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Issues related to human resources at Uber

Question:

Discuss about the Human Resource Issues at Uber.

Management of the human resources in the contemporary business organizations is important due to the reason that the distinctive skills sets and the expertise that the employees possess is beneficial and required for the organizations to gain competitive advantages in the market (Armstrong & Taylor, 2014). Moreover, effective management of the human resources is important in order to enhance and maintain the level of motivation of the employees. This is due to the fact that, the more motivated and engaged will be the employees, the more will be their involvement in the organization, which will in turn increase the rate of effectiveness of the organization.

Uber is one of the most prominent cab aggregators in the world with having their market presence in all the major cities around the world. However, in the recent time, they are drawing flak due to their ineffective management of the human resources (Yoo, 2017). Their treatment and handling the issues with their drivers have also attracted various lawsuits against them. This report will discuss about the issues related to human resources being faced by Uber. Moreover, the issues will be critically evaluated in relation to different theories of human resources. Recommendations will also be discussed according to the identified issues.

As being reported by Yoo (2017), in the recent time Uber is facing issues related to their management of the human resources. The issues are being generated from their management of their drivers. For the business policy of Uber, drivers hold the key part of their operation. However, ill treatment with the drivers along with not meeting their basic requirement is creating issues. According to the article, several drivers are of the opinions that deactivation of them from service is unjustified. Thus, they are filing lawsuits against the organization. The dealing procedures of Uber with their drivers are the origin of the issues. In this case, Uber is actually facing the ethical dilemma in adhering with their customer security and managing the human resources. This is due to the reason that, in this article it is being stated that the justification being given by Uber in deactivating the accounts of the drivers is related to their customer security. According to Uber, if the driver is being found that he has indulged in fighting with the riders or caused any harm are being deactivated from the system. Thus, in the recent years, Uber is facing these issues related to their management of the human resources.

Breach to the employee contract

Effectiveness of Maslow's Hierarchy of Needs for Uber drivers

Several issues related to the human resources are being identified from the above discussed article. One of the key issues being identified is deactivating the drivers without any prior notice. According to the lawsuit being filed by them, Uber is not communicating well enough with their drivers before deactivating their access from the system. This is a breach to the effective management of the employees (Jafri, 2012). Moreover, this is creating an unfair and unjustified impression among the employees. According to the Maslow’s Hierarchy of needs, the basic needs or the physiological needs are food, water and shelter that is mandatory for the human beings (Lester, 2013). According to Maslow, if the physiological need cannot be effectively met, then the higher needs will not be met. However, in the case of Uber, the basic needs of the employees are not being effectively met. This is due to the reason that, the source of income of the drivers is being stopped if they are being deactivated from the system. Thus, Uber is not effectively meeting the need theory of Maslow in managing their employees.

The second issue that is being identified is not treating the drivers as the employees. According to the organizational strategy of Uber, drivers are being considered as partners rather than employees. This is having two benefits for Uber. One is the positive impression of terming and considering the drivers as their partners rather than just employees. This creates goodwill and reputation of the organization. On the other hand, another benefit for Uber is non-adhering with the regulations related to the employee welfare and benefits (Spiro & Yuchtman-Yaar, 2013). Due to not considering the drivers as their employees, Uber is not bound to follow the regulations regarding employee benefits and welfare. However, this is also creating negative impression among the drivers. They are being deprived from the employees’ welfare and benefits.

According to the esteem need of the Maslow’s hierarchy of need, appreciation and recognition of the employees in their organization is required to keep them motivate and engaged in their workplace (Menguc et al., 2013). However, in this case, as the drivers are not being treated and considered even as the employees, thus the appreciation and recognition are not being provided to them. This in turn lowers the morale and level of motivation of the employees. Thus, the productivity of the drivers in Uber will also reduce and this will have negative impact on the providence of effective customer service.

Drivers as Partners

Another key issue that is being identified from the article is the absence of the job security of the drivers. This is due to the reason that, deactivating the access of the drivers from the system without giving any prior notice is portraying the image of not having any job security for the employees (Hijzen, Mondauto & Scarpetta, 2013). This will also act as a demoralizing factor for the employees. According to the motivation Hygiene theory being stated by Herzberg, there are some factors known as hygiene factors such as the job security (Latham, 2012). According to him, not fulfilling the hygiene factors by the organizations will create negative impact on the employees along with reducing the level of motivation of them. Thus, in the case of Uber, lack of job security for their drivers is acting as demoralizing factor the employees. Moreover, the lack of providing the employee benefits along with lack of recognition and other amenities by Uber is also reducing the positive job attitude of the drivers.

