The Case of Jaguar Land Rover Ltd
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Human resource management (HRM) is a designed function to maximise the performance of employees in an organisation in service to the organisational objectives (Torrington et al 2007). The human resource unit is usually responsible for activities such as recruitment of employees, training, rewarding, and also performance management. The department is also accountable for guaranteeing that the activities undertaken by the organisation are in line with the standards, regulations, and laws set by the government (Abdullah et al 2009). When recruiting new staff into the organisation, the HRM department requires several strategic points in order to recruit staffs that have the skills and specifications that will help attain the set staffing goals. Some of these factors include quality of the required workforce, cost of unfilled jobs, availability of labour, highly skilled applicants who are attracted by the proper advertisement of the job opportunities, employment ‘branding’ and image, practising internet recruiting, among others.
Several questions have been raised concerning the impact of human resource management on the performance of a firm. Some argue (Abdullah et al 2009; Beardwell and Claydon 2010) that adopting a strategic HRM, which will help develop unique practices and also satisfy the employee, while some have argued that a strategic HRM can help firms to gain an advantage over their competitors. Other companies view human resource as a dark bureaucratic force that blindly implements nonsensical rules, opposes creativity, and hinder constructive change. This paper argues that Jaguar Land Rover Ltd has maintained its business performance in the current economic climate using its various Human Resource Management activities.
Human Resource Management (HRM)
The modern view of HRM gained momentum in 1981 with its introduction on the MBA course at Harvard Business School, providing an influential interpretation of HRM with other such interpretations being developed in Michigan and New York (Price 2007, p. 20). From that point onward, HRM became a new approach to managing people, which differentiated greatly from personnel management. This is because HRM is portrayed as being a more proactive approach by looking at people in a more economic term as either assets or costs that need to be actively managed (Price 2007, p. 21). Also, compared to personnel management, HRM is more strategic as it connects the management of people to business objectives by managing people, not just employees, in the long-term interests of a business (Price 2007, p. 21). According to Price (2007), HRM is also seen as an integrated approach that is able to provide a coherent programme by connecting all aspects of people management. Furthermore, HRM is thought to be holistic in the sense that it’s concerned with the overall people requirements of an organisation. With this theory, HRM had implied a significant shift towards a more conceptual and higher-level concern which includes the organisation’s structure and culture based on the provisions of required competencies.
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HRM Practices of JLR
To look at JLR’s HRM process in more depth, Mckinsey’s 7S model was used to understand each of the company’s components better. According to Straker (2009), when a company looks to manage or improve itself, the 7S model can highlight how changing one area of the model is problematic; instead, multiple areas need to be changed to maintain a balance.
Jaguar Land Rover has adopted HRM to improve its performance. The company has a unique disciplinary approach that consists of employees from different parts of the world, especially in Europe. It aims at hiring the most qualified personnel by conducting behavioural interviews and testing the cognitive abilities of the individuals who are part of McKinsey’s 7S Model soft factor of staff and style. Once hired, the staff can enjoy further training opportunities through e-learning, learning from their colleagues in the workplace, and external presentations (Jaguar Land Rover 2014). The company has also assigned responsibilities to its employees with the belief that issuing work-related duties exiting to the employees can greatly improve their creativity and innovative capabilities in the workplace. Jaguar Land Rover also has an open mind to the ideas of its employees, which is really the centre of its success. During interviews, they include some questions aimed at helping them predict the success of the company. They also have a “self-nomination” system that is used for promoting employees.
Figure 1- McKinsey’s 7S Model
Jaguar invests heavily in its workforce, including a high level of development activities and relevant training, including intensive training. The company’s workforce is taken through two weeks of manufacturing placement to help them experience operations (Jaguar Land Rover 2014). There is no provision for employees to move roles in their two years of employment (Jaguar Land Rover 2014). The company has sustained a clear balance of workload across its graduate scheme (Jaguar Land Rover 2014). It has invested heavily in graduate school scheme, which offers its employee’s great opportunities to make them grow as individuals as they try different roles jobs in different departments (Jaguar Land Rover 2014). Its employees receive a lot of support and are encouraged to go out of their way and try out things that interest them (Jaguar Land Rover 2014). Focusing on personal development and a flexible approach to working hours, the company has come up with a yearly fund to allow its employees to learn any non-career-based skills. The role is engaging and fluid. It comprises project management and engages other supplier visits, contract management and department.
