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Harrison Brothers Corporation Kwanghun Cheong Essay

1. Background

Harrison Brothers Corporation (HBC) is traditional department store that extends business field from clothing to home furnishing and home items recently to become the leading chain of department stores in the Northeast. Today’s customers are quickly changing needs to have something for both value and specialization. In addition, competitors such as superstores and giant discounters are increasing. CEO of HBC clarified the company’s strategy; that is reposition of offering exciting brand names, excellent sales help, and frequent sales. Furthermore, CEO has been agonizing HR function since he felt the employee quality and performance would be important to get the strategic goal.

2. Problem Definition

Main problem of HBC’s HR department is that organization model of HR department does not function as strategic business partner. In the short run, HBC does not keep a well-trained, highly motivated workers and there is a shortage of professional employees all the time. In the long run, the HR department does not contribute to achieving the company’s strategic goal.

3. Cause of Problem (Analysis)

1) Insufficiency of aggressive act to external environmental changes As competitors increase, the HR department has difficulty retaining competent employees. So, they spend most of time doing administrative role such as recruiting and training new employees. Even though sales employees are key to promote business, new employees who are wanting in ability are assigned to sales. “We get some employees who cannot effectively complete the cash register training. Our training tries to expose them to selling techniques and how to properly interact with customer”

2) Organization model of HR department which does not align with strategy Though the company is traditionally highly decentralized, HR functions are extremely centralized. So, there is a gap between the HR department and the other sales departments, and the HR department eventually cannot consider the business oriented strategy. Also, as independent HR department, there are 3 staffs except a trainer and a payroll clerk. So, they cannot deal with extension of business because of increasing administrative job.

3) HR manager’s lack of strategic awareness

Although HBC ask the HR manager to become a business partner, she focuses on internal issues such as amendment of HR process and managing HR team. Ex) As the results of questionnaire completed by HR (Exhibit 1.4), the HR manager focuses on staffing and performance management, while store managers ask HR to focus on knowledge of business and managing change additionally.

4) Others

Short term result principal makes difficulty training to sense customers’ sensitive changes. HR department has been recognized cost center.

4. Alternative Solutions
1) Restructuring HR policies which is suitable for strategy
HBC should Induce professional employees’ long service through amendment of Compensation system

AS WAS TO BE

Compensation system
. Monthly term incentive
. Minimum base pay
. Long term incentive
. Raise base pay

Long term incentive : paying incentive to employees after 2 or 3 years in the light of personal and company performance. (Effects : inducing employees of ability, retaining them) To stabilization of livelihood, base pay should be raised below budget. For the early maturity of newly market entry, HBC should prepare for system of reaction to changes such as holding regularly market trend seminars. 2) Establishing strategic suitable HR model

HR’s administrative role should be empowered to sales managers and HR department just should take a role of professional group and advice to sales
managers. So, sales managers should be responsible for man-power management such as evaluation, recruiting, and termination. On the other hand, HR department focuses on consulting sales organizations to become a value-adding strategic partner. Additionally, it also concentrates on structuring organization culture and managing sensitive changes.

HR should have pay policy role, but valueless payroll function should be outsourced because payroll function is simple and repetitive if policy is definite. In addition, where new employee can learn selling techniques well is sales departments. So, the role should be decentralized to the sales departments. When all the HR’s role and functions are newly defined, sales and operation managers should get involved to all the organization become more strategic.

AS WAS TO BE
HR Organization chart
. HR manager
. HR assistant 2
. Trainer
. Payroll clerk
(5 employees)
. HR manager
. HR assistant 2

(3 employees)
HR’s function
. Recruiting & Interviewing
. Structuring & Operating
HR policy
. Training new employees
. Payroll
(McCain’s view)
. Structuring HR policy
. Consulting
. Structuring organization
Culture
. Managing changes
Sale’s function
. Sales
. Sales
. Operating HR policy
. Training new employees

3) HR manager Replacement

Brenda should be forward deployed to sales department to systematically train as the future HR manager successor who fully understand management and whole organization. HBC should assign the new HR manager who perfectly understands business and strategy from either external HR expertise or one of the sales manager.

The current superficial problem is shortage of professional employees and the root problem is that HR organization model is not align with strategy. To solve the superficial problem HBC should push forward restructuring HR policies. Unless this problem is solved, it is meaningless to say the future of the company. Also, to solve root problem, HR organization model should be made a radical reform. When HR supports the company’s strategy, the company can be developed in one direction. On the other hand, HR manager replacement is extreme action and it could make whole organization increase tension. So, this action should be acted as a last resort.


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