HRM practices at Ford Essay

Henry Ford â€Å"Failure is simply the opportunity to begin again this time more intelligently.† â€Å"I do not believe a man can ever leave his business. He ought to think of it by day and dream of it by night† â€Å"It has been my observation that most people get ahead during the time that others waste.† – Henry Ford History of Ford Motor Company Ford Motor Company is an American automaker and the world’s third largest automaker based on worldwide vehicle sales. Based in Dearborn, Michigan, a suburb of Detroit, the automaker was founded by Henry Ford, and incorporated on June 16, 1903. Ford Motor Company would go on to become one of the largest and most profitable companies in the world, as well as being one of the few to survive the Great Depression. The largest family-controlled company in the world, the Ford Motor Company has been in continuous family control for over 100 years. Ford now encompasses several brands, including Lincoln and Mercury. The founding of Ford Motor Company Henry Ford’s initial foray into automobile manufacturing was the Detroit Automobile Company, founded in 1899. The company floundered, and in 1901 was reorganized as the Henry Ford Company. Ford had a falling out with his financial backers, and in March 1902 left the company with the rights to his name and 900 dollars. The Henry Ford Company changed their name to Cadillac, brought in Henry M. Leland to manage the operation, and went on to be a successful manufacturer of automobiles. Henry Ford himself turned to an acquaintance, coal dealer Alexander Y. Malcomson, to help finance another automobile company. Malcomson put up the money to start the partnership â€Å"Ford and Malcomson† and the pair designed a car and began ordering parts. However, by February 1903, Ford and Malcomson had gone through more money than expected, and the manufacturing firm of John and Horace Dodge, who had made parts for Ford and Malcomson, was demanding payment. On June 16, 1903,  the Ford Motor Company was incorporated, with 12 investors owning a total of 1000 shares. Ford and Malcomson together retained 51% of the new company in exchange for their earlier investments. When the total stock ownership was tabulated, shares in the company were: Henry Ford (255 shares), Alexander Y. Malcomson (255 shares), John S. Gray (105 shares), John W. Anderson (50 shares), Horace Rackham (50 shares), Horace E. Dodge (50 shares), John F. Dodge (50 shares), Charles T. Bennett (50 shares), Vernon C. Fry (50 shares), Albert Strelow (50 shares), James Couzens (25 shares), and Charles J. Woodall (10 shares). At the first stockholder meeting on June 18, Gray was elected president, Ford vice-president, and James Couzens secretary. Despite Gray’s misgivings, Ford Motor Company was immediately profitable, with profits by October 1, 1903 of almost $37,000. A dividend of 10% was paid that October, an additional dividend of 20% at the beginning of 1904, and a nother 68% in June 1904. Two dividends of 100% each in June and July 1905 brought the total investor profits to nearly 300% in just over 2 years; 1905 total profits were almost $300,000. However, there were internal frictions in the company that Gray was nominally in charge of. Most of the investors, both Malcomson and Gray included, had their own businesses to attend to; only Ford and Couzens worked full-time at the company. The issue came to a head when the principal stockholders, Ford and Malcomson, quarreled over the future direction of the company. Gray sided with Ford. By early 1906 Malcomson was effectively frozen out of the Ford Motor Company, and in May sold his shares to Henry Ford. John S. Gray died unexpectedly in 1906, and his position as Ford’s president was taken over by Ford himself soon afterward. Ford came to India in 1998 with its Ford Escort modelFord India was ranked as one of the top 25 best employers in India in 2009 by the Hewitt Associates. The company was included in the top 25 employers due to an objective oriented strategy, strong emphasis on recruiting, motivating, developing and training capable human resources. The company has implemented career development in the company objectives and there is an open culture at every level of the organisation. Growth oriented strategies and well being of employees are emphasised to enhance employee satisfaction (Ford Motor Company 2009). Ford introduced methods for large-scale manufacturing of cars and large-scale management of an industrial workforce using elaborately engineered manufacturing sequences typified by moving assembly lines. Henry  Ford’s methods came to be known around the world as Fordism by 1914. Alan Mulally Alan Roger Mulally (born August 4, 1945) is an American engineer and business executive who is currently the President and Chief Executive Officer of the Ford Motor Company. Ford, which had been struggling during the late-2000s recession, returned to profitability under Mulally and was the only American major car manufacturer to avoid government-sponsored bankruptcy. Mulally was previously executive vice president of Boeing and the CEO of Boeing Commercial Airplanes (BCA). He began his career with Boeing as an engineer in 1969 and was largely credited with BCA’s resurgence against Airbus in the mid-2000s. Education Mulally graduated from the University of