Developing business and making profit are definitely two main targets that all the organizations desire to achieve when they open and run their businesses. Without a doubt, workforce is one of the most important contributions to an organization’s development in general and operations management in particular. Recruiting and retaining high qualified employees is not easy but managing them in an organization is even more difficult than that. In order to maintain the operations and develop businesses, employers need to manage their employees effectively. So, the questions such as “what is managing people?”, “why is it important?” and “how to do it?” etc. are given and need the answers. To deal with these questions, this paper will examine and analyze human resource management and its indispensable role to an operations management.
Operations Management and the Importance of Managing People
According to Council of Supply Chain Management Professionals (CSCMP) and Nada Sanders (2013), every organization use variety of business functions to manage each facet of the business. In an organization, there are four main core functions including marketing, operations, finance and MIS as shown as the below organizational chart.
Organizational Chart (CSCMP and Nada Sanders 2013)
Operations has responsibility for controlling the creation process of products and services whereas the other three main key functions such as marketing, finance and MIS are responsible for managing sales (by connecting with customers), money (capital, assets, profit) and information respectively. In specific terms, operations management is related to the responsibilities, activities and tasks in controlling production progress (outputs are transformed from inputs, stated by Bayraktar et al 2007) and goods’ delivery services. Operations managers are responsible for supervising, processing, managing and maintaining the smooth running of any business.
In operations function, workforce is one of the core factors. Workers are often considered to be the “greatest asset” of one firm (Hassin, 2009). There are a lot of explanations for the importance of managing people in an organization. The most critical element that can show companies ability or let the other competitors recognize whether their businesses run efficiently or not, succeed and develop or not is their human resource with their creativity and enthusiasm in work. All the important elements to operations such as raw materials, facilities, equipments and technologies can be purchased, learnt and copied except people. In the same vein, people can make and create material wealth but conversely, material wealth does not make people. Without presence of people and their activities, operations process does not progress because all the production line and services run under the observation, implementation and control of human resource. Clearly, human resource management plays one of the most crucial roles to the existence, survival and development of every organization.
Issues in Managing People
The worst disaster severely impacting on business of an organization is the crisis in human resource. It is really difficult to solve the people crisis and serious outcomes, which are caused by human resource crisis, may lead to another crisis in capital. Small companies have to confront with the crises in both capital and human resource. However, in a situation with a heavy work-load, the number of employees is not enough or do not meet the demand, a question that is about which solution can help the company survive and develop is given. The most appropriate answer for that question is an efficient workforce that has potential to develop (Ehin, 2013).
One of many problems derives from leaders’ mistakes in human resource management is employee dissatisfaction with work. Let’s begin with the definition of “job satisfaction”. According to Judge, Hulin and Dalal (2009), the term “job satisfaction” is defined in a book entitled The Oxford Handbook of Organizational Psychology edited by Kozlowski (2012) as “multidimensional psychological responses to one’s job”. What Judge, Hulin and Dalal (2009) mean by “responses” are employees’ reactions which has elements in both cognition (evaluation) and emotion (affectivity). In other words, they are employees’ thinking and feelings towards their job and their work.
Employee contentment plays a vital part in the success of any organization’s business. In fact, the rate of employee satisfaction has either positive and negative relation to employees’ decisions of staying at their firms or resigning from work and turnover intentions (Lum et al., 1998) that severely impact on their work performance (Shore and Martin, 1989), their morale, their productivity (Kiely 1986) in particular and the businesses of their companies in general. As stated by Kiely (1986), employee dissatisfaction even has been leading to strikes, demonstrations, claims, uprisings and attacks, which are conducted by employees, aiming to their companies’ leaders in order to achieve their goals. Such strong employees’ actions towards their organizations like those partly ruin their companies’ image, reputation and prestige, which seriously affect all their companies’ relationship or co-operation with their partners and other firms as well as their businesses. Conversely, if all the organizations can satisfy their workforce, they will receive a lot of benefits in a competitive environment from customer contentment, revenue growth, greater profit, more prestige and higher positions which stem from employee satisfaction.
One more issue of managing people in an organization is job performance. Jex (2002) defines job performance as “all the behaviors employees engage in while at work”. In another way of understanding, job performance refers to the results or the abilities that employees can perform at their work. The quality of job performance has a negative and direct effect on operations function in any company. However, the quality of job performance depends on the ability and characters of each person. For example, employees who lack essential working skills will do their tasks at a slow pace in a longer time than the others who do not while people who are full of skills but sloppy in work resulting in mistakes, inaccurate figures and unreliable reports. Besides, there are still workers who are skillful, careful and can complete their tasks at a high pace but too confident of themselves or evaluate themselves in higher positions than their co-workers so that they do not want the others to manage their work and tend to be difficult employees to be disciplined in the workplaces.
In addition, employee recruitment and retention are now big problems in managing people and the issue of retention starts from recruitment. Every year, employers have to spend a huge amount of expenses to running the hiring process as well as training programs in order to recruit the best new members working for their firms. In almost every company, the operation of recruitment does not depend on the retention function. However, one small mistake in recruiting new employees will seriously affect the human resource retention which leads to the failure in managing people. For in stance, in Vietnam, recruiters tend to hire employees based on their quality of qualifications and background or personal relationship instead of evaluating their true abilities in work. This alarming tendency has been resulting in the inefficiency in the way of using workers and arranging activities and tasks which are suitable with each individual’s capability. It is the inefficient retention which is one of the main factors causing other issues seriously impacting on operations management of an organization including the ineffective work performance and employee dissatisfaction.
