HRM_Jia Hsin

8/11/2019 HRM_Jia Hsin

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TABLEOFCONTENTS

EXECUTIVE SUMMARY ....................................................................................................................................... 2

HRM FACTORS FOR SUSTAINABILITY ......................................................................................................... 3

The Application of Performance Management ..................................................................................... 3

Diversity Management ................................................................................................................................... 4

Managerial On-the-job Training ................................................................................................................. 7

Job Rotation ................................................................................................................................................... 7

Coaching/understudy method ............................................................................................................... 7

THE ACCREDITION: ISO 14001 AND OHSAS 18001 ............................................................................... 8

HARVARD FRAMEWORK ................................................................................................................................ 10

The Model ......................................................................................................................................................... 10

Situational factors .................................................................................................................................... 11

Stakeholders interests ............................................................................................................................ 11

Human resource management policy choices ............................................................................... 12

Human resource outcomes ................................................................................................................... 12

Long-term consequences ...................................................................................................................... 13

Feedback loop ............................................................................................................................................ 13

The Measurements ....................................................................................................................................... 14

RECOMMENDATIONS OF HRM PRACTICES ............................................................................................ 15

CONCLUSION ....................................................................................................................................................... 17

REFERENCES ....................................................................................................................................................... 18


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EXECUTIVESUMMARY

This case study researches on the sustainability of Jia Hsin Co Ltd, a foreign

Vietnam-based company which is the supplier for sandals manufacturing industry.

The first part of this case study is discussing about human resource management

(HRM) practices that help Jia Hsin Co Ltd in maintaining the sustainability in the market.

Main practices are identified include of: (1) the application of performance management;

(2) effective diversity management and (3) effective managerial on-the-job training. All

three applications emphasize on the importance of management level regarding to the

business performance of the company.

Secondly, there will be analysis of HRM practices that contributed in the

achievement of the company regarding to the accreditation of ISO 14001 and OHSAS

18001. The effective communication of management with employees, effective training

program, high collaboration, and ethical incentives are the main factors that support the

company in gaining such management certification.

The Harvard HRM Framework is also applied in order to analyze the

implementation of those practices. Last but not least, the recommendations toward the

adjustment of some HRM policies are conducted to help the company in improving the

performance and reducing the turnover rate.


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INTRODUCTION

Jia Hsin Co Ltd is a sandal manufacturing company wholly owned by Jia Cherng

Corp. incorporated in Republic of Mauritius (Jia Hsin Co Ltd, 2011). Jia Hsin means New

and Pretty. The company has the expectation to maintain the sustainable abilities within

the market. The case study is based on the Global Reporting Initiative (GRI) Sustainability

Report 2011 of Jia Hsin Co Ltd to review the activities as well as the glance toward internal

operation process that support the company in achieving ISO 14001 and OHSAS 18001

certifications.

HRMFACTORSFORSUSTAINABILITY

THEAPPLICATION OF PERFORMANCE MANAGEMENT

Concerning to the performance rating process, it seems that Jia Hsin Co Ltd has

applied the performance management instead of conventional methods in the aspect of

performance appraisal. Performance Management and Performance Appraisal have similar

characteristics; however, according to Dessler (2013), three points that can be used to

distinguish them:

1. The organisations conduct the continuous interactions among senior

management and subordinates in order to guarantee the continuous quality

improvements. Jia Hsin Co Ltd stated that the firm has conducted weekly

meeting for leaders and managers and re-formed the employees on the basis of

issues being discussed within the meeting (Jia Hsin Co Ltd, 2011).


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2. Performance management is based mainly on goals. The companys performance

is based totally on business results while income of the senior management in

each of department will be calculated with fixed wages plus a performance

bonus (Jia Hsin Co Ltd, 2011).

3. Performance management means continuously re-evaluating and if needed,

modifying how the employee and team get their work done. In the case of Jia

Hsin Co Ltd, through the performance management process is conducted weekly,

staffs will be implemented the career development plan in order to have an

overview regarding to what they can do and do the best to be rotated in suitable

departments or training programs (Jia Hsin Co Ltd, 2011).

