The human resource department at Accord Lighting Co. was facing several problems including high labor turnover, poor quality goods, and late deliveries due to short staffing. The deputy manager proposed creating a specialized HR department to address these issues by conducting proper workforce planning, improving recruitment and training, and reducing turnover. Effective HR management could help increase labor productivity and output, improve quality control, retain valuable employees, and ensure the company has the right staffing levels to maximize profits as demand for its products rises. The deputy believes a HR department is needed to strategically manage the company's workers and gain a competitive advantage.

1. Further Human
Resource
Management
BY: AIN ATIYA AZMI BINTI NAZMI
CIE A LEVELS BUSINESS STUDIES
INTERNATIONAL ISLAMIC SCHOOL MALAYSIA (2016)

2. CASE STUDY:
HUMAN RESOURCES
CRISIS IN THE
FACTORY
COURSE BOOK PAGE 186

3.  Accord Lighting Co. is the manufacturer of
specialist lighting equipment for theatres and
cinemas. Demand for the firm’s products had
increased following the recent rise in
customers’ income.
 The deputy manager of the factory, Bernardo
Alves had received an influx of customer
complaints. They were dissatisfied at the poor
delivery times and poor quality goods.

4.  The departmental managers faced trouble in
recruiting and training staff and this resulted in
high labour turnover and reduced annual
output.
 Bernardo decided to update his report to the
directors of Accord Lighting. His proposal to
create a specialised human resource
department was rejected two years ago.
However, following recent crisis, he hoped to
convince them about the importance of
specialist management of people.

5. 1. Outline the HR problems
experienced by Accord
Lighting Co.
(8 marks)

6.  There are several HR problems identified
in this case study. Firstly, the factory was
short-staffed. This had led to customer
dissatisfaction due the poor quality
goods and late delivery times as there
were not enough staff to carry out these
services efficiently.
 Next, skills and experience of employees
are not matched to the responsibilities
being given to them. For example, there
were unsuitable recruits being asked to
take on quite skilled jobs without training.
This has resulted in poor decision
making and failure to complete tasks to
the required standard

7.  Moreover, there was poor management
of employees. Recruitment of workers
was carried out by outside agencies and
new recruits were not properly explained
about their tasks. This has impacted the
motivation and productivity level of
employees and caused the recent ouput
to decrease.
 Furthermore, there was high labour
turnover in all production departments. It
is due to the lack of people management
skills among the departmental
managers. This further increases
recruitment costs for the factory.

8. Calculate labour productivity for:
a) i- 2012
ii- 2013
(4 marks)
Labour productivity:
Annual output / Total production
2012: 1400/25 = 56 units/worker
2013: 1100/22 = 50 units/worker

9. b) Assess how this
manufacturing business could
increase labour productivity.
(10 marks)

10.  Accord Lighting Co can increase its
labour productivity by creating a
specialised human resource
department. This is a strategic
approach to the effective management
of an organisation's workers so that
the business can gain a competitive
advantage. The function of Human
Resource Management (HRM) is
different to the work of other
departments.

11.  Firstly, HR can conduct a proper workforce
planning for the factory. They will have to
audit the current staff and identify future
labour needs. By planning ahead, HR can
provide managers with the right number of
people, with the right skills, in the right place,
and at the right time.This is to ensure that the
problem of short-staffing can be overcomed.
The HR work dependently on the business
cycle so there will be no need for panic hiring
or lay-offs following the business' boom or
bust. Since there is a recent growth in
demand for the factory's manufactured
products, the HR professionals should be
able to recruit suitable number of workers for
these tasks. Thus, the factory can run its
operations smoothly and avoid delays due to
staff vacancies.

12.  Next, the HR will aid in in the recruitment
and selection of staff by drawing up
suitable job descriptions and person
specifications. This is to ensure that
recruits are capable of performing their
roles. Training may also be required to
develop skills of employees to meet the
responsibilities they are given. For
example, new recruits need effective
induction training to familiarise
themselves with the layouts of the
factory and also the health and safety
hazards. Thus, they will be carefully
communicated about the stresses of
working under the factory environment
so that they have proper guidelines to
work by.

13.  Moreover, the HR can tackle the problem of
labour turnover. There is a high labour
turnover in the factory indicating employee
discontent, low morale , and a recruitment
policy that leads to the wrong people being
employed. The HR therefore have to come up
with better recruitment and selection
techniques to ensure that job applicants
understand the pressure they will have to
work under. Features of job enrichment can
also be added for example letting the workers
undergo complete units of work so that their
contribution to the overall production can be
identified. This will lead to an increase in
employees' motivation and thus is vital to add
productivity to the factory.

14.  In conclusion, the HR has a central
role in managing the workers in the
factory. Workers, as assets to the
organisation, can be properly
developed in the most productive
manner so that business’ objectives
can be achieved.

15. 3. To what extent would the
profitability of Accord Lighting
Co can be improved by more
effective management of its
human resources? (12
marks)

16.  There are many ways in which effective
management of human resources can help
improve the profitability of this factory.
 Firstly, in terms of workforce planning, it will
ensure that the business has the necessary
human resources to achieve its goals. Delivery of
finished goods to the customers is important in
the manufacturing industry so management
needs to ensure that there are always workers to
carry out this task on time. This will avoid
customer dissatisfaction and improve the
reputation of the business. Workforce planning
will also ensure that there are appropriate level of
staffing. As the demand for specialist lighting
equipment and cinemas has increased, there
should be sufficient workers to increase the
production output.

17.  Next, recruitment and selection of staff must
ensure that the business has the right
workers. For example, the factory needs to
recruit skillful workers for each production
process. This will ensure that the product is
up to the standard required based on their
performance and durability. The quality of the
goods produced need to be maintained as
this displays brand integrity and customers
will be more likely to switch products should
Accord Lighting fail to deliver high quality
products. Training of staff also carries many
benefits such as employees will be able to
carry out their jobs more effectively. There will
be less risks of accidents which in turn
reduces wastage and increases the overall
ouput.

18.  Moreover, the proper management of
human resources can retain workers in
the factory and reduce the cost of high
labour turnover. Effective two-way
communications between the recruits
and the HR personnels can make the
recruits feeling more valued by the
organisation. Proper induction training to
expose about the pressures in the
working environment can provide
necessary guidelines to improve their
sense of security. Added with features of
job enrichment, the workers will be
satisfied with their tasks and will be more
inclined to stay within the company.
Therefore, employees' loyalty and
productivity are strenghtened.

19.  In conclusion, human resources is just
one of the functional areas of the
business and must work in association
with finance, operations and marketing
to create a successful manufacturing
business.

20. THE END