MGT5OBR Organizational Behavior 2

Employee management is an important function of any organization in the world. This refers to the process of helping an underperforming employee to improve and prevent a high performing employee to become a weak performer (Alfes et al. 2013). An organization can only perform in an efficient manner if it can implement measures for effective employee management. For designing the framework for efficient employee management, it is important to identify the employee management issues and plan accordingly. There are various types of issues regarding management of the human resources in an organization, such as, selection and recruitment, team management, employee motivation, retention, job satisfaction, conflict management, wage and hour issue, workplace health and safety, leave policy, etc. (Shields et al. 2015). This report aims to recognize the employee related issues within EPIC Company, which is an Australian tax audit and accounting firm, and provide relevant recommendations to overcome the issues and function efficiently. The potential outcome of the report aims to assist the company to make decisions and plan appropriate strategies to mitigate the employee management issues.

EPIC is an Australian audit and accounting firm, which provides professional services like auditing, accounting, tax and advisory services. It was founded in the year 1991. The main aim of this organisation is to provide best accounting and audit services to enhance the service value to the customers. The growth of the company has always been based not only on the skills and experiences of the employees, but also on the ability to embrace the sexual orientation and cultural diversity, thus being recognized as a provider of equal opportunity to all the employees, irrespective of the gender. In terms of sustainability, the company has continued to invest in innovation of new services through acquisition, alliance, and growth. This report will focus on the 4 major employee management issues in the EPIC Company, namely, recruitment of the competent people, team management, motivation and employee retention. The analysis of the issues is expected to improve the recruitment process, interpersonal relationship and organisation of the teams and motivation and retention of the skilled employees.

The report commences with a brief description of the company and the purpose of the report. It is followed by identification of 4 types of employee management issues within the EPIC Company that are affecting the performance of the company, their analysis and recommendations to deal with these issues. Lastly, the report will end with a concluding statement.

There are varieties of employee management issues that affect the performance of EPIC Company. These issues must be resolved in the best possible manner to establish a good working environment and enhance employee productivity. Employees can only perform better if there is a supportive and favorable work environment and opportunities for motivation and job satisfaction (Mone and London 2018). In EPIC, there are 4 major employee management issues were identified, namely, recruitment of the competent individual, team management, and employee motivation and employee retention. The analysis, its implications and recommendations to manage these issues are explained below.

Issue 1: Recruiting the competent person 

Selection and recruitment is a very important function of the HR department in EPIC as well as in all type of companies. The job profiles are designed in every company as per the nature of the products or services. Moreover, there are many positions across the organizational hierarchy, which needs different types of skills or expertise and educational background, such as, the managerial positions. Hence, the HR department has the responsibility to select and recruit the right person for the right position in the company. It must have the capability to understand the potential of the candidates based on their educational background, practical knowledge, previous experience, presence of mind, attitude for stability and personality (Rahman and Islam 2012). With this information and judgment, the right candidate is chosen and placed at designated job profile. If the candidate is competent, then over time, he would develop his skills further and grab the opportunities of career growth within the organization. Apart from that, competency of the employees also depends on the resources of the company. If a company cannot provide the right amount of required resources to its employees, their productivity is decreased. Thus, it is important for the HR department of the company to not only assess the potentiality of the new and existing employees as per the job profiles of the company but also arrange for the right type of resources and trainings to further develop their skills and competencies (Burke et al. 2014).

In the initial stage, EPIC Company faces the challenge of selecting and recruiting the right candidates and developing their skills. Being an audit and accounting firm, EPIC needs employees with a sound knowledge of taxonomy, audit, accounts, costing, economics, statistics, and overall commerce. Hence, the HR department faces the challenge of getting the candidates with some knowledge in some of the commerce subjects, if not all, and some experience of handling the audit projects. If the candidates are not competent or lack the attitude to be competent, then their performance suffers. These candidates cannot develop skills or knowledge required to meet the company objectives and thus, the company performance also gets affected. At the same time, providing the right scope and equipment to the employees also helps in the improvement of their skills and competencies, which is also a problem for EPIC. Moreover, often the newly recruited employees lack the knowledge or skills required to fit the new role and thus, they are apprehensive about taking the challenges of different job profiles within the organization. This limits the possibility of growth for both the employees and the company. Thus, placing the right candidate at the right job profile with the right type of equipment and resources is one of the major employment issues of EPIC.

