Case Study Report On Flextronics: Human Resource Management Issues And Solutions

Employee-Turn Over

Write about the Case Study Report on Flextronics.

Flextronics is suffering from several problems that are bob man resource and management related.  Modern day management involves human resource in planning to ensure that employees are aligned to the business strategy that the organization. This has therefore led to the inclusion of human resource personnel at the management level and the rise of human resource managers. Organizations that are doing well in the modern business era have proper human resource management structures that are defined by several indicators within the organization. Employees look at these indicators to measure the benefits that they derive from the company out of their effort to give their best to the company. Flextronics faces several issues from the case study, namely; lack of a clear organizational culture, high employee turnover and lack of a hybrid management structure that is tailored to meet different employee views and perceptions regarding management (Clark 2009, P.131). This report seeks t identify human resource related issues in Flextronics and propose possible ways that can be used to solve the problems.

This is measured by the period that an employee stays with the organization or how often employees are replaced within the organization.  Oswald, Eugenio and Daniel (2006, p. 24) suggest that it is based on the rate that the employees leave the company and not the reasons that make these employees leave.  The movement of the workers inside and outside the organization is considered voluntary or involuntary and thus this is used to make decision on how the organization satisfies the employees. However, there are three aspects under which an employee can leave an organization, voluntary separations, layoffs and discharge. Voluntary separations entail termination of the relationship between the employee and the organization through the initiative of the employee (Yang, Wan &Fu, 2012, P.840). The employee therefore laves the organization at will through requesting to end the contract with the organization. Layoffs are a result of suspension from the payroll system of the organization initiated by the organization due to management decisions that are mostly driven by economic factors like slow down. On the hand discharge is a permanent termination of the employee’s services as a measure of disciplinary action. Here the employee is involuntarily discharged from the responsibilities and benefits that they derive from the organization. Macey & Schneider (2008, p. 21) suggest that, employee turnover has been mostly defined as a negative issue but it can also have positive impacts if the organization can control the employees through establishing proper human resource systems.  This is because turnover is used as an indicator of performance in determining the efficiency and effectiveness of an organization.

Lack of Clear Organizational Culture

This is a concern for many organizations since it negatively affects planning and the resources that the organization has invested. Flextronics invests a lot of resources in employees through training and development programmes that aim to polish the skills of employees and increases the competitive nature of the organizations. Since the company operates in an ever changing business line, the need for skills and right employee patterns is a factor that the management considers at all costs. (Costen & Salazar 2011, p. 278). Researchers have argued that employee turnover is based on shocks that play a role in the decisions that the employee makes to ether leave the organization or stay in the organization. Under voluntary circumstances, better opportunities define the causes of departure by the employee to another organization. Luxembourg labour market indicates that churning rates are common in many organizations are related to the factors that lead to employee turnover. On the other hand Angel, Junquera, & Ordiz (2008, P. 6032) use employee withdrawal as one of the major factors that increases turnover.  The definition of withdrawal is expanded to include a wider array of variables.

Human resource managers have linked employee turnover to job satisfaction within an organization. Several factors come into play to determine how an employee chooses on organization over another. These employees have expectations that need to be made for them to be satisfied. Using Maslow’s hierarchy, once an employee enters the organization salary becomes obvious and thus the need to satisfy higher level needs within the organization (Mehra et al 2006, P.21).

Several factors play a role in employee turnover; motivation for higher pay, low responsibilities at work, poor management, limited career development and failure to recognize the efforts and achievements of the employee. Hungarian employees stay less with the organization and left easily when another opportunity arises with better opportunities. Further different employees from different countries had different perceptions about recognition. Some wanted certificates after a training course while others preferred other forms of recognition like increased responsibility with benefits (Macey & Schneider 2008, P.23).

Organizational culture is a sense of identity that employees use to identify themselves with an organization. This is a unique identifier that the staffs use to set themselves apart from other organizations. It exists in all organizations and defines the morale and motivation that the employees have. Cultures are communicated through artifacts, symbols, values and basic assumptions that visible and invisible. Maon, Lindgreen, & Swaen (2008, P.25) present four types of organizational culture: communal culture, fragmented culture, networked culture and mercenary culture. The four types of culture play different roles within the organization through building of great teams within the organization.

Organizations are based on interactions between individuals and groups in executing tasks within the organization. This culture contains unwritten rules that define the way the organization operates and meets business needs within the area that it operates. Flextronics lacks a clear organizational structure that defines the organization and guides the activities of the organization. After realizing that this does not exist, management has now channelled resources and personnel to ensure that they are able to develop an identity that defines the organization by enabling the customer and the employee to understand and easily determine what the organization stands for (Ilies Nahrgang & Morgeson 2007, p.271).

Therefore the culture defines how employees within the organization interact; it creates a healthy way of relating between employees at the workforce by developing loyalty patterns in the organization. Further, organizational culture stimulates healthy competition in the organization by necessitating a level ground where the employees base their actions of set standards that are established in the organization. It enables establishing of relationships between juniors and superiors and ways in which these relationships are defined. Employees are also motivated to give their best to the organization through forming bonds that are work driven. Through these bonds, employees establish the best relationships that increase efficiency and effectiveness of the workforce. Gordon (2011, P. 398) argues that, Organizational culture therefore entails policies in an organization that define the way of doing things that the organization feels is unique from other organizations. This enables defining of individual roles and how the role is shared amongst employees. Work relations are defined by the relationship that the employees have when carrying out tasks at the organizational level. Organizational culture therefore is the mortar that cements relationships that employees form in their line of duty. For proper coordination from one task to another and one level to another, there must be an informal coordination that defines how the employees relate and how responsibilities are defined and shared.

