A Study on the Need for Human Resource – With Specific Reference to the Manufacturing Sector

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A Study on the Need for Human Resource – With Specific Reference to the Manufacturing Sector

Mrs. V. Renuka, Research Scholar, Department of Commerce, FSH, SRMIST Dr. S.Tamilarasi, Associate Professor, department of Commerce, FSH,SRMIST

Abstract

The new economic paradigm is characterized by speed, innovation, quality and customer satisfaction.

The focus has shifted from tangible to intangible assets, especially on human capital and its effective coalition with the overall organizational strategy. The entire system of measuring HR’s contribution to the organization’s success needs to change to reflect the demands of succeeding in the new competitive economy.

HR practices influence employee skills through the acquisition and development of a firm’s human capital. Recruiting procedures that provide a large pool of qualified applicants, paired with a reliable and valid selection process, will have a substantial influence over the quality and type of skills possessed by the new employees.The manufacturing industry is a highly regulated production unit that stabilizes the economic environment of nations around the world.The HR departments typically measure elements that are measurable and quantifiable and ignore the qualitative aspects.

This paper aims to study about the benefits and suitability of HR practices in manufacturing companies to identify the different HR functions which have opportunities for growth. The study will be conducted through collecting primary data with the help of questionnaires from the respondents. All the collected data’s will be analyzed through simple statistical tools like Percentage and Chi-square test.

Keywords: HR Policies, Human Capital, Manufacturing Companies Introduction

Human Resource is the set of individuals who comprise the workforce of a company or an organization.

The impact of Human Resource Management (HRM) policies and practices on the performance of a company is an important topic in the fields of human resource management, industrial relations, and industrial and organizational psychology. There were a lot of arguments in the past researches about a firm’s current and potential human resources and their importance in the development and execution of its strategic business plan.

HR practices influence employee skills through the acquisition and development of a firm’s human capital. Recruiting procedures that provide a large pool of qualified applicants, paired with a reliable and valid selection process, will have a substantial influence over the quality and type of skills possessed by the new employees. Providing formal and informal training, such as basic skills training, on-the-job training, coaching, and mentoring can further influence employees’ growth career.

The manufacturing industry is a highly regulated production unit that stabilizes the economic environment of nations around the world. Human resource departments must design and monitor the existing work processes to reduce opportunities for internal theft and collusion. Employees are aware of the importance of technology in their operations. Companies are adopting and adapting to technological tools to further their businesses.The new and enhanced skills require new knowledge and behavioral adjustments in respect of existing human resources. The training system will emerge as an important tool of intervention. Smooth functioning of HR department depends upon healthy and safe work environment,

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involvement and commitment of all employees, incentives for employee motivation, and effective communication system in the organization.

Importance of HR

The HR professionals have to introduce teamwork as it is another important factor and requires essential soft skills. HRM is to be regularly reviewed against business outcomes as part of strategic and operational planning. As people are primary asset, it is essential not only to invest in them, but also to ensure that the supporting elements provide maximum value on a sustainable basis, improve adaptability of their structure that will be able to absorb, draw and retain the best resources.

HR departments must design and monitor work processes to reduce opportunities for internal theft and collusion. HR policies, separate cash receiving, storage, processing and disbursement,and record all activities through video surveillance. In the event that an employee attempts to wrong acts, the HR department must handle the legal paperwork and administrative processes required by court proceedings.Finding the right executives is crucial in any industry, especially the one in which competition is so fierce and legal compliance very important. Human resourceprofessionals must go the extra mile to recruit the best executive talent into the manufacturing field paving way for the growth of their company.

Technology on its part is changing the existing HR roles where HR performance indicators will shift from manpower and man-hours supplied to brainpower and brain hours delivered. The key result areas in people management will also shift from production and quantity to productivity and quality. The current HR function is very much configured like the company’s purchasing department. People, like parts and supplies, are requisitioned by user departments based on depletion and growth rates of their operations.

Resources are screened for quality control and cost or budget constraints. The only slight difference is that unlike purchased parts, people are trained or prepared before they are sent to the requisitioning parties which may train them further before actual deployment or usage.

HR can help to deliver organizational excellence by:

 HR should become a partner with senior and line managers in strategy execution and other related operations.

 It should become an expert, delivering administrative efficiency by reducing costs and maintaining quality.

 HR should represent employees and speak to the management representing their concerns and views.

 HR should become an agent of continuous transformation for the growth and development of the employees and the company.

Importance of HRM

The HRM function in manufacturing companies has gained increasing strategic emphasis, and the importance of aligning HRM strategy and business strategy is well acknowledged. Effective HRM is vital for being able to meet market demands with well qualified employees at all times. Competence management is an important part of HRM practice where the aim is to generate competencies that provide the organization with the right mix of talent to meet existing and future needs.Companies should focus on employees’ career development and their long-term goals.

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The idea that human resources can become a source of competitive advantage for the organization is notnew. It is generally accepted that companies can create a competitive advantage from human resources and their management practices. It is important to manage employees, their knowledge and competences in such a way that the company can build a long-term competitive advantage.

