INTRODUCTION
Adopting an appropriate PM or HRM model is probably one of the most important thing that management has to do for proper running of the business. In this discussion we will talk about and try to evaluate the personnel strategy adopted by the by that Pirelli General for their new computer- integrated manufacturing unit in south Wales. While writing this assignment different and multiple models of HRM have been used for explaining the policies undertaken by the company which may not fit exactly to their new personnel policies undertaken, while developing their new plant in south Wales but the models used for analysis and evaluation are those of the closest match found, even multiple models have been used for analysis of some of their new policies undertaken by Pirelli General.
THE COMPANY IN PAST AND THEIR NEW SHIFT
Pirelli general was involved in manufacturing building wires in a more traditional manner. In its factories in Aberdeen, in south Wales, and in its Southampton factory. In September 1985 the company decided to close its factory in south Wales, and to build a new fully automated plant on the same site to manufacture, building wires, a relatively basic range of low tech electrical cables used primarily for house wiring and domestic appliances. while maintaining their traditional way of production in its Southampton factory. The company decided to invest around £20million in setting up their new computer integrated manufacturing system in their new plant in south Wales. to help improve the method of production together with flexible manufacturing system and just-in time production methods because they realize that these improvement were necessary to stay in competition with other companies.
In order to achieve their goal of smooth and profitable performance in their new unit, Pirelli General involved the personnel department at a very early stage in planning the introduction of the new technology and devising a appropriate personnel strategy. Even before the construction of their new unit in July 1986, they established a small project team to manage the change and the team was actively encourage by the senior management of the Pirelli group to adopt an innovative approach to all aspects of units operation. Here we can see Tyson's Business Manager Model of PM, where personnel specialist integrate their activities with top management and ensures that it is serving a long term strategic purpose. The team was given a guideline to work and the guideline said "analyze in a critical questioning manner each and very aspect of the business, establish new and innovative methods or reconfirm the old to provide a profitable business at low cost. this informal required to familiarize itself in detail with technical and production of the new (CIM) system, aground which the new personnel strategy would have to be devised, simultaneously the group also decided to seek information from number of other organizations as well. As a result of this intensive research and discussion a new personnel strategy emerged, the basic philosophy of the philosophy were actually centered toward employee commitment, to be consistent with the operational requirements of the unit, and to employ progressive personnel practices and to develop a sprit of unity across all groups of employees. These new personnel philosophy's adopted shows a flow of management type which can be described as soft approach of HRM. [as Storey said, the term HRM is to signal a more business-oriented and business-integrated approach to the management of labor. The lever of HRM {selection, rewards, etc.} are pulled in integration with one another so that the system is in line with the business strategy. Storey also brought forward the argument by Richard Walton, which argues that HRM is a unique and distinctive approach to employee commitment via policies of mutuality [as in mutual goals, rewards, responsibility, etc.] (Pennington A, Edwards T, 2000).
The personnel policies derived from the overall philosophy and management style cover these main areas:
1. Work structure based on the acquisition of flexibility with in and across the traditional function of production, management and administration.
2. Appropriate and clear recruitment criteria.
3. Comprehensive and continuous training for all staffs.
4. Single staff status, reflected both in common conditions of employment and an integrated salary structure for all non-management staff.
ANALYSIS OF POLICES UNDERTAKEN
Functional flexibility helps employees with appropriate training or retraining, can be redeployed quickly to different activities and crafts. Examples include multi skilled crafts man or career changes among management and professional staffs. [ims/manpower ltd, 1984]. In functional flexibility employees will initially either posses or quickly acquire skills specific to their type of work , but they will also be required as a matter of course to acquire and use other additional skills from the other functions, one influential explanation of this type of employment model is increasingly being adopted has been put forward by John Atkinson of the Institute of Manpower Studies. Who argues that work forces are tending to segmented in to two broad categories, the "core" and the "periphery" in order to achieve greater flexibility. The core group tends to be characterized by employees with full time , permanent status. Employees in this group are likely to be highly flexible and adaptable, the training and development resources of the organizations are mainly devoted to them and they are more likely to enjoy good carrier and promotion prospects. The periphery group is subdivided into two groups, the first group consists of full time employees with skills that are readily available in the labor market, they have less access to career changes and less is spend on them for training purposes. and they are in high risk of getting fired while considering workforce reduction by a company. The second peripheral group provides even greater numerical flexibility and it includes part time and temporary workers having even lesser job security than the first peripheral group. Therefore the main purpose of functional flexibility is to equip all workers with enough knowledge so that they are able to perform more varied role and functions other than only the work specific to them. Most of the organization through out the UK has been able to implement a degree of flexibility, both between the production and maintenance functions and between the mechanical and electrical maintenance activities. But what was so special about Pirelli General is that, they are the first company to be able to implement functional flexibility among its all employees, the company specially sought to implement functional flexibility between what have traditionally been regarded within the company as "blue collar" and "white collar" occupational groups. The main purpose of Atkinson's model was to provide the organization with alternative ways of improving their flexibility and responsiveness to fluctuations in economic activity with the leanest possible levels of full time permanent staff.
