Leading and Managing Ethically BU7404
Introduction ( Leading and Managing EthicallyBU7404)
Human resource management in an organisation plays a crucial role in elevating the performance of the company. Therefore, it becomes the responsibility of the HR manager to ensure the well-being of their employees while taking steps to ensure that the performance of the organisation is at par with the industry level.
However, in many cases, it has been seen that in order to manage performance within the company, organisations, and the HR management often takes unethical ways to influence human resources. The following study is based on the case of Jaguar Land Rover that has been taking several steps including the job cuts and job redundancy policies for reducing their workforce in order to manage and optimise the performance of the company.
Therefore, the study would focus upon the ethical issues that are present in the company related to the recent occurrences. Additionally, the nature of ethical issues would also be discussed along with the evaluation of the approaches adopted by the organisation in order to minimise its impact. Moreover, a set of recommendations will also be provided for the organisation so that the present ethical issues can be eliminated at present and avoided in future.
Company Background
Jaguar Land Rover Automotive PLC is a British automotive company and it is based at Whitley, Coventry, United Kingdom. The key people of the organisation are Gerry McGovern, the chief design officer and Thierry Bollore the chief executive officer of the company. Their new global strategy is to re-imagine the luxurious design of the future by their two different British brands. Jaguar Land Rover produces Sport utility vehicles and Luxury vehicles (Jaguar Land Rover, 2021). Jaguar Land Rover was the subsidiary of Tata Motors but later after the announcement of employing 1,000 new staff at Halewood plant in 2013, Jaguar Cars Limited and Land Rover made an alliance and merged as Jaguar Land Rover Limited under the name of Jaguar Land Rover Automotive PLC.
The company has the following subsidiaries such as Jaguar Land Rover India, Jaguar Land Rover Holdings Limited, Chery Jaguar Land Rover and Jaguar Land Rover Limited. This firm has over 39,787 employees, which leads them to the position that they are holding today. The total revenue of the company is £22.984 billion and the growth is 12.4% during the financial year 2020-2021.However, the company faced a net loss of -£0.469 billion with having total assets worth over £24.104 billion (Jaguar Land Rover, 2021). The company has operations in over 160 countries with 80% of its vehicles manufactured in the UK.
The organisation also owns the rights over Lanchester, Daimler and Rover Marques among its top vehicles.
Ethical issues present in the company
Considering the present position of the Jaguar land rover in 2020 the organisation had to take several measures in order to maintain its position in the market. During the covid-19 pandemic in 2020, the organisation faced a decline in the sales as consumers were mostly focused on buying essentials there for automobile sales is severely dropped (Kufelová & Raková, 2020). As a result, to maintain the operational costs of the organisation, Jaguar Land Rover decided to cut jobs globally and this can be considered as unethical issue in human resource management in order to ensure a higher rate of performance of the organisation.
The prime reason for cutting short the workforce of the organisation was to ensure that the company does not face any loss after declining of sales. Over 4,500 job cuts were planned by the company out of which 500 was to be done in the Halewood plant in Merseyside (BBC News, 2020).
It can be stated that due to the increasing losses that the company has been facing in both its global markets as well as in the markets of the UK. The organisation was forced to cut short its workforce in order to maintain its performance and survive in the highly competitive automotive industry. It has been a very tough decision for the organisation to decide how many jobs the organisation is willing to cut short so that they can reduce the company’s losses while also maintaining the motivation levels of the employees (Liverpool echo, 2021).
The ethical dilemma, in this case, occurs when the management has to decide whether to cut jobs or to keep the employees working and adopt a different strategy to minimise the impact of losses they have incurred in the different markets (Schaltegger & Burritt, 2018).
Even though the decision was taken by the organisation to cut short their workforce has a rational reason, which would allow the company to reduce its losses. However, the covid-19 pandemic has been a very tough situation for everyone and taking away the jobs of the individuals working for the company would only make it worse for them.
It is essential for the organisation to focus upon the well-being of their employees and ensure that they are well kept even during a period of crisis (Farouk & Jabeen, 2018).
Based on the utilitarian ethical theory of human resource management it can be stated that it is essential for organisations like Jaguar Land Rover to treat their employees equally and undertake actions that can help to elevate their motivation level (Smart, 2020). Utilitarian ethical theories also refer to the phenomena of utilitarianism within the organisation, which refers that actions taken by the human resource management that leads to happiness among the workforce can help in improving the job satisfaction levels.
