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THE HR FUNCTION AT CONRAD VALVES The case Conrad Valves Ltd is a specialist manufacturer located in Houston, Texas, of various kinds of valves and
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THE HR FUNCTION AT CONRAD VALVES The case

Conrad Valves Ltd is a specialist manufacturer located in Houston, Texas, of various kinds of valves and pumps originally for the motor industry but more recently for other branches of the engineering industry, for example aerospace and marine. A healthy export trade has also been developed. Under its Chairman and Managing Director (who is the major shareholder) the business has expanded its workforce from just under 150 to over 250 in the last three years. However, there have been problems recently to do with quality and a number of complaints have been received from customers. As Conrad Valves depended on its reputation for high quality, this was alarming. The Chairman has recently taken over another business and has therefore appointed a Managing Director for Conrad Valves. His function is to concentrate on running the company under the overall guidance of the Chairman.

The new Managing Director

The Managing Director was appointed from outside and quickly identified employee problems in regard to quality of product, employee relations, employee turnover, and other issues. Since Conrad Valves did not have a functional Human Resource Department, the new Managing Director decided to engage an independent HR consultant to find out how people matters were being dealt with, to examine the case for creating an HR function, and if one was needed, to recommend what it should look like.

The consultant's findings on the present organizational employees were as follows:

1. Recruitment - each of the functional departments at Conrad carry out their own recruitment, having agreed with the Managing Director on the engagement of additional people and what they should be paid. Some use is made of recruitment agencies for administrative staff but sales representatives, production engineering staff, operatives and technical staff are mainly recruited by advertisements. Interviewing techniques, as observed by the consultant, were crude to say the least.

2. Labor turnover - this is fairly high: 20 per cent for operatives and 15 per cent for technical and administrative staff. The failure to retain a number of recent technical and operative recruits is worrying and may have contributed to the quality problems.

3. Training - there is no formal training; people are recruited with, it is hoped, the required skills and experience and learn the Conrad way of doing things on the job. Some supervisors carry out orientation training conscientiously but the majority don't. Again, it was considered that this prejudiced the achievement of high-quality standards.

4. Pay - operatives were paid the local going base rate (no payment by results) and staff were paid whatever it was believed necessary to recruit and retain them - there was no formal grade and pay structure. Pay was reviewed once a year, generally to keep pace with inflation and in particular to ensure that key staff were paid competitively. Some cash bonuses (usually not more than 10 per cent) were paid to some staff as authorized by the Chairman. There was no performance management or appraisal system.

5. Employee relations - There were no formal consultation or communication processes with employees. Managers lacked the proper skills to motivate and engage employees.

 

Based on the above findings of the Human Resource Consultant, what solutions would you recommend for each of the 5 issues identified? Utilize information discussed in class and formulate responses that offer logical HR problem solving methods.

Questions

1. What recommendations would you make to improve recruitment efforts and interviewing skills?

 

2. What retention strategies can be explored to decrease the high-turnover of skilled employees at Conrad Valves?  

3. How can HR improve training and development programs? How should the orientation program be implemented for maximum effectiveness?

4. How can Conrad develop fair and equitable pay grades and structures? What type of incentive plans can be implemented to better motivate employees?  

5. What type of Employee Relations practices should be developed to better motivate and engage employees?

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