Kansas, also his mother’s alma mater, in 1969 with Bachelor of Science and Master of Science degrees in aeronautical and astronautical engineering. He is an alumnus of the Kappa Sigma Fraternity and is its 2007 Man of the Year. He received a Master’s degree in Management (S.M.) as a Sloan Fellow from the MIT Sloan School of Management in 1982. Ford Motor Company Mulally was named the President and CEO of Ford Motor Company on September 5, 2006, succeeding William Clay Ford, Jr. CURRENT NEWS FORD EARNS FIRST QUARTER PRE-TAX OPERATING PROFIT OF $2.3 BILLION AND NET INCOME OF $1.4 BILLION + Ford Motor Company [NYSE: F] today reported 2012 first quarter pre-tax operating profit of $2.3 billion, or 39 cents per share, and net income of $1.4 billion, or 35 cents per share, led by strong performance in North America and Ford Credit. Ford has now been profitable on a pre-tax operating basis for 11 consecutive quarters. (27 April 2012) Ford claims multiple Edmunds value awards Ford dominated five categories of Edmunds’ 2012 Best Retained Value Awards. Ford F-150 took Large Light-Duty Truck honors for â€Å"offering so many models and useful features,† while Ford F-350 Super Duty’s â€Å"ideal mix of power, brawn and refinement† earned it the Large Heavy-Duty Truck award. The â€Å"best pony car you can buy† goes to Ford Mustang in the $25,000-$35,000 Coupe category while â€Å"top dog† Ford Shelby GT500 won twice, taking both Coupe and Convertible Over $45,000 groups. Click here for more. (24 April 2012) Ford Motor Company has long had a history of advertising slogans that bring the current company direction to the masses and now, FoMoCo has unveiled the newest motto that the company believes will resonate well both with consumers and employees – â€Å"Go Further†. Human Resource Managment for Ford Motor Company Ford Motor Company is a world-wide leader in automotive and automotive-related products and services as well as in new industries such as aerospace , communications and financial services . Their mission is to improve continually their products and services to meet their customer ‘s needs , allowing them to prosper as a business and to provide a reasonable return for their stockholders , the owners of their business . Values , how they accomplish their mission is as important as the mission itself . Fundamental to success for the company are these basic values : People , their people are the source of their strength People provide their corporate intelligence and determine their reputation and vitality . Involvement and team work are their core human values . Products , Their products are the end of their efforts , and people should be the best in serving customers world-wide . Operation in the Human Resource Department The Ford Motor company ‘s transition from tough managerialism , a management philosophy based on the promising pursuit of tight control over all employees , to a strategy of willing participation and involvement. Ford Motor Company in the 1980s provided a powerful example of major changes in personnel practice . They chose to concentrate on Ford for two reasons (a ) because of its paradigmatic importance as progenitor of the traditional production approach and (b ) because of the magnitude of the chance it initiated during the 1980s which reflected a critical re-evaluation of the production approach and a significant move in the direction of HRM for strategic reasons Ford is synonymous with the creation of a particular  management style- Fordism based on hierarchical decision-making with strict functional specialization , tightly defined job design and specialized machinery to mass produce a standard product for mass markets (Starkey Mckinlay ,1989). A conjunction of market and technological factors stimulated Ford ‘s continuing efforts to redesign jobs , its mode of organization and its prevailing culture . The organizational model for Ford ‘s rethinking of its approach to personnel management was , in part , Japanese-inspired The company ‘s close links with Mazda , in which it owns a 25 a percent stake , serves as a source of competitive bench-marking . This bench-marking formed the basis of its long-term strategy . The pre-existing Fordist system provided important elements of continuity System or Strategy Used For Hiring New Workers Henry Ford ‘s celebrated Five-Dollar-a-Day program , introduced in 1914 contained an element of investment to deal with worker heterogeneity . In the early 1900s , most of Ford ‘s workers were recent arrivals to Detroit and many were new immigrants : in 1915 more than 50 languages were spoken at Ford ‘s Highland Park plant Ford made two types of investments in employment relations to deal with worker heterogeneity . First , it is well known that he introduced an extreme division of labor in his mass production system. Such an arrangement reduced , if not eliminated , the necessity for workers to communicate with one another. Second, for introduced a system of inspection and certification to homogenize workers with respect to certain productivity attributes . Thus , according to Raff and summers (1987 , some 150 Ford Sociological Department inspectors visited the homes of all workers in to inculcate them with Ford values and to certify them for the Five-Dollar-a-Day program Recruitment is the first important step