With the significant development of economy all over the world, an enormous number of organizations have been setting up their branches or representative offices which are located in other foreign countries to achieve their great ambitions to dominate the global market, not only to survive and develop as usual. Frankly, this mission is hard to do because operations are not easy to manage while managing operations overseas is even more difficult and complicated than that. In fact, one wrong decision in managing operations in foreign countries can make not only a branch or a representative office of a company fall into crisis but also the whole organization collapse at any time. Those are the reasons why the leader of a firm has to consider all the aspects of management and try to avoid making any mistake or wrong decision.
Solutions in Managing People
There are varieties of methods to deal with human resource management. However, if employers want to manage their employees effectively, they should pay prior attention on their workers’ satisfaction. There are four different measures including financial conditions of work, interpersonal communications, operations and tasks and working conditions which are recommended by Herzberg (1965), Locke et al. (1964) and Zalewska (2001). In specific terms, financial conditions of work are exactly economic benefits that workers can receive from their work. Precisely speaking, these financial conditions mean amounts of pay (e.g. salary, bonus, promotion) whilst interpersonal communications are good opportunities for workers to reveal their characters and their efforts in adapting to the working environment and building up their relationships with their managers, supervisors and colleagues. Besides, operations and tasks are activities to show employees’ working abilities (both individual and team work skills) that are conducted under employers’ observation and evaluation whereas working conditions consist of essential working equipment, tools, facilities (computers, telephones, printers, etc.), transport vehicles (cars, buses) and rules, policies or insurance related to health and safety of workers (identified by Sypniewska, 2014). In order to maintain employee satisfaction, all the things that employers need are finding solutions to attract, retain and motivate their workers. Superiors must know and evaluate values of each subordinate and his/her personal characters so that they can arrange suitable work and position for the right person or providing him/her new tasks that can improve his/her ability, skills and creativity. Furthermore, managers need to learn to listen to their staff, to share and respect their ideas and their opinions. Finally, one more way to satisfy employees is to give them a well-equipped working environment, chances for promotion and higher salaries as rewards for their great performances. All over the world, it is true to say that there are many famous and successful companies have been following these above plans to satisfy their employees’ needs such as Google, Facebook, Apple, Microsoft, etc. In the fully-equipped offices of these firms, employees can find all the things that they need from working to entertaining and health services without paying any fee which derive from leaders’ understanding with their staff’s pressure from busy work and their appreciation for their subordinates’ achievements.
With regard to recruiting and retention, in hiring process, recruiters should prepare all the full description, clear requirements and job criteria for assessment as well as knowing exactly what the essential working skills they enquire their applicants must have are and who they want to offer the jobs before engaging in the interview so that interviewers can evaluate the competence of each interviewee and decide who will be the best person that deserves to have this position. After recruiting, managers also need to design and conduct training course for new members so that new comers can have chances to get more experiences, gain more knowledge and adapt to the new working environments. Then, new employees can show their capability in doing activities and completing tasks.
Turning to operations overseas, the most effective steps to manage operations in foreign countries are researching, planning, assessing and adapting. Before expanding business, it is sure to say that all the organizations have to do a lot of different researches about markets, procedures and places that they will open their offices. After collecting all the necessary information from researches, leaders will make plans in details and carry out assessment to evaluate their potentials in competition and then, adapt to the new markets.
Human Resource Management applied to Direct Imex Pty Ltd – A Logistics Company
Direct Imex Pty Ltd which is a logistics company located in Australia. This is a trading firm which imports varieties of household products including detergent, fabric softener and drinks, etc from Vietnam and Thailand to sell in Australian market. Because of the specific characteristics in business, Direct Imex Pty Ltd often cooperates with many manufacturers in Vietnam and Thailand. Hence, this company has two representative offices in both Vietnam and Thailand to maintain conveniences for business. Although the facilities, equipments and working conditions in workplaces in three different countries are fully provided to the employees, the workload for individual directed by the leaders is not appropriate to each person’s capability and fair because there are many people who work hard whereas some others do not. The imbalance in work distribution has been causing employee dissatisfaction and affecting negatively job performances and operational effectiveness. To solve these problems, the employer needs to evaluate the competence of each member, redesign work, share workload to every member fairly and try to sustain justice for employees not only in Australia but also in Vietnam and Thailand offices.
Recently, there are some new products with the origin of Thailand are being planned to ship to Australia for sale. The staffs in Australia head quarter need to do marketing researches and find information, customs procedures in order to ensure smooth operation. For example, to import and to sell grass brooms in Australia, employees in Australia office should contact all the customers to market and conduct researches aiming to receive their feedback. Moreover, they also need to know customs procedures related to grass brooms’ import such as duty customs clearance, fumigation, etc. This crucial preparation can prevent any problem which occurs in operation process.
In conclusion, managing people is considered a key factor to contribute to the success of an organization. To survive, firms’ leaders need to recognize the importance of human resource management to the operations management. To develop and to defeat other competitors, managers have to try to avoid negative issues involving job dissatisfaction, low work performance, ineffective employee recruitment and retention and mistakes in managing operations overseas by researching, planning, assessing and satisfying their staff with their best financial, working conditions and appropriate arrangement for individual ability as well as understanding what they want, what they need in work so that employee contentment can result in smooth operations, revenue, profit increase and enhanced reputation for their organizations.