Human Resource Practices and Outcomes

Many researchers agree that human factor is potentially a significant source of sustainable competitive advantage for organizations. HRM affects the performance of a company by improving employee behaviour. Unfortunately, most empirical studies ignored the causal relationship of HRM chain i.e. the link between HR practices and HR outcomes.

The HR policies and practices reflect the relationship between management and employees. These practices include recruitment and selection, training and development, performance management, job design, compensation, and career planning. These HR practices help to improve the HR outcome, which is the ultimate goal of HR practices. The relationship between HRM and performance outcomes is important to maintain a sustainable workforce. It is necessary to study the interrelated HR practices that affect performance as a ‘synergistic whole’. Some of the best HR practices are:

 Providing security to employees

 Choosing the right people for the right job

 Self-managed and effective teams

 Compensation based on performance

 Relevant training

 Creating a flat and democratic organization

 Easy accessibility of information.

Current HR Strategies

The company’s HR strategy includes a number of qualitative objectives in the areas of - resourcing, performance management, training and development, reward, employee relations, career development and organization development. These helped to identify the measurement areas.

 Likely pitfalls

 Absence of a well-defined strategy

 Using inappropriate measures

 Use of basic metrics.

Strategies for Better Functioning of HR

 Involve the employees in all activities and decisions

 Encourage individuals to share their work with each other

 Employees to have lunch together at the same time

 Encourage effective communication among the employees and with their supervisors

 Written modes of communication must be promoted among the employees

 Morning meeting is another effective way to improve relationship among the employees.

 Praise and reward the individual on exceptional performance.

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Scope of the Study

The aim of this study is to evaluate the need and importance of HR in today’s manufacturing sector. A case study for this research was undertaken from various employees and supervisors of manufacturing companies in the central Chennai. Responses got from the employees were analyzed to bring out the findings and suitable recommendations for this study. With regard to the methodology of research, the casual research design was chosen as the most appropriate research design for the study.

Data was gathered using both primary and secondary sources. Responses from questionnaire and interviews with employees of the manufacturing companies formed the basis for the primary data, while books, articles, journals, websites, etc. on human resources worked as the secondary data. Findings from this study revealed that human potential and their capabilities are very vital and essential for better production. It was undertaken to know the impact of HRM practices on the performance of the employees in the manufacturing sector. Other findings include framing strategies to create a conducive and friendly environment for the functioning of the manufacturing sector. The most valuable recommendation was proper implementation of various HR practices.

Statement of the Problem

A recent study revealed that employees do not put their best performances at workplace when they are un- happy with management, government, or even their fellow colleagues. In such a situation the role of HR becomes very indispensable. At present HR plays a predominant part in maintaining a satisfied and contented work force. In policy-making circles, HR emphasizes on institutional intervention and laissez- faire form of association.

In this context, the training system will emerge as an important tool of intervention. The training system in the manufacturing industry has a strong structural base, though the past training activities have been more ritualistic due to absence of a strategic link between training and human resource development.

Today, training has become an effective organizational intervention by establishing a clear policy of training and development within the framework of total human resource development.

Objectives of the Study

The main objective of this study is to understand the role of HR in the field of manufacturing. The other objectives of the study are:

 To study the benefits and suitability of HR practices in manufacturing companies.

 To identify the different HR functions and levels where modern tools are used.

 To define work standards and validate customer’s expectations so as to reduce turnover costs and labour absenteeism.

 To be familiar with the governance procedure inside the organization i.e., the quality of relationships among functions and units which lead to its success.

Research Methodology

This study is compiled with the help of primary data collected by a specially prepared questionnaire which include questions related to the general information about the HR department, its importance, role of HR in manufacturing, and explore the areas of opportunities for growth.Totally 45 respondents were selected by using simple random sampling method. The sample size was considered adequate and

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sufficient to depict the role of HR and the importance of HRM. This is purely a descriptive study wheresimple models and tools such as percentage, averages and chi-square were used for the analysis.

Analysis and Interpretations

The present study is related to the problems of traditional approaches in considering HR’s importance(manufacturing sector). The nature of HR deliverables including performance drivers and enablers are considered valuable and significant.

Age of Respondents Age of Respondents

Age (Years) No. of Respondents Percentage

Less than 25 8 18

25 – 35 11 24

35 – 45 19 42

Greater than 45 7 16

Total 45 100

Age and socio - economic factors are inter-related in various aspects. The young and middle age employees can actively participate in HR activities leading to a tremendous growth in the manufacturing field.

Difference in Satisfaction with Regard to Monthly Income

Ho: There is no significant difference between satisfaction levels and the income category of the HR professionals.

H1: There is significant difference between satisfaction levels and the income category of the HR professionals.

Results of ANOVA

Sources of Variables Sum of Squares

df Mean of Square

F Sig

Satisfaction Between Categories Within Categories Total

83.52 1777.96 1861.49

2 147 149

41.76 12.09

3.45 0.030

The F valuefound for the satisfaction and monthlyincome group of the HR professionals is 3.45, which is notsignificant.The result indicates that there is no significantdifference between satisfaction and income level of HR professionals. Since there is no significant difference, the Null Hypothesis Ho is accepted and the AlternateHypothesis H1 is rejected.

