Analysis of HRM Issues- Group Assignment

MMS 5202 Human Resource Management

Prof. (Dr.) Aruna S. Gamage

D L A Muthusarani MBAD/2022018

D D Somirathna MBAD/2022019

W.L.Madhuwanthi MBAD/2022031

M. A. N. P. Manasinghe MBAD/2022058

S. S. Colombage MBAD/2022064

MBA/MPM/M.Sc. Year 2022

Contents
1. Introduction .................................................................................................................................... 3
2. HR Functions at Cargills................................................................................................................... 4
a. Recruitment and Retention ........................................................................................................ 4
b. Grievance Handling ..................................................................................................................... 4
c. Performance Assessment ........................................................................................................... 5
d. Remunerations and Benefits....................................................................................................... 5
e. Occupational Health and Safety ................................................................................................. 5
3. Problems relating to HRM............................................................................................................... 6
4. Analysis of the problems................................................................................................................. 7
4.1. Root causes for high employee turnover..................................................................................... 7
4.1.1. Larger workload .................................................................................................................... 7
4.1.2. Lack of recognition ................................................................................................................ 7
4.1.3. Company culture ................................................................................................................... 7
4.1.4. Remuneration and benefits .................................................................................................. 8
4.1.5. Poor learning and development opportunities .................................................................... 8
4.2. Root causes for lack of competent employees ............................................................................ 8
4.2.1. Lack of professional development within the organization ................................................. 8
4.2.2. Lack of learning opportunities .............................................................................................. 8
5. Discussion on Solutions................................................................................................................... 9
5.1. Given Solutions for Lack of Employee Competencies .................................................................. 9
5.1.1. Prioritize professional development within the organization .............................................. 9
5.1.2. Equipping employees with industry-relevant technical knowledge and language skills ...... 9
5.1.3. Follow up employee using checklist for Empower them ...................................................... 9
5.1.4. Enhancing employee interest in the online retail course system ......................................... 9
5.1.5. Showcase Understanding about the employee .................................................................. 10
5.1.6. Allocation of a portion of the company budget for employee training.............................. 10
5.2. Given Solutions for High Employee Turnover ............................................................................ 10
5.2.1. Offering salaries & benefits competitive with the market ................................................. 10
5.2.2. Appreciating their hard working employees ...................................................................... 10
5.2.3. Arrange flexible work schedules (Better work-life balance)............................................... 10
5.2.4. Prioritize employee promotions & development program ................................................ 10
5.2.5. Corporate culture should be developing a line with the present ....................................... 11
6. Discussion of suggestions to solve the problems ......................................................................... 12
References ............................................................................................................................................ 13

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 1. Introduction

Cargills (Ceylon) PLC runs a chain of supermarkets and engages in the food processing
industry. The company operates Food City, a chain of supermarkets, convenience stores, and a
hypermarket that sells a variety of fast-moving consumer goods (FMCG) products and
beverage brands. Meats, dairy ice cream, milk, jams, cordials, sauces, and beverages are among
the available goods. Founded in 1844, Cargills (Ceylon) PLC was incorporated in Sri Lanka in
1946. Looking back on its 177-year history, the company has transformed from a wholesale
and retail operation to a key player in multiple food and beverage industry sectors. (EMIS.com,
2023)

The company continues to invest in the professional skill development of their youth, not only
helping to improve their living standards and communities, but also enabling them to enter the
global labor market as a skilled, experienced, and qualified youth workforce with the potential
to bring in sizable foreign exchange and add greater value to our economy. To support and
nurture Sri Lanka's rural young and provide them better opportunity to create their futures,
Cargills continues to work with government agencies, nonprofits, and other groups that share
its values. (Cargills (Ceylon) PLC - Sustainability Report 2021 - 2022, 2022)

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 2. HR Functions at Cargills

Cargills has established a solid framework for human resource governance that includes
tenacious policies for hiring, compensating, developing, retaining, and succession planning.
This framework is regularly reviewed and updated to align with local and international human
rights laws, Cargills employment standards, and benchmarked occupational health and safety
regulations.

a. Recruitment and Retention

While hiring individuals to fill positions, it tries to keep a healthy balance between frontline
operations and support roles depending on the needs of the business' expansion objectives.
Regardless of race, gender, ethnicity, religion, language, or civil status, all applicants are
objectively evaluated. Candidates who are younger than eighteen (18) years old are not
employed. According to operational needs, all candidates are required to work anywhere in the
nation.

