Hrm - Wac - Meeds

8/13/2019 Hrm - Wac - Meeds

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Human Resource Management

Medical and Environmental Electric Devices Corporation

(MEEDs Corp.)

Written Case Analysis

Submitted to:Prof. F. A. Fareedy

Teaching Associate:Ms. Haadiah Qaiser

Group Members

Fahad Asif

Saiba Mian

Zaid Nomani

Zara Naqi

MBA-II

Section-A

Lahore School of Economics


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Introduction and Case Overview:

The case talks about a company; Medical and Environmental Electronic Device Corporation

(MEED) and its supplier of circuits the IC group. The company acquired its name in 1964 and

by 1979, MEED had achieved overall 31% market share in the area. MEED designed,

manufactured, sold and serviced complex medical and environmental control systems. It had

facilities throughout the world and the HQs were in Michigan. The sales and profitability of the

company, since then, have been on the rise (if seen on an overall basis). The organizational

culture however is informal and ambiguous, with no defined parameters or rules. Talking about

the IC group; it is an ever-evolving manufacturer of circuits which is transitioning as the

technology is changing. ICG was not MEEDs major supplier as it bought 80% of its supplies

from other companies but ICG was like a laboratory to MEED as it fell in its umbrella. The case

centers itself around the dynamic environment and how ICG and MEED try to find the premise

of their existence skilled manpower. With ever-growing needs of employees, the case talks

about how it is becoming extremely difficult to find employees. For the purpose of doing so,

HRDP, a separate department is created by Tom Douglas, which is also facing issues. Hence,

several problems pile up and bring about various concerns for the management at MEED.

Problems Identified:

A number of problems persist within and outside of the organization. Let us take a look at them:

External problems

The industry has a shortfall of skilled, expert labor hence the labor market was tight.There is an ever-increasing demand (especially in the case of technical and managerial

skills) but there is not enough supply.

In the industry that ICG operates, its becoming an industry norm to allure workforcefrom one place to another. Whosoever offers more money becomes the employer. Years

are spent on technically training an employee, and when that happens the employee is

ready to leave the company for other. The poaching is increasing and workforce is

decreasing creating a dilemma for ICG.


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There is a cultural fixthe West and the East Coasts both are opposites in term of cultureand they dont settle in each others domains.

There is a lot of effort needed by companies to stay abreast of technology and there is anever-increasing dynamic change in the circuits business with which ICG has to deal with.

Hence life cycles of devices in the semi-conductor industry ended quickly.

Relocation costs were very high moving employees was next to unfeasible with theamount being $5000 per semi-conductor engineer brought from West Coast to Michigan.

This business is also very expensive in the sense that the cost of producing chips is a lot.Hence, the high costs are a setback.

Internal problems:

The turnover rate is increasing, causing instability in the workforce and internalmanagement of the company.

o Exempt employees : 10%o Nonexempt employees : 20%

There is understaffingthere are 106 positions that are open and still need to be filled.o This is over-burdening the current employees. Each person has to give in their

150% because theres a shortage of workforce. For instance, Tom Douglas (group

manager ICG as well as plant manager Jackson was also reported of program

management, planning and personnel).

There is no formal planning. Let alone long-term goals, there is no succession planninghappening in the company. Planning wasnt even done at ICG.

Organization culture at MEED and ICG is just informal and ambiguous. There are norules and no parameters defined which is why theres always a haphazard operational

scenario. There are no guidelines, no conformities and way too much flexibility.

ICG is not being able to meet the demand of MEED. Where it is supposed to pitch in20% of MEEDs demand, it only fulfills about 5-8%.

There is a major scheduling issuea very chronic problem. Parts were being delivered toassembly units after several delays and the nature of the business didnt afford that (as

technology changed at a very fast pace).


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MBAs are needed in the firm as management is required. But there is no formal programfor recruiting MBAs. Engineers were moving up into management squeezing out

recruitment of MBAs.

The underlying problem is that engineers are bad managers and in this particularcompany, engineers are given management position where they have no such background

and vice versa. Tom Douglas, not even having semi-conductor background, was running

as plant manager Jackson. This is also leading to overlapping roles.

