Introduction
Human Resource Management (HRM) significantly contributes to the identification and management of workplace major employee-related issues which helps HR managers to deploy appropriate strategies accordingly (Collins, 2020). These strategies, if successfully utilized, ensure the effectiveness of the workplace which directly influences the organizations’ productivity and growth. Also, a significant number of HRM models and theories are available that assist HR managers in efficiently organizing employees and using their expertise for continuous improvement in the workplace environment.
However, businesses face many challenges in their working environment due to various internal and external factors which can cause potential threats to the overall organization’s structure especially by influencing the existing models of human resource management. For example, natural crises such as COVID-19 and economic recessions along with political factors abruptly bring changes in the company’s core values and consequently their business model and resource planning. These unforeseen and uncertain circumstances put a great challenge for HRM to address and resolve employee issues due to many financial, social, and political restrictions (Obrenovic et al. 2020).
For a better understanding of such challenges in human resource management, the following study critically analyses the strategic role of HRM by incorporating an Australian small company. Sydney Ferries is an example to discuss the company’s response to certain COVID-19 impacts on the mutual relationship of employers and employees. Moreover, current challenges for effective human resource management are identified and the recommendations are provided in terms of an efficient human resource planning approach.
Critically Analysis of Key Human Resource Management Challenges and Recommendations
Sydney Ferries business is based on a public transport network that operates in Sydney Harbor. COVID-19 has a very significant impact on all businesses however, the transport sector has been affected mainly due to imposed lockdown and shutdown of any kind of transport (Obrenovic et al. 2020). Therefore, as a result of this socio-economic change, the company’s workplace culture has completely changed according to its transport network from Sydney Harbor to the Parramatta River. Since this route is used by many people on daily basis, its operations could not be stopped completely (Banks, et.al, 2016). However, the telecommunication work culture adopted by the employees of the office staff was difficult to monitor the operations properly. Therefore, the HR managers of Sydney Ferries experienced many issues in monitoring the performance of employees when virtual teams were developed to bring the whole workforce on one platform. In this regard, the flexible “work from home” has been effective only for office work but to operate the ferry on the route the employees need to be physically present.
According to Tam and Gray (2016), the organizational life cycle theory successfully explains the life cycle periods of an organization from its creation to termination which includes an unexpected event that brings an advanced change. In light of this theory, COVID-19 can be considered a sudden change in the business operations of Sydney Ferries. As explained earlier, the shutdown of the company’s operations was not possible, therefore, all transport-related activities are being conducted with the complete standard operating procedures (SOPs). Therefore, it provides one-time services due to no other options for people to cross that route. However, the ticketing process has become completely digital now, which is considered a positive step for Sydney Ferries. Moreover, employees now have to deal with customers through the online platform, but this telecommunication has disturbed the tracking process of employees’ timing (Urick, 2020). The delay in the issuance of the salary of employees due to minimized operations in response to COVID-19 has also impacted the mutual relationship between employees and employers. All these changes can be extensively described in light of the institutional theory considering the resilient aspects identified from the social structure of the company.
In short, the contemporary changes in the workplace have received a negative response concerning different HRM practices and business operations. However, the virtual team of the company is to make its utmost efforts to maintain effective communication with each other.
Impact of COVID-19
Sydney Ferries used to provide training to the employees of the public transport system weekly because the primary focus of HR professionals in the current case makes them aware of their key responsibilities and provides training to prevent any human or system error that can lead to an accident (Ramos-Torres, 2017). Therefore, the company has a very good record in terms of the number of accidents annually. But the inconsistent training due to aftereffects of the pandemic has negatively impacted the performance of employees. Moreover, the changes in virtual teamwork and telecommunication affected the revenue generated by the company every month. Therefore, profit and revenue both are completely dropped because of no operations for a certain time period along with the reduced number of passengers. This has led to the incapability of Sydney Ferries to provide similar wages to the employees as before. Moreover, the HR managers also had to look for the retention of certain employees and take back different employment advantages and incentives. In response, the company is now looking for new ways of employee training. The main focus of HR is to balance the organization and employee rights but, in a pandemic situation, the analysis criteria got changed.
Significant Current Issues in Business
The following are the significant challenges faced by Sydney Ferries as the Australian workplace in the pandemic situation.
Operational restriction
The complete lockdown in Australia had initially completely stopped the operations of the business due to lockdown by the government. However, in Sydney Ferries, the HRM focused immediately on setting up the telecommuting working system for the employees (Kendrick, Bartram, Cavanagh, and Burgess, 2019). According to the contingency theory of HRM, the emphasis has to be on the task which needs to be performed to resolve the issues and in this regard, the focus was on the issues of Sydney Ferries employees to revive the operations of public transport (McGrandle, 2016). Moreover, the HRM has to look for certain ways of revenue generation so that the financial failure of the company can be prevented. Although the lockdown has been partially ended, still the restricted SOPs of social distancing need to be followed in the public transport business. For the Sydney Ferries business, this change is reducing the engagement of customers.
