Pirates Inc.

Human ResourceManagement

Pirates Inc.

Submitted to:

Mrs. Homayara Latifa AhmedAssistant Professor,

Institute of Business AdministrationUniversity of Dhaka

Submitted by:

Group 2Ahona Azad Choyti 59Ashhab Zaman Rafid 97Md. Saif Hassan 105Afsar Hossain Jamil 106Emranul Haque Shehab 111

Date of Submission: 22nd May 2012

1

Content

Items Page No

HRM Case: Pirates Inc. 03

Questions and Learning Objectives 05

Answer to Question No. 1 06

Answer to Question No. 2 08

Appendix A 10

Appendix B (References) 11

Appendix C 13

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HRM Case: Pirates Inc.

Mr. Jack Sparrow has been an integral part of management at Pirates Inc. a themed

amusement park since its inception. His loyalty to the company is unquestionable, and his

contributions are many and well recorded. So, naturally when the company decided to

expand, the board of directors elected Mr. Sparrow to be the CEO of The Black Pearl© (5 star

hotel). The directors reasoned that market penetration should be handled by the most

experienced and loyal employee that they had.

Mr. Sparrow conducted his market research and decided to set up the hotel in Dhaka.

He bought a plot in Banani, constructed a 20-storied hotel with indoor swimming pool, gym,

24-hour restaurants, bars etc. Upon starting business, Mr. Sparrow was sure to employ a

professional Human Resource Manager with good credentials. After a recruitment process,

which he himself carried out, Mr. Sparrow employed Mr. Hector Barbossa as his Head of

Human Resource Management. He gave Mr. Barbossa full reign regarding his activities; he

only gave Mr. Barbossa one objective:

“It is important to me and our company that our employees are totally

satisfied with their working conditions. To our investors it is important that

The Black Pearl© makes a profit. So it is quintessential that our employees

are satisfied, productive and highly efficient. Keep them happy Hector” (Mr.

Jack Sparrow).

At the semi-annual management meeting Mr. Sparrow was shocked by the financial

figures that the company had generated in the 6 months of operation. His market research

showed that there would be a huge demand for such a hotel yet the profit margin was well

below what he expected, in fact it was lower than the worst-case scenario in his pro forma

sensitivity analysis. Mr. Sparrow knows for a fact that there is negligible loss of efficiency

regarding inputs whether it is raw materials, machineries or capital. He also knows that there

have been an adequate number of guests to the hotel to satisfy the profit margin

requirements. So, with his job and reputation at stake, Mr. Sparrow starts to investigate the

problem. His discoveries have led him to believe that the problem lies with the Human

Resources Department. He saw that the customers complained about room service and

general cleanliness and attitude of the staff. He also interviewed individual members himself

and he detected a general sense of discontent amongst the staff members. He immediately

confronted Mr. Barbossa, who appeared to be just as flabbergasted as he was. Mr. Barbossa

defended himself by saying:

“I went by the book, boss. I hired experienced people with good references

and an impressive resumé. I was careful to hire people who fitted the job

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description and who gave a satisfactory interview and seemed to know

what was required of them. I have set up a traditional organogram of our

organization with a proper chain of command, and compensation and

benefit system based on said chain of command. The managers seem

satisfied and the staff knows what to do. I honestly don’t know what went

wrong.” (Mr. Hector Barbossa)

This placed Mr. Sparrow in a dilemma. He investigated further into the chain of

command and the general structure of the company. He found that the chain of command had

five tiers of managers ranging from floor manager all the way to Head of Housekeeping. Then

there were two more tiers between Head of Housekeeping and Head of Departments. These

heads of departments then directly reported to the General Manager and the CEO. These

managers were paid at the market rate, as per their post. The compensation and benefits and

promotion were handled by the heads of the department on a basis of experience and time

spent as a company employee. There seemed to be no obvious leak in the system, yet the

staff members were not performing and the company had a low profit margin.

So for the next term Mr. Sparrow asked Mr. Barbossa to come up with an action plan

that should boost the company performance in the long-run and make the company more

profitable. Mr. Sparrow went as far as stipulating that the company might be willing to incur

some losses for the time-being, if it meant that the company would perform better in the long-

run. Mr. Barbossa proposed that the following actions be taken for the benefit of the company.