DIVERSITY MANAGEMENT

Buckingham (2010) stated that many years ago, the top management and board of

directors had the tendency to establish a homogenous organisations in order to share the

similar organisational behaviours, culture, and so on. However, the homogenous

environment can cause myopic opinion regarding to various types of problems (Morgan &

Vardy, 2009) and especially internal group think phenomenon the staffs share the culture

and mind-set; therefore, they will all agree with incorrect solutions (Marques, 2007).

Labedz & Berry (2013) stated a reason fo efficient diversity management is the proactive

attitude from organisation. In the case of Jia Hsin Co Ltd, the diversity management has

been carried out efficiently. Top management has the tendency to recruit less female

employees since they have high possibility of maternity leave and cannot compare with

male in some heavy tasks (Pieterse, et al., 2013). However, Jia Hsin Co Ltd has the


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proportion of female employees in approximately 68% in comparison with 32% of male

employees.

Figure 1. Jia Hsin companys workforce by gender in 2011 (Jia Hsin Co Ltd, 2011)

Marques (2008) made a statement that one of problems in diversity was that a lot of

firms manage the diverse workforce mainly on the basis of profits instead of building a

serious cultural and moral matters. Additionally, Daft (2010) stated that management has

tend to promote people that share the same cultural background and this leads to the

narrow solutions in problem-solving perspectives. Jia Hsin Co Ltd, in another hand, is

serious in promoting both local and expat:

Figure 2. Companys senior management regarding to nationality in comparison

between 2010 and 2011 (Jia Hsin Co Ltd, 2011)


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Although the companys GM (General Manager) is a Taiwanese; however,

Vietnamese senior management increased to 8 people (2011) with a rate of 35% and took

some of important senior positions such as Operation Manager and Human Resource

Manager. Menezes (2012) stated that efficient diversity management can help the

organisation reduce the turnover rate. Jia Hsin Co Ltd actually had the turnover rate reduce

0.11% in 2011 and kept the yearly turnover rate be stable at 4% (Jia Hsin Co Ltd, 2011).

MANAGERIAL ON-THE-JOBTRAINING

According to Dessler (2013), the managerial on-the-job training include approaches

of job rotation, coaching/understudy method and action learning. In the case of Jia Hsin Co

Ltd, the company has applied the job rotation and coaching/understudy method.

Job Rotation

Job rotation is defined as conducting a cross-department training for managers or

supervisors in order to enriching their knowledge and understanding in the aspect of tasks

and business; moreover, it is also used to test their abilities (Noe, et al., 2011). Jia Hsin Co

Ltd has rotated the supervisors among divisions in order to train them to become senior

management in the future that can supervise several departments (Jia Hsin Co Ltd, 2011).

Coaching/understudy method

Dessler (2013) stated that the employees will be worked with different supervisors

or managers for broadening coaching. Jia Hsin Co Ltd with the motto Right people will lead

to more growth has been applying the policy for identifying potential staffs and put them

in training program through complex functions for the stable development in the future (Jia

Hsin Co Ltd, 2011).


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THEACCREDITATION:ISO14001ANDOHSAS18001

Jia Hsin Co Ltd achieved the accreditation of ISO 14001 and OHSAS 18001

management system (Jia Hsin Co Ltd, 2011). Range of practices have contributed into the

accreditation achievement include:

Invest in training programs to improve employee skills (Gomez-Mejia, et al.,

2012): For ISO 14001, the strong emphasis concentrates on training as well as

communication in order to support realizing changes and continuous improvement (Kaur,

2011). Jia Hsin Co Ltd built and applied the CSR (Corporate Social Responsibility) software

for data collection and performance measurement. Beside the establishment of

Sustainability Team, the supervisors also took part in the rotation traning to enhance their

knowledge in the aspect of system and software. So, they can adapt promptly in order to

support operating the process system. Jia Hsin Co Ltd also invested for training programs

US$ 12,957.42 in the year 2011 (Jia Hsin Co Ltd, 2011).