The typical turnover rate for the retail industry is one of the highest in the world, at over 60%.
Being one of Sri Lanka's leading retail chains, Cargills finds it challenging to manage attrition
rates that are influenced by broader social and economic influences. They have addressed
prejudices and stereotypes inside the sector, fostering a climate of equality and diversity where
workers feel empowered to succeed. To motivate employees, Cargills keeps redefining the
employee experience by bridging the gaps in employment growth and career transition.
Cargills intends to conduct a Group-wide Employee Satisfaction Survey to better understand
employee perspectives, attitudes, and perceptions and better align them with those of the
Company to implement a more targeted approach to retention.

b. Grievance Handling

Even though all business sectors have formal grievance handling procedures in place, Cargills
also upholds an Open-Door Policy that encourages good communication between Management
and employees, giving their team the freedom to voice their grievances in an open forum. Any
grievances received through various channels, including a 24-hour hotline, are thoroughly
recorded, followed by relevant enquiries, and forwarded to management for any necessary
action. To find out more about how Cargills can become a better employer, we also conduct
exit interviews and arrange Employee Clinics at retail locations with high worker attrition.

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 c. Performance Assessment

Key Performance Indicators (KPIs), which include work ethic, competencies, and required
training certifications, are regularly reviewed between their team members. Regardless of other
factors, team members are recognized and rewarded based on performance and a solid track
record.

To increase efficiency and the effectiveness of performance appraisal system, all job
descriptions and pertinent job responsibilities were revised during the most recent financial
year under review.

d. Remunerations and Benefits

Their regular entry level wage continues to be higher than Sri Lanka's sector-specific minimum
monthly wage, and our permanent cadre receives a range of perks and incentives designed to
boost and maintain employee satisfaction, performance, and motivation at work. Advantages
comprise:

 Medical claims – including special case by case consideration for critical illness claims
 Death benefit fund
 Bonus
 Ex-gratia payments
 Provision of staff transport on need basis
 Provision of duty meals
 Staff loans at special interest rates
 Staff discounts from Cargills retail and restaurant outlets
 Gifts on special personal occasion

e. Occupational Health and Safety

Following the COVID-19 pandemic, the team's health and safety remained a key priority, and
every effort was made to ensure their employees' welfare. They successfully continued their
COVID-19 vaccination campaign and tightly on boarded personnel based on their vaccination
status. Their manufacturing facilities have implemented health and safety management systems
in accordance with ISO requirements, and they are now working to achieve a zero-incident rate
for workplace accidents by raising awareness through ongoing health and safety training
programs and other communication materials.

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The mandatory first two doses of COVID-19 vaccine were given to 99.99% of Cargills'
workforce during the most recent financial year under review, and 32% of the group received
the booster vaccination. Representatives for health and safety (H&S) at the group level were
appointed to ensure the strict application of H&S regulations. For workers who tested positive
for COVID-19, Cargills maintained four additional quarantine centers in addition to a
company-owned Patient Holding Centre (PHC). Employees were given free antigen and PCR
tests at these facilities. Whenever necessary, staff transportation was offered during the
intermittent lockdowns. Pregnant women were given special quarantine leave. Only one serious
injury was reported during the reporting period in terms of occupational occurrences.

