2. “HR departments must be more involved in designing—not just executing—the company’s strategic plan. This can be accomplished by aligning HR strategy with the Business strategy”. Outline the Basic Model that helps an HR manager translates the company’s strategic plan into HR policy and practice.
D) Case Application: “Managing HR in Arab Countries”
The Arabco Company was established in January (1988) in Saudi Arabia and has expended during the past 20 years into other countries in the region, including U.A.E, Bahrain, and Oman. The company is a subcontractor for various construction activities, mainly civil and electro-mechanical works. Under the leadership of its founder, Mr. Majed Al Amri, and due to the wise management of the HR director Mr. Hazem Shaker and the commitment of all employees; the company gained a good reputation in the Arab region, and marked itself in the construction industry for quality and the timely delivery of projects.
In the year 2008, the HR director, Mr. Hazem Shaker, retired and a new Young HR manager, Kareem Sabry, was appointed to the company. In order to meet the economy downturn challenge that happened, Kareem was proud to tell Mr. Majed that he will implement plans that can help the company decreases spending. He attempted to change some of the company’s HR policies and practices by:
n Lowering salaries for all employees.
n Hiring people who were willing to work for very low financial incentives.
n Reducing the training and development budget.
In less than four years, the clients started complaining of poor delivery of Arabco projects which drew Mr. Majed al Amri attention to that something was going wrong, but he did not know what.
He met with Kareem and learned that the employees’ turnover rate was very high, and at the time an employee was hired, another one resigned.
After visiting the 20 projects and finding similar problems in many of them, Mr. Majed noticed that five senior project managers (all are line managers) had resigned, and many of their team members were not happy in the company. Mr. Majed Al Amri wondered what action he should take.
- Obviously, the new policies set up by Kareem have caused the problem; yet, Mr. Majed was also responsible for this problem to occur? How?
- Do you think that Kareem had a problem implementing effective communication with the line managers? If yes, What HR functions would be carried out by the line managers?
- As the new policies have shown negative impact on the company’s relevant outcomes, how can the HRM strategy help the company in creating a sustainable competitive advantage?
- Do you think that culture and employment law provide strong explanation and guide for many of the HR practices?