Further, Scott-Findlay et al (2006, P. 522), suggests that leading organizations have an established culture with clear unwritten norms that employees follow. This culture is used in orientation of employees and how they fit in the system. This encourages employee performance factors like punctual reporting on work and standards that increase efficiency.  This enables the individual to develop a career that defines how the employees meet the needs of the organization and develop their career. When clear responsibilities are set within the organization, employees set their objectives that aim at meeting their career development needs. On the underhand, new employees use organizational culture to fit into the organization through acculturation.

Flextronics has a larger international presence with business operations in different countries. Each of these countries ascribes to specific management and communication patterns at the organizational level. For example directness and interpersonal differences can be experienced between Hungarians and Austrians. On the hand different teams within the organization collected different Six Sigma practises, quality and material management, programme management and training. This led to the need for a common platform within the company and its large scale operations that led to integration of both Flex University and Flex Factory. This led to global access to standardized training and leadership development in human resource.

Paying employees more than what other competitors pay is the simplest solution to employee turnover. This will mean the company offers better benefits than the competing company and thus no employee will be willing leave the company. Hom & Kinicki (2011, P. 281) argue that employee become dissatisfied with work due to the failure of the benefits they derive at work to meet family, community and personal needs. The individual is therefore in a conflict with his work from this inter-role a factors which makes them leave. Therefore a better pay will reduce the conflict through meeting the needs of the employee.

On the other hand Baker (2012, P. 58) suggests that exit interviews help organizations to determine the reasons why employees leave. Finding relevant information regarding reasons for leaving will lead to developing appropriate strategies that will be used to correct the mistakes. If it is a management issues then the organization needs to ensure that proper factors are put in place to control turnover. Management can handle this through open door policy that allows employees to lay down their problems where management can respond and find ways of addressing them.

Diagnosing culture is the starting point of the direction for organizational culture.  Flextronics needs to identify its culture through determining the way of life that the employees should lead and relate with the customer. The need to analyze existing culture within the organization will help in identifying a new culture. Flextronics has very many departments and overseas operations in different countries. These countries are a product of different management styles and employee attitudes towards work. This has thus led to different approaches to work and attitudes towards the organization. For example Australian workforce was characterized by experienced workforce and functioning routines while Hungarian workforces had start up issues. This is the reason why a training program for future managers was developed but did not work. The company therefore adopted the collective intelligence approach through e-learning was seen as time consuming and ineffective. Further customers complained of the company lacking an initiative to create ‘ONE Flextronics’ that could easily define what the organization stands for (Giberson et al 2009, p. 127) 

After identifying the existing culture, proper planning and change management processes need to be put in place. Culture change can be evolutionary, focused or revolutionary. The organization needs to choose the best culture type that complements the dynamics within. Flexibility, stability, internal and external dimensions may be chosen.  The competing value framework suggests that each cultural profile should be differentiated from the other to identify a dominant culture that can be adopted (Waldman 2006, P. 21).

Tailoring the needs of the employees and line managers through developing a hybrid management system can be necessitated through integration of both

Flex University and Flex Factors. This offers a tailored training package that will develop hybrid managers who unified fm over 30 countries. Therefore a unified management system that encompasses the perceptions of employees and the countries they come from can be the best strategy for developing a hybrid system (Schneider, Ehrhart, & Macey (2013, p. 368).

Avolio, Walumbwa & Weber (2009, p. 432) argues that the need to address management and human resource related issues within the organization is the approach to competitive advantage. Flextronics needs to align its employees to the business strategy that the company has to be able to meet the business needs of the company. Controlling an international market of over 30 countries means a clear strategy of minimizing internal management risks like turn over. This can create a gap and at the same time spill out company strategies to competitors. From the case study Hungarian employees have a high turnover that is based on pay. The company therefore has to review its compensation packages to determine whether they match up with other competitors. There are international rates that apply for different job groups that can be used to determine employee benefits. This illustrates that the company has taken long before revising its employee benefits (Fitzgerald 200, p. 13, 15).

Training programs that fit the international needs of the company need to be developed. Key areas of challenge that are unique to specific countries need to be identified so that employees can be trained and aligned to the organization. After several trainings, global standards will be met where general programmes will be used.

Developing of a Flextronics way of doing things will enable the country develop a new culture that can change the company, it seeks uniformity in the business operations within all the 30 countries. Therefore an organizational culture is important in moving the company to the next level. Employee relations and dynamics will be easily controlled while it will be easy to integrate new members into the company. This will also create completive advantage and enable the company to compete internationally (Ongori, 2007, p.11).

Conclusion

According to Cameron, and Mora (2003, p.12) every organization seeks to develop effectiveness in business processes through efficiency and high delivery of the workforce. High engagement of employees’ leads to satisfaction with their work and reduces turn over. This develops a culture within the organization that is a result of design and not default. Mangers have to craft proper business strategies that can propel the organization to competitive advantage. Using Maslow’s hierarchy each within the ladder is related to another that is to be met by the employee or has just been met. Thus motivation and culture are core elements that relate to each other.

Flextronics has to ensure that it develops an organizational culture that can distinguish the company from other competitors. A flexible management system and structure need to be crafted that accommodates all the three countries.  Creation of good conditions that support employees will reduce turn over and improve organizational efficiencies.

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