Hard Rock’sHuman Resource Strategy

BA 240 - WFP

Group 2

Group Leader Alyssa Loren Arellano

Group Members Carlos Ibarra Rev Cao

Goodwealth Chu

Chernobyl Diones

Mara Angelica Raina Aranas

Maria Daisy Cortes

December 4, 20136:30 - 7:50 PM

OBJECTIVES

● Understand how a human resource strategy contributes to competitive advantage● Understand how to manage labor, and design jobs to utilize people effectively and efficiently● Understand how the differences between goods and services companies influence the

application of a human resource strategy

SCOPE

The case study focuses on one of the 10 operations management decision areas, human resources. Hard Rock Cafe was used as a case in point. The Hard Rock Cafe value system was then compared and adjusted with the decision strategies implemented on an assembly line production.

METHODS/APPROACH

1. The group discussed how Hard Rock Cafe manages labor and designs jobs to effectively and efficiently utilize its employees.

● The human resource strategies adopted by Hard Rock Cafe were identified.● The role of the human resources department and how it supports these strategies

were also analyzed.

2. The group then analyzed the operations of a traditional assembly line to adopt the human resource strategies of Hard Rock Cafe.

● The Hackman and Oldman’s core job characteristics were used as the basis for the implementation of a human resource strategy in an assembly line.

ANALYSES AND DISCUSSION

Companies are defined by people. The skills and attitude of employees shape the supply chain, product design, and overall quality of the company’s offerings. How the company relates to employees plays a big part on how employees treat the end customers. Competitive advantage can definitely be built and reinforced through a solid human resource strategy.

Hard Rock is primarily a service company. Its dining and merchandise sales are driven by the people who deliver the Hard Rock experience in a fun, unique, and memorable manner. Through close and frequent customer interaction, employees have numerous “moments of truth” to drive customer satisfaction; hence, a good human resource strategy is a must.

Hard Rock’s turnover is low at about half the industry average. The above-average benefits package is one clear reason. Retention programs such as the 10-year Rolex watch, and the internal promotional opportunities are some of the things that employees look forward to. Respect for individuality and the prominently displayed employee bill of rights also emphasize each employee’s value to the company. All these reinforce the feeling of belongingness to the Hard Rock “family”. This is a great strategy because after all, family members stick it out with each other through thick and thin and gloss through minor inconveniences.

Hard Rock’s human resource department is a key element of the company’s overall strategy. Recruitment is focused on the most qualified applicants - only the “right” applicants join the family, not just the “right now” applicants. The applicants’ music tastes and personality are also matched

against the company’s norms. Job fit is a mutual relationship; the applicant and company should be right for each other. The compensation and benefits team supports the recruitment team by maintaining an abundant supply of applicants, through attractive work remuneration. Once employees are on board, they have to attend the standard 2-day Rock 101 training where they learn the company’s history, culture, and expectations. Later on employees can periodically refresh their knowledge through interactive learning modules. Finally, employees are provided with further opportunities to feel part of the Hard Rock family through community service initiatives and charity drives.

Hard rock acknowledges that HR strategies are expensive and take effort to sustain. However, heavy investments in employee development also enable Hard Rock to reap commensurate benefits, lending credence to the mantra that “Quality is free.”

How could this successful strategy be applied to other industries, say for assembly line workers? While an assembly line would value worker traits different from what Hard Rock would, the same emphasis on job fit should be observed. For example, machine operators should be consistent, patient, and show great attention to detail. Recruitment strategies must have a good concept of what makes a good worker for a particular job and hire accordingly.

A traditional assembly line could be adjusted in the following ways to address more “core job characteristics”.

1. Skill variety

Both the company and workers can profit from employing the latter’s variety of skills and talents. Through job rotation and work assignment flexibility, the company can locate manpower where it is most needed, and workers improve their skills at the same time.

2. Job identity

When workers perceive the job as a whole and recognize start and finish points, they feel more accomplished and satisfied. In the case of an assembly line, management should try to assign complete modules to workers and not just bits and pieces of work. While short-term efficiency could take a hit, inspired workers will make up for it through higher-quality work.

3. Job significance

Workers should have a sense of the job’s impact on the organization and society. Management should constantly stress that every part of the work is essential to the company’s overall success. Being careless in the smallest of ways could harm everyone else’s output. For example, a loose bolt might come off and make an otherwise well-made automobile veer off the road.

4. Autonomy

The high demands on worker efficiency might afford minimal leeway for discretion in tasks. At the same time, management should see the value of a bottom-up improvement process. Those closest to the work know it best, and would know how to make it better. Suggestions and recommendations from employees on how to improve the process and perform their job more efficiently should also be encouraged. Relaxing small policies such as dress codes, if applicable, can also boost employee morale.

5. Feedback

Workers need clear and timely information about their performance. The first step is to have reliable metrics that measure parameters relevant to the job. Next is to have frequent informal meetings between workers and supervisors, in addition to formal peer reviews and performance appraisals.

FINDINGS AND CONCLUSION

Hard Rock Cafe recognizes that a company’s human resource strategy can yield competitive advantage. Building an environment with mutual respect and commitment, and a reasonable quality of work life are the underlying rationale for their human resource strategy. The emphasis they put into their employees gains them not only loyal and efficient staff but also loyal and happy customers.

However, the way a service organization formulates its strategy is different from how a manufacturing company would. The focus of a service company is on how well its staff interacts with its customers while a production company focuses on the technical skills and efficiency of its employees. Thus, adopting the core job characteristics to a manufacturing company may be more challenging given the repetitive nature of their work and lack of customer interaction.

RECOMMENDATION

Recommendations are focused on more specific suggestions on how to improve the HR strategy of assembly line companies using the job design model of Hackman and Oldham:

1. Skill variety

For manufacturing companies, hiring requirements should include experience or at least the potential to perform at least 2 tasks from the set of processes in the assembly line. Likewise, job rotation should be regular and aimed at maintaining the dexterity of workers in at least 2 functions. The aim of regular job rotation should not be to merely assign employees to where bulk of the workforce is required.

2. Job identity

Allow employees to wear uniform or apparel representing their department or job function. This is similar to sports teams who wear well-designed jersey uniforms in order to strengthen team identity. Companies may shoulder (in part or in full) the cost of building job identity to foster loyalty and belongingness. Regular inter-division reports may also help in showing the end-to-end performance of the company.

3. Job significance

Mission statement can be conceptualized on a per task basis in order to emphasize the significance of one’s function to the whole end-to-end process. For a shirt-manufacturing company, sample mission statements could be: “We are producing 10,000 needles every year which help produce 1 million shirts for Filipino men every year.” for the needle-maker, or: “I am a shirt sewer who patches 35 fabrics in a day to make 10,955 shirts yearly and sold to Filipinos nationwide.

4. Autonomy

Autonomy can be highlighted by setting-up avenues for the production workers to directly propose process improvement stategies and policies to management; unlike in traditional policy development processes wherein policy officers would represent and report the workers’ ideas and initiatives. Allowing employees to directly propose changes will empower the workers to find ways of continuously improving their tasks.

5. Feedback

Performance reports should be given regularly to employees and not only for year-end evaluation and salary adjustment purposes. Performance reports should be a comparative of the employees previous and present output in order to see if his productivity is improving or declining.