Analyze the Harvard case the Treadway Tire Company: Job Dissatisfaction and High Turnover at the Lima Tire Plant 2189
Analysis of Treadway Tire
Analysis of the Harvard case the Treadway Tire Company: Job Dissatisfaction and High Turnover at the Lima Tire Plant 2189
An analysis of the dilemma facing the Treadway Tire Company, particularly at its Lima plant in Ohio, is one that reveals many aspects and problematics of contemporary human resource management. This case is in essence a model for many of the themes and issues facing modern management and leadership in large-scale industry.
The Treadway Tire's plant in Lima has been confronted with high levels of job dissatisfaction, which is accompanied by high turnover rates, particularly among there line foremen at the company. This is partly due to the position of the foremen as they are uncomfortably situated between management and the unions. However, central to the problems experienced at this plant are issues that pertain to cardinal aspects of human resource management and leadership. These include limited opportunity for career advancement, lack of recognition, as well as a concern with regard to the implementation of a human centered approach to the management of resources.
As a number of commentators have noted, the solution to the problems at the plant involves a restructuring and refurbishment of the underlying thinking and philosophy behind workforce management. As will be discussed, the analysis of this case has far -- reaching implications for not only of the situation at Treadway Tire but also for human resources management theory and its application in the contemporary context.
2. Background and overview
From a rather simplistic point-of-view the problem facing this company and the issues that have arisen in HR in recent years with regard to aspects such as job dissatisfaction and high turnover, are indicative of the failure to achieve positive balance and functional intersection between the different management and employee structures, This has resulted in a negative level of productivity. The company in question in this report is not only plagued by issues surrounding job satisfaction, among many other internal issues, but also has to face the higher prices of raw material and other external problems.
The problems that plague the company and the plant can be clearly seen in that, according to the Harvard report, almost fifty percent of the foremen on the staff have recently left (Skinner and Beckham, 2008, p. 2188). This is an alarming figure and is indicative of various problems within the structure and functioning of the company.
The Treadway Tire Company employs more than nine-thousand hourly and salaried staff (Skinner and Beckham, 2008, p. 2). It is also well-known as a major supplier of tires to the" & #8230;original equipment manufacturer and replacement tire markets" (Skinner and Beckham, 2008, p. 2188). The company produced about 25, 000 tires per day in 2007. (Skinner and Beckham, 2008, p. 2189) The Lima Tire plant was one of the company's eight manufacturing plants.
The Lima plant employed more than 1,100 people. Of these, 970 were hourly employees and 150 were salaried employees. A further aspect that added to the complexity of the problematic environment at the plant was the fact that the hourly personnel were members of the United Steelworkers Union (USW). This added another layer of responsibility and difficulty to the situation, especially for the foremen at the plant, as the union contract "…dictated job classifications, pay rates, the schedule for pay increases, health/safety standards, and grievance procedures for hourly workers in the plant" (Skinner and Beckham, 2008, p. 3). Ironically, Lima recently was refurbished and modernized in 2000, which had made it potentially one of the most lucrative producers in the country.
Furthermore, in terms of company structure and operation more emphasis has been placed on the Lima plant, as Treadway downsized its Greenville plant in South Carolina in 2006. The volume of work from this plant had subsequently been moved to the Lima plant (Skinner and Beckham, 2008, p. 2189). As a result of this increased focus the Lima plant has intensified a production and work schedule - which in turn is another factor that was to weigh on the issue of responsibility for the line foremen.
The line production employees at the plant were supervised by salaried line foremen. These foremen were not unionized, which placed them in a precarious and sensitive position between management and the unionized staff. There were fifty line foremen at Lima (Skinner and Beckham, 2008, p. 2189). The basic structure of the company was as follows: above the line foremen were thirteen general supervisors who managed the line segments. They in turn reported to Lima's five area mangers. Oversight at the plant was the responsibility of a single plant manager.
The issue facing the line foremen is critical to the understanding of the problems experienced at the plant. As will be discussed, what this report makes clear is that an analysis of the issues at the Lima plant lies within the ambit of human resources management and the analysis of the structure and organization of the company.
The report by Skinner and Beckham ( 2008) also makes it clear that in the last decade the company has had to contend with a number of external pressures and problems -- which includes the increasing costs of raw materials as well as the pressure from global competition. (Skinner and Beckham, 2008, p. 2188). The issue of globalization therefore cannot be excluded as a background factor that has had an influence on the present situation and should not be underestimated in an analysis of the total problem. This will be expanded on below.
The central and obvious issue that faced the company in this difficult economic climate was the high rate of turnover; which amounted to almost fifty percent of the line foremen at the Lima plant. However, as one analyst noted, the issue of turnover was not the real problem but masked a much deeper and insidious range of issues that existed beneath the surface, as it were. It was, in effect, the "…tip of the iceberg" (Skinner and Beckham, 2008, p. 2188). There were many other underlying issues which affected the morale not only of the lien foremen but also the entire plant. These various aspects will be disused in more detail below.
In the first instance, we should not underestimate the economic background to the issues facing the company, as these have been shown to have played a key exacerbating function in problems that manifested themselves internally. As Skinner and Beckham ( 2008) point out; "Raw Materials represented about 55% of the cost to produce a tire, and petroleum derivatives were an important ingredient in the mix" (Skinner and Beckham, 2008, p. 1). This is brings into play the impact of the global economy on the company, which can be seen to have exacerbated the already serious structural, internal problems.
Raw materials were thus highly dependent on the price of oil. The price of crude oil climbed from below 25 dollars per barrel in September 2003 tro 92 dollars per barrel by October, 2007, pressuring the economics of the company" (Skinner and Beckham, 2008, p. 2188).
3.2. Turnover and Job Dissatisfaction
As noted above, turnover was "the tip of the iceberg" of the problems of the company. In other words, turnover was a symptom of much deeper problems and issues that had resulted in the high rate of resignation in the first place. Studies have found that there is often a strong correlation between high turnover and low levels of support from supervisors and management. As a study by Kalliath and Beck ( 2001) points out; " Several studies have shown that low levels of supervisory support contribute to job burnout and turnover….low levels of supervisory support will have both direct and mediated effects on job burnout and turnover intentions & #8230; (Kalliath & Beck, 2001) Central to this aspect is the situation of the line foremen, which is evident in their exceedingly high turnover rate.
3.3. Structure, Training and Responsibilities
As noted above, the line foreman constituted the largest group of salaried employees at the plant (Skinner and Beckham, 2008, p. 2). They were employed essentially in four areas; namely, production, maintenance, material control and quality assurance (Skinner and Beckham, 2008, p. 2). Furthermore, their task was a difficult one in that they had to balance a variety of human resources as well as be responsible for administrative issues. Central to the problematics of their position was the fact that they were often "…pulled in different, often conflicting directions by management, the workers and the union" (Skinner and Beckham, 2008, p 3). In effect, the line foreman was also held responsible if production fell behind schedule -- and this was measured on a daily basis. This was also made more difficult by the long and extended working hours at the plant. Among their other duties was to ensure that production went ahead without any technical…