Human resources function and organizational roles

Human Resources

Managing Underperformers and Turnover at Cardington Yutaka Technologies, Inc.

Cardington Yutaka Technologies, Inc., is a subsidiary of Honda Motor Company, Ltd. Cardington Yutaka is a supplier of pre-market components for cars assembled by Honda. Their products include torc converters, brake parts, and catalytic converters. Cardington Yutaka Technologies, Inc. (CYT) began in 1995 in response to demand by Honda of America (Manta, 2008). They have approximately 875 full time employees and a variable staff of temporary employees. The number of temporary employees varies according to workload.

The demographics of the plant are largely younger employees under the age of thirty. The number of older employees is shrinking. The company employees consist of 70% males and 30% females. The racial mix is 87% white Caucasian, 9% African-American, and 3% Hispanic and 1% other. The demographic makeup of the plant clearly matches that of the community at large. However, CYT does attract employees from the larger surrounding area. Many are willing to drive a small distance to work at CYT. The excellent pay attracts many to apply for a job with the company. Attracting applicants has never been a problem in the area, which has a sufficient workforce in the area to supply the company's needs.

Employees range in education according to their position within the company. A minimum of a High School Diploma is required for employment. However, 2% of the employees have a GED to meet the age requirement. Lower level managers must meet the minimal educational requirement, but they can work their way up through performance and demonstrated dedication and skill. Middle and upper level managers must have at least an associate's degree in order to meet the minimum requirements of their positions. Only 7% of the employees have degrees higher than a High School Diploma.

The average tenure with the company is two years. The main reasons cited for leaving are finding another job. Approximately 20% of the employees have been with the company longer than the average employee. Another 2% have been with the company over five years. The profile of the average employee reflects inexperience in performing their job tasks. This places the employee at a disadvantage, in terms of maximum productivity and quality. The most desirable employee is the one that knows their job and can do it quickly and efficiently. Employee retention must be improved so that the company can continue to produce quality products, reduce operating costs and ensure operation will into the future. The company's future relies on the ability of human resources to resolve employee retention problems.

Analysis of Problems

For the past several years, turnover rate at CYT has been on the rise. They went from a 3% turnover rate to a 15% turnover rate over the past six months. This number reflects turnover in regular employees and does not include temporary employees. In addition, the number of parts rejected by Honda as defective has increased by over 30%. The contract with Honda may be jeopardized, if this trend continues. It is believed that the high turnover rate is related to the decrease in quality. In addition, to a marked decrease in quality, the plant has also experienced a decrease in overall productivity. To compound problems, CYT has experienced higher absentee rates as well.

Compared to other companies in the local area, CYT offers higher base pay, than any other company in the area. They offer excellent benefits, compared to other companies in the area. However, employees have been overheard complaining by management, calling it a "sweat shop" and comparing it to slave labor. These comments indicate a high level of employee discontent, which is assumed to be driving factor in conditions at the company. Employees receive many hours of extra overtime. The company has been on continual overtime for over a year. It may be that employees are simply tired.

CYT recognizes the value of experienced, happy employees. Reduced productivity and low employee morale are a major concern. Long-term, experienced employees are leaving in droves. Younger employees and temporary employees are more apt to make mistakes than experienced employees. This makes the situation even more urgent, as they are not only losing employees, but are losing their most valuable employees.

The situation has become desperate and managers are beginning to worry about their ability to meet the needs of their major, and only, customer. In addition, the accident rate of the company has gone up.

It is up to human resources to determine which issues are the most important in resolving the crisis. They have been assigned the task of diagnosing the problem and devising viable solutions to the problem. It is suspected that employee retention and morale are at the heart of the crisis. The following will summarize the analysis, explore appropriate theories and will present a plan to remedy the problems.