He proposed to:

1. Increase the number of staff members per floor

Reason: Customers main complaint seemed to be about general cleanliness of the

staff. So if there were more staff members per floor this would enable each member

to spend more time and attention towards cleanliness.

2. Increase the number of Administration and Maintenance staff

Reason: This will mean that administration staff will be able to concentrate on a

smaller group of staff members this will make sure that staff members are always

performing at their level best. Henceforth this should increase customer satisfaction,

and thereby increase the company’s profit margin.

3. Increase the salary of all employees on a fixed line basis

Reason: This is basically a permanent bonus to the base line salary of all employees.

This should provide a greater incentive to work better and therefore ensure higher

performance from all employees throughout the company.

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It is of vital importance that The Black Pearl© picks up its performance and increases its

profit margin before the annual general meeting, which is in 6 months’ time. Not only does it

have to perform better in the short-run, but also in the long run the company must become

profitable enough so that the investor’s continue to invest. Mr. Sparrow’s long-standing

reputation within this company hangs upon the success of The Black Pearl©.

*Note: Refer to Appendix A for source

Questions and Learning objectives

Question 1: Discuss Mr. Barbossa’s proposed HR action plan. Do you think it will benefit the company? Why or why not?

Learning objective 1.0: To understand the drawbacks of traditional HRM and how Strategic HRM makes a significant difference regarding company performance

Learning objective 1.1: To understand when Job Analysis and Job Evaluation is conducted and their purpose

Question 2: Mr. Sparrow is not convinced with Mr. Barbossa’s action plan. So he hired you as a HR consultant. What would you advise?

Learning Objective 2.0: Understand the implication of Job Analysis and Job Evaluation in an organization and the process of implementation of Job Analysis and Job Evaluation

Question 1: Discuss Mr. Barbossa’s proposed action plan. Do you think it will benefit the company? Why or why not?

Pirates Inc.5

In the context of the dissatisfactory performance of the company, when Mr. Barbossa was

asked to come up with some action plan he proposed the following solutions:

I. Increase the number of staff members per floor.

II. Increase the number of Administration and Maintenance staff.

III. Increase the salary of all employees on a fixed line basis.

Analyzing these proposed action plans, it can be seen that Mr. Barbossa made these

decisions on the basis of traditional human resource management strategy[2]. He thought that

if the numbers of staffs are increased per floor then more attention will be given to the

customers and an increased number of employees will be able to attend to customers by

giving each of them more time and focus. Secondly he thought to maintain and supervise

these increased number of employees by employing more administration and maintenance

staffs and henceforth there will be proper distribution of the workforce and also these new

administration and maintenance staff will be able to make sure that all the floor-staffs are

attending to the customers properly. In the third plan he thought that an increase in salary

would motivate the employees to self-driven work and better performance. And thus he only

concentrated mainly on the superficial traditional strategies[5].

But he could not go to the core of the problem, which is introduction of strategic human

resource management in the organization[2]. Here Strategic human resource management is

necessary because it focuses on human resource programs with long-term objectives. The

focus is on addressing and solving problems that affect people management programs in the

long run. In other words it can be said that strategic human resource management should be

introduced in the company to increase employee productivity by focusing on business

obstacles. Also strategic human resource management can be introduced for motivating the

employees[15]. But he could not identify the importance of strategic human resource

management and rather tried to bring changes on the basis of traditional human resource

management[2]. He just suggested increasing the number of staffs and salary of the

employees, which can only add to the attendance of the customers on time. But it will not

result in them improving their working performance in any way. Furthermore it is not evident

anywhere that the employees are not performing well and giving their cent percent due to the

lack of the salaries. So a raise in the salary will not necessarily increase employee dedication

and satisfaction, which leads to employee motivation. As a result whatever he proposed might

seem to be able to solve the problem for the time being, but in the long run it will not provide

any healthy solution. Hence it can be said that Mr. Barbossa’a proposed action plan would not

benefit the company.