Association between HR Professionals and the Manufacturing Sector

Null hypothesis (Ho): There will be a significantassociation between HR professionals and the manufacturing sector.

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Alternate hypothesis (Ho): There will not be a significantassociation between HR professionals and the manufacturing sector.

Results of Chi-square

Value df Asymp. Sig

Chi-square 2.64 1 .104

The chi square value found for HR professionals and the manufacturing sector is 2.64 with adegree of freedom 1. TheAsymp.sig found is .10, which is significant (vide Table4.10). The results thus imply that there is a significantassociation between HR professionals and the manufacturing sector i.e., Null Hypothesis Ho is accepted and the AlternateHypothesis H1 is rejected

Recruitment and Selection procedure

The major aim of recruitment is to make eligible candidates to apply for various positions and the aim of selection is to choose the right candidate for the right job. It is true as many HR professionals prefer it for translation of strategy into measurable parameters. It increases productivity and align individual goals with objectives and goals of the company.

Recruitment and Selection Procedure

Reasons No. of Respondents Percentage

Source the right talents 12 27

Internal recruitment process 8 18

Strong HR marketing platform 10 22

Conduct suitable tests 6 13

Ensure job satisfaction 9 20

Total 45 100

Effectiveness of Performance Appraisal

Many HR professionals accept that they have benefited after effective performance appraisal. They also came up with innovative ways of improving the status and the society as a whole. They consider performance appraisal as an effective tool for evaluating actual performance and identify areas for improvement.

Effectiveness of Performance Appraisal

Response No. of Respondents Percentage

Evaluate actual performance 11 24

Set standards for better result 8 18

Increase productivity 9 20

Identify areas of improvement 10 22

Ensure job satisfaction 7 16

Total 45 100

Effect of HR Policies on Employees

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Ho: The HR policies have a positive impact on the employees’ attitude H1: The HR policies have no significant impact on the employees’ attitude Results of Chi-square

Value df Asymp. Sig

Chi-square 2.44 3 .10

The chi square value found for HR policies and the employees’attitude is 2.44 with adegree of freedom 3.

TheAsymp.sig found is .10, which is significant vide Table4.10. The results imply that there is a positive impact on the employees’ attitudei.e., Null Hypothesis Ho is accepted and the AlternateHypothesis H1 is rejected

Findings and Suggestions

 Many of the respondents are in the middle age group and they believe that HR plays an indispensable role in the manufacturing sector. Employee recruitment is considered the major role of HR.

 It is considered to find the right talent for the right position. Bridging the manpower gap between current availability and future requirement is the need of the hour. Performance appraisal is a challenging task conducted every year in almost all companies.

 Nowadays the management considers HR policies to be useful to reap better results. It can create a smooth and conducive work environment for the employees.

 Strategic HR is mainly pre-occupied in moulding the employees of the future. For organizations to survive and excel in the future, its needs to develop or acquire employees who are multi-skilled, cross- functional, empowered, and are able to work in teams.

 In addition, they need to possess high emotional intelligence (EQ) and capability of thinking “out of the box” about the future. HR keeps these employee attributes as its goals while conducting its basic processes of recruitment, training, job rotation, career path, and performance appraisal.

 The primary emphasis needs to be in integrating human resource management strategies with the business strategy. It includes managing change, creating commitment, achieving flexibility and improving teamwork. The other processes representing the overt aspects of HRM are recruitment, placement and performance management.

Limitations of the Study

Each research work has its own limitation. Thisresearch was not an exemption. However, efforts were madeto reduce the scope of these limitations. Some of thelimitation encountered during this is listed below.

 Time limit restricts detailed survey work and opinioncollection and the location of the respondents was also a constraint

 Certain respondents couldn’t give the requiredinformation causing a drawback to the study

 The bias of the respondent is another built-inlimitation

 Respondent are very busy, soit was difficult to get an appointment of them for thestudy.

Conclusion

The core function of HRM in the manufacturing industry is to facilitate performance improvement, measured not only in terms of financial indicators of operational efficiency, but also in terms of the quality of financial services. Factors like skills, attitudes and knowledge of the human capital play a

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crucial role in determining the competitiveness of the manufacturing sector. Capital and technology are replicable but not the human capital which needs to be valued as a highly appreciated resource for achieving that competitive edge. Success stories of large manufacturing companies have been evident of the fact that HRM is quite different from mere management of physical assets. Human brain has its own peculiar chemistry.

With liberalization of activities within the manufacturing sector, there is more emphasis on manufacturing activitieswhich has turned itself into a more market-based business. This has further highlighted the need for proper deployment of manpower to run companies efficiently. HR is no longer a backroom or support function. It is in the forefront of corporate strategy like sales and marketing. A customized HR practice bundle may bring best out of limited resources and may substitute the scarcity of financial funds.In the management of best HR practices, the literature has to come up with a specific mechanism through which HR practices can bring desired outcomes.

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