Strategic Human Resources Management

Strategic human resources management is the key to make people management aligned with the strategic goals of the organizations. It will allow the company to have the right people at the right place and the right capabilities to ensure the organizations survives the competition in its sectors. Human Resources management also look into the future of the organizations, and make sure that the right mix of people and skills will be able to make the company hold on longer. Moreover, having a good human resources management enable the organization to have good governance to ensure that the company work towards the organization goals.

In this Johnson Turnaround case study, the issue that the company face in terms of human resources management and governance is the cost reduction programme and the instruction to cut down the senior management’s pay by between 5% to 30%.  The reason for this action to be taken by the management is to reduce the manpower cost. To overcome this issue, it is recommended to the management to use the defensive strategy which is the divestiture strategy. The management can let go of a certain division that are responsible to the company’s poor performance or the division that cost so much and it can be outsourced. Moreover, the management can also provide a certain compensation to the deduction of the employee’s salary. However, the management can have a standard increase in salary during an employee’s promotion and give them more employees benefit instead of just increasing the salary in huge amount and complain the manpower cost is expensive. For example before promotion his salary is RM 3000 and have a standard increase of 10% to the salary.

Next issue in the Johnson Turnaround faced by the management in terms of the human resources management and governance is when the first layer of unproductive management staff are trimmed by allowing most expatriates to leave. The reason of this action is same as the previous issue, which is to reduce manpower’s cost. To overcome this issue, it is recommended to use the defensive strategy which is the retrenchment strategy. Instead of letting go expatriates to leave, the management should analysis which expatriates skills can bring productive inputs into the organizations and who does not bring any productive inputs to the company. When letting go of the unproductive management staffs , the management should provide them compensation to ensure that they are not leaving empty handed for the times they have worked in the organization or even provide them job opportunities outside the organization to ensure that when they are leaving the company they have jobs and ensure that their survival is intact.