SHRM ASSIGNMENT 2

Strategic Human Resource ManagementIgnite Industries Limited

Submitted to:-

Mrs Shilpee Mehrotra

Submitted By:-

Pethe Sarang Sunil – 10189157

Pragati Naik - 10188958

Madan Lal – 10189167

Subba Reddy M V - 10188953

Strategic Human Resource Management 2010

Table of ContentsExecutive Summary.....................................................................................................................................2

Overview of Agency.....................................................................................................................................3

Issues to Be Addressed................................................................................................................................4

Proposed HR Strategies..............................................................................................................................5

Short Term Strategies..............................................................................................................................5

Restructuring.......................................................................................................................................5

Recruitment and Resizing....................................................................................................................6

Cost retrenchment...............................................................................................................................7

Training...............................................................................................................................................7

Improve workplace environment..........................................................................................................8

Long Term Strategies..............................................................................................................................8

Reduce number of layers.....................................................................................................................8

Performance management...................................................................................................................9

Step by Step Implementation......................................................................................................................10

Means to reduce Opposition to Restructuring...........................................................................................11

Recommendation & Conclusion................................................................................................................11

References.................................................................................................................................................13

Ignite Industries Ltd. Page 2


Executive Summary

Ignite Industries Ltd. (fictitious name) a government company, which operates in textile and

clothing sector, is presently facing many problems. The change in government has reduced

budgetary allocation and has increased pressure to attain transparency and accountability. The

employees are dissatisfied with previous restructures and have become unclear about their

responsibilities. The present report focuses on different issues faced by the company. We have

proposed various suggestions, so that the company overcomes the problems. We propose that

company adopt restructuring again. Though there have been negative consequences of the

previous restructuring process, we feel that the restructuring process if implemented properly this

time, will surely help the company. We propose to carry an operational restructuring. A few of

the recommendations include recruiting young talent, resizing, designing performance

management system that is transparent and clear, delayering the organization, outsourcing least

important processes, etc.

We have provided a step by step implementation procedure to carry out the restructuring. We

have also identified that, there is bound to be opposition for this process and we have given ways

to reduce this opposition. We have finally concluded that the organization can overcome

turbulent times through restructuring. However the success of restructuring lies with

participation of employees and clear communication.



Overview of Agency

Ignite Industries Ltd is a government company established in 1953 and is main player in textile

and clothing industry. Ignite Industries Ltd is a globally known textile and clothing

manufacturing with state-of-art facilities by following best corporate practices. The company has

shown consistent growth over the years. The company has been profitable from last three

decades.

The company has a separate Human Resource Department directly under the jurisdiction of

Human Resource Director. The company has a mix of blue collared and white collared

employees. The government has large control over the operation of company. The company has

faced turbulent times and have recovered through restructuring. Currently the parent company

has over 850 employees. The company follows government regulations in terms of employing

workforce these includes state reservations. The company has established its brand image and

holds major market share. The company has entered into retail sector by establishing exclusive

showrooms. Ignite Industries being a government owned company; the operations follow various

government regulations. The government policies largely affect the organizational decisions. The

company is one of the star performers in government controlled companies. The recent recession

however has affected the company hard. The company has for the first time shown negative

growth.

The liberalisation of Indian company has opened up Indian economy for many global players;

there have many players entering into this sector and are proving a threat to the company. The

increased competition has made it mandatory for company to expand, the company has

expansions plan in mind; however, it had held it back due to recent elections. The expansion plan

requires large budgetary support from the government. The structural changes in company’s

operations have left employees into dismay regarding their roles and positions. The company is

also facing internal problems that have affected the operational efficiency of the company. The

management is not able to take corrective decisions or aggressive actions due to work unions.

Further, the company’s workforce operates in way that is more conventional and it is not open to

changes.



There were elections held recently and there has been change in government. Due to change of

government, there have been several changes in governmental policies affecting the company’s

operations. The new government focus on operational efficiency has made company to redress it

operations in new dimensions to be more productive. There have also been talks of government

planning to divest it stake in the company by going to capital markets.

