Good Health Products Limited is a diversified company engaged in the production of sugar, alcohol and bio-pesticides. This company is one of the major players in the sugar industry with a significant market share and a workforce of 8,200, with 4,800 unionized employees. It has full-fledged manufacturing information system and marketing information systems, which have ensured the complete automation of these departments' operations. Its HR department is headed by the HR manager, MrAtul, who is supported by 120 employees. Atul made a request to the management for installing an HRIS in order to enhance the efficacy of its operations but the request has been pending with the management.
Meanwhile, the HR department released the performance evaluation reports of the employees. As per the general practice of the company, the line managers conducted performance interviews with the employees to hand over the evaluation reports and these decide the employees' future financial benefits, including promotion. Due to its importance, the performance evaluation process and the reports often get embroiled in controversies and invite criticisms from those employees whose performances are found to be insufficient for good rewards. The protest over the performance evaluation process and results became more vociferous this time and the management asked for the details of the performance evaluation process and an explanation from the HR department over the results of the performance evaluation.
The HR manager reminded the management about his long-pending request for the automation of the HR operations of the organization. He pleaded with the management to fulfil at least a part of his request by installing the performance management system (PMS) immediately, if not the complete HRIS. He strongly believed that the introduction of the information system in performance management would improve the visibility in the measurement, communication and accountability in the entire evaluation process. For the HR manager, the introduction of PMS appeared to be the best solution to solve the recurring performance evaluation-related problems in the organization.
However, the forceful arguments of the HR manager in favour of PMS were rejected by the management for four reasons. One, it was not cost-effective since the benefits are not tangible and substantial. Two, the labour reduction in the HR department on account of the introduction of the PMS is not possible due to strong unions. Three, it cannot be an immediate solution for the present problem. And four, the HR department has so far not chosen the most effective appraisal method for performance evaluation and this, according to the management, was the root cause of the problem. The HR manager is now contemplating his response to the observations of the management.
Questions for discussion
- What is your assessment of the entire situation at Good Health Products Limited?
- Do you agree with the stand and arguments of the HR manager regarding the introduction of an HRIS and a PMS?
- What have you to say about the arguments of the management of Good Health Products against the introduction of a PMS?
- If you were to be the HR manager of Good Health Products, what would you do now?