Therefore, it is essential for organisations to ensure that their employees are at high motivation levels that can further upgrade company productivity (based on the ideas of de Lazari-Radek & Singer, 2017).
The main reason due to which Jaguar Land Rover decided to cut short its workforce was to optimise its performance management. However, the way the organisation was trying to achieve their desired level of performance can drastically affect its performance management. For instance, cutting short the workforce can affect the motivation level of the existing employees and this would have a negative impact on the performance, as employees working with the declined motivation level cannot achieve their organisational goals and objectives (Biglari, 2018).
As a result, it is essential to undertake ethical HRM practices, which can help the organisation to maintain its desired level of performance while also maintaining the number of employees existing in the company. Based on the global position of the organisation, there are a number of ways through which the organisation could have retained most of its workforce; however, the company chose to cut it short (Tweedie et al. 2019). This step taken by Jaguar Land Rover can be identified as unethical HRM practice, which is aimed towards maintaining the position of the organisation without bothering about the well-being of their employees.
The organisation employs several thousands of people in the global context and these employees are dependent upon the company’s HR management policies and practices (Yang, 2019). Cutting short the workforce in one of its major units can have a detrimental psychological impact on the employees working in other plants across the country as well as in different parts of the world. Moreover, most of the jobs were cut down in the Halewood plant of the UK, which can be identified as the major unit when it comes to their production facilities.
Adding to this, the Kantian theory of ethical human resource management practices can also be taken into consideration which states that the moral actions taken by an entity need to be rational and in the favour of the human resources (Kavanagh & Szweda, 2017). Therefore, the decision taken by the organisation to cut short its workforce can be clearly identified to be as a decision taken against the well-being of the employees working for the company (Giubilini, Douglas, & Savulescu, 2018).
Nature of the ethical issue
Jaguar Land Rover is Britain’s largest automotive company who has recently announced to cut 1,100 jobs after they have seen a huge loss of £500 million in just three months as the outbreak of covid-19 halted their manufacturing and production along with closed showrooms that were forced to shut down due to the nationwide lockdown (Jhamb & Carlson, 2020). The job cuts will affect the company within their plants including Ellesmere Port, Castle Bromwich, Halewood and Solihull.
Jaguar Land Rover was already under major problems, which led to the biggest loss of £3.6bn faced in the Chinese market, which led to the situation of job cut (Jhamb & Carlson, 2020).
The organisation has been facing losses since last year due to the covid-19 pandemic and declining sales in China along with the falling demand in the United Kingdom due to the effect of Brexit and the restrictions in trading. Due to the sinking production and sales, the issue of job cuts arose as Jaguar Land Rover was finding it difficult to maintain the employees with such huge losses.
The performance management strategy was not able to resolve the issues of losses that forced management to make the decision of job cut in order to stabilise the company’s base (based on the ideas of Pavlov, Mura & Franco-Santos et al. 2017).
In shedding jobs, ethics are involved in the decision-making as it affects the environment of the company (Kabeyi, 2018). Sometimes due to economic and financial circumstances, layoff happens and sometimes it happens due to poorly handled decisions made by the performance management. In order to maintain the positive reputation of the company it is essential to take strong steps regarding the issues, which will affect the company business and record of accomplishment.
The ethical dilemma that were present in the management issues in Jaguar Land Rover is the most due to the decision-making process done as a part of optimising the Performance management in the company (Hiekkataipale & Lämsä, 2019).
This affects the morale of the employees, as they feel devalued and unappreciated. The environment of the organisation is chaotic and all the employees feel insecure about their position in the company. Sudden layoff increases the reduction in loyalty among the employees and the management (as per the ideas of Jeanes, 2017). The job cuts in a company may seem minor but they can affect the production of the business.
It decreases customer loyalty and increases emotional distress in the organisation. Downsizing can implement a negative approach towards the company with less innovation and increased voluntary turnover (Nuseir & Ghandour, 2019).
A layoff can develop a missing gap between the employees, which can rapidly affect the business of the organisation. This can increase dissatisfaction and less motivation among the workers, which will significantly affect the retention of the customer.
The productivity level of the employees will shrink due to fear and distrust. Less number of workers means limited innovation and delays in the delivery of goods and services, which develop a negative image in the market. The company is still recovering from the difficulties posed by the pandemic to react in a decisive way (Richards, Yeoh & Chong et al. 2019).