Issues to Be Addressed

The issues to be addressed are as follows,

There has change in government due to recent elections which has caused decrease in

budget and pressure to increase accountability.

The age profile of the company is very high and there is need to promote youth

employment.

The employees have seen many restructuring and have now become disillusioned.

Many employees are facing higher level of stress and burnout.

The company has a multilayered and hierarchical organizational structure. We propose that the

company should use restructuring strategy. However it is necessary that the senior staffs are

involved in the restructuring process and there is a need for proper communication channel to

explain the need of restructuring needs to employees. The restructuring process can be carried

out through following measures,

Streamlining production process.

Rationalizing supply chain and better inventory management.

Downsizing and

Looking for enhanced flexibility.



Proposed HR Strategies

We would like to propose various HR strategies not only to cut costs but also to promote young

talent. The various strategies proposed are a mix of long term as well as short term. The aim of

the short term policy is,

To increase the number of young staff by carrying out recruitment process.

Cut costs through innovative processes.

Increase number of client.

Improve workplace environment to reduce stress.

There are long term strategies proposed which are aimed to achieve,

Smooth exit of aged employees.

Designing a clear performance management system to increase transparency and

accountability.

Reduce number of layers to create flatter organization, which would help in quick

decision making.

Short Term Strategies

RestructuringRestructuring can be of three types, portfolio, financial and organizational restructuring. The

public sector company can easily adopt organizational restructuring. The organizational

restructuring process is aimed at reducing the number of aged employees and increasing the

number of youth employees. The other aim is to eliminate the non-core businesses and outsource

non critical services. The company should conduct recruitment programs at all management

levels. There is need to recruit people at middle and top level as there is large number of aged

population. The Key result areas KRA of this growing aged population should be redefined.

They should be assigned mentoring roles and training the young talent. The company should

identify processes which involves large cost and requires accuracy. The cost associated with



those processes can be reduced by using better technologies. All the processes in the

organization should be redesigned to reduce the costs and achieve efficiency (Gauld, 2003).

Finally, the aim of restructuring is to achieve following goals,

Build transparent communication system.

Enhance learning through teamwork.

Creating environment which encourages innovation and creativity.

Develop customer centric approach at all levels.

Develop flatter organization structure with focus on learning and knowledge

management.

Recruitment and ResizingThe company should conduct campus recruitment programs in top management colleges to

acquire top talent of the country, which will be able to operate in top level management. The

company should clearly convey the work culture, career path and development opportunities to

the potential employees. The company should try to become ‘employer of choice’ by promoting

the organizational work culture. The company can source the candidates from sources like job

portals, consultancies, campus placements, etc. However we feel that company should primarily

use internal source, like references from employees. This will help in reducing cost as well as

make employees feel that they are important for the company.

The company should use employee reduction; however, large-scale layoffs should be avoided.

The company cannot go for large scale layoffs due to work union pressure. The layoffs should

take in systematic manner. Initially we should develop strategy, determine the persons to be

involved in this process, prepare a plan for layoffs, determine the criteria and then execute the

layoffs. The aged population should be reduced gradually. The company should introduce

programs like Voluntary retirement schemes (VRS). The VRS schemes should be introduced on

deferred payment system. This will not only avoid immediate cash out flow but will also create a

win-win situation for both employer and employee (Gibbs, Lee, & Lin, 2008).

The HR professional should identify those top-level employees that are less efficient or not

required in organization. The HR professional should then use counselling for those employees



to make them ‘golden handshake’ being offered. This will ensure that the aged employees leave

the company and there is a smooth exit of these employees. The company should carry out

operational restructuring to increase efficiency, control costs and cope with changing business

environment. The company should redesign the workforce size and skills required according to

capacity and location of plant. The company should re-assess all the functions and the manpower

required in that processes. The aim should be at identifying activities where there is overstaffing.

