schedule In addition to their extremely high work efficiency, the new workers have a rigorous working attitude and standardized garment production process => With the coming of these senior workers, Ciyang increased their productivity and approached a new working process - Impacts of the two salary system in parallel: Liu's team was satisfied with the salary Li paid, but some existing workers showed great dissatisfaction with it According to the old salary system, Zhang's team members could not earn more than 3,000 yuan per month, while each member of Liu Ning's team could earn 4,000 to 5,000 yuan with the new salary system The huge gap between the two systems deeply offended these veteran workers Therefore, they collectively organized an absence from work to protest Moreover, these veteran workers worked hard to train new ones and significantly contributed to completing factory orders For example, Zhang had been coaching five newbies this year and could often be seen teaching them skills during the day and even working late at night Each of these skilled workers had worked diligently to fulfill their duties => They think it was unfair to bear more pressure and obtain less pay than the newbies While Li decided to adopt the new floating salary system for Liu Ning's team, he did not replace the old piece-rate salary system for original workers and decided to apply the two systems simultaneously => The use of the two makes the existing workers unsatisfied and organize absence from work If this situation lasts for a long time, it will cause a labor crisis and deeply affect all the operation and productivity of Ciyang Therefore, Li, as a founder and manager, has to come up with solutions to improve this situation - Build more sources of recruitment to find the most suitable worker working for the company: This is a great way to avoid substandard portfolio and ensure the best quality of the company’s workforce - The power of automation: CY can consider this solution as an effective way to take over the place of zero-experienced workers Instead of hiring temporary workers with relatively poor skills, CY can use the application of automation in certain production steps It will help CY boost the efficiency of performance and avoid the risk of hiring new and zero-experienced workers simultaneously Build an experienced HR department: This factor is more and more important when the company grows Li should care more about building and training a strong and skilfull team of HR professionals to meet with the demand of hiring quality workers Benchmark with the industry’s leaders: To tackle the problem of high labor cost due to the lack of labor, CY needs to know how the industry leaders are basing their compensation and reward structure - Apply advanced technology to enable a faster training process for newbies: Besides teaching them skills during the day and even working late at night, the company can introduce interactive learning modules through an online platform (Weibo, WeChat) By arranging online meetings like this, newbies will find it easier to learn new skills for better performance at work without wasting the time of veteran workers It will lead to the reduction in the burden of training on the existing personnel of CY - Peer-to-peer training: Another way to change the situation of uneven productivity is to exchange members within the two teams The method of mixing old groups of workers with new members of Liu Ning’s team helps boost the efficiency of their overall performance By working together with peers, newbies can easily learn new skills from them and feel more comfortable to ask for help from people of their age Change the salary system: In this case, Li should merge the two existing salary systems into a new one with different conditions that will support all workers equally + Fixed salary: This criterion is applied for all workers (based on the position and level of skills, there will be a change in the salary rate) + Variable pay: CY should have bonus for everyone who is not absent from work in a month + Additional wage: Rewards for high rank or special skills at work are considered as important aspects in terms of the salary system - Announce a new salary system: In order to solve the absenteeism incident, Li needs to publicly announce a new salary system that will apply for all workers, without any exception By doing this, Li can reassure old machinists that everything is now settled and they can trust him to go back to work - Compensation for veteran senior workers: Li should give all senior workers an amount of bonus/reward money as a way to compensate for his mistake in allocating the salary system It is also a way of acknowledging and praising their efforts to make contribution to the development of the company The implementation process will be presented in a chronological way: (1) The third day of the absenteeism (2) The next three months (3) The next six months (4) One year from now on Action: Li should contact Zhang and other veteran workers to come and begin negotiation with them: - Give them an