Sharing information and effective communication (Tan & Nasurdin, 2011):

Effective communication from management positions will support and ensure the clear

understanding in the aspect of EMS/ISO 140001 and OHSAS 18001 for the staffs as well as

the systems function, and employees role in identifying and controlling environmental

issues (Kaur, 2011). Jia Hsin Co Ltd implemented 3 additional channels over 7 total

channels for communication between top management and employees (Jia Hsin Co Ltd,

2011) a total implementation of 43%.


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HARVARDFRAMEWORK

THE MODEL

Figure 3. Harvard human resource management model (Torrington, et al., 2005)

Harvard human resource management model is an analytical framework developed

by Beer et al. (1984) and include of six components (Bratton & Gold, 2012):


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Situational factors

Regarding to Bratton & Gold (2012), these factors will influence managements

choice of human resource strategy. Concerning to the workforce characteristics of Jia Hsin

Co Ltd, the average annual turnover rate was 4%, 856 new employees joined in 2011 and

the number of leave was 901 (Jia Hsin Co Ltd, 2011). In another hand, 74.53% of new

employees were under-30 years old. It meant that the companys workers ages were quite

young and they can change job anytime they want (Jia Hsin Co Ltd, 2011). Therefore, the

number of new employees was large enough to consider. Training supports employees in

mastering understanding, knowledge, abilities, skills that can make contribution not only to

management practices in daily routine operation but also in term of innovated products

and production process (Tan & Nasurdin, 2011). Based on Paille et al. (2014), training and

development environmental knowledge is the first core component for motivating the

endorsement of environmental management system (EMS) such as ISO 14001.

Stakeholders interests

The stakeholder interests help to identify the importance of trade-offs between

the owners interests and those of employees and their organizations, the unions (Bratton

& Gold, 2012). The company has considered enhancing the understanding among the

partners is an important factor for the business success and development. Therefore, Jia

Hsin Co Ltd had to implement the communication effectively by sharing with the

employees in the aspect of strategies of company, business policies, targets and objectives,

the expectations from the customers, suppliers, and board. The company also notifies its

requirements toward employees cooperation and contribution (Jia Hsin Co Ltd, 2011).


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Human resource management policy choices

The human resource management policy choices concentrates on the aspect that

management's decisions and actions in human resource management can be completely

appreciated on the basis that it is resulted from an interaction between constraints and

choices (Bratton & Gold, 2012). Based on the employeessurvey result, 33.3% of employees

wish the company would have more policies in supporting living conditions (Jia Hsin Co

Ltd, 2011). Therefore, a high contingent reward system based on the organisational

performance can help to create an environment in which employees were motivated to do

their best and had chance to improve the living condition through working progress.

Human resource outcomes

The human resource outcomes are high employees commitment to organisational

and high individual performance which lead to the cost-effective products or services

(Bratton & Gold, 2012). The managerial on-the-job training helps to discover employees

competencies in various aspects. This also creates the opportunity for their career

development and enhances their commitment toward the organisation. Moreover, since

they made the commitment with the organisation; the performance management process

will help to make the congruence between the employees goals with the firms strategic

goals. Last but not least, together with the commitment of employees, the ethical incentive

culture lead to the successful implementation of OHSAS 18001 which can bring

tremendous benefits for company including of decreasing less work-related accidents

which can lead to absenteeism and turnover, downtime and associated cost, adapting with

the legal requirements as well as public insurance costs (To, et al., 2012).


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Long-term consequences

The long-term consequences are divided into three levels: individual, organizational

and societal (Agyepong, et al., 2010). In the aspect of individual, the job rotation is a part of

job enrichment attempt developed by Herzberg (1957) in a book by Torrington et al.