The employees in overstaffed departments should be relocated. The company should encourage

job rotation for these employees (Heugens & Schenk, 2004).

Cost retrenchmentThe change in government has reduced budgetary allocation for the company. This means that

company has manage its present activities with less budget. The company can obtain the extra

money by cost retrenchment. In case of lower performance and less support from government,

cost retrenchment will help to conserve the cash flow. The company should identify processes

which have large costs associated with it. These processes should be modified to reduce the cost.

For example, the company can use centralised buying system to procure raw materials and then

pass it on to different units where there is a requirement. A significant cost cutting can come

from human resources. As discussed above, resizing the organization is also one of the ways to

reduce costs. The other ways to achieve cost reduction is through liquidating out dated inventory,

combining functions and asset downsizing (Howard, 2002). The company can outsource

functions like transportation to reduce costs. The company should identify functions which are

less important and outsource them to reduce costs. The company should focus on supply chain

management to reduce storage costs.

TrainingThe training function becomes important in turbulent time, as there is need to train employees to

increase knowledge base and skills, which are in line with changing environment. Training is

also important as it shows that the company is committed towards the employees. Training

becomes an important option before and after the restructuring process. Before restructuring the

company helps the employees to build upon their skills and increase their employability. After

the restructuring has taken place the training is aimed to assimilate the change which has taken

place (Raman & Singh, 2005). Change management is extremely difficult. There is a possibility



that employees may leave the organization. The training function helps the employees to reduce

stress. It helps to develop leadership skills and motivates them to take new responsibilities. The

employees who are laid off should be treated with dignity and they should be provided with

outplacement services. The outplacement service helps to prevent mental breakdown of the

employees.

Improve workplace environmentThe employees have disillusioned by restructuring which have taken place over the years. This

has caused increase in stress and burnout. There is a need to improve the workplace

environment. The HR professional should arrange counselling for the employees which feel

higher degree of stress. The employees should be motivated through rewards and their work

should be recognized. The HR professional should try to build a workplace which promotes

learning. The company can introduce innovative workplace practices which have been

implemented in other companies. The HR professional should conduct training programs to

inculcate better stress management.

Long Term Strategies

Reduce number of layersThe company can restructure the various job positions. Wherever possible the company should

try to club jobs. The employees should be given proper training which would help them to

prioritise work and gain assistance from other employees. The company has a traditional

hierarchical, multilayered structure. The company should reduce the number of layers so that this

reduces the bureaucracy involved and helps in faster decision making. If we consider the

company to have a pyramid structure with about seven layers, the company should try to bring

this to four or five levels. The employees in the layers which are reduced should be relocated to

other divisions. The position of employees in the new flatter structure should be redefined. The

employees should be informed properly about the need to reduce levels. Improper

communication may lead in employees getting de-motivated. The company policies should aim

to include commercialization, corporatization, devolve management responsibilities, shift focus

from input to outcome measurement, strict performance measurement and outsourcing different

functions.



The restructuring will cause increase in work stress due to increase in span of control and

responsibilities. The reduction in staff also cause increase in work stress. The role of HR

managers becomes important in this case. The HR managers should have greater flexibility and

adaptability to manage greater number of staff. Further, the HR managers should closely work in

liaison with work unions to address the employee grievances. They should also have strategic

orientation and broad knowledge of whatever is happening in the organization (Taplin, 2006).

We propose to reduce the layers in the organizational structure. However, with this management

training and development will gain importance. The employees will have added responsibilities

and training will help them to acquire skill essential to perform that job.