amount of bonus/reward money as a way to compensate for his mistake in allocating the salary system Reassure them that he would declare a new salary system applied for all workers in months Clarify: This is mainly to placate these irritated workers It is also a way of acknowledging and praising their efforts of making contribution to the development of the company Expected outcome: The veteran workers would return to work and accept the current solution 10 Action 1: Li should prepare everything needed to build a new salary system applied to all: Undertake job evaluation with related compensable factors: experience, complexity of tasks, responsibility Define key jobs - production workers who play the most important role in the production for orders Decide pay rates, pay grades and pay ranges => Create a suitable pay structure Clarify: New salary system Newbies - (zero-experienced): have to undergo a period of probation for months without fixed salary Fixed salary Regular workers: 600 CNY/month Team leaders: 1000 CNY/month (Liu Ning is also considered a team leader) Full attendance bonus (working days 28 days): 200 CNY/month/person Quantity of work x unit price of each product Variable pay + Pant leg 0.6 yuan; + Waistband 0.35 yuan; + Cloth pocket 0.4 yuan; + Keyhole button 0.6 yuan Additional wage 11 - Seniority wage: applied for employees who have worked at least years: 10% of fixed salary and incremental of 2% for every years - Performance bonus: If the worker's production quantity of each product ranks in the top 30% of the workers who produce the product, they will be rewarded according to the qualified rate of the product - Skill reward: a one-time reward for special skills such as manual embroidery used in production - Coaching salary: Veteran workers who train newbies would receive bonus per person (50 CNY/month/trainee) Expected outcome: - Ensure fairness among all employees - Reduces turnover rate - Employees have incentives to enhance their skills and increase their productivity - Increase loyalty and EVP Action 2: - Introduce a series of instruction videos about key skills for garment workers and upload them onto an online platform (Weibo, WeChat) for personal training - Rearrange people in teams: mixing old groups of workers with new members of Liu Ning’s team Expected outcome: 12 - Free the burden of training on the existing personnel of CY, leave them more time to spend on enhancing their own productivity - Close the gap between the two group of employees, both in person and in productivity 9 Action: Build more sources of recruitment to find the most suitable worker working for the company: We can make clusters of all the nearby towns/cities/villages in the Shandong province based on population and socioeconomic status Based on this we created targeted ads for people on the platforms Weibo and WeChat Improve the equipment at the factory by investing in automation in certain production steps Expected outcome: - Ensure the quality of workforce right from the first stage of recruitment (more suitable, less likely to hire zero-experienced workers) - Boost the efficiency of the assembly lines 10 Set up an HR Department: In the long run, an HR department becomes more and more necessary as the company grows This department will be responsible for designing and standardizing the HR strategy which includes recruitment and selection, training and development, compensation and performance management Benchmark with the industry leaders in the south: As the company grows, it is pertinent to know how the industry leaders are basing their compensation and rewards structure To summarize, we have mentioned the problems above that CY have to deal with Through applying theories from HRM modules, especially the module of Compensation Management, we have come up with some feasible solutions for CY to manage human resources in both short-term and long-term Human resource management plays an important role in every organization, employees are the assets of the company As a 13 leader, Li has to make the right decision to balance the benefits between workers and become a profitable organization 14 [1] Hollenbeck, N and Wright, G., 2022 Fundamentals Of Human Resources Management 4th Edition 4th ed pp.326 - 348 [2] Ilo.org 2022 [online] Available at: [Accessed October 2022] [3] Lu, V., 2022 Minimum Wage Level for Garment Workers in the World (Updated in December 2020) [online] FASH455 Global Apparel & Textile Trade and Sourcing Available at: [Accessed October 2022] 15 More from: quản trị nguồn nhân lực Trường Đại học… 162 documents Go to course Giao trinh quan tri 131 27 26 nhan luc 7792 quản trị nguồn… 100% (21) TIỂU LUẬN ĐÀO TẠO VÀ PHÁT TRIỂN… quản trị nguồn… 95% (20) CÔNG TÁC TUYỂN DỤNG TẠI CƠNG TY… quản trị nguồn… 100% (8) Phân tích hệ thống 25 đãi ngộ tập đoà… quản trị nguồn… 100% (7) Recommended for you 19 112 287 Frozen Basha Fish Fillet Giao dịch TMQT 100% (1) Midterm Test Group - Report of… Giao dịch TMQT 100% (1) Hrm-testbankchapter quản trị nguồn… 100% (1) Tailieuxanh mh18 noe fundhrm wm1 769 quản trị nguồn… 100% (1)