No formal career development tracks were in place. And the training was minimal. JDs, JSs are not specified. There are no solid criteria; there are no models and in the case

it says people dont know what a good manager looks like...

There is specialized recruitment thats being done workforce is being found but theresno follow up. None of the potential workers that are searched for are called.

HR problems also exist.o Employees were moving around too much mobility was causing problems in

planning.

o There was no proper appraisal system in place.o There were no mentors to help new hires to start out.o Compensation system was not in placeincoming engineers were paid more than

the previous engineers which was clear discrimination.


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Analysis

As has been mentioned in the introduction, the company is facing many problems which range

from managerial problems to human resource problems. The short-term problem that the ICG

faces and should be solved immediately is that of finding an experienced plant manager for the

smooth running of the Jackson plant in Michigan.

The manufacturing was initially done at a plant in Lansing, Michigan but due to high turnover

and increasing expenses the plant was closed down. Its operations were transferred to the

Jackson plant in Michigan which was headed by Tom Douglas. When Douglas was made the

manager of Manufacturing, before him 5 plant managers had come and gone in the short time

span of four years. ICG was facing a lot of problems in its manufacturing which were spilling

into other subunits as well.

Previously, all the plant managers of manufacturing were from semi-conductor background and

had knowledge of how to run a plant. But due to high amounts of pressure the job required the

previous managers had quit. Mr. Douglas when made the Plant Manager was also the Group

Head of ICG, so now he had a dual role and responsibility. His expertise was not in semi-

conductor as he was an electrical engineer and also had a degree in management. But the issue

was that he had never managed a plant before and although he seemed calm about it but it was

having an effect on the operations of the plant. The performance yield of the Jackson plant was

below of that of the industry. This means good chip as a percentage of chip starts. While the

industry yield was 71%, the yield of Jackson plant was at 65%. Moreover, the cost of

manufacturing operations for the current fiscal year had exceeded by $11 million than forecasted.

This shows that the operations of the plant were not efficient and even though Douglas knew the

top management was not going to interfere but he realized that it was his responsibility.

Furthermore, the ICG was to fill the 20% requirement of chips of MEEDS and the rest of 80%

were to be provided by outside suppliers. But ICG was also not able to fulfill this requirement

and it was only contributing 5-8% as to 20% originally agreed contribution. And even the chips

it was manufacturing, it was at a higher cost then being supplied by the outside suppliers. Apart

from the above mentioned problems, the most critical of all the problems was that of Scheduling.

Mr. Douglas was not able to develop and implement an effective schedule which resulted in


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production delays which in turn meant delays for volume assembly. The semi-conductor industry

has very short lifer cycles due to continuous innovation and delay in production led to the design

becoming obsolete more quickly which ultimately resulted in lost sales of approximately

$100,000 a week.

Due to the above mentioned reasons and explanations, Mr. Douglas should immediately start

searching for an experienced plant manager for the running of Jackson Plant. As has been

mentioned in the case that the search can take time of up to 6-8 months due to lack of expertise

therefore the HRDP Director, Barbara should be ordered to search for potential plant managers.

ICG was also facing a number of other problems. Although the problems were not directly

stemming from lack of utilization of Human Resource functions, they were a part of the

problems. Ms. Barbara was made the Director or HRDP to do employee forecasting for

managerial and professional personnel. One of the problems ICG was facing was lack of

managerial depth. Managers have extremely important functions to perform in a company:

Planning, Leading, Staffing, Organizing and Controlling. All of the functions from the basis of a

managerial job which needs to be performed. This means that ICG did not have enough

knowledge base of managers and they did not have a policy to hire MBAs. But they will soon

need to change their policy and bring in MBAs for managerial jobs. Currently, they have been

promoting engineers, the technical employees, to managerial positions. Some of them have been

successful while others used to think more as technical employees rather than managerial

employees. It was a pattern at ICG that engineers became managers and as every manager knows

that Engineers make bad managers. They dont have the decision making and planning mind

set. For instance it has been mentioned in the case that Engineers dont care about managerial

tasks like reporting, they are more interested in challenging projects and for this may even

ignore recruitment duties.

