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Tata Motors, the number one automobile company in India, holds a position of prestige also in the international market. Apart from India the company has its operations is many international markets such as South Korea, Thailand and Spain. It was established in India, in the year 1945; and with the passage of time the company grew larger and larger to become a part of the global arena (Tata Motors, n.d.). Among other factors, a well balanced human resource management is one that helped the company to attain such heights. Tata Motors is a subsidiary of Tata Groups. The parent concern is a well diversified business group which has existence in engineering sector, energy sector, chemical industry and hospitality as well as financial service sector. Tata group is a century old business established in 1874 by Jamsedhji Nusserwanji Tata (Goldstein, 2008, p.6). Tata Group is a conglomerate like many others in developing nations. The diagram provided below will better illustrate the structure on which the company operates.
At present the chairman of Tata Group is Ratan Tata, who is the grandson of the founder of the Tata Group. The changing business strategy has compelled the company to shift its management focus from traditional to more contemporary style. This change is adopted to make the company more competitive in the long run. This report gives a fair idea regarding various factors related to the human resource management. These factors include human resource planning, job evaluation, motivation, rewards, criteria for redundancy etc. The report includes relevant theories and their possible application in the context of Tata corp.
Since its inception, the company was able to develop a strong bondage with its employees and the HR department considered the employees as a strategic partner of the company. Though the nature of business changed from a family owned business to a conglomerate managed professionally by the corporate, but the traditional HR approach is still prevalent in the company. According to the higher management, the company is planning to introduce major changes in its HR practices (Tata-a, 2010). As per the company information, the HR department is taking due care to make the policies more transparent by making it more flexible to suit the changing needs of the employees (Tata-b, 2004).
In Tata Ltd, the HR department needs to handle all the necessary activities associated with developing an effective human resource force. Hence the list of the activities range from recruitment & selection, remuneration related activities, human resource planning, performance appraisal, human force development, grievance handling and many other such vital activities. Different persons involved in the HR department have different role to do, as for example the responsibilities of line managers in HR practices is to motivate the employees to achieve their target and to put their utmost effort to attain excellence in their performance.
For many years the company was practicing traditional management style but to attain competency in international market Tata Ltd decided to change its human resource planning. The company plans to expand its business because the economical conditions are ideal for expanding business practices; hence the company needs to hire more human resource. For making the remuneration policy competent to the industry standards, HR department of Tata Ltd needs to collect information regarding the benchmark level in local market and then to set the pay appropriate to the present market condition.
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According to Michael Armstrong and Angela Baron, job evaluation is “a systematic process for defining the relative worth of jobs within an organisation” (Armstrong, Baron, 1995). In simple words it can be said that job evaluation is the process of describing and analysing the positions and making comparisons among duties of different employees in terms of individual responsibilities (Goel, 2008). The main objective of job evaluation is to determine employees’ wages based on their relative jobs or work in the organisation. It clarifies the responsibilities, authority and functions of employees. It is crucial to remember that it is the process of evaluation of job, not of the person who is doing the job. There are two factors that need to be considered during the process of job evaluation. These are internal equity and external equity of the job. Internal equity is referred to the value of job compared to other jobs in the organisation, whereas external equity of the job is referred to the job’s value in the external market (Bogardus, 2004).
To determine more accurate pay structure for the employees, the HR department will have to conduct an in-depth job analysis. First and foremost the manager will analyse the respective job responsibility which the employee needs to fulfil, then they will have to find out the skill and knowledge required for fulfilling the job responsibilities (Gerhart & Rynes, 2003, p.84). It is a known fact that if the HR department hires highly skilled employees, the cost of pay will also be high. Hence the HR department prefers to hire semi-skilled employees and then provide training so that the employees are able to gather the required skill and knowledge for fulfilling the respective job responsibilities. The company believes in rewarding the employees for motivating them. Since the time the founder of the company realised the importance of its human resource, he provided a fair chance to its employees to be strategic partners. In 2000 the company announced Performance Ethic Program (PEP) for rewarding the high performing employees (Tata-c, 2003).
