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Human Resource Management 14th Edition by Robert Mathis,Sean Valentine,John Jackson
Edition 14ISBN: 978-1133953104Human Resource Management 14th Edition by Robert Mathis,Sean Valentine,John Jackson
Edition 14ISBN: 978-1133953104 Exercise 1
Rio Tinto: Redesigning HR
Rio Tinto is a mining and minerals company headquartered in London. The multibillion-dollar company employs over 98,000 people worldwide and operates in more than 60 different sites in over 50 countries.
When the 2008 global recession hit it was clear that a reduction in workforce would be necessary for the company to survive, and 14,000 employees and contractors were let go. HR had been involved in the initial business discussions and understood that the reduction in force (RIF) was necessary.
For the first time, Rio Tinto's HR used a coordinated approach globally. Previously, executives and HR directors in the individual business units would have all approached the downsizing differently. But this time with a common approach, the downsizing took place in an efficient, ethical, and sensitive manner, using regional severance policies and a comprehensive database and measurement tools to track the impact of the redirections. Highpotential leaders and people with critical skills were identified and were moved around internally to retain them. Managers were trained to help the "survivors" stay focused. Previously the process would have taken two or three times as long it was estimated, and employee engagement and morale would have taken a much harder hit.
Rio Tinto had undertaken a strategic analysis and reformation of the HR functions before the RIF that made the favorable results possible. The analysis looked at HR functions for both effectiveness and efficiency. All HR functions needed to be delivered at a lower cost while maintaining quality. Previously most HR professionals would have spent their whole career in one plant. Today they move across product groups, locations, and assignments fostering a more consistent culture. A senior HR council to provide leadership and guidance was started. This helped with a consistent HR philosophy that supported policies and standards for the whole company.
Efficiencies were achieved by using more digital processes and adding self-service tools for employees. Bringing together disparate HR departments across multiple business units increased speed and lowered costs. Further, the company moved from a defined benefit pension plan to a defined contribution plan to conserve cash through reduction in long-term pension liabilities.
Rio Tinto feels that using their human capital better, organizing teams, developing talent, and supporting innovation and creativity can help make the company's people a source of potential competitive advantage. The company's HR professionals gained new skills relative to helping productivity in the workforce. The value of a 1% to 2% increase in productivity far outweighed the entire cost of the transformation of Rio Tinto's HR function. 58
QUESTIONS
1. How did Rio Tinto's revamping of HR help with minimizing the potential problems with the reduction in force? What role would an HRIS (also called a Human Resource information system) have to play in managing an RIF?
2. Without a consistent philosophy, policies, and approaches to reduction in force (or any other disruptions in the future) what would the likely reactions from employees be?
Rio Tinto is a mining and minerals company headquartered in London. The multibillion-dollar company employs over 98,000 people worldwide and operates in more than 60 different sites in over 50 countries.
When the 2008 global recession hit it was clear that a reduction in workforce would be necessary for the company to survive, and 14,000 employees and contractors were let go. HR had been involved in the initial business discussions and understood that the reduction in force (RIF) was necessary.
For the first time, Rio Tinto's HR used a coordinated approach globally. Previously, executives and HR directors in the individual business units would have all approached the downsizing differently. But this time with a common approach, the downsizing took place in an efficient, ethical, and sensitive manner, using regional severance policies and a comprehensive database and measurement tools to track the impact of the redirections. Highpotential leaders and people with critical skills were identified and were moved around internally to retain them. Managers were trained to help the "survivors" stay focused. Previously the process would have taken two or three times as long it was estimated, and employee engagement and morale would have taken a much harder hit.
Rio Tinto had undertaken a strategic analysis and reformation of the HR functions before the RIF that made the favorable results possible. The analysis looked at HR functions for both effectiveness and efficiency. All HR functions needed to be delivered at a lower cost while maintaining quality. Previously most HR professionals would have spent their whole career in one plant. Today they move across product groups, locations, and assignments fostering a more consistent culture. A senior HR council to provide leadership and guidance was started. This helped with a consistent HR philosophy that supported policies and standards for the whole company.