To deal with this issue, the recruitment process should be improved. Other than the interview process, the company should also focus on arranging the required resources, such as, capital, equipment, training programs, recreational scopes and career growth opportunities, to enhance the competencies and productivity of the human resources (Yuan et al. 2018).

• They should update the selection process, by introducing aptitude test and designing creative practical questions to assess the knowledge and skills of the candidate. This would help them to select the right person for a particular job profile.
• They should introduce internship programsand train the accounts students. Based on the performance during their internship, EPIC should directly hire them.
• The resources should be monitored closely and updated frequentlyso that updated resources, that is, tools and equipment, can be provided to the employees, which would enhance their capabilities.
• EPIC should conduct competency analysisonce a year to assess the skills of the existing employees and relocate them in other job profiles if necessary. That would also help the new employees to work with the existing employees and learn about different job profiles. This would help in increasing the overall competency level of the employees and the company.

Issue 2: Team management 

Team management is a very important concept in the modern business world. As stated by Belbin (2012), team management refers to the ability of the individual or a company to monitor, administer and coordinate a team to execute a job. It is depicted as a cooperative process to help the members of a team to perform and achieve a common goal or purpose. The main activities under team management are support and coordination among the team members, team work, effective communication, setting of clear objectives, assigning task as per the ability and competency of the employees, and performance appraisals (Weller, Boyd and Cumin 2014). This also includes the activity of identifying the issues and resolving the conflicts within the team. Fapohunda (2013) states that a team manager must be able to apply the right type of leadership style in improve the productivity of the team members, implement transparent communication and develop and effective team.

Tuckman’s Teamwork Theory can be applied for effective team management. According to this theory, there are four stages of team development, namely, forming, storming, norming and performing (Pelegrini Morita and Marie Burns 2014). According to this theory, forming represents initial phase of team development, in which the individuals come together and try to find their place in the team by gelling up with others. Storming is the second stage, in which people start to think themselves as a part of their team. In this stage, there are conflicts about the purpose of the team, and the process of working to achieve the goal. There are differences in the team work in the storming stage, and this often results in some loss of focus and productivity (Berlin, Carlström and Sandberg 2012). Third stage is the norming stage, which involves the coordination and cooperation among the team members. In this stage, the team members start coming together to form an effective team and a sense of togetherness, developing the processes and defining clear roles and responsibilities. The final stage is called performing, in which the team members coordinate and support each other and focus on performance and increasing productivity. This stage is characterized by the intention of achieving the organizational and individual goals. Thus, it can be stated, that this theory perfectly understands and describes the team building and evolving process, and this is an important concept in understanding the team management process (Seck and Helton 2014). This is beneficial in designing the effective team management measures.

The team management at EPIC is a matter of concern for the higher authority. It has been found that, there is lack of coordination, resulting in conflicts, lack of effective communication, individual conflicts, confusions due to improperly defined roles and responsibilities, lack of commitment and accountability, and absence of trust among the members and on the organization’s management. Thus, these problems in managing the teams affect the organizational performance. The Tuckman’s teamwork theory is relevant in understanding the team management issues. The higher authority of EPIC should be able to clearly identify the issues in team management and relate them with the teamwork theory, which is beneficial for designing the measures. The identified issues in team management fall mostly under the storming and norming stages. The confusions due to lack of clearly defined roles and responsibilities, lack of transparency and effective communication, lack of commitments, all exist in the storming and norming stage. Hence, the company must focus on implementing measures to move towards the performing stage.

To achieve a productive team, with minimum of issues, EPIC should implement the following measures:

• EPIC should implement transparent working environment, which includes transparent and effective communication, transparent rules and regulations for all stages in the hierarchy. This would increase the mutual respect between the team members and leaders. This is also beneficial for increasing the job security among the team members, and they would also feel free to contribute new ideas and valuable suggestions for innovation, creativity and enhanced productivity.
• Transparencyshould also be implemented in the hierarchical structure, terms and processes of the projects, and in the roles and responsibilities, so that everyone clearly knows every aspect of the project and have a clear idea about their positions in the bigger picture. This will also enable the team members to be clear about their roles and responsibilities, which would help in reducing confusions and improved performance and coordination.
• Effective communicationshould be implemented within the teams. The team members should be given an environment where they would feel confident to voice their concerns and effectively communicate with each others, and the team leaders are also able to provide constructive feedback. Advanced technology should be applied for efficient internal communication.
• The team leaders in EPIC should promote and support a great level of collaborationwithin the teams. This would help to utilize diverse skill sets of the employees to achieve the organizational goals and objective more efficiently.
• The leaders should increase their trust on the ability of the team members, which would make the employees confident about their abilities and explore their potentiality to push their limits.

