Human resources management is one of the core aspects that can affect the development of organizations. Human resources are often referred to as key assets of companies, which is largely true, especially in companies operating in industries that require innovative approaches and creative vision (Mathis, Jackson, & Valentine, 2015). Some companies resort to contract labor as it is associated with reduced costs due to different taxation approaches. Nevertheless, the reliance on contract labor can often have adverse effects on the company’s performance. This paper includes a brief analysis of the issues Computer Zone, Inc. has to address.
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The company is facing such issues as large fluctuations in labor force, high labor costs, and decreased performance. One of the key issues is the company’s reliance on contract labor. It has been acknowledged that contract labor can be effective if used as a complementary source rather than the major type of human resources (Grandori, 2013). The underlying issues include the lack of contract workers’ loyalty, motivation, and commitment to achieve organizational goals. It is noteworthy that contract workers can work on temporary projects, but their involvement in lasting projects, as well as tasks associated with long-term organizational goals, tends to be ineffective (Appelbaum, 2013).
The company should consider changing its approach towards human resources management. First, it is essential to have a certain number of employees who will be available during working hours. The turnover among contract workers is high as they can leave quite easily according to the contracts as compared to the staff. Contract workers are often involved in certain project or time periods. Their involvement in various projects (in different organizations) results in their reluctance to stay or work harder. The contracts also rarely include some motivational points as they are confined to specific rewards and time limits.
One of the most effective solutions is to hire more employees rather than contract workers. The company will have to pay a bit more (up to 30%) in taxes, but the performance will improve considerably (Mathis et al., 2015). Clearly, the human resources strategies to be used should involve effective motivation initiatives. It can also be beneficial to introduce performance assessment incentives. Reports and self-reports can help identify high-achievers and those who perform poorly. Monetary rewards, as well as promotion, flexible schedules, and perks, can motivate people to perform better and be more loyal. Training and development should also be utilized as these human resources strategies help companies perform better.
The contingency plan may include the following stages. The company should hire more employees. The number of employees should be appropriate for a proper functioning of the company (Appelbaum, 2013). The rest of the workforce can remain contract workers. It is also possible to hire contract workers on a seasonal basis. As has been mentioned above, human resources training and development should become a part of the human resources management.
To evaluate the effectiveness of the new strategy, the company should assess labor costs and performance three and six months after the implementation of the strategy. The performance can be evaluated through the analysis of each employee’s performance, as well as the efficacy of the entire organization. The quality of projects, customers’ satisfaction, and profits should be analyzed to evaluate the overall performance of the company. Reports and self-reports can help evaluate people’s performance.
In conclusion, it is necessary to note that the use of contract labor as the major type of human resources can be harmful to companies’ development. Computer Zone, Inc. should hire more employees and reduce the number of contract workers. Staff training and development can help improve employees’ motivation and loyalty, which will translate into improved performance of the company.
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Appelbaum, E. (2013). The impact of new forms of work organization on workers. In G. Anthony, J. Belanger, P. A. Lapointe, & G. Murray (Eds.), Work and employment in the high performance workplace (pp. 120-149). New York, NY: Routledge.
Grandori, A. (2013). Human capital and property rights. In A. Grandori (Ed.), Handbook of economic organization: Integrating economic and organization theory (pp. 273-288). Northampton, MA: Edward Elgar Publishing.
Mathis, R. L., Jackson, J. H., & Valentine, S. R. (2015). Human resource management: Essential perspectives. Boston, MA: Cengage Learning.