Rewards and motivation are interrelated. This relation can be better explained by describing motivational theories like Maslow’s Hierarchy of Needs. According to Maslow there is a hierarchy of five different needs. These are physiological, safety, social, esteem and self-actualisation needs. Various physiological needs include hunger, thirst, sex, shelter etc. Safety needs are referred to the needs for protection from various emotional and physical harms. Social needs include needs for affection, acceptance, belongingness and friendship. The fourth need which is the esteem need is referred to the need for autonomy, self-respect, achievement, recognition, status etc. Finally the need for self-actualisation is referred to the drive of becoming what an individual is able to become. Each and every person has any one of these needs. A person, who has fulfilled all his physiological needs, would now look for meeting the safety related needs. Generally in an organisation like Tata Corp. employees are expected to meet their physiological and safety needs easily. As a result they would try to meet either safety needs or esteem needs or self-actualisation needs. If rewards that are given from the organisation help employees in fulfilling their needs then they will be definitely motivated. A middle level manager who has already fulfilled his first three needs will certainly look for meeting the other two kinds of needs. He will look for more recognition and status. He will try to achieve all the objectives in his professional life. If the organisation can help him in this process then that help will be considered as a reward. The company can give him more opportunities, responsibilities and more right to make decisions. On the other hand a top level manager is expected to fulfil the needs for self-actualisation. He will be keen to become what he is capable of. The best way to motivate him is to provide him all the opportunities from organisation’s side and help him in achieving his personal goals and objectives.
The management not only provides monitory but also provides many non-monitory rewards to the employees to enhance their performance and motivation level. Thus it can be said that the HR department of Tata Ltd follows ‘Maslow need theory’ to motivate the employees. The company thereby follows a Balance Scorecard to appraise employee’s performance.
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As compared to the other car manufacturing companies, the recruitment policy of Tata Ltd is quite different. For example GM, one of the market leader in car manufacture industry follows a more contemporary recruitment polices whereas in Tata Motor the influence of family owned business culture is distinctly visible. During the recruitment process preference is given to the internal source of recruitment. In GM the recruitment and selection follows a well mapped process of interview and it is more structured but in Tata motor the employees have to go through a chain of event and the interview is often quite lengthy. This is because the management follows both structured as well as unstructured mode of interview.
In GM the employees have a well structured exist policy which reduces time lag. As the turnover rate is moderate, the management prefers to finish all the formalities as fast as possible. On the other hand in Tata Corp the employees generally maintain a lifelong relation; hence the HR department maintains a rudimentary and traditional exit policy.
Taking into account the comparison between the HR policies of Tata Motors and GM, it can be concluded that Tata Motor needs to introduce certain changes in their selection process. The company should attract more potential employees who are eager to learn and become a valuable asset for the company. Hence the company needs to restructures its selection process and if required the recruitment activity can be outsources to save valuable time of the HR department.
There should be fair criteria for selection regarding redundancy. Criteria for both mandatory and voluntary redundancy need to be capable of justification and must have proper objectives which should be aligned to the overall organisational objectives. There should not be any biasness in the selection criteria in the form of gender, pregnancy, marital status, family status and disability. Redundancy criteria can be influenced by the factors like performance appraisals, efficiency at the work, tenure of the employment and attendance record (CCH Asia Pte Limited, 2009).
When compared to the industry standards, the HR policies of Tata Motor are not up to the mark. Nevertheless they are efficient enough to encourage the employees to put their level best and work hand in hand to achieve corporate goals. The company however, is not complacent with it and are making efforts to restructure the organisation and change their recruitment and selection policies to achieve corporate excellence. It needs to give more importance on factors such as job evaluation process and criteria for redundancy.
Armstrong, M. Baron, A. 1995, The job evaluation handbook, CIPD Publishing
Bogardus, A. M. 2004, Human resources jumpstart, John Wiley and Sons
CCH Asia Pte Limited, 2009, Termination and Redundancy Practices in Asia, CCH Asia Pte Limited
Gerhart, B. A. & Rynes, S. 2003. Compensation: theory, evidence, and strategic implications. SAGE.
Goel, 2008, Performance Appraisal And Compensation Management: A Modern Approach, PHI Learning Pvt. Ltd.
Goldstein, A. January 2008. The Internationalization of Indian Companies: The Case of Tata. Organization for Economic Co-operation and Development (OECD). [Pdf]. Available at: http://www.ciaonet.org/wps/casi/0001617/f_0001617_830.pdf [Accessed on April 02, 2010].
Tata Motors. No date. Profile. [online]. Available at: http://www.tatamotors.com/our_world/profile.php [Accessed on April 02, 2010].
Tata-a. January 2010. Finding the right formula. [online]. Available at: http://www.tata.com/media/interviews/inside.aspx?artid=HQqRi4Xvg5A= [Accessed on April 02, 2010].
Tata-b. September 2004. All in a day’s work. [online]. Available at: http://www.tata.com/careers/articles/inside.aspx?artid=u7jLneDv8kE= [Accessed on April 02, 2010].
Tata-c. 2003August 29, 2003. Tata Steel ranks sixth on the list of top ten employers in India. [online]. Available at: http://www.tata.com/company/releases/inside.aspx?artid=O/xJuBV1UVY= [Accessed on April 02, 2010].
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