BP&S Case Analysis

TRINITY UNIVERSITY OF ASIA

COLLEGE OF BUSINESS ADMINISTRATION

CASE ANALYSIS

Human Resource Management Business Policy and Strategy

A.Y. 2014 – 2015

Gerald Jader Ronald Flores  Airi Imamura Lee Ann Espiritu

PROBLEM ANALYSIS Jamieson Drugs, Inc. is one of the top pharmaceutical companies in the country and has been in the industry for more than 25 years. Along with the company’s coping with the demands and expectations from their customers to maintain its position in the industry is a significant turnover of its sales personnel. The turnover can be traced from better prospects, dissatisfaction, career growth and leading a family life –  which, later on, stem further. Sales personnel form the major portion of the company making up sixty percent of the key positions and identified to be the income generators. With significant turnover, the sales of the company are affected to which it decreased by two percent and workloads of incumbent sales personnel became heavy since they have to fill in those who have resigned –  therefore, employee performance depletes. To settle vacancy, the HR department hires new employees at which they are able to employ 150 individuals in just a year. However, these don’t make the scenario even better. Hiring a number of employees in a year to which their number exceed almost twice of the tenured personnel would mean inefficiency in hiring because most probably these people are hired for the sake of keeping up its manpower without a complete regard to the qualifications demanded by the position. Hence, it only contributes in the decline of sales as evidenced by inefficient product detailing among hospital administrators, clinicians and doctors. With these problems on hand, Jamieson Drugs is looking into outsourcing its recruitment processes to Manpower Magnate. Manpower Magnate is relatively new in the outsourcing industry and maintains an account with a multinational firm, the first in its recruitment line. Jamieson Drugs has not yet received any feedback regarding the performance of the outsourcing company and confidentiality of its (Manpower Magnate) client is maintained; instead, they only relate that they possess an excellent track record in outsourcing. The problem here rises in the unfamiliar identity of the company should they be worthy of risking especially if the assignment would be the recruitment for sales personnel.

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PROBLEMS AND ALTERNATIVE COURSE OF ACTIONS (ACA) PROBLEM 1: Significant turnover of sales personnel The value and importance of employee are often underrated and neglected to be seen by managers as valuable assets of the company –  as in the case of Jamieson Drugs evidenced by better prospects, dissatisfaction, career growth and leading a family life as the reasons for resignation of sales personnel. Employees are drivers of a company to which they put any strategic plan set by the management in action –  with the management overseeing the operations to ensure the business succeed. Without these employees, business would be paralyzed. Employees have valuable knowledge and skills that contributes to the success of a business. Although automation can be utilized to save costs, nothing can replace the exceptional knowledge that each and every employee has especially for industries where public relations is considered to be essential in generating sales. The significant skills that employees have add worth to a company and these employees are worth keeping.  ACA 1:  In order to address this problem, Jamieson Drugs should create an inclusive workplace in which employees will have the sense of belongingness. Employees need to feel that they are valuable to a company. Develop programs that would promote teamwork and sportsmanship, and boosts employees’ morale. Support career growth and development among employees. Give them trainings and development programs that will further enhance their technical skills and abilities to produce better performance. In this way, employees continuously learn and realized that they are of great value to a company.  ACA 2: A low cost solution to high cost turnover is retention. HR professionals estimate that it costs nearly 1.5 times the employee's yearly salary to lose them. Avoid a high turnover rate by proactively recruiting and retaining your employees. Keep employees engaged and belonged to prevent them from becoming bored and losing interest in their work. Seek ways to Case Analysis: Human Resource Management  | 2

keep the job interesting and fresh. To keep talented employees, compensate adequately. Also spend time to mentor, train and advance the staff. Keep the lines of communications open and build trust from the current employees.  ACA 3: Invite people who fit in the company's culture and allow those who don't fit to leave. There are many ways to solve the turnover problem but these only give temporary fix. To get concrete, positive and long-term results the company must assess its corporate culture. If the organization is very clear about the kind of culture they want to work in and communicates that clearly to the employees, it will show up in the hiring process. As a result, right kind of people will be invited to the organization. Right from the beginning they would feel significant. On the contrary, turnover can be a good thing. There are employees that prefer to exist in organizations where everything is not so clear and they can spend a lot of their time complaining and avoiding work. Recommendation:  ACA 1 and ACA 2 are highly recommended because keeping the employees is very important. Before the company can fix the external problems, internal problems must be prioritized first. Prevention is better than cure. Current employees must be prioritized first and should always be because they drive the company towards either success or failure. Once internal problems are fixed and resolved, fixing external problems will be easier for the company. Eventually, the company will return to their normal operations.

PROBLEM 2: Inefficient recruitment Recruitment process is the method that an organization uses to fill vacancies and hire new talent. Vacancies should be given to qualified applicants – following the demands set for a specific position – and not to those who just bother to apply for the sake of getting employed.