Evaluation of the organisational approach
The approaches taken by the organisation, in order to ensure that reducing their workforce does not have a negative impact on the existing employees as well as over the ones who have been terminated are focused on providing redundancy programs (Liverpool echo, 2021). This essentially means that the company would refer these employees to other organisations or would provide them financial compensation for relieving them of their duties (Giubilini, Douglas & Savulescu, 2018).
This approach adopted by the HRM of the Jaguar Land Rover can be identified as a response to the ethical dilemma in terms of identifying if they need to cut short their workforce or retain them.
Finally, the organisation has come up with the solution and approach, which can be identified as in the favour of both the organisation as well as employees. However, during the time of the covid-19 pandemic, it is not clear if other organisations would accept these employees in their organisation (Bates & Hertig, 2020).
This is mostly due to the fact that just like Jaguar Land Rover every other automobile organisation working in the automotive industry is facing a period of crisis. Nonetheless, the job referrals provided by Jaguar Land Rover can work in the favour of the employees once the crisis of the covid-19 pandemic is over
However, the organisation could have also adopted other approaches, which could have helped them in retaining most of their employees without letting them go. For instance, the organisation achieved a growth of over 12% in the first quarter of 2021, which indicates that the company has consistently performed well after the crisis of 2020 (Jaguar Land Rover, 2021).
The performance of the organisation can work in the favour of the decision made by the company to cut short its workforce. However, the ethical dilemma in reducing the number of employees of the company to increase the performance of the organisation remains.
The action taken by the organisation can have a detrimental impact on the company’s reputation in the market and brand image (Jaguar Land Rover, 2021). In future instances, if the company is willing to increase its workforce by hiring new employees there can be a shortage of individuals willing to work for the company as they would have a fear in mind that this company terminates employees during a period of crisis (Diaz-Fernandez, Bornay-Barrachina & Lopez-Cabrales, 2017).
As a result, the organisation needs to adopt approaches in future that can help them in improving their reputation and image in the market. Furthermore, the organisation can also adopt a process that can help in uplifting the motivation level of the existing employees who have been under constant pressure due to the actions taken by the HRM (McDermott et al. 2019). For instance, providing incentives to the existing workforce based on performance can have an elevating effect on the organisation’s performance management practices.
Recommendations
It is recommended that providing training to the employees will affect the production of the company. Better training will lead to better work and improve the growth rate of the company. In order to keep the organisation in the competition, workforce training is essential.
Every employee is a human and everyone has their gap in their professional skill but it will get improved through the training. Having a high and better quality workforce will strengthen the foundation of the organisation and the success will be attained sooner. Training will improve new technology, manage the cost control, develop the quality of the product and services, and mainly improve the organisational flexibility and viability.
Reassigning the employee will work rather than unemployed them. Acknowledging the right person to the right position with skills will help in organisational success. Cutting jobs will affect the company more compared to switching or changing the roles.
Companies can switch the roles into manufacturing ground, which will motivate the employee to do something new, and innovative ideas can be generated which will help in productivity of the business.
Introducing new reward schemes for the existing employees can have a detrimental impact on the motivation levels of the employees. This would also help the organisation in increasing the performance level of the employees, which is the prime focus of the organisation considering the crisis that Jaguar Land Rover faced in 2020.
Introducing new rewards schemes and incentives for employees can motivate their existing workforce to perform beyond their existing capacity, which would not only work in the favour of the organisation but would also help the employees to achieve a greater financial reward.
Apart from that, as a part of the rewarding strategy, the organisation can provide recognition to the employees who have worked exceptionally well during a period of crisis which has allowed Jaguar land rover to survive the covid-19 crisis.
Hiring new employees can also be recommended to the organisation mostly because the organisation has attained growth in the first quarter of 2021. Considering the fact that the company has recovered from the losses it has incurred during 2020 it is feasible for the company to hire new employees and fill the gaps that were created by cutting short the workforce in 2020.
Conclusion
Based on the findings and evaluation of the HRM practices adopted by the Jaguar Land Rover during the period it can be stated that the organisation to some extent has taken and ethical decisions in terms of managing its existing workforce.
The decisions taken by the organisation to cut short its workforce during the covid-19 pandemic have been analysed and found that other companies have undertaken this method as well where they develop HRM strategies and retained their employees. However, the organisation decided to cut its workforce rather than retaining them, which had a major impact on the existing workforce.
The action taken by the organisation was in the favour of improving the performance, which to some extent did include in the first quarter of 2021; however, it also left an impact on the company’s image in the broader context.
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