3. Problems relating to HRM

The success of any organization depends on the human resource. Therefore, attracting and
retaining suitable candidates is one of the important Human Resources Management decisions
in an organizational context. Maintaining employees is about providing working conditions
that are worker friendly, involvement in decision making, good salaries, recognition for good
performance and so forth. (Justus et al., 2011). However, many companies even well-
established companies like Cargills (Ceylon) PLC faces the problem of higher labor turnover.
Labor turnover refers to employees leaving the organization during a given period. This may
occur due to variety of reasons such as inadequate compensation, lack of growth and
progression, poor working conditions, leadership style, organizational culture, and larger
workload. Staff turnover rate of 15% in 2021 had risen to 20% in 2022.

For employees to feel confident in doing their jobs and to improve performance, employee
competency is an important factor. Therefore, having a competent workforce is a critical factor
that affects the success of any organization. Another major issue in HR that is faced by Cargills
is the lack of competent employees to perform the relevant tasks and duties of their particular
jobs. To perform a job satisfactorily, employee competencies are therefore very important.
Having a staff that is underqualified is serious problem for an organization, where they might
require to spent additional cost and time on training employees on job related competencies.
Therefore it is important to identify root causes and solutions for these problems in order to
improve the productivity of the company

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 4. Analysis of the problems

According to the discussion had with HR manager of Cargills (Ceylon) PLC, we have identified
two major HR issues as high labor turnover and lack of competent employees. Moreover, we
have identified the root causes for these issues through the discussion had with the HR
Manager. As per the gathered information, there are several reasons for these two major HR
issues of Cargills.

4.1. Root causes for high employee turnover

4.1.1. Larger workload

Larger workload can be identified as the main root cause for high labor turnover. The
management tries to cover the tasks spread within a wide scale, through individual employee
to achieve the goal of effective and efficient use of HR. At that point they do not consider about
the capacity of the employee. Due to the high workload the employees become stressed and
overwhelmed. Also, they make mistakes intentionally as well as unintentionally. However, at
the beginning they struggle to manage the workload within the given period and once they
understood they are unable to manage, they leave from the organization. Assign tasks without
considering the ability and the interest of the employee will demotivate the employees. Even
there is not any flexible procedure to cover up those assigned tasks. This type of working
conditions makes the background for employees to leave from the organization.

4.1.2. Lack of recognition

The second reason for high labor turnover is lack of recognition. Even though employees are
working hard for the success of the organization there is not any procedure to appraise them.
Reward and recognition are more important to retain employees. Because human resource is
the more important thing in the organization. Sometimes, some employees are working more
than what they receive. Under such situation when they do not receive any kind of appraisal
they demotivate and disappoint.

4.1.3. Company culture

Cargills PLC follows the same organizational culture since their beginning of the organization.
But, as per the rapid changes happen in the present-day business context there should be some
favorable changes happen for the satisfaction of the employees. Otherwise, the business
environment provides negative impact on employees’ attitudes and actions. However, still this
organization do not understand the mismatch between the organization culture and the
employee attitudes. So, this matter also causes for the high employee turnover.

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4.1.4. Remuneration and benefits

In this organization, employees receive their remuneration packages as lower than what they
perform. Specially, during the economic crisis, the organization tries to cut down the benefits
provided for employees. This matter highly disappointed the employees. So, they understood
the insecurity of their jobs within the organization. This reason highly affected for the high
labor turnover.

4.1.5. Poor learning and development opportunities

In this organization there is a large pool of employees. Due to that reason career development
opportunities for employees are very rare. Most of the times employees must wait so many
years to get promotions. On the other hand, there is no any leaning opportunities provide for
employees. Employees work in same position, perform same tasks for a long time without
having new updates related to their post or any other working area. This makes bored on the
job and persuade employees to leave the job.

4.2. Root causes for lack of competent employees

4.2.1. Lack of professional development within the organization

Even though the organization hired competent employees they do not retain with the
organization due to less career development opportunities within the organization. It is essential
to present career development path for the employees to attract and retain competent
employees.

4.2.2. Lack of learning opportunities

In this organization there is no proper opportunities to leaning and development of employees.