These measures can help to address the team management issues and establish a supportive work environment.

Issue 3: Employee motivation 

Motivation is one of the primary determinants of the employee and organisational performance. Employee motivation refers to the commitment, energy and creativity that the employees bring to the jobs (Dobre 2013). Motivating employees and increasing the organisational productivity is a major concern of any organization, as lack of motivation can lead to fall in the organisational performance. Employee motivation depends on various factors. Material as well as emotional factors are important for influencing the employee motivation. As stated by Lazaroiu (2015), employee motivation depends on tangible and intangible factors that include remuneration, benefits, career growth and skill building opportunities, supportive work environment, rewards and recognition, sense of responsibility and achievement, etc.

There are many employee motivation theories, and among them, one of the most relevant theories is the Motivation-Hygiene theory by Herzberg. According to this theory, there are some intangible factors, such as, challenging work, involvement in decision making, sense of responsibility and accomplishments, recognition, achievements, and personal growth, are known as motivators (Smith and Shields 2013). These are intrinsic conditions of the job. On the other hand, tangible factors, such as, job security, remuneration, incentives, rewards, benefits, leave policy, work conditions etc. are known as hygiene factors (Herzberg 2017). These are extrinsic to the work and extremely important to increase motivation of the employees. Hygiene factors are mostly responsible for creating job dissatisfaction. An organisation is obliged to provide these tangible and intangible factors to its employees and these are the major determinants o employee motivation (Muogbo 2013).

EPIC faces employee management issues due to lack of employee motivation. It has been found that employees do not get motivation to work as the organization does not pay attention to their wellbeing and provide enough benefits to increase their motivation and job satisfaction. The employees of EPIC reported that the individual achievements or accomplishments are not valued by the higher management. In other words, there is no reward and recognition system in the company and this demotivates them. The employees do not feel interested in putting more effort as their efforts are not values or recognized. They also have reported that the range of salary is quite low for the market standard. Being in the industry of tax auditing and accounting, while the other firms pay quite higher salary, EPIC does not provide the basic salary as per the market standard. Salary and benefits are two very important motivation factors. If the employees are not provided the expected salary as per their skills and capabilities, then their job satisfaction is reduced. Another issue was also indentified in EPIC. The employees reported that the path to salary increment is quite long in comparison to other firms in the market. EPIC increases the salary of their employees after they have spent five years with the company. This is quite a long time and thus, skilled employees leave the company much sooner. Every company usually have a policy of annual increment based on the performance of the employees, which works as a motivator for the employees, however, EPIC does not follow this policy and the employees have to wait for five years to get an increment. This is highly demotivating for the employees and this increases their lack of commitment towards their job. They lack job satisfaction and feel demotivated to put more effort for increasing their productivity. Thus, individual as well as organizational production is greatly hampered, resulting in loss of profits.  

As per the motivator-hygiene theory by Herzberg, EPIC does not provide the motivator and hygiene factors properly to increase the motivation of the employees. Neither there are scopes for recognition of efforts, nor do they provide market standard salaries and annual increments. Thus, the skilled and competent employees do not feel motivated to enhance their performance for achieving the organizational goals and objectives. To deal with this situation, EPIC must implement many motivational measures.

• Rewards and recognition systemshould be introduced with immediate effects. For example, they should start a system of recognizing the individual efforts of the employees per month and awarding those certificates and some monetary benefits for being ‘employee of the month’.
• Wages and benefits should be made at par with the market standard. In the accounting and auditing industry, the market standard of wages is quite higher compared to other industries, due to the excellence of knowledge and skills required. EPIC should follow the standard and provide an immediate increment to bring parity in the employee wages.
• System of annual increment should be implemented. EPIC must revise their salary increment policy and introduce the annual increment scheme. Employee performance appraisal should be conducted every year and different increment slabs should be created and imposed to make increments as per the employee performance. Not only the salaries, but the benefits should also be increased to keep the employees motivated. Various types of benefits, such as, performance incentives, paid leave polices, vacation benefits, inflation allowances, bonus structure, fringe benefits, etc. should be increased or made attractive so that the employees feel motivated to work for EPIC.
• EPIC must design and implement policies for enhancing the interpersonal relationshipswith the employees and provide a supportive working environment to remove the job related dissatisfaction of the employees.
• EPIC should arrange for training and development programsto enhance the skills of the employees. They should conduct a training needs analysis of the employees and arrange the training programs accordingly. This will be helpful in increasing the skills and knowledge of the employees and will help in career growth. This is a motivational factor and will have a positive impact on the employees’ performances.

