Human Capital Dimension Module

The Case Study – Seatup Ltd

Student name: Miranda Rugovaj

Student ID: 2016 07 MB
1382 Words
April 3rd 2017
Table of Contents
1.0 Acknowledgements ........................................................................................................................... 2

2.0 Seatup Ltd - Case Analysis: .............................................................................................................. 3

3.0 Conclusions and Recommendations: ................................................................................................ 5

4.0 References/Bibliography:.................................................................................................................. 6

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1.0 Acknowledgements

I would like to take this opportunity and thank the lecturers Mr. Turner and Mr. Murtezaj for
their support and help during the lectures. Also I would like to thank Riinvest College for
understanding and allocating more time for this assignment.

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2.0 Seatup Ltd - Case Analysis:

Human capital is the driving force in any organization. According to Boxall and Purcell
(2010: 29) HRM is an inevitable process that accompanies the growth of organizations.

On the other hand, Fombrun et al (1984) developed what has been named the ‘matching
model’, this model points out that the organization structure and human resource systems
should be managed in a congruent way with the organizational strategy.

Legge (1989: 25) argues that strategic business planning should incorporate human resource
policies and use it to strengthen the organizational culture, or change the organizational
culture when it is inappropriate. They also argue that human resources are a source of
competitive advantage and there should be consistent policies that promote commitment and
enhances the employee’s willingness to be flexible in order to achieve company’s objectives
or pursuit of excellence for the company. The need and the importance of human resources
was also emphasized by Storey (2001: 7) who noted that human resources gives competitive
edge to the company, and aim of the company should be to enhance employee’s commitment.

Therefore, it is evident there is a need for a wider role of HR in Seatup Ltd as the competitive
advantage of the company is driven by employees. Ulrich (1998) suggested that HR should
not be defined only by what it does but also what it delivers which are concrete results that
enrich the value of the company to employees, customers and investors.

On the other hand, HR strategy is developed and placed into practice by HR professionals in
this case an HR manager. HR manager plays a vital part in generating an environment which
allows employees to make the best use of competences in order to achieve company’s
objectives but also to attain satisfaction through their work. The role of an HR is to provide
HRM by providing insights, different advices, leadership and insights on issues which are
important for the company. HR professionals, particularly at the highest level, make a
strategic input that enables the organization to have skilled and engaged employees.

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In this case, ‘inside-out’ approach (Wright et al, 2004) can be used, this approach begins with
the status quo of HR function, for example skills, processes, technologies and then attempts
(with variable degrees of success) to identify links to the business (such as via focusing on
‘people issues’).

The appropriate Strategic Human Resource Management approach which can be used to
solve Seatup Ltd issue is bundling. Bundling can be used in a number of ways. Bundling can
be used to identify specific recruitment standards or processes, deliver a framework for
interviews based on competency, learning and development needs and standards of
performance/behavior.

According to MacDuffie, 1995, Bundling is defined as the development and implementation

of several HR practices together so that they are inter-related and therefore complement and
reinforce each other. This is referred as ‘complementarities’ or the process of horizontal
integration.

As a matter of urgency there are two HR priority areas which need to be tackled first. The
first HR priority is Reward and Performance Management. Seatup Ltd must develop
motivation, job engagement and commitment of their employees by evaluating people based
on their contribution. Based on the case study, employees are not paid based in a reward
system, rather they are paid whenever it is believed it is necessary to recruit and retain them.

According to Beer et al., (1984) reward systems are seen as one of the four key policy
choices through which organizations aim to develop competence, commitment, cost-
effectiveness and congruence.
The second HR priority is Learning and Development. Learning and Development is listed as
a priority because it is impacting negatively in the achievements of high quality standards.
According to Guest et al., 1997: 3 learning and development lies in the heart of innovation
within an organization. The importance of learning and development was also emphasized by
the president of the Chartered Institute of Personnel and Development who said that ‘People
are our only source of differentiation and sustainable competitive advantage (Beattie, 2002:
2–3). Individual’s continuous learning and development is crucial and therefore has a
strategic importance for the success not only forthe company/organization but also for the
economy in general.

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Since at Seatup Ltd there is no learning and development programme, it is needed to develop
a formal training programme rather than ad-hoc trainings which also can be more costly and
less efficient for the company.

3.0 Conclusions and Recommendations:

Seatup Ltd is a typical case of a firm coping in an ad hoc manner or not coping at all where
HR resources are non-existent. The case for an HR function is quite clear – there are serious
business issues in regards to the quality –where customers has already started to express their
dissatisfaction and the review identified a number of problems with recruitment, labour
turnover and training that were contributing to these issues.

HR decisions are of strategic importance and that therefore HR policies should be integrated
into the business strategy (Storey, 2001:7), therefore the company should hire an HR
manager who would align HR strategy with business strategy and increase Company’s
performance, customer’s satisfaction and ultimately increase company’s revenues. Becker
and Huselid (1998: 97) argued that HR should be seen ‘a resource that solves real business
problems’, thus in the case of Seatup Ltd, hiring an HR manager would solve the problem of
high employee turnover and customers dissatisfaction.

HR manager would be able to incorporate people strategy focus on the business strategy and
thus decrease customer dissatisfaction and increase the revenues of the company. The HR
manager would also make productivity and performance evaluation in different sectors,
especially in production and sales. Hiring an HR manager which would assess the needs of
the company for additional employees, or employees who are about to go in pension. The
review of compensation and reward system, distribution of work appraisal/recognition for
distinctive employees in order to motivate them to work even better in the future. Establish
internal recruitment for employees who already work in the company, because they know the
internal processes in the company better and also can establish trust among other employees.

The Managing Director of the Seatup Ltd must be aware that if the company increases, so
does the number of employees, because it is needed more workforce to meet customer’s
demand in timely manner and at expected quality. Thus, an HR manager is needed in order to
establish procedures which empower employees and are people focused.

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4.0 References/Bibliography:

1. Armstrong, M. (2011) Armstrong’s Handbook of Strategic Human Resource

Management, London: Kogan Page
2. Beardwell. J and Claydon, T. (2010) Human Resource Management. A
Contemporary Approach. 6th edition. Pearson Education Limited.
3. Boxall, P. and Purcell, J. (2011) Strategy and Human Resource Management,
Third Edition, Basingstoke: Palgrave Macmillan
4. Bratton, J and Gold, J (2012) Human Resource Management: Theory and
Practice, Fifth Edition, Basingstoke: Palgrave Macmillan
5. Brewster, C., Sparrow, P. and Vernon, G. (2011) International Human
Resource Management, Third Edition, London: CIPD.
6. Farnham, D. (2010) Human Resource Management in Context: Strategy,
Insights and Solutions, London: CIPD
7. Henderson, I. (2008) Human Resource Management for MBA Students,
London: CIPD
8. Kew, J. and Stredwick, J. (2010) Human Resource Management in a Business
Context, London: CIPD
9. Truss, C., Mankin, D. and Kelliher, C. (2012) Strategic Human Resource
Management, Oxford: Oxford University Press
10. The Aston Centre for Human Resources (2008) Strategic Human Resource
Management: Building Research-Based Practice, London: CIPD
11. Salaman, G., Storey, J. and Billsberry, J. (2005) Strategic Human Resource
Management: Theory and Practice, Second Edition, London: Open
University/Sage
12. Price, A. (2007) Human Resource Management in a Business Context, Third
Edition, London: Thomson
13. Storey, J. (2007) Human Resource Management: A Critical Text, Third
Edition, London: Thomson

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