Volkswagen Group's Human Resource Management | Free Essay Example

Volkswagen Group’s Human Resource Management

Words: 1994
Topic: Business & Economics
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Introduction

The corporate strategy of the Volkswagen group is to become the top automobile producer and to lead in sustainability within the next six years (Martin, 2010). So as to meet the mentioned corporate strategy, the Volkswagen group will require an effective, resilient, and creative workforce that is properly managed to develop attractive brands, increase production volumes, increase sale volumes, and move towards sustainability among other key areas of its corporate strategy (Peter, 2006). The strategic management of the human resource so as to meet the expectations above has been a key area that is pursued by the Volkswagen group. Among the key approaches that are applied for the strategic management of employees at the Volkswagen, group include the use of training and development programs, performance management, and pay for performance, among others (Martin, 2010). Apart from a few limitations and shortcomings, the above approaches have generally been helpful in directing the Volkswagen group towards achieving its corporate strategy.

Development and Training

The Volkswagen group employs a total of about 400,000 workers, in the UK, across the whole of Europe and other areas who contribute towards the production of 30, 000 automobile pieces daily (Martin, 2010). The purpose of training and development programs at the Volkswagen group is to increase the capacity and effectiveness of the human resource base so that it can achieve the set out corporate strategy. Here, among other things, the Volkswagen group is intending to increase its market share from the current 12% to 20%, and move towards sustainability within the next six years (Martin, 2010).

Due to the differing needs for performance in its workforce, the Volkswagen group has fruitfully adopted a system of training that recognizes varying degrees of specialization in its workforce (Campbell, 1972). Training has especially been differentiated into two areas: managerial training and training for the non-managerial staff (Gosling, 2003). Thus, selected stuff at the Volkswagen group has been allowed to undergo training programs that are suited to their individual needs (Druskat, 2003). Here, workers have been trained on new technologies and methods that are appropriate for achieving increased outputs and sustainability (Martin, 2010). Apart from theoretical learning, trainees will be required to perform given tasks in accordance with what they have been taught (Floyd, 1994). Most of the training (especially for the management trainee recruits) is usually undertaken in the presence of a mentor (Martin, 2010).

Following the introduction of training and development programs, the Volkswagen group has made significant steps in achieving its set out corporate strategy. For example, in 2010, the Volkswagen group increased automobile sales by one million from the previous year (Martin, 2010). During the same period, the company saw its revenue rise by 21 billion Euros (Martin, 2010). Such a direction is critical in attaining the intended global market share of 20% by the Volkswagen group in 2018 (Howard, 2010). Moreover, the Volkswagen group has been moving towards sustainability by manufacturing cars with low carbon emissions (Howard, 2010). For example, in 2010, the Volkswagen group reduced carbon emissions per manufactured vehicle from 234 (measured in kilograms per vehicle) in the previous year to 175 (Martin, 2010).

However, the implementation of training and development programs at the Volkswagen group has not always guaranteed 100% better performance by the workforce. Sometimes, workers have not responded appropriately or developed an interest in training programs (Floyd, 1994). Moreover, other uncontrollable factors like poor health, poor cooperation and networking between employees have also played against improving the performance of the workforce at the Volkswagen group (Floyd, 1994). It has also been painful for the Volkswagen group to see the exit of talented professionals who have benefited from its training and development programs (Hart & Cooper, 2001). The majority (About 60%) of the workers at the Volkswagen group work on a contractual basis (Martin, 2010). Although such a direction has helped to cut costs, the setback here has been a large proportion of employees who the Volkswagen group cannot heavily invest in. The effect of the realities that have been considered above is a no guarantee of returns on billions of dollars that are usually siphoned by training and development programs at the Volkswagen group (Gosling, 2003).

Apart from promoting the capacity of the human resource base to perform, training and development programs at the Volkswagen group have also emphasized on the growth of employees (Druskat, 2003). At its website, the Volkswagen group has emphasized on the growth of employees as an important area that it continually pursues (Martin, 2010). After completing training programs, workers are usually promoted to a higher scale with a salary increment (Martin, 2010). Often, some workers are promoted to positions of higher responsibility once they have successfully completed training programs (Martin, 2010). Moreover, since the experience and capacity of employees who successfully complete training programs are assumed to have expanded, such employees will consider themselves more marketable in the job market; hence, an increase in their overall value (Heimovics, 1989).

Unfortunately, due to its large proportion of contractual employees, it has not been possible for the Volkswagen group to engage contractual employees in progressive development programs (Martin, 2010). Another setback that has played against the development of employees at the Volkswagen group has been a focus on employees in the management and leadership positions at the expense of other employees (Howard, 2010). Despite efforts from the Volkswagen group to identify the most competent employees for the training and development programs, a section of the workforce at the Volkswagen group has often felt discriminated by being left out of the programs.

Like most companies that have an interest in building individuals that can take up leadership roles in the future, the Volkswagen Group has a management trainee program (it usually runs for a period of twelve months) (Floyd, 1994). The management trainee program has been fruitful in producing a crucial segment of the Volkswagen workforce that is competent in implementing useful tasks for the group (Howard, 2010). Generally, the management trainee program at the Volkswagen group has been designed to be educative, exciting and promising for management recruits; hence, helping to attract and retain talented professionals in the above segment (Druskat, 2003). However, the limitations that I considered above such as the exit of talented employees who benefited from the management trainee programs, among other limitations, will continue to pose a challenge to the Volkswagen Group in its effort of attaining highly competent employees (Peter, 2006).