Theories and Concepts

Human Resources is the backbone of the business. Without the ability to find and retain quality employees, a company can sustain mounting losses. This is the situation at CYT. By examining existing theories, one can gain insight into current problems facing the company. Many Human Resources theories are borrowed from other disciplines, such as psychology or sociology. The following discussion will examine theoretical paradigms that apply to the current situation.

The first theory that we will examine is Social Learning (Cognitive) Learning Theory. This theory considers learning to be a dynamic exchange between the person, their environment and behavior (Gibson, 2004). Social Learning Theory is a determinant of organizational culture. When one applies this theory to the current situation, it is easy to see that the poor morale being experienced at the company is contagious. Social Learning Theory teaches us that attitudes are contagious, whether for good or bad. This would lead to the conclusion that the morale problem at the company must be treated in a holistic manner. The reasons behind the poor morale must be addressed. Once these problems are addressed, it could be expected that the morale will improve on a company-wide basis.

Any human resources problems can be reduced to a question of motivation. The problem faced by human resources is how to provide sufficient incentive to motivate employees to come to work, to do their best, and to be as productive as possible. The classic question in human resources is whether intrinsic or extrinsic motivation are preferred methods of motivation. Intrinsic motivation refers to motivation that stems from doing a task because it is enjoyable or produces some type of emotional reward (Zimmerman, 2007). This is they type of motivation that is the goal of every human resources manager. They want their employees to be motivated because they get some type of satisfaction from their job.

Extrinsic motivation means doing something because it has a favorable outcome (Zimmerman, 2007). Human motivational theory places greater emphasis on intrinsic motivation as a source of action. Extrinsic motivation must meet certain criteria to lead to a desired action. The person must feel that the goal is attainable. They must believe that the activity will lead to the reward and they must feel that the reward is sufficient to outweigh the costs (Zimmerman, 2007). Items such as pay and benefits are considered extrinsic motivation.

When one considers extrinsic and intrinsic motivation at CYT, it becomes apparent that intrinsic motivation is the missing element. CYT is ranked as one of the highest paying employers in the area and is considered to have one of the best benefit packages. All employees get two weeks off with pay when the plant shuts down for maintenance. In addition, they get all major holidays, as well as ample sick leave. The work environment is clean and comfortable. A considerable amount of effort has been placed on providing the best extrinsic motivation possible for employees. Therefore, it must be concluded that the problems at CYT are related to intrinsic factors.

Intrinsic factors are more difficult to measure than extrinsic factors. However, it is essential to understand which factors are missing so that remedies can be devised. Previous Human Resources surveys focused on measuring employee desires in terms of extrinsic motivators. The company responded with better pay and benefits. However, there is still something missing. In order to determine what is missing, a measurement device must be developed that targets the reasons why employees wish to leave and what could be done to make them stay. The final section of this research will discuss a plan for developing a mean to measure intrinsic factors that currently affect employees at CYT.

Solutions and Implementation

The first step in resolving the dilemma surrounding CYT and its inability to retain employees is to determine the root cause of the problem. The best way to accomplish this task is to engage the employees themselves, regardless of longevity and examine intrinsic factors that affect the likelihood that they will stay with the company. An employee survey is the most common means to assess employee attitudes and how they influence employee behavior. However, there are several factors that must be considered before engaging in a task such as this.

The first consideration is that employees may be reluctant to reveal their innermost feelings about the company for fear that they will be punished for their responses. For this reason, it is imperative that employees are assured of absolute anonymity. This will also encourage honest answers and be the most likely to result in discovering the root causes of the problem. Employees will be able to respond anonymously by dropping their folded responses into a box by human resources.

Those that feel good about their job may be more eager to respond to a survey than those that are unhappy. A voluntary response would be more likely to result in a biased sample population. It is important that the sample is representative of the entire plant, rather than a small, select group. Therefore, employees will be told that the survey is mandatory. Although, there will be no real way to identify the employees that responded from those that did not respond, if the employees feel that it is mandatory they will be more likely to respond than if they feel that it is voluntary.