In the whole case it can be seen that there is no sign of job analysis and job evaluation

done in the company[11]. In this century it is very important to conduct a job analysis for

successfully running a business. But Pirates Inc. is expecting to make high-levels of profit

without doing any kind of job analysis and job evaluation of the company. When the company

started to make losses, Mr. Barbossa was supposed to propose to conduct job analysis, but

he failed to consider its significance and identified few steps superficially which will not benefit

Pirates Inc.6

the company in any way. Other then identifying those steps if he had advised to the high

officials and Mr. Jack Sparrow the importance of job analysis in the company, his purpose

would have been served and the company would have been benefitted.

It is evident that the main problem in the case lies in the lacking of job analysis and job

evaluation[2]. The customers are not satisfied with the performance of the employees and of

the organization and they frequently complain about it. This is leading to loss of the company

and also customers and employee dissatisfaction[16]. In order to solve these problems, a

successful job analysis is needed to be done by the company, along with identifying and

explaining job description, job specification, etc[13]. By this formal process the content of the

job in terms of activities involved and attributes needed to perform the work and major job

requirements has to be identified[14]. It will also provide information to the organization about

how many employees are required for the job and which employees is best fit for the

organizations. Thus what Mr. Barbossa proposed in his first and second step will only be

successful after a proper job analysis is being conducted. Again one of the main purposes of

conducting job analysis is to prepare job description and job specification, which in turn helps

to hire the right quality of workforce into an organization. Thus when hiring more employees in

the organization for proper maintenance it is very important to keep in consideration the job

description and job specification of their respective jobs. Otherwise only the number of

employees will increase bringing no significant change in the quality of the performance. The

third step, which Mr. Barbossa proposed; to raise the salary of the employees, also has no

basis because in any successful organization it is very absurd to specify or raise salary

without determining and describing the job description. For positive results the company

should first go for describing the job of the employees and the range and level of duties that

they will perform and then decide on the salary scale[8]. Otherwise, without knowing the nature

and type of the job, an increase in salary would be inappropriate.

In conclusion, it can be said that whatever Mr. Barbossa had proposed can only be

implemented if he can recognize and understand the significant difference between traditional

human resource management and strategic human resource management[2]. He must

understand the significance of strategic human resource management to run a business

successfully on a daily basis and that it is the key to success to satisfy both the employees

and the customers. At the same time his plan will benefit the company if and only if a

successful job analysis and job evaluation is done in the company. So without any further

delay he should propose to Mr. Jack sparrow to introduce strategic human resource

management in the company and conduct a job analysis on a first priority basis. Otherwise

whatever Mr. Barbossa had proposed would not bring any significant advantage to the

company and the company will continue to do make losses.

Pirates Inc.7

Question 2: Mr. Sparrow is not convinced with Mr. Barbossa’s action plan. So he hired

you as a HR consultant. What would you advise the company?

Mr. Sparrow came to us with the projected profits of The Black Pearl© and its semi-

annual performance reports. He tasked us with the job of improving his HR department to

ensure that the company starts performing at its full potential and hopefully make profits. As a

HR consultancy firm, our first task was to analyze the company’s current situation so that we

could advise them accordingly. We found out that Mr. Barbossa, the company’s current Head

of Human Resources is running the firm as per traditional human resource management

systems[2]. However, this has resulted in a severe lack of employee motivation and general

confusion amongst staff, which has led to customer dissatisfaction. We believe that this is the

reason behind the poor performance of the company. We advise that before the company

takes any drastic steps, the organization must conduct a Job Analysis and a Job Evaluation [13]

[8]. Using data generated from Job Analysis methods, we should be able to construct a Job

Description and Job Specification, which should in-turn help us improve staff coordination and

work-standards which will then improve company performance[13]. Then we will conduct a Job

Evaluation, which will help us determine an internally equitable and externally competitive

compensation and benefits system, which will ensure that the employees are being rewarded

according to the amount and value of work that they do.