in creating the right work force for successful training . Most hiring in Japan takes place in spring when students graduate from high schools and colleges . New hires arrive ready and malleable for employment-based training . Japanese employers stress academic achievement in their hiring decisions , in contrast to the U .S . situation where academic achievement rarely serve as a hiring criterion . In Japan schools , which are in the best position to judge students ‘ achievements , perform much of the screening through semiformal ‘ arrangements with specific employers. Many employers have  established ongoing relationships with particular high schools to help recruit their graduates year after year . In hiring for production and clerical jobs , for example , employers , especially large ones , rely extensively on the recommendations from high schools . These recommendations are based mostly on academic achievements . In some cases , employers also administer their own tests , though this practice has become less common recently , given the shortage of high school graduates In hiring workers , Ford had no use for experience and wanted machine-tool operators who have nothing to unlearn , who have no theories of correct surface speeds for metal finishing , and will simply do what they are told to do , over and over again , from bell-time to bell-time In deskilling shop-floor work , Ford conformed to the more general trend in US industry at the time . By the 1920s craft control had been defeated , and in the process , in most of the major mass-production enterprises , shop-floor workers found themselves excluded from the organizational learning process that generated competitive advantage responding to , and reinforcing , the segment system of skill formation that emerged in dominant US industrial enterprises in the early twentieth century , a highly stratified educational system evolved that effectively separated out future managers from future workers even before they entered the workplace. Thus , a deep social gulf was created between managers as `insiders ‘ and workers as `outsiders ‘ in the employment relations of US industrial enterprises Until the last decade of the nineteenth century , a formal system of higher education was relatively unimportant for the development and utilization of productive resources , in part because US industry was only beginning to make the transition from the machine-based first industrial revolution , in which shop-floor experience remained important , to the science-based second industrial revolution , in which systematic formal education was a virtual necessity . From the late nineteenth century , however , the system of higher education became central to supplying technical and administrative personnel to the burgeoning bureaucracies of US industrial enterprises Developing its system. During the period when Ford was developing its system of mass production , it  encountered on a correspondingly massive scale the individualized resistance of workers who refused to consent to permanent subordination under the new system . By the time the first moving assembly lines were being created in the Highland Park plant , labor turnover was becoming an acute problem for Ford management . In 1913 the rate of quits at Ford was about 370 percent of the Further , according to company officials , during the same period it was not unusual for 10 percent of those currently holding jobs at Ford to be absent on a given day . The company was becoming aware that problems with its labor force were costing it money . hiring and training of new workers on such a massive scale entailed a significant seen as impairing the efficiency of production Another aspect of the labor problem ‘ which Ford management perceived was restriction of output or soldiering by workers , a form of covert and informally organized resistance which directly challenged the basic presumption of Taylorism and Fordism : management control of the pace and intensity of work. Flow production and moving line assemble were reducing the scope for soldiering , but would not eliminate it. Ford management was also concerned about more organized forms of opposition and the potential influence among its workers of unions such as the Carriage , Wagon and Automobile Workers ‘ Union (CWAWU ) and radical groups such as the International Workers of the World (IWW . Although Detroit had been justly known as an open shop town since around 1902 and labor unions and radical organizations were not particularly strong in the automobile plants , the IWW had launched a well publicized campaign to organize Detroit auto workers , had agitated at Ford ‘s Highland Park plant , and led a strike-all the more frightening to employers because it was organized along industrial rather than craft lines. Ford ‘s problems of labor control were compounded by the large numbers of immigrants who comprised the new industrial workforce at Ford. In 1914 , 71 percent of Ford workers were foreign-born , representing at lest 22 different nationalities (some Ford publications claimed fifty or more ) among which eastern and southern Europeans predominated . Many of these immigrant workers were from a peasant background , and found entirely alien an industrial work culture such as that at Ford . Although the detailed