The company provides lots of impetus behind it because of massive growth. This makes sourcing more exciting and easier. It gives performance-driven raises, this helps to control turnover and enhances retention, and they reward success and also do not penalise failure because of the belief that after failing, one is able to learn and do their job well. Currently, it has a very high workload. While this benefits employee who aim at making their career, it has a detrimental effect on their work-life balance. However, employees enjoy option that highlights different opportunities to ensure they adhere to the working hours (West 2014). In the purchasing department, there is an explicit reward for employees’ overtime work. Having grown very quickly in recent years, the company is struggled with the infrastructure to keep up with the ever-increasing number of employees.
JLR expects its workforce to increase by 11% worldwide in the 2013/14 financial year to a total of 29000 (Jaguar Land Rover 2014). The human resource department has a vision that is designed to align with long-term business goals. The department also has a set of rules and strategies, which it uses to engage with its employees. They include giving people the tools and resources to succeed. They also hire more inquisitive learners. They ask questions on every issue they cannot understand and need more clarifications from their seniors. In case the learners fail, they always ask for guidance on improvements from their seniors. Also, when working on small projects, they work in small teams so as to avoid wastage of time. There is the need to keep structures flat because as the company gets big, the information needs to flow up, and they also have to discuss everything they can publicly.
One of the most important priorities at Jaguar Land Rover is improving and maintaining gender balance. The company has a women’s development program that aims at encouraging and motivating women in joining Engineering careers. The company also operates a sponsorship scheme for engineering female undergraduates. The company was also recognised and awarded with the ‘Two Ticks’ symbol for its efforts to not only employ disabled staff but also keep them and develop their abilities further.
The HR department in Jaguar Land Rover also employs training evaluation as one of the strategic responsibilities of the department. Organisations use training to facilitate the learning of skills, attitude, and knowledge among the employees to improve work performance with the aim of achieving organisational goals. Training is essential in every organisation since it takes into consideration the long-term goals of the organisation. Therefore, evaluation of all the employees’ training programs is an important part of strategic planning. Evaluation of training helps tell whether or not the investments made in training were effective. Achievement of the previously set objectives is used as a basis while determining the effectiveness of training. There are different levels through which employee training programs can be evaluated. They include reaction, learning, impact on the organisation, and behavioural change (Dessler 2000). Taking the participant’s feedback just after training is the reaction level. Feedback is taken on everything related to the training program, including their views on the facilitators, resources, methods used, among others. Knowledge and skills acquired are also determined at the end of the training program. The Jaguar Land Rover Company carries out this task through questionnaires, formal or informal interviews, getting feedback from the training unit, manager’s feedback, making a cost-benefit analysis, among other methods. The behavioural change level is carried out at the workplace. The habits and attitudes of the participating employees are observed. The impact to the organisational level first focuses on the particular unit where the participating employees are assigned. An improvement in the unit will reflect the overall performance of the company. The evaluators observe the level of customer satisfaction and product sales profit, which has been increasing at an impressive percentage lately.
Issues in HRM which JLR Overcame
The problem with the HR department in almost every company is the obsession it has with matters relating to the employees pay and watching of rules and regulations (Vermeeren et al. 2008). Traditionally, human resource professionals have been in charge of systematising and acting as the policing arm of the executive management. In their roles, which include hiring, and paying employees, and dealing with their benefits, the HR department was viewed as a roadblock to success by other departments in the organisation. They will never get to be involved in any strategic activities if they don’t show their influence on the firm’s performance. Theories suggest that organisations can enhance their competitive advantage and performance with strategic HRM practices that are effective (Huselid et al., 1997). Companies such as Jaguar Land Rover have made proper use of their HR department have been successful.