We advise that to start off with, the company should observe employees to

understand what each job is and what it requires. Observation should help construct a job

specification in terms of technical skill and competency required to perform the job

satisfactorily, i.e. just by observation an HR supervisor should be able to determine the level

of technical skill and competency needed to clean a room, wait-on customers at the hotel

restaurant or serve drinks at the hotel bar[2]. The observation process should also help the HR

department to come up with a job definition that clearly states the purpose of the job. On top

of this, observation will also be used to delineate jobs into tasks, so that the expectations from

employees are clear to the employee themselves. So according to us the first and most

important task of the HR department is to come up with a job specification, job definition and

job delineation based on observation of jobs.

While conducting the observation processes, we will also carryout a small

questionnaire to the employees. This will enable the HR department to establish job identities

with respect to the jobs being performed, i.e. a simple questionnaire with no more than 5

questions asking each employee to identify their job title, job department, job function (in their

opinion) and job evaluator (the manager that the member reports to), should suffice. This will

allow the HR department to construct clear, concise job identities for each class of jobs. [2] The

observation processes will provide enough data for job specifications and coupled with the

questionnaire we should have data regarding job identification, job definition and job

delineation all of which will be combined to form the job description. For our initial stage of

Pirates Inc.8

investigation, we have only used generic methods of job specification and job description so

that we can provide quick-relief for the major areas of concern regarding HR.

For our second stage of investigation, we will use some specific methods to further

develop our job analysis. We will use McCormick’s Position Analysis Questionnaire (PAQ)

model to further develop our job specification, job delineation, job definition and job

identification[12]. The PAQ model includes approximately 195 items that determine necessary

information input, mental processes, work output, interpersonal relationships, job context and

other job characteristics[17]. This should help the HR department to identify and solve all

compatibility issues between employee characteristics and job characteristics.

Furthermore, we will also conduct a Task Inventory Analysis (TIA) to clearly identify

discrete tasks, this should provide us with a clear job delineation so that the employees know

exactly what and how much is expected from them[19]. On top of this, the TIA should help the

company maintain work standards, which should ensure continued customer satisfaction. TIA

will also provide us with inferences about KSA (Knowledge, Skills and Abilities) requirements

and the weighting of the required KSAs[14].

To conclude the second stage of our investigation, we will conduct a Functional Job

Analysis (FJA), developed by the United States Department of Labor[3]. By the time we have

finished the PAQ and TIA, the necessity of training should become clear to us. So we will

conduct the FJA to mainly focus on the training requirements of the employees [18]. This should

fulfill all the job analysis requirements of the organization.

After the job analysis has been conducted successfully, we will conduct a Job

Evaluation. The purpose of our job evaluation is for the company to become internally

equitable and externally competitive[2]. Since Mr. Barbossa has already set-up a

compensation structure, we opted to conduct the job analysis first so that issues regarding

customer satisfaction could be addressed immediately. The other reason for doing job

evaluation after job analysis is because we believe that the data generated from job analysis

will help the job evaluation is more comprehensive. For our job evaluation we will use the Hay

Method to account for knowledge, problem solving, accountability and working conditions[8].

The Hay method basically divides the job into input, process and output, which is then scored

as score A, B and C respectively: Score A judges depth, breadth and interpersonal skills,

Score B judges problem complexity and available guidelines/information and Score C judges

discretionary authority and real-time importance of job[2]. These scores are then amalgamated

into a total score, which then forms the basis of compensation and benefits along with

relevant data from job analysis. We believe that this will increase employee satisfaction and

employee motivation by making the company provide the proper amount of compensation,

where it is due. This is how the company will become internally equitable. This will also help

the organization be externally competitive by eliminating extra, unnecessary compensation

that adds no value to the company, its outputs or its performance.

This concludes our opening investigation of The Black Pearl© as its HR consultants.

After we have all the data from job analysis and job evaluation, we will be in a position to

advise the company regarding its future policies. At this initial stage we believe that we have

sufficient data to implement strategic HRM policies, which should make the company

profitable before its annual review by the board of directors from Pirates Inc.

Pirates Inc.9

Appendix A

Interview with Mr. Mahir Haroon(25% stakeholder of a new hotel to be constructed)

Q1. What Compensation system do you plan to apply? Why?

Q2. How do you plan to motivate the employees to self-driven work?

Q3. What will they do with wastage of perishables? Do you have a wastage management plan?

