13 Jun THE ROLE OF THE PEOPLE MANAGEMENT FUNCTION AND ITS IMPACT ON STRATEGIC PLANNING.
Valleyway: Assessing the role of the people management function and its impact on strategic planning.
Valleyway is a multi-site high street retailer with a head office based in the Midlands. The company employs a total of 3000 staff; 2,500 within its store network and 500 employees at its head office. The organisation has an autocratic culture, with a central power base and a Managing Director who appears to make all the decisions, keeping tight control of the business and ruling by intimidation. He focuses mainly on the success of the retail side of the business, where there are two Regional Managers who each have responsibility for 19 Area Managers between them. Communication is very much a downward cascade. Company policies and procedures are designed and agreed by only the Board of Directors before being implemented, without any other consultation. Morale within the head office is very low. It was particularly affected when head office staff were invited to attend a conference for sales staff. They listened to the announcement made by the Managing Director that all staff working within the store network would have a bonus increase of up to 25%. Head office staff do not get paid any commission or bonuses and only receive a basic salary. The Personnel Function is based in the head office and comprises a Personnel Manager, a Personnel Officer and 3 Personnel Administrators. They have responsibility for the personnel issues of the entire company (except for payroll which is incorporated into the Finance Department) and report to the Legal Director. There is a separate training function. The Training Manager reports directly to the Managing Director and has 4 Training Officers reporting to her. The Training Officers spend all of their time visiting the store staff to assess their product knowledge and offering training programmes on effective store management and basic selling skills. The Training Department has no involvement with, or responsibility for, the head office training requirements. This is left to individual managers to request assistance from the Managing Director. Very few formal policies exist and the company’s personnel practices seem to exist on a trial and error basis, e.g. when things go wrong a guidance document is issued. A guidance document exists for Area Managers relating to disciplinary activity but no formal training has been provided. Most of the Area Managers have worked their way up in the company and started off working on the sales floor. Area Managers are advised that they must always contact the Personnel Department with any issues relating to discipline. All Area Managers are aware that no one can be dismissed from the company without the permission of a Director of the company. The Personnel Department is of course reactive in its nature and is constantly in ‘fire fighting’ mode. The Personnel Manager is the only qualified member of the Department and due to his extensive role, his availability to managers is minimal. Each of the Administrators has very clearly defined roles i.e. one is responsible for all new starters, one for leavers and references and another for issuing contracts and new starter packs. Area Managers are therefore required to speak to three different people with regards to the employees on their Area. The Personnel Officer also takes on the role of office manager and oversees the work of the Personnel Administrators. Responsible mainly for head office staff, she has to also deputise for the Personnel Manager in his absence.
All personnel records are kept centrally, with a file for each individual employee. The Personnel Department occasionally receives a copy of medical certificates but other than that has no knowledge of the sickness absence levels in the company. A monthly report identifying long-term (six weeks or more) sickness is produced by the Payroll department but there is no formal policy for dealing with either short or long-term sickness absence. This results in great inconsistency in dealing with employees, it depends how the Managing Director ‘feels on the day.’ The Managing Director has high hopes for the organisation and has plans to expand the company in the coming years. He hopes to increase the store network by 50 stores in the next 3 years. Unfortunately this has not been communicated to the rest of the organisation, although employees are aware that recruitment is on the increase. Each Director decides when they need a new member of staff in their section, although Personnel are responsible for advertising and collating the responses. All retail positions are arranged by the Area Management with very little input from Personnel. Area Management are responsible for their own recruitment and are involved in all interviews, Store Managers do not have responsibility for recruiting staff. Neither area nor head office managers have received any formal recruitment and selection training. Personnel are sometimes involved in the recruitment of head office staff, but this is at the discretion of the Director and depends on the level of the position. On several occasions, individuals have been appointed but Personnel are not made aware of the vacancy/interview process etc. until they are requested to issue an offer of employment. Appraisals were not conducted until 1998. Appraisal documentation was issued to head office and retail staff and the responses collected and filed. The information gathered during this exercise has not been acted upon, and has adversely affected the morale within the company. Appraisals have not been conducted since and performance is reviewed only sporadically depending on the competence of the Manager.
Kirsten Krauth, Coventry University Business School
A quick reminder: your exams on 19/05/2015 are based on the ‘Valleyway’ case study available in the assessments tab and you will need to answer these questions from the case study:
Your task
In your role as an HR Consultant, address the following issues:-
The role of the current Personnel function and its future in the organisation.
Outline any changes you would recommend, both in the short and long term.
You may wish to write your responses in bullet points and then expand on them.
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