Efficiencies were achieved by using more digital processes and adding self-service tools for employees. Bringing together disparate HR departments across multiple business units increased speed and lowered costs. Further, the company moved from a defined benefit pension plan to a defined contribution plan to conserve cash through reduction in long-term pension liabilities.
Rio Tinto feels that using their human capital better, organizing teams, developing talent, and supporting innovation and creativity can help make the company's people a source of potential competitive advantage. The company's HR professionals gained new skills relative to helping productivity in the workforce. The value of a 1% to 2% increase in productivity far outweighed the entire cost of the transformation of Rio Tinto's HR function. 58
QUESTIONS
1. How did Rio Tinto's revamping of HR help with minimizing the potential problems with the reduction in force? What role would an HRIS (also called a Human Resource information system) have to play in managing an RIF?
2. Without a consistent philosophy, policies, and approaches to reduction in force (or any other disruptions in the future) what would the likely reactions from employees be?
Explanation
Verified
Verified
Company RT is a mining and minerals company based in Country L. The company operates its business in many countries. During global recession, the company was required to lay off employees for its survival. Unlike the conventional approach, during the time of crisis, the company adopted a more efficient and coordinated approach.
While reducing its workforce due to global recession, Company RT has revamped its HR processes. The company utilized a coordinated approach for downsizing the workforce around the globe. The company has utilized an efficient as well as ethical way to lay off the employees. Furthermore, the HR team has identified the highly skilled employees and managers across different countries and moved them internally in order to retain them. In addition, the company provided training to the managers in order to boost the motivation level.
The HR practice that helped the company in minimizing the potential problems associated with the reduction of the work force as explained below:
• Company RT has trained its managers to keep the employees motivated. It helped them in maintaining the motivation level of employees. Furthermore, productivity of the employees was not affected.
• During layoffs, highly skilled employees and potential leaders leave the organization in the fear of getting downsized. Company RT has already moved such employees internally to keep them retained. Hence, the company has successfully retained the skilled employees.
Human resource information system (HRIS) has helped the company in managing the Reduction in Force (RIF). It provides comprehensive database and measurement tools to the company that helps in tracking the impact of re-directions. Thus, the company was able to retain the highly competent employees. Hence, it enabled them to conduct an efficient Reduction in Force (RIF).
The employees can feel dissatisfied when a company without a consistent philosophy and policies approaches to RIF. The survivors that were retained by the companies would get demotivated. It would negatively impact their productivity and work quality of the employees. Some of the employees might feel deceived and biased in the absence of consistent approach and policies towards layoffs.
While reducing its workforce due to global recession, Company RT has revamped its HR processes. The company utilized a coordinated approach for downsizing the workforce around the globe. The company has utilized an efficient as well as ethical way to lay off the employees. Furthermore, the HR team has identified the highly skilled employees and managers across different countries and moved them internally in order to retain them. In addition, the company provided training to the managers in order to boost the motivation level.
The HR practice that helped the company in minimizing the potential problems associated with the reduction of the work force as explained below:
• Company RT has trained its managers to keep the employees motivated. It helped them in maintaining the motivation level of employees. Furthermore, productivity of the employees was not affected.
• During layoffs, highly skilled employees and potential leaders leave the organization in the fear of getting downsized. Company RT has already moved such employees internally to keep them retained. Hence, the company has successfully retained the skilled employees.
Human resource information system (HRIS) has helped the company in managing the Reduction in Force (RIF). It provides comprehensive database and measurement tools to the company that helps in tracking the impact of re-directions. Thus, the company was able to retain the highly competent employees. Hence, it enabled them to conduct an efficient Reduction in Force (RIF).
The employees can feel dissatisfied when a company without a consistent philosophy and policies approaches to RIF. The survivors that were retained by the companies would get demotivated. It would negatively impact their productivity and work quality of the employees. Some of the employees might feel deceived and biased in the absence of consistent approach and policies towards layoffs.
Human Resource Management 14th Edition by Robert Mathis,Sean Valentine,John Jackson
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