Organization always tries to minimize the cost and do not give their priority to improve their
employee knowledge. For the success of any organization there should be a knowledgeable
work force. Also, when there are leaning opportunities, the employees will motivate and be
competent on what they do. But still this organization do not understand the importance of
competent workforce and it leads for different HR issues in this organization.

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 5. Discussion on Solutions

5.1. Given Solutions for Lack of Employee Competencies

5.1.1. Prioritize professional development within the organization

By giving priority to professional development in the organization, various types of advantages

can be obtained. That is, the employee can be convinced that the company is always interested
in the development of employees. Through that, the employee is interested in the development
of their skills with dedication more than usual. So further it should indicate to the employee
that the organization is interested in the development of the employee. The ways it can be
indicated is to educate the employee about the career opportunities available in the retail
industry and what qualifications they should have to get those career opportunities, then the
employee recognizes the qualifications they need to improve and is interested in improving
them. Cargills Ceylon PLC currently has some level of focus on this concept, but it is not a
significant level. So, they need focus more on that concept to develop employee competencies.

5.1.2. Equipping employees with industry-relevant technical knowledge and language

skills

Facilitates professional development as well as technical education and language development

contributes greatly to employee competencies development. For example, Cargills is a chain
of outlet spread across the country, and each area is staffed by local people relevant to each
area. In other words, the southern part is Sinhalese people, and the eastern part is Tamil
people. But the customers coming in are different each other. Therefore, to maintain a good
communication with them, at least two languages should be proficient, so Cargills should focus
on the development of those language skills to maintain good communication with customers.
As well as they introduced new technology already, but proper training is not given, so they
need to focus on that.

5.1.3. Follow up employee using checklist for Empower them

Cargills has introduced a check list to measure the performance of employees in every outlet.
But it notes measure properly by outlet managers, so each Cargills outlet managers should
identify weaknesses in their team and focus on improving them through a checklist.

5.1.4. Enhancing employee interest in the online retail course system

Recently, Cargills has developed an online retail training system (AAPI platform) to develop
the skills of its employees. But the awareness and interest of the employees is low. Therefore,
employee competence can be improved by making the employee interested in it.

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5.1.5. Showcase Understanding about the employee

In the same way that an organization understands the needs of its customers, it must understand
the needs of its employees. Identify the skills that each employee needs to develop and try to
develop them.

5.1.6. Allocation of a portion of the company budget for employee training

5.2. Given Solutions for High Employee Turnover

5.2.1. Offering salaries & benefits competitive with the market

Nowadays, many competitive supermarkets can be seen in the industry. Offering competitive
salaries can be identified as a key strategy to reduce employee turnover. Competitive salaries
and benefits should be offered to keep highly skilled employees from leaving the organization.
Cargill’s is doing this to some extent, but it is not satisfactory level.

5.2.2. Appreciating their hard working employees

Employees can be motivated in financial and non-financial ways. Working the retail outlet is
not an easy task. In that situation employee satisfaction can be increases by giving monetary
benefits to their hardworking employees as well as expressing gratitude for their work. Then
the employees feel that they are valuable to the organization. Then employee turnover can be
reduced. Every year Cargills top management give appreciation to the employees using that
ways.
5.2.3. Arrange flexible work schedules (Better work-life balance)

Nowadays, employees try to balance their work and personal life. So they expect a flexible
work schedule for that. But according to the rules of Cargills, they are not allowed to employee
to change their work schedule. This is very serious concerning situation of employee turnover.
By taking care of it and providing some relief to them, employee turnover can be reduced.

5.2.4. Prioritize employee promotions & development program

This can be identified as another weakness of Cargills Company. That is, there may be a delay
in giving promotions to employees who are full of skills and experience. Employees then leave
the organization and try to join an organization that matches their values. Therefore, employee
turnover can be reduced by showing more interest in it.

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5.2.5. Corporate culture should be developing a line with the present

The culture of an organization is a very important factor in employee retention and

turnover. This organizational culture greatly contributes to an employee's job satisfaction and
frustration. The characteristics of today's employees are different from those of the past, so
there must be some change in the organization's culture to match it. But this Cargills Company
has been following the same cultural methodology for some time. It does not fit the present so
some change should be made.