division of labor and specialized machinery in the Ford shops minimized the requirements of skill and judgment and thereby made it possible for unskilled immigrants to become auto workers  with minimal training , Ford managers were concerned about the effects which such a culturally heterogeneous workforce might have upon shop discipline and the steady output of their integrated productive system Fordism and current HRM Practices at Ford Motors  Much of the origins of Modern Human Resource Management can be traced back to developments in American industry in the early years of the 20th century, more specifically t o the management and production policies initiated by Henry Ford at the Detroit factories of Ford Motors. Organising the workforce of the company on the same footing as other factors of production, Ford was instrumental in introducing the concepts of assembly lines, mass production, and the technical division of labour within companies and their production units. Fordism, as this set of personnel management practices came to be known, was identified with strong hierarchical control, extraordinarily good remuneration, (the five dollar day), and the restriction of workers to particular tasks, both skilled and unskilled. The emphasis in Fordism was on quantity, not quality, and workers were not allowed to involve themselves in any activity outside their specifically delegated functions. Fordism came to be associated with hierarchical decision making, strict functional specialisation, and tightly defined job design. With assembly line stoppages remaining unattended on purpose until the arrival of specialists, and workers knowing very little outside their specific areas of work, product quali ty in Fordism was allowed to be subordinated to the need to maintain and increase volumes. Ford Motors also saw the establishment of the first â€Å"sociology†, or employee welfare departments, in which managers tried to ensure that domestic problems were not allowed to impinge on assembly line productivity. Whilst absorption and utilisation of modern technology and design have always been associated with Ford’s way of functioning, the company even today typifies the â€Å"production model† of HR, manifested by tough and consistent practice of industrial relations and a clear focus on the continuity of production. HR policies have continued to be hierarchical and the company organisation is known to be multi layered, bureaucratic, and with comparatively low levels of delegation and working independence. Reacting to the success of Japanese manufacturing practices, Ford initiated changes in its personnel policies in the early 1980s to bring in elements of  Japanese HR practice. A number of measures for increasing participation and involvement of worker s in Ford UK over the following years led to significant improvement in results. Performance Management imperatives were incorporated into the remuneration structure and problem solving groups, similar to quality circles, now flourish in the company. The company’s Employee Development and Assistance Programme, which allowed for non-work, non-pay benefits for educational needs of employees also met with significant worker approval. Whilst Ford Motors is trying to make its HR policy more participative and focused on improving workforce skills and abilities, old bureaucratic practices still remain. Industry analysts assert that the company is manager heavy and that individual managers are prone to guard their own turf. It is estimated that Ford has 12 levels between the shop floor worker and the Chief Operating Officer (COO) compared to 4 for Toyota. Despite recent efforts to renew workforce participation, which resulted in thousands of suggestions, even transparently effective recommendations for improving productivity and cutting costs are difficult to intr oduce because of complex and time consuming procedures and the need for union acquiescence. Steady inroads made by trade unions over the years also means that all Ford workers are covered by contracts that include not just pay and benefits but also a broad range of shop floor actions. Productivity levels, once the glory of the company, is, at 37 hours per vehicle, much worse than Toyota’s comparative figures of 27 hours. Strikes are not uncommon, not just at Detroit but also at Ford factories in other countries. A recent strike at Ford’s Russian factory led to prolonged work disruption and resulted in across the board wage increases of more than 20% before production restarted. Whilst selection and recruitment policies at Ford are extremely structured, with salaries and working conditions being governed by union agreements, adding manpower is the last thing on the management’s mind right now. The management, apart from selling off its Jaguar and Land Rover brands, has initiated a process of downsizing its American workforce by 30,000 workers, a proposal that has not been met kindly by its unions, and which is likely to be the company’s chief HR focus in coming months. HR PRACTICES AT FORD MOTOR HR Strategic Planning Culture and Change Management Leadership Development Labour Relations Succession Planning Diversity Enhancement Learning and Development Employee Relations Reward and Recognition Systems Workforce Planning Recruiting and Selection OTHER HR PRACTICES- US