The main aim of an HRM department in an organisation should be influencing the productivity of a workforce in a positive direction and determining the factors that affect the individual or performance of a team as a whole. These factors include determining the firm’s productivity foundations, direction and aim, support factors, communication, information factors, resourcing, and other miscellaneous factors. This means that if the HRM works with the management, they can attract, hire, and retain high-performing employees, learners, and innovators. They should also continuously train their employees and make sure everyone in the firm delivers effectively and efficiently, which is actively used in JLR. Employees whose own goals align with the organisational goals tend to be more productive. Therefore, the HRM should not overlook this fact when building a corporate strategy to ensure total commitment. Employees that perform well should be highly rewarded to ensure they are motivated and also there is competition within the organisation (Huselid 1995). Also, when building a team, the HRM should ensure that all the team members share the same objectives and offer trust and support to each other. Lack of teamwork will hinder productivity.
The HR department should learn how to always say the right thing. At the grand level, what they tell the employees has to match what the company believes in. Also, when it comes to the details of pay and benefits, they should clearly explain what has been done and why it has been done. For HR to be taken seriously by the top management, they must demonstrate their impact on the business organisation (Huselid 1995). To achieve this, they must cut off the individuals who get into HR and do not have functional skills. The people who work in HR should be competitive and sophisticated about the company’s strategy and customers (Mondy & Gowan 2005). Some employees see HR staff as stooges for management, and the management views them as annoying do-gooders representing the employees. The best employee supporters are the ones who are always concerned with advancing organisational and individual performance. They should represent the management with honesty and integrity and at the same time support the employees in the aim of improving the company’s competence. They also need to foster proficiency and commitment among the workers, develop the abilities that allow managers to execute policy, help build connections with clients, and create assurance among stakeholders in the firm’s future value.
The roles of the management in the department need to be redefined to align its objectives with those of the organisation as a whole. In order for any HR manager to start contributing to the firm’s performance, they need to consider themselves as strategic partners. In this role, they will take responsibility and contribute to the accomplishment of the organisational objectives. The objectives of HR will then be established to help attain the main business objectives. The representatives from the department are also aware of the kind of work system designs in which the people will contribute and also succeed. Becoming a strategic partner will have an impact on services offered by HR such as hiring, designing work positions, rewarding, recognition, employee development, succession planning, and strategic pay (Mathis and Jackson 2003; Torrington et al. 2007; Mullins and Christy 2013). Professionals in JLR’s HR department take part in these strategic roles thus are seen as strategic contributors to the success of the firm. Therefore, they have to act and take responsibilities that come with being a successful business partner.
According to Youndt et al. (1996), the department manager should also play the role of an employee advocate. Being an employee advocate will require him to generate a work atmosphere that will encourage the employees and happily contribute to the firm’s success. The manager should also foster effective goal-setting methods, empowerment, and communication that will give the staff a sense of belonging. It should be one of the HR professionals’ roles to create a climate that will give the workplace an effective and competitive mood to ensure customer satisfaction. The employees also need to accept and embrace change in the organisation. The frequent evaluations of the staff carried out by the HR department should help identify the sections where change is needed. The HR professionals are exceptionally important because of their ability to execute successful and effective change strategies. If the employees understand change and link it with the organisation’s strategies, there will be minimal cases of employee dissatisfaction and resistance when applying the change.
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The success of the Jaguar Land Rover Company proves that the human resource department is as essential as any other unit in an organisation. Therefore other organisations should ensure that the professionals in this area take over their responsibilities in full in order to give the management room for running the organisation. The HR under good leadership can use their expertise to improve the performance and productivity of any organisation largely. JLR is a perfect example that asserts that business performance can be maintained in the company due to the extensive activities of the company’s HRM department. These activities have allowed the company to stay afloat in the tremulous economic climate that various companies in the UK are experiencing. It is recommended that other companies use JLR as an example and learn to integrate HR activities with strategic business goals.
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