Even though the company was in dire need of experienced engineers and technicians, but still notenough technical training was being provided to them which was considered to be a major need

at ICG. Engineers felt that no special attention was being paid to their career development and

they were of the view that engineer development was discriminated when compared with

management development. Even though there was no management development system in place

and the company was not even hiring MBAs for management positions.


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So it is evident that ICG need to recruit more people, especially, people with managerial

background so that they could manage their operations efficiently. A total of 106 open positions

are at ICG and they have to be filled. Also according to ICG hiring requirement projections in

Exhibit 1 and 2 of the case reveal that if they do not start hiring people now than they might start

facing more operational problem. But the question is from where to recruit people? These could

be recruited internally or externally. Most of the companies prefer internal recruiting before

jumping to external recruiting.

If ICG fills in open positions internally, it would have several advantages and disadvantages. On

the positive side, the internally hired candidates strength and weaknesses would have been

known to the management. So the supervisor would know which person is best suited for which

job. They would have high commitment and high moral if they are being promoted. And they

would require less orientation and training than the outsiders. ICG should hire from internal

sources if the right person is available for the right job at the right time. To do this efficiently,

they need to develop two things: (i) Succession planningand (ii) Skills inventory. It should be in

Barbaras responsibility to develop these two things. However, on the down side, internal hiring

might not be fruitful if an employee applied for the open position and got rejected. Such a

situation needs to be handled very carefully. So HR personnel and the line manager need to

coordinate and handle the situation in such a way that employee morale is not compromised.

If ICG fills in open position externally, then it has quite a few options. Firstly, college recruiting

is an option. The good thing about this option is that it creates a good pool of applicants for the

open positions. But it is very costly and time consuming. Moreover, in case of ICG, the problem

is that not enough college graduates are coming out every year to meet personnel requirements of

ICG. The College Relations department of ICG is already trying to establish good relationships

with many universities to attract potential employees. The College Relations department could

work with the deans of the universities and design the course content which would be more

practical, so that, the students could get exposure to the real business environment before they

even graduate. ICG should invite university students for an On-Sitevisit of their company and

make them familiarize with MEEDs culture. They can also offer them internships. Another

external source of recruiting for ICG is attracting employees of competitors. Although, it has

been mentioned in the case that if a semiconductor engineer is hired from another company then


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he/she would mostly likely be relocating from California to Michigan which would be very

cumbersome for the employee and moreover he/she might not get adjusted in the environment of

Midwest. However, if they are given higher salaries and more incentives along with the

assurance of career development then they would stay. Also they should be informed that

MEEDs is growing at more than 30% growth rate and it has the highest market share (31%). So

the future prospects are bright for this company and also for the employees of this company.

Not only is the company facing recruiting problems, it is also facing the dilemma of culture

conflict. The culture of MEEDS and ICG is such that they dont fire or lay off people even

during the times of recession. They believe that even if a whole equipment system has been

messed up by someone it can still be fixed up instead of scrapping it. Their culture is opposite to

that of a semi-conductor industry culture. The semi-conductor industry is said to be extremely

strict and harsh with the employees, firing them if seen as incompetent. Semi-conductor industry

needs discipline and planning which is not part of the MEEDS culture. MEEDS culture is

ambiguous, freedom and it lets the employees do what they want. Therefore, MEEDS also need

to change its culture to attract more semi-conductor experienced engineers and technicians

because they would be the best ones to run a semi-conductor manufacturing plant.


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SWOT

Strengths: Excessively growing Sales Technologicallyadvanced Freedom & Flexibilityfor Employees Rapid Growth No Union Good employee treatment and help No layoffs despite recession

Weaknesses: ICGs supply- 8-9% when 20% is

expected Over lapping positionsDual reporting Informality in the structureleading to

ambiguity

Excessively technologically advanced Lack of Specialization No program to hire MBAs Excessive dutieson one manager Unclear JA, JD & JS ManufacturingHigh turnover and

expenses

Lack of Succession planning Roleof HRDP ambiguous

Opportunities: Work in collaborationwith local

universities like Wang

Employee retentionprogramsIncentivize

Formal Structure Reducing the duration of training Proper follow upwith candidates Offer internships to the passing out

engineers

Channelizegrowth constructively Training Centre Standardize policies across the board Fill key positions at the earliest