It can be stated that, this main HR problems in Cargills Ceylon PLC can be solved to some
significant extent, if the solutions provided by them are implemented properly & by
implementing the solutions that are not currently provided.

The company has installed successful solutions for the main human resource problems
discussed above, such as Lack of employee competencies and High employee turnover. But
this problem has not been solved since its implementation is not done properly by each outlet.
In order to solve this problem, it is essential that each of the solutions mentioned above are
implemented properly.

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 6. Discussion of suggestions to solve the problems

The one of solution given under lack of employee competencies is prioritizing professional
development within the organization. This concept focus level is low, so they need to focus
more to reduce lack of competencies. In that equipping employee with technical knowledge
concept, they introduced new technology, but proper training is not given them. So firstly, the
managers of each outlet should first be given training on using the new technical tools
introduced by the organization under Equipping employees with industry-relevant technical
knowledge and language skills. Because as an organization it is very difficult for each person
to practice this individually. Therefore, by giving proper training to the managers employee
competencies can be developed. The other factor is followed up employee using checklist for
empower them where a checklist has been introduced as an organization, but due to not using
this properly by the managers, so proper benefits cannot be obtained. Therefore, by mandating
the use of such a checklist, employee weaknesses can be identified and remedied. The other
factor, enhancing employee interest in the online retail course system developed by Cargills,
the organization recently introduced an online retail learning system with the aim of solving
this human resource problem. But there is no proper value embedded in the outlets. Therefore,
conducting a workshop to introduce its value and benefits is a very successful method. Through
that, I believe that the knowledge of the employees about this system will be developed, and
this human resource problem can be successfully solved through that. Also showcase
understanding about the employee these factors will be basically clear that employees take a
different form each other. Their mental levels and behavior patterns are different from each
other. Therefore, this problem can be solved by identifying the weaknesses of each employee
and focusing on them individually. Cargills has made some financial allocations for employee
training, but they have not been properly utilized. Therefore, we think that it will be more
successful to give the allocated money to the outlet and train the employees there under a proper
system.

As well as, Cargills has provided successful solutions for high employee turnover, but their
results have been limited due to the deficiencies in the use of those solutions. For example, the
employee wages are small amount low compared to other supermarkets. It also affects the
employee turnover. Therefore, efforts should be made to provide an equal salary that is in line
with the market. Also, under appreciating their hard working employees, under this once a
year through Cargill’s radio, gratitude is expressed to the top management to their employees,
but it is not satisfactory. So, make sure to meet them physically at least once a year to discuss
with them and express their gratitude to them. Also, currently company is not willing to set
flexible work schedule for employees. But with the current conditions, by setting up a work
schedule with flexible, employee turnover can be reduced to a considerable extent. Cargills
also gives promotions to qualified employees, but some delay can be seen. Then there is a risk
of employees moving to another organization. Therefore, arrangements should be made up
provide quick promotion for that. Finally, their corporate culture cannot be seen to develop.
For a long time, they maintain the same type of corporate culture. It should be changed to suit
the present.

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According to the above discussions, through the successful use of the solutions given by them,
the solutions for the main human resource problems such as Lack of employee competencies
and high employee turnover will be solved.

References

Justus W., Kombo A., Murumba N., and Edwin M., (2011), “The factors contributing to labor
turnover in the sugar industry in Kenya (a case of Sony Sugar Company limited)”, International
Research Journal, Vol. 2(5) pp. 1138-1148

Cargills Ceylon PLC Annual Report 2021/2022

Cargills Ceylon PLC Sustainability Report 2020/2021

EMIS.com. (2023, February). Retrieved from Cargills (Ceylon) PLC (Sri Lanka):
https://www.emis.com/php/companyprofile/LK/Cargills__Ceylon__Plc_en_2313961.
html

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