Cut down on employee salary decision
HRM always needs to take immediate decisions based on situational analysis. The decision of employee salary cut down leads to the increasing challenge of employee demotivation and a decrease in job satisfaction. However, it changes the behavior of employees towards the job affecting the quality of the work which can further impact the organizational performance of Sydney Ferries negatively. As explained in the hard model of HRM that this department has to focus on strategic control according to situation demand and maintain the organizational economic structure (Truss et al. 1997). Therefore, the Sydney Ferries company has to look for a solution in which the cut down of salaries of an employee could not impact their motivation and job satisfaction. Moreover, the brand image also needs to be maintained by HRM in terms of maintaining a relationship between employer and employee (Mitchell, Obeidat, and Bray, 2013). In this regard, the resource-based theory of HRM also draws attention towards the strategic value of workforce for the workplace issues identification and team development (Collins, 2020). In contrast, it is also possible that Sydney Ferries which is a small company having limited employees in every department might leave their job due to the salary cut-down issue caused by HR.
Employee retention decision
The decision-making of HRM for employee retention in a few departments of Sydney Ferries has become a challenge. Although, the increased period of lockdown in Australia demands this decision by HRM. The department of public transport drivers, customer service, marketing, accounting, and finance are actively operational only in Sydney Ferries. However, there is a total of 600 employees currently working in Sydney Ferries Company and according to HRM the company now could not support the salaries of this huge number of employees due to a decrease in revenue. The employees of administration and office cleaning have to be listed for retention as the physical office work is not happening currently. Moreover, partial retention from other department employees also needs to be done as per the requirement including public transport drivers, customer service, marketing, accounting, and finance. Thus, the decision of HRM can help the company to regain its position in the business market, and then a decreased rate of revenue could not affect the financial condition of the company. However, the brand image of Sydney Ferries might get impacted and the remaining employees get demotivated by this action of HRM. As every employee gets into the fear of retention and therefore overall performance of Sydney Ferries might be affected.
Human Resource Planning Approach
Sydney Ferries is seeking new ways to get out of current challenges as discussed above which needs HRM to deploy an effective human resource planning approach. The company analyzed that in the pandemic customer behavior got changed toward shopping of products and services. Therefore, HR had a focus on the changing mobility trends for public transport and its comparison with the current baseline. In this regard, the company has utilized its trends and customer engagement standards to identify its future activity planning (Neis, Neil, and Lippel, 2020). The government in Australia had allowed 12 people to travel in one vehicle for which the Sydney Ferries had maintained their operations. However, due to the ongoing poor financial conditions of the company, it did not recruit new employees but employee retention was avoided because this company is already too small in size. However, it might impact their future growth, so HR took the decision of not paying the salaries of a few unneeded staff for few months during the lockdown period and then retaining their salaries afterward when the restrictions get removed. Therefore, this action can maintain a relationship between employer and employees and also impact the organizational financial condition. The employees would not lose their jobs and look for another job in a pandemic situation.
Conclusion
To conclude, the decision-making and strategic role of HRM plays a major role in maintaining the employer and employee’s relationship along with the control of the organizational situation. The employees are the asset of every company and the current situation leads every company to the position of taking the decision of employee retention and salary cut down. As discussed in the report, the Sydney Ferries transport operations got stopped due to the lockdown period in Australia for which HRM needs to take measures. However, the major challenges faced by Sydney Ferries are employee retention, operational restrictions for an unknown period, and salary cut-down impact on employees. HRM’s strategic role contributes can ensure the employees retain complete salaries of the extra employees after the lockdown period and until then they engage them with the company. Moreover, the allowances and benefits are not provided, and this can help in balancing the financial situation of Sydney Ferries. Such decision-making of HRM needs to maintain the work culture of an organization and contributes to protecting the company from financial downfall.
Recommendations
According to the Australian work culture analysis, the recommendation is provided to cut the benefits allowances, and bonuses of employees from the higher position of CEO until the junior employee by HRM. Therefore, it can help to save the cost of maintaining the company’s revenue loss. Moreover, the employees should be explained the financial condition of the company so that they can stay in the support of HRM decisions rather than getting demotivated. The experienced employee should not loosen in the retention process because of the pandemic situation. However, on employee’s willingness, the salaries and working of partial employees have to be stopped. The pay raise needs to be ensured by the company as soon as operations resume again after the lockdown period in Australia. The safety of customers is needed to ensure the quick opening of operations. HR also needs to focus on providing the online training class to the employees to keep them motivated and also to elevate their job satisfaction
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