CASE STUDY

Question

Reliance Motors, an automotive manufacturing company employs over two hundred (200)
employees and has been in business for over a decade. The New Delhi, India based company has
thrived well in the market until emergence of operation disrupting hiccups in 2012 when the
company was adding another line of product to its production. Due to the competitiveness of the
automotive industry, Reliance Motors made an effort to diversify its operations by adding a new
model to its production line. The change brought about an introduction of new technology in the
work place which most of old employees were not familiar with. Due to competition pressure,
Reliance could only afford on the job training as the company could not afford to lose production
hours. The change management process was rapid without due care of whether or not all the
employees were keeping up. Results were demanded and those who couldn’t meet expected
production levels were let go without hesitations regardless of their ability or potential to be star
employees if only they were nurtured and supported towards the right directions. Noticing the
unpleasant working environment, some of the employees who couldn’t keep up resigned from the
organisation before they were sacked. Employees of Reliance Motors were expected to make target
each and every day without any feedback given to them about their performance unless if target
was not made. Management of the company believed that the highly competitive salaries and target
bonus paid to the employees were enough to motivate them in the workplace. Most of the
employees found their jobs to be monotonous and could only do enough to keep their jobs. Error
rate on finished products started to escalate and recalls of faulty cars also increased. Due to high
turnover, recruitment costs also escalated, and profit margins plummeted. Due to the specialization
nature of the automotive industry other employees also queried that the Engineering Department
employees were given special treatment due to their scarcity in the labour market and this brought
divisions among the employees. Overwhelmed with these challenges the Managing Director of
Reliance Motors, Mr Mathur Kumar Khan found it necessary to bring on-board a Human Resource
Practitioner who could identify the root causes of HR problems at Reliance Motors and probable
solutions thereto.

a) As a Human Resources Practitioner employed by Reliance Motors list and explain five (5)
HRM problems identified from the case study. (15 Marks)

Answer 1

As a Human Resources Practitioner analyzing the challenges faced by Reliance Motors, several key HRM problems can be identified from the case study. Below are five significant issues:

1. Inadequate Training and Development:

   • Explanation: The introduction of new technology without adequate training led to difficulties for long-term employees who were not familiar with modern processes. On-the-job training was insufficient, and the rushed change management process failed to ensure all employees were competent in their roles. This lack of proper training resulted in a higher error rate and compromised product quality.

2. Poor Performance Management and Feedback System:

   • Explanation: The absence of a robust performance management system that includes regular feedback contributed to low morale among employees. Employees were not informed of their performance unless they failed to meet targets. This lack of positive reinforcement and constructive criticism made it challenging for employees to improve and grow, further demotivating them and leading to a culture of fear rather than improvement.

3. High Employee Turnover:

   • Explanation: Due to the pressure to meet production targets and the lack of support, many employees either resigned voluntarily or were let go. High turnover rates can lead to increased recruitment costs, loss of institutional knowledge, and an unsettled workforce, which diminishes overall morale. Continuous turnover can also impact the team dynamic, leading to decreased productivity and increased stress among remaining employees.

4. Employee Motivation and Job Satisfaction Issues:

   • Explanation: The management’s belief that high salaries and bonuses would be motivating proved ineffective. Many employees found their jobs monotonous and felt disconnected from their work. When employees do not find meaning in their roles or feel supported, their motivation declines. This situation was exacerbated by perceptions of unequal treatment among different departments, leading to divisions and dissatisfaction within the workplace.

5. Poor Internal Communication and Lack of Team Cohesion:

   • Explanation: The case study indicates that there was insufficient communication between management and employees regarding expectations, performance metrics, and general company updates. The perceived favoritism towards the Engineering Department added to the division among employees, creating rifts that hindered teamwork and collaboration. Poor communication can lead to misunderstandings, resentment, and a lack of unity among staff, which is detrimental to an organization's culture.

In summary, these HRM problems at Reliance Motors highlight the need for a strategic approach to training and development, effective performance management, employee engagement initiatives, and improved communication to foster a positive work environment and enhance overall productivity.