Performance managementThe previous restructuring have caused confusion among the employees regarding the areas they

are responsible for. The restructuring will cause clubbing of jobs, moving employees to new

positions, redefining roles, etc. The company has to clearly convey the key responsibility areas to

the employees. The employees should be clear about what they are accountable for. The

company should involve the employees while discussing about the key result areas. The

employees should be encouraged to choose specific responsibilities and they should be hold

accountable for that responsibility. This will make employees feel that they are part of decision

making and increase accountability. The reward process should be aligned to organizational

strategy. The employees who work for company’s interest and perform well continuously should

be rewarded appropriately. We recommend that company should use high wages and promotions

to reward the best performers. The promotions in this case mean adding responsibilities to best

performers. The company should introduce performance appraisal system which clearly

differentiates the performance of employees and act as agent to bring about positive or negative

reinforcement. The company can use new tools like 360 degree performance evaluation and

balanced score card approach to assess the readiness to future growth. The company should use

360 degree feedback as there is emphasis on teamwork and it promotes participative

management (Tomasko, 1992).



Step by Step Implementation

We propose that the company uses following steps to complete the restructuring process and

overcome the problems which it is facing,

Identify the number of aged employees at different levels.

The best of the employees from this aged population should be retained and promoted at

top management level. These employees should be given mentoring roles.

The jobs and different positions should be redesigned. Various job positions should be

clubbed.

Carry out recruitment process to recruit young talent at the middle management level.

The candidates who can handle stress and accept challenging roles should be hired.

The Performance management system should be redesigned in such a way that the

employees are clear about their Key result areas.

Establish proper communication channel to inform the employees about restructuring.

Introduce VRS schemes and the employees who are not required in the company should

be laid off.

A lay off program should be prepared and it should take place gradually.

Implement innovative workplace practices to reduce the stress level among the

employees.

Arrange training programs to impart the employees skills required to carry out new roles

and manage stress.

Use activities like role plays, group discussions, etc so that the need for restructuring is

communicated properly to the employees.

Involve the employees in the restructuring and the employees parting away should be

treated with dignity.

Identify the organization structure and devise a way to reduce the number of levels to

create a flatter organization. This will helps in faster decision making.

Identify less important functions and outsource those functions.



Means to reduce Opposition to Restructuring

The company has already seen many restructuring process. So, while restructuring the

organization there can be oppositions. However we propose to reduce the opposition by

following ways,

The need for restructuring process should be communicated as clearly and honestly as

possible. The HR professional should demonstrate that they care for their employees.

The HR managers should articulate the need of restructuring to the union leaders

explaining them the importance of increased efficiency to survive in competitive market.

Use company’s monthly newsletter to communicate the company’s direction. Using

bulletins during times when there is rapid development.

Before announcing major decisions related to restructuring, the management staff should

act quickly and create good relations with the employees.

It is possibility that employees may leave the company during the restructuring process.

Those employees who remain with the company should be rewarded adequately and

motivated to work further in the interest of company.

The line managers should identify employees who can take added responsibilities and

promote them.

Make use of brain storming sessions to foster creativity and communication to generate

employee ideas. The employee who brings good ideas should be rewarded.

Organize events like role plays to communicate the need for restructuring. The

employees at all the levels should be a part of restructuring process.

Recommendation & Conclusion

The company has undergone restructuring a number of times in previous years. Now, while

restructuring the company this time, there may be opposition from the employees. The key for

successful restructuring lies with participation of employees and clear communication. The

company should carry out self analysis to find out the different processes and functions which

required restructuring. The company needs to reduce costs, which it can do through operational



restructuring. Also redesigning different processes will help to reduce costs. The important part

is to carry out recruitment process and acquire young talent. The company should promote the

workplace environment and career development opportunities. This can be bundled with offering

higher pays. The aged employees should be promoted to higher roles and they should be given

mentoring roles. The middle level management job roles and responsibilities should be

redesigned. The roles can be clubbed and the employees who are promoted can be given added

responsibilities. The employees in the middle management should be trained to acquire skills

required for new responsibilities.

Finally we conclude that organizational restructuring can be successful if there is participation of

employees and proper communication channel. Ignite Industries Ltd. will certainly overcome the

problems it has been facing, if the recommendations are followed properly.



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SHRM ASSIGNMENT 2