Performance Management

Performance management at the Volkswagen group is the process in which the Volkswagen group employs a range of activities as a way of measuring its (Volkswagen group) progress towards achieving the set out corporate strategy (Floyd, 1994). All the employees that work in the Volkswagen group are thus required to adopt a range of behaviours and practices that are suited to increase productivity, produce quality items, and respond appropriately to customer needs (Howard, 2010). Emphasis has been laid out to each of the employees (through training and established norms and behaviours) of the Volkswagen group on how his/her behaviour at the workplace has an impact on meeting the company’s expectations (Kraut et al., 1989). For example, each employee knows that arriving at the workplace late has an impact on productivity (Hart & Cooper, 2001). Here, the premise is not just been to provide the worker with do’s and don’ts, but to make the worker understand that as a valuable member of the Volkswagen workforce, he has a direct impact in meeting set targets (Hart & Cooper, 2001). The highly attractive and competitive automobile brands that have originated from the Volkswagen group can be attributed to a highly disciplined and creative workforce there; who have been guided by effective performance methodologies (Martin, 2010).

Among the approaches that are employed by the management of the Volkswagen group to review and guide the workforce in meeting set targets is the use of performance reviews. Here, structured meetings where the progress of workers in meeting set targets is reviewed are common (Peter, 2006). During such meetings, group leaders, workers, and managers get a chance to give opinions, corrections, and guidance on the progress that has been made by employees in achieving set targets (Hart & Cooper, 2001). Since it is normal for worker deviates from achieving specific objectives, performance review meetings at the Volkswagen group have helped to align the behaviours of the workforce towards achieving set out goals (Hart & Cooper, 2001).

Improved performances in the two key areas that are required for the attainment of the corporate strategy at the Volkswagen group (Financial performance and sustainability) indicate a workforce that is responding to performance management (Howard, 2010). As it had been indicated earlier, there has been a progressive increase in the volume of sales, and revenue for the Volkswagen Company over the past year (Profit after tax rose to 700 billion Euros in 2010 from 900 million Euros in 2009) (Martin, 2010). In the direction of moving towards sustainability, the Volkswagen group has attained a high health index of 98% (Martin, 2010). Besides, apart from developing models that consume very little fuel (including innovative units that can travel about 100 kilometres on just a litre of fuel), the Volkswagen group has reduced carbon emissions per produced units, among other steps towards sustainability (Martin, 2010).

However, it is fruitful for the Volkswagen management to identify key challenges in performance management and develop improved approaches towards the same. For example, the Volkswagen group will require developing a more creative approach that can translate its goals to easily measurable parameters so as to give appropriate feedback to the workers (Floyd, 1994). Workers would like to see clearly how their individual actions contribute to increasing sustainability and production. Besides, instead of just focusing on individual actions of employees, it is would be more useful for the Volkswagen management to apply an approach that views the Volkswagen Company as an interdependent system (Peter, 2006). Failure by employees to meet tasks can then be viewed in light of the responsibilities of other employees. Importantly, instead of on focusing merely on influencing individual actions of employees to increase productivity, the management of the Volkswagen group should develop a fruitful approach where employees are placed in groups that can exploit the strengths and weaknesses of each of the employees (Peter, 2006).

Pay for Performance

The salary of the Volkswagen group employees is usually calculated on two components: a fixed component and a variable component (Martin, 2010). The variable component depends on the performance of employees in meeting set targets (Kraut et al., 1989). For example, following an improved performance in 2011, the management board of the Volkswagen Group was paid a bonus of 62 million pounds (Martin, 2010). The purpose of bonus incentives is to motivate the workers of the Volkswagen group to work towards achieving the set out corporate strategy (Howard, 2010). The main shortcoming of bonus payouts has been an overemphasis on the top management of the Volkswagen grout at the expense of other employees (Martin, 2010). It would be fruitful for the Volkswagen group to explore how a change of emphasis from the top management to other employees, could impact on the overall performance of workers, and make appropriate changes if necessary (Martin, 2010).

Conclusion

The Volkswagen group has embedded critical aspects in its human resource management that are useful in aligning the behaviours of its workforce to meet set goals. The training and development program that has been adopted by the Volkswagen group will obviously prove useful in producing a more competent and able workforce. Moreover, the performance management strategies that have been employed at the Volkswagen group are relevant to the strategic needs of the Company. However, just like any other corporation in the real world, the Volkswagen group will continue to face limitations and challenges that come with the implementation of human resource strategies. A creative and sustainable approach in dealing with such challenges would help the Volkswagen group achieve its set out corporate strategy (Martin, 2010).

Reference List

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Floyd, S. (1994). Dinosaurs or dynamos? Recognizing middle Management’s strategic role Academy of Management Executive, 8(4), 47-57.

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Hart, P & Cooper, C (2001) ‘Occupational Stress and Well-Being’ in N Anderson, DS Ones, HK Sinangil, & C Viswesvaran (eds), Handbook of Work and Organizational Psychology, Sage, Newbury Park, CA

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Howard, N, (2010). Towards sustainability: The Volkswagen group. Harvard Business Review, 94(11), 68 Kraut, A. I., Pedigo, P. R., McKenna, D. D., & Dunnette, M. D. (1989)

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Martin, W, (2010) Volkswagen group sustainability report 2010. London, UK: Volkswagen press

Peter, T. (2006). Revisiting the original management primer: Defending a great Productivity innovator Industrial Management, 34(1), 19-20