Recruitment- Pirelli General invested lot of time and thoughts in developing a perfect recruitment model as they wanted to get a recruitment model which should be compatible with the other polcie model that they have already implemented in their new unit. Considering the models of HRM an analysis can be drawn in relation to the overall approach of the company towards their recruitment policy. The features of the Harvard's human resource flow model and Guest's recruitment and man power flow model in Pirelli Generals recruitment model, keeping in mind that the company has also implemented functional flexibility in their policies. According to Harvard model, human resource flow concerns the managing the flow of people into, through and out of the organization. This means making decisions on recruitment and selection, promotion, termination of employment and related issues. Managers and personnel specialist, according to Harvard model must work together to ensure that the organization has an appropriate flow of people to meet its strategic requirements. Special thoughts have been given in recruiting employee to generate perfect working process, satisfying the companies needs and requirements. Underpinning the value of good HR practice and the delivery of business objective, reference will be made to the traditional "good practice" model, which can be seen as widely used by Pirelli General's recruitment strategy. In "good practice" model the recruitment is done in the following steps starting with:
Describing and analyzing jobs
job analysis
Search
for candidates
Selection
techniques to predict performance
Decision
Therefore it can be concluded that that the company has also used their "good practice" model of recruitment.
Training- The company has really took training seriously. They have
not looked at the training as a cost but as an investment. The company has
made comprehensive training a must feature prominently both at the outset of
the unit's operation and continually through its development. Here they have
emphasize on life long learning where training is due on a regular and
continuous basis. this approach can also be seen in Store's model of HRM
where he has emphasize on training and development as continues learning
companies. The company has also taken up the training issue as a long term
approach rather than a short term approach. They have been able to prepare
training programs for all employees to enhance their skills in traditional
areas of production, maintenance, administration. As well as to develop
their team building and team working skills. They also provided a mixture of
off and on the job training, they carried out training in conjunction with Aberdeen
Technical College. In addition they have also been able to collaborate with
SEIA an Italian company owned by IBM to provide a computerized training
called POEMS [plant operation emulation system] for the new unit. POEMS has
required a capital investment of £100,000 which proves the companies
commitment to comprehensive training. After analyzing the training process
undertaken by the company, it can be said that the company has used some
form of the "German model" of training, where training is seen as
investment and not as a cost. The training process undertaken
by Pirelli group can also be related to the Ashridge Research
Group’s findings about various different approaches to training and
developing employees in some UK organizations and
in their conclusions, the
group said that environmental conditions demand more customer-orientated ,
internationally –focused, and flexible organizations. In turn this leads
to a changing role of manager at all levels which emphasize leadership
rather than control, horizontal rather than vertical relationship and
developing and nurturing the potential contribution of employees. Relating
these arguments to the training and development approach undertaken by
Pirelli General can be related the “formalised approach” described by
the Ashridge Research Group’s report- where training and development is
planned. Training needs are identified , training needs are identified, here
there is integration with other HR processes and with business objectives ,
thus achieving some horizontal and vertical integration. Line managers
becomes involved in the training process. different forms of training like
on-the job and off-the job courses are implemented. The company has also
used the “focused approach” described by Ashridge Research Group where continuous
learning is recognized as necessary for survival and as a prime weapon.
Single status and salary This is a vital step taken by the employee to improve commitment and sense of equality among the employees. To support the requirements that all staffs should be flexible and interchangeable within the limits of their capability and training, the company has also tried to emphasize on integration of their employees, the companies "Aberdare package" involves the introduction for the first time with in the Pirelli General of single staff status and fully integrated salary structure for "blue collar" and "white collar" staffs. They have also made integrated salary schemes . The fundamental aim of this was to stimulate motivation and to create a spirit of unity and common purpose by removing status barriers between groups of employees. They provided common benefits, flexibility, continuous training to its employees except few employees in management for unavoidable reasons. But the overall strategy was to have single status and salary. All these approaches can be associated with the soft approach of HRM where respects and equality is a key issue foe employees.
CONCLUSION
In respect of the analysis of Pirelli General's personnel policies undertaken for establishment of their new factory, it has clearly been revealed that the company has actually used more of HRM'S soft approach policies than of the hard approach policies, though the company has not devalued their business motive of profit earnings but still they have been able to keep in mind some important issues for the benefits of their employees while configuring their personnel policies. The company has been very focused while forming there personnel policies for their new unit so that to use all the good and the very best approaches and models of HRM. They have formulated their policies keeping in mind all the different models of HRM. Overall out come of their hard work and research is a good up to date personnel policy.
[1] Barnham K, Fraser J and Health, Management for the Future Ashridge, Ashridge Management College, 1987.
[2] Flexible Manning: the way ahead, Brighton, IMS/Manpower Ltd, 1984.
[3] Pennington Ashley, Edwards Tony, Human Resource Management, Oxford University press, 2000.