Threats: SchedulingDelay and losses Shortage of supply of engineers Attraction and relocation of candidates

is different

High turnover Intense work load may lead to existing

managers leaving


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Recommendations

One of the gravest issues facing MEEDS right now is that of lack of labor available in the market

and the type of expertise they are looking for is not only extremely scare but most of the

engineers do not even possess those skills and do not have an understanding of the technology

that MEEDS is using. Therefore, a wise thing to do for MEEDS is to work in collaboration with

the local universities which have candidates mostly from the local area. One of the most lucrative

universities is WANG, which is seen as the upcoming MIT. If the management at MEEDS works

in collaboration with the management and deans at WANG and provide them with the exact

profile of the candidate they are looking for; they can retrieve very promising candidates from

there who have the needed skills and are also familiar with the area and other extraneous factors

that led to engineers from the west coast leaving within three months.

One thing MEEDS to focus on is how to retain their existing employees, because, as it is, there is

a bleak supply of engineers that can possibly meet their demand and if the existing ones were to

leave, it would cause mayhem in the organization. There is a high probability for them to leave

because the employees are overburdened with work due to under staffing and they need to be

incentivized to stay with the firm because as it is mentioned, people leaving means they go

behind their schedules and their entire production cycle is messed up and would yield them

losses. Proper monetary as well as non-monetary benefits to make the existing employeesinterested in their job would be a good way of making them stay with the organization,

consequently, decreasing turnover.

MEEDS being an organization with an extremely informal working style and structure, need to

develop themselves and build on a more formal and streamlined structure. There are no

standardized operating procedures and neither do they have a formalized handbook or procedures

manual that the employees need to follow, thus they need to make this structure more formal and

based on standard protocols that need to be followed so the work is properly channelized and

there is low wastage of time.

Training is the most crucial factor, as of now for MEEDS, because of the fact that the supply for

the kind of labor they are looking for is near to zero and thus they need to train the employees to

get them familiarized. But the problem at hand, taking into account the training is the length of


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the training; it takes three years for them to conduct an entire training of an engineer and for him

to be totally adept to the procedures and technology at MEEDS. This severely needs to be shrunk

given the market dynamics and the supply of labor and their increasing size by the day. If they

would waste so much time on training itself, it would harm the productivity of the firm. They

need to take remedial measures to shorten the training which can be done by providing

universities with curriculum of what they need from the candidates so they are trained in advance

and only their polishing needs to be done.

It has been highlighted that the recruitment staff is providing the line managers or engineers with

a pool of candidates that they think are suitable for their jobs but the managers are not following

up with these candidates. They say that the pool is built but the candidates are never contacted.

Given the condition MEEDS is in right now, it is highly doubtful that they would want to lose

candidates because there is already a shortfall of about 20,000 candidates in the market and thus

they would not want to lose candidates like this on their own.

Another concern that stems out of the previous problem is that of a proper allocation of work on

part of the engineers. They have been assigned with duties that they should not be doing and

there is a lot on their plate so if there are overburdened, it is probable that the employees might

not be able to do any of the work correctly. So a proper job analysis, job description and job

specification of every position needs to be made so everyone knows their tasks and

responsibilities and work constructively and efficiently.

Succession planning is the backbone for the smooth running of any organization; no matter what

size they have and what business they are operating in. The issue facing MEEDS right now is

that two of their key positions are open right i.e. of the plant manager and the operations

manager and only one person, Douglas is looking after all of these responsibilities. Now this

needs to get streamlined at the earliest, because key positions are the ones that make or break an

organization because they need to control and plan the organizations working. A propersuccession planning procedure needs to constructed so the organization plans for unforeseeable

leaving of any key position holder and their probable candidates can handle and take charge of

the position quickly without causing undue pressure on one person and ensuring smooth running

of the organization.


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There also no formal procedure to hire MBAs at MEEDS and they really do not understand what

a management personnel is responsible of doing so it is advisable for them to create such a

program, where specialized business management and administration personnel are hired who

can look after the management side of the business and keep the engineers free to do the job they

are suited for. There is a clear case of person job fit issue here where technical people are taking

care of the management, which should not be the case, rather they should hire MBAs, who are

business analysts and are capable of managing the operations effectively and efficiently.

Documents

Hrm - Wac - Meeds