(2005). This adapts well with one of the motivation strategies of Armstrong (2009) beside

the financial motivation, in which employees can be motivated with the opportunity to

grow by developing abilities and careers. In the organisational area, keeping the stable pool

of talent management would help the company be sustainable and maintain the

competitive advantage in comparison with other competitors. Last but not least, taking

account to the stable human resource pool means the organisation also has to take care the

community or society around the employees. For instance, beside conducting a new waste

disposal system, Jia Hsin Co Ltd also carried out the training and education classes

concerning to various types of diseases for both employees and their families (Jia Hsin Co

Ltd, 2011).

Feedback loop

The situational factors influence HRM policy and choices but long-term

consequences can have impact toward the situational factors, stakeholders interests and

HRM policies (Bratton & Gold, 2012). This means that long-term output can help to

improve the situation of the organisation, through the evaluation and lead to continuous

improvements. For illustration, although the company can keep the stable and has a slight

decrease in turnover rate, Jia Hsin still decided to implement Human Resource

Management System (HRMS) and organisation reformation to improve the company


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structure in order to help improving the turnover rate, and absenteeism (Jia Hsin Co Ltd,

2011).

THE MEASUREMENTS

The company has applied some of these approaches in order to measure the

outcome of human resources practices:

Human Resource and Business Result:regarding to Huselid (1995), the investment in

HR practices can have impact toward business results, both in financial and market value.

In the period 2010 2011, Jia Hsin Co Ltd appointed more local staffs in senior

management level and implementation of OHSAS 18001 and Human Resource

Management System (HRMS), the retained earnings increased 99.38% while the sales

volume increase 31.42%.

Human Resource Audit: in order to ensure the sustainable compliance, Jia Hsin Co

Ltd built up the labour management system and do the periodically internal audits (Jia Hsin

Co Ltd, 2011). Through the HR audit, the company can identify the roots in quality

improvement and conduct two important approaches:

Adding human power for CSR system implementation.

Conducting rotation training for employees to maintain multi-function HR pool.

Employee Survey: the employee survey is also conducted in order to identify the

requirement as well as expectation of employee regarding to the companys operation.


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RECOMMENDATIONSOFHRMPRACTICES

Providing recognition to staffs with both financial-oriented and non-financial

rewards (Gomez-Mejia, et al., 2012): the annual turn-over rate kept constantly at 4%. In

which, 77.25% of under-30 age employees left because as Jia Hsin Co Ltd stated, for

opportunities that can helped them gain more earning. Therefore, the company should

develop policy that can give prompt and appropriate recognition toward employees in

order to keep the turnover rate down beside the remuneration or salary.

Figure 4. Number and age of leave employees (Jia Hsin Co Ltd, 2011)

Making the staffs become part-owners of the organisation with stock (Tiwari,

2012): the remuneration and salary that Jia Hsin Co Ltd offers for basic employees was

VND3,158,881. Indeed, if the company does not want to break the salary floor, it can offer

the potential employees with stock. By this way, it can motivate the staffs to work better

because now their performance and bonus can stick with the business performance of the

company.


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Figure 5. Basic salary and remuneration by category and function (Jia Hsin Co Ltd,

2011)

Develop a screening trainee selection program to recruit best potential staffs

(Armstrong, 2009): although the company has the career development program for

potential staff to practice complex functions; however, with the turnover rate of 4%, there

is high chance that these staffs would leave the company during the training period.

Therefore, the company can make implementation by screening the potential applicants

right during the recruitment and selection progress and put them in managerial on-the-job

training right in the first time.


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CONCLUSION

In conclusion, Jia Hsin Co Ltd successfully implemented the human resource

practices of performance management, diversity management and managerial on-the-job

training. Especially in the aspect of training and development, with the promotion of the

local senior management together with the job enrichment policy for supervisors, the

company can ensure the cohesive teamwork for better performance. Moreover, the

enhanced communication among stakeholders together with an open and multi-channels

environment, it augments the company in the information flows from management to

employees as well as the collaboration spirit. However, the company would needs to make

the implementation in the aspect of motivating employees with recognition and make them

become a part of the organisation in order to reduce the turnover rate. A talent screening

and development program would be useful for head-hunting potential employees.


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HRM_Jia Hsin