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It is essential that organizations put time and resources into developing an effective process for bringing in good employees. By not properly screening job candidates, an organization wastes resources through training an employee that will not stay or by being stuck with an employee that is not productive. The process must also make clear to the candidate what he or she can expect should the job be offered; it may be that a highlyqualified candidate may not want to take the position after all. An unsatisfied employee is also not as productive.  ACA 1: In order to call a hiring process efficient, the company must invite the right people in the first place. It is important to screen all potential hires carefully. Getting to know if the person is a good fit to the company's workplace culture should be concentrated taking into consideration the work experience, educational background and skills. Also, a thorough background check shall be performed before a final decision is made. A series of skills test should be outlined with the department heads to determine if a candidate meets the criteria for a post.  ACA 2: In order to avoid employee turnover costs and find talented candidates who are willing to become loyal employees, the company must consider employee referral. Employee referrals are the number one source of external hires. Referral is also beneficial to new hires' culture fit. In addition, employees can benefit from the incentives attached to internal referrals. There will be higher production of employees who are productive and have higher retention rates.  ACA 3: Most job seekers exploit job portals and job fairs for chances of landing a job. The company should make use of these channels in search of qualified individuals. These channels provide for a wider reach of jobhunting people; hence, more chances of getting the most fit for a post. However, the company should only join recruitment activities (job fairs) based on the setting and its audience. Job fairs setting where most of the

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applicants are newly graduates would not fit for a company who is looking for seasoned applicant. Recommendation: ACA 2 and ACA 3 are considerably acceptable but ACA 1 has the greater preference. Implementing a hiring process that would result in getting the most qualified for the job is important especially if the position is relatively in connection with the income generating unit of a company. The company can select the best of the bests that they need with good hiring process in place.

PROBLEM 3: Outsourcing may lead to loss of managerial control The very first challenge that companies are likely to experience when embarking on outsourcing certain functions, is that of a possible lack of buy-in from people inside the company, which may take the form of active or passive resistance; create the desire for “special treatment” or opt out from the outsourcing services, and result in business case deterioration. The prospect of outsourcing also creates uncertainty for existing employees, who may decide to look elsewhere for employment. Whether you sign a contract to have another company perform the function of an entire department or single task, you are turning the management and control of that function over to another company. It is true that you will have a contract, but the managerial control will belong to another company. Your outsourcing company will not be driven by the same standards and mission that drives your company. They will be driven to make a profit from the services that they are providing to you and other businesses like yours.  ACA 1: The best way to address both these problems is to implement an effective change management strategy as soon as the outsourcing contract has been signed. A comprehensive communication program should be developed and disseminated to all stakeholders who will be affected by the outsourcing process. The message should be personalized for different levels

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of employees, and should essentially answer the question: “What about me?” Employees should be given the opportunity to ask questions and be heard.  ACA 2:  The outsourcing company must hold substantial one-on-one discussions with the client company during the pre-contact stage and during implementation. At the appropriate stage, the service provider executive responsible for delivering the outsourcing services should also meet with the client sponsor and business unit leader. These activities create a dialogue about specific issues/or concern for that organizational entity receiving services, and they build mutual understanding.  ACA 3:  Even though the client is outsourcing, it does not abdicate responsibility for results. Senior management with the client organization must paint this vision, and commit an appropriate level of management staff to achieve intended results. The contract or service provider—by itself —is not enough. Recommendation:  ACA 2 is highly recommended since this will build mutual understanding between the client organization and the outsourcing company. This will also build trust and reliance between the two and hence could be an adequate solution to the problems pertaining to the management’s performance.

PROBLEM 4: Outsourcing may give threats to security and confidentiality The intellectual property of companies includes business plans, trade secrets and other proprietary knowledge. Outsourcing presents a considerable risk of theft or hacking of this property to client companies. In addition, there is the challenge of securing the confidential information of the company’s customers and, in some instances, patients when outsourcing business processes.  ACA 1:  In order to mitigate this risk, it is necessary to develop stringent safeguards and protocols when outsourcing. Technical safeguards include

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the protocols governing access to information; physical safeguards will protect

buildings

and

equipment

from

unauthorized

access;

and

administrative safeguards stipulate policies and procedures for operations, the conduct of employees and the use of security controls. An outsourcing service provider should adopt an information security risk management strategy that complies with best practice.  ACA 2:  If you have payroll, medical records or any other confidential information that will be transmitted to the outsourcing company, there is a risk that the confidentiality may be compromised. If the outsourced function involves sharing proprietary, company data or knowledge (e.g. product drawings, formulas, etc.), this must be taken into account. Evaluate the outsourcing company carefully to make sure your data is protected and the contract has a penalty clause if an incident occurs. Recommendation: Both alternative courses of actions are acceptable and appropriate, but ACA 2 is more plausible since initially taking action on this could make the first ACA follow through. Choosing the right outsourcing company is very important and before contracting with any, Jamieson Drugs Inc. should also consider its reputation and standing in the outsourcing industry. A short-lived and new outsourcing company like Manpower Magnate should be taken out of their prospective outsourcers and hence pick a well-established and reliable

company

instead.

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