Skills and Credentials HR Summer Intern Program HR Ford College Graduate (FCG) Program E-HR Practice HR ONLINE – a key component of Fords HR service delivery strategy Launched in Jan 1999  training program Ford’s training program includes the Fairlane Training and Development Center. This is a center that focuses on teaching vital skills to existing employees to become future leaders. For example they teach the Six Sigma theory that is now viewed as one of the most important management theories. Since 1999 Six Sigma has become Ford’s turnaround strategy to reclaim market share. They trained thousands of their workers to improve their skills on quality management so that they could implement this new strategy. In addition they have set up a Leadership Development Center that is targeted at grooming future leaders. Providing more incentive for workers to work hard and hopefully become leaders in the organization. Ford’s Performance Appraisal System Conclusion A broad summarisation of HRM policies at Ford leads to the following conclusions: HRM policies at Ford have evolved over many years. Ford’s HRM  policies still follow the production model, which works towards continuous production.Ford is making efforts to increase worker participation, its inherent bureaucracies and adversarial relationships with Trade Unions make this task difficult and complex. Ford is also very careful about the quality of its employees at all levels. However, with downsizing programme in the USA, which includes both managers and workers, has effectually led to most of its recruitment efforts occurring in overseas locations, where local constraints play a part in the recruitment process. Remuneration and benefits for employees are attractive in Ford and the company believes in providing for employees through cash and non cash means. Ford is significantly more constrained in its ability to alter compensation or work practices because of the strength of it s Trade Unions. In Ford, whilst the commitment between management and employees is lesser, strong Trade Union agreements make it difficult to terminate workers at will. Trade Unions play a far more dominant role in Ford , especially in its Japanese factories. Some future challenges for ford Globalization and increased competition Managing a global workforce. Ensuring availability of employees who have the skills for global assignments. Focusing increasingly on employee productivity to ensure competitiveness. Ensuring legal compliance when conducting business abroad. Downsizing Managing organizational relationship with survivors Managing morale and commitment of survivors Providing outplacement services or relocation for employees who lose jobs. Providing personal and family counseling to employees who lose their jobs. Industry and Occupational shifts Managing workforce with flexible working patterns. Focusing on competencies during hiring process. Designing incentive based compensation. Developing proactive employee development programmes. Technological Advancements Managing a virtual workforce. Managing employee alienation. Developing training modules and conducting programmes to provide employees with required skills. Retraining current employees to mange obsolescence. Providing work-life balance initiatives. Outsourcing Manage employee concerns about losing jobs due to outsourcing. Managing employee morale and productivity. Flexible Work Arrangement Managing the loss of organizational control over work. Developing programmes for motivating the flexible workforce. Developing ways of ensuring commitment of the flexible workforce to the firm. Workforce Composition Devising customized HR strategies for hiring, retaining, and motivating employees belonging to different generations. Developing life-style driven perks for the new generation employees. Developing work-life balance programmes. Ageing population and workforce Finding replacement for retirees. Managing the demand-supply gap for qualified managerial talent due to a large retiring workforce. Developing mentoring programmes to ensure the skills of experienced mangers are passed on to new managers. Obsolescence training and retaining of older employees. Managing retirement policies. Conducting programmes to retain experienced employees. Women in workforce Strategizing to attract and retain educated and skilled women workers. Conducting programmes for women who opt for career breaks. Providing facilities such as crà ¨ches, flexible working hours, etc. Global Workforce Developing diversity training programmes. Developing HR initiatives directed to workforce diversity. Identifying and training expatriate managers for overseas assignments. Developing equitable pay plans for individuals working in different  countries. References Briscoe, D, Schuler, R, & Claus, L (2004), International Human Resource Management Policy and Practice for Multinational Enterprises, 2nd Edition, Routledge Brewster, C, Sparrow, P, & Vernon, G, (2007) International Human Resource Management. 2nd Edition, London, UK, Chartered Institute of Personal Development Brewster, C., Mayrhofer, W., & Morley, M. (Eds.), (2000) New Challenges for European Human Resource Management, Basingstoke, England: Macmillan Briscoe, D. R., & Schuler, R. S. (2004). 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