  • Uber should consider their drivers as their employees rather than their partners. It will help the drivers to feel more involved in the organization. They will be able to consider themselves as a part of the brand. Thus, it will increase their engagement and involvement in the organization, which will in turn enhance their level of motivation and productivity (Caillier, 2013). Providence of the employee benefits and welfare schemes will help the organization in enhancing the level of motivation in their workplace. Thus, the more motivated drivers of Uber will help them in providing the effective customer service.
  • Uber should have a transparent and fair policy of terminating any employees. The policy statement should be well communicated to all the stakeholders in the organization. It will help the employees in having the awareness about the clause and regulations of the termination policy (Demarzo & Sannikov, 2016). This will refrain them in indulging in any unethical incidents. Moreover, in case of termination of a particular employee, Uber should effectively communicate with the employee about stating the reason of termination. The employee should also be given the chance of defense. This will help to create the transparency in the whole process of termination.
  • The status of employability with the drivers of Uber should be checked due to the reason that the existing system of Uber has contractual relationship with their drivers. However, contractual employability will not motivate the drivers due to the reason that they will not feel engaged and involved in the organization (Bakker & Derks, 2012). On the other hand, if they can be given the permanent status along with initiation of incentives based on performance, then the productivity and the level of motivation of the drivers will be increased (Lazaroiu, 2015). They will treat themselves as a part of the organization and the average level of motivation and job engagement will get increased.

Conclusion

Thus, from the above evaluation of the article stating the issues being faced by Uber, it is being seen that they are facing issues in managing their human resources. The existing policy of dealing with their drivers is proving ineffective and inefficient. Moreover, they are being deprived from the basic employee benefits, as they are not being considered as the employees of Uber. Thus, the level of motivation of them is rapidly reducing which is affecting the customer service. It is also been seen in the article that other factors such as lack of job security is another reason for the low morale of the drivers of Uber. All these issues are creating trouble for the organization and attracting several lawsuits from the employees. Thus, a few recommendations are being discussed in this report. It is being expected that, effective implementation of these recommendations will help to reduce the issues related to human resources for Uber.

References

Armstrong, M., & Taylor, S. (2014). Armstrong's handbook of human resource management practice. Kogan Page Publishers.

Bakker, A. B., Tims, M., & Derks, D. (2012). Proactive personality and job performance: The role of job crafting and work engagement. Human relations, 65(10), 1359-1378.

Caillier, J. G. (2013). Satisfaction with work-life benefits and organizational commitment/job involvement: Is there a connection?. Review of Public Personnel Administration, 33(4), 340-364.

Demarzo, P. M., & Sannikov, Y. (2016). Learning, termination, and payout policy in dynamic incentive contracts. The Review of Economic Studies, 84(1), 182-236.

Hijzen, A., Mondauto, L., & Scarpetta, S. (2013). The perverse effects of job-security provisions on job security in Italy: results from a regression discontinuity design.

Jafri, M. H. (2012). Influence of psychological contract breach on organizational citizenship behaviour and trust. Psychological Studies, 57(1), 29-36.

Latham, G. P. (2012). Work motivation: History, theory, research, and practice. Sage.

Lazaroiu, G. (2015). Employee Motivation and Job Performance. Linguistic and Philosophical Investigations, 14, 97.

Lester, D. (2013). Measuring Maslow's hierarchy of needs. Psychological Reports, 113(1), 15-17.

Menguc, B., Auh, S., Fisher, M., & Haddad, A. (2013). To be engaged or not to be engaged: The antecedents and consequences of service employee engagement. Journal of business research, 66(11), 2163-2170.

Spiro, S. E., & Yuchtman-Yaar, E. (Eds.). (2013). Evaluating the welfare state: Social and political perspectives. Elsevier.

Yoo, T. (2017). Uber Australia is settling unfair dismissal cases, despite insisting drivers are not employees. Business Insider Australia. Retrieved 5 October 2017, from https://www.businessinsider.com.au/uber-australia-is-settling-unfair-dismissal-cases-despite-insisting-drivers-are-not-employees-2017-6

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