Issue 4: Employee retention 

Employee retention is another major issue in the industrial world. This is closely related to the employee motivation aspect. The rate of employee turnover would be high if the level of job satisfaction and motivation is low among the employees of any organization. As stated by Davis (2013), employee retention refers to the capability of an organization to retain the employees. It is usually represented by a percentage. Das and Baruah (2013) highlight that retention is dependent on the strategies that are undertaken by the companies to retain their employees. However, retention is also dependent on the level of motivation and job satisfaction of the employees. Thus, organizations formulate strategies and implement schemes and policies to keep their employees, as recruiting new employees and training them for the job profiles require time and cost (Mehta, Kurbetti and Dhankhar 2014).

Herzberg’s motivation-hygiene theory is relevant for illustrating the employee retention also. As per the theory, employee’s job satisfaction is highly dependent on the motivator and hygiene factors. Lack of those factors leads to poor job satisfaction and higher rate of employee turnover (Sankar 2015). Hence, the organizations must put focus on increasing the motivation factors and reducing the hygiene factors. The strategies must be made after assessing the motivation and job satisfaction needs of the employees and implemented accordingly.

This issue can also be explained by applying process theory. A process theory illustrates the procedure of the changes that makes an entity to evolve (Petri and Govern 2012). Vroom's expectancy theory is a process theory of motivation that explains the process of how people choose from the available actions. According to the author, motivation plays a major role in governing people regarding their voluntary decisions, and the motivation comes from the belief, that, the decisions would reflect their expected or desired outcome (Parijat and Bagga 2014). This theory is based on three factors, expectancy, instrumentality and valence. People expect that more hard work would result in more success. They also believe that there is a connection between the goals and activity and if they work, they would get rewards. Lastly, the degree of value they attach with the rewards is a key determinant of their effort on the job (Yung Chou and Pearson 2012). Hence, the organizations must take measures to increase the perceived value of rewards to the employees, so that they put more effort. For retaining the employees, the companies should try to increase the perceived value of the rewards, by making those more attractive. This will increase the expectations of the employees about the rewards and keep them motivated.

EPIC encounters a high rate of employee turnover due to poor administration procedures, which are not employee friendly. The high level of turnover is not profitable for the company as that leads to continuous recruitment process and training of the new employees.  This incurs high cost on part of the company. Lower level of turnover is preferred as it helps the company to maintain its employee related costs. It is found that, as the level of employee motivation is very low due to lack of motivational factors, like, lower salary, five years experience for increment, lack of rewards and recognition etc., and this also results in poor job satisfaction. These factors lead to higher rate of employee turnover. Thus, EPIC must implement strategic measures to increase employee retention by applying the Herzberg’s theory and Vroom's expectancy theory.

• The company should focus on increasing the factors for job satisfaction, following the motivation-hygiene theory by Herzberg.
• Legitimate retention techniques and maintenance methodsmust be implemented by the administration of the company.  
• The rewards, that is, benefits, incentives, more responsibilities, an important position in the company, learning and career growth opportunities, etc. should be made attractive, so that the employees can remain motivated and put more effort to improve their performance.

It can be concluded from the above discussion that, EPIC Company, similar to any other organization, faces variety of employee management issues. Among those, recruitment of competent candidates, team management, employee motivation and employee retention are some major issues in EPIC. It has been found that, the company has some policies that affect the efficient performance of the employees. Firstly, there should be modifications in the selection process to hire the competent candidate for the right job profile. Secondly, there should be more transparency in the system, along with effective communication for implementing effective team management. Thirdly, the reward system, salary increment system, incentive structure, and other motivational factors should be updated to make those attractive to the employees, so that their motivation is increased and rate of employee retention is increased. Employee management is a tricky issue, which influences the individual as well as organizational performance. Hence, EPIC Company must consult and implement the recommended solutions to deal with the employee management issues.

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