Q4. On what basis will the performance of employees be evaluated? What are your methods of performance appraisal and key performance indicators?

Q5. How do you plan to train them to handle emergency situations?

Q6. How will you increase production without increasing employee number/working hours, efficiency plans?

Q7. What measures do you plan to take for employee satisfaction?

Q8. What are your recruitment methods?

Q9. How do you plan to organize your human resources? No. Of managers or team leader (vs. employees)?

Q10. What kind of departmentalization do you plan to implement? Why?

Q11. What are your proposed employee benefits?

*Note: Refer to Appendix B-5

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Appendix B

References:

1. “Contents of Position Analysis Questionnaire.” Human Resources. N.p., n.d. Web. 21 May

2012. <http://www.humanresources.hrvinet.com/ contents-of-position-analysis-

questionnaire/>.

2. Fisher, Cynthia D., Lyle F. Schoenfeldt, and James B. Shaw. Human Resource

Management. New Delhi: Biztantra, 2009. Print.

3. “Functional Job Analysis.” Human Resources. N.p., n.d. Web. 21 May 2012.

<http://www.humanresources.hrvinet.com/ functional-job-analysis-fja-model/>.

4. “Functional Job Analysis Questions.” Human Resources. N.p., n.d. Web. 21 May 2012.

<http://www.humanresources.hrvinet.com/ functional-job-analysis-questions/>.

5. Haroon, Mahir. Personal interview. 15 May 2012.

6. “Hay Evaluation Method.” Waterloo Human Resources. University of Waterloo, n.d. Web.

21 May 2012. <http://www.hr.uwaterloo.ca/ staff/ hay_evaluation.html>.

7. “Hay Guide Chart.” Wikipedia. N.p., n.d. Web. 21 May 2012. <http://en.wikipedia.org/ wiki/

Hay_Guide_Chart>.

8. Hay System of Job Evaluation. The Hay Group. N. pag. PDF file.

9. “Hay vs. Mercer Job Evaluation Methodology.” LinkedIn. N.p., n.d. Web. 21 May 2012.

<http://www.linkedin.com/ answers/ hiring-human-resources/ compensation-benefits/

HRH_CMP/ 117532-1618173>.

10. “HR Ogranizational Structure and Organization Chart.” HRM Advice. N.p., 2008. Web. 21

May 2012. <http://hrmadvice.com/ hrmadvice/ hr-organizational-structure.html>.

11. “HR Planning.” Explore HR Management. N.p., n.d. Web. 21 May 2012.

<http://www.explorehr.org/ category/ HR_Planning/ HR_Planning.html>.

12. Hurst, Carol L. Position Analysis Questionnaire. Arizona State University, 2008. PDF file.

13. “Job Analysis Method.” Human Resources. N.p., n.d. Web. 21 May 2012.

<http://www.humanresources.hrvinet.com/ 18-methods-of-job-analysis/>.

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14. “Knowledge, Skills and Abilities.” Human Resources. N.p., n.d. Web. 21 May 2012.

<http://www.humanresources.hrvinet.com/ what-is-knowledge-skills-and-abilities-ksa-

model/>.

15. “Performance Appraisal.” Exploring HR Management. N.p., n.d. Web. 21 May 2012.

<http://www.explorehr.org/ category/ Performance_Appraisal/

Performance_Management.html>.

16. “Performance Appraisal Rating Factors.” Human Resources. The University of Arizona, 3

Feb. 1998. Web. 21 May 2012. <http://www.hr.arizona.edu/ 05_prf/ ratingfactors.php>.

17. “Position Analysis Questionnaire.” Human Resources. N.p., n.d. Web. 21 May 2012.

<http://www.humanresources.hrvinet.com/ position-analysis-questionnaire-paq-

model/>.

18. “Process of Functional Job Analysis.” Human Resources. N.p., n.d. Web. 21 May 2012.

<http://www.humanresources.hrvinet.com/ process-of-functional-job-analysis/>.

19. “Task Inventory.” Human Resources. N.p., n.d. Web. 21 May 2012.

<http://www.humanresources.hrvinet.com/ task-inventory-method/>.

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Appendix C

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