This module analyses the range of human resource management (HRM) activities undertaken within organisations to manage the performance of its employees and explores the devolution of many of these roles and responsibilities to line managers.
You are required to complete an essay to demonstrate learning outcome 1:
Discuss the rationale for managing performance within organisations, its position in the employee lifecycle, and the role of the line manager in the process.
You should apply your answer to the Ferdinand Bilstein Logistics Centre at Markham Vale and illustrate key points with reflection on your participation in the practicals you will undertake during module seminars. A case study and supporting videos and documents are provided in Appendix 1 and we will work with the case study during lectures and seminars as a teaching and learning aid.
Discuss the rationale for managing performance at the Ferdinand Bilstein Logistics Centre at Markham Vale. Assess the advantages and disadvantages/limitations of introducing an annual appraisal scheme to achieve this and the role of the line manager in effective design and implementation. Illustrate your answer with your own experiences from the practical activities you have completed in the seminars.
Your response should consider:
· Why organisations need to manage the performance of employees
· How performance appraisals might improve organisational performance (in ‘theory’ and in ‘practice’) at different stages of the employee lifecycle
· The risks and limitations of an annual appraisals process
· The reaction of employees
· The ability, motivation and opportunity of line managers to implement the system
· Examples from your own experiences in seminar practical’s.
All answers must be:
· Between 1000 and 1,500 words long. (NOTE: 1,500 words is the MAXIMUM word limit for this assignment. There is no +10% allowance on these questions.)
· Supported with relevant literature using the Harvard Referencing system. This requires citations (references to relevant literature) within the answer itself which then must also be listed in full in a reference list at the end of your work. Work will not be awarded a pass grade at this level of study without a clear demonstration of this skill.
· Compiled into a SINGLE word document containing ALL answers
Ferdinand Bilstein UK Ltd deliver high quality vehicle components to the UK aftersales automotive market offering more than 62,000 different replacement parts for professional vehicle repairs such as timing belts, water pumps, cooling systems, electrical components, wiper blades and steering and suspension parts. The Logistics Centre at Markham Vale opened in January 2018 and is the main distribution hub and UK headquarters for Ferdinand Bilstein UK. This is a subsidiary of a 180 year old German based business, the Bilstein Group, which is both a manufacturer and supplier of automotive parts. “The strategic aim of the business is to be a supplier of choice to the independent aftermarket by continuing to offer a comprehensive range of high quality vehicle parts.” They “aim to offer a high quality service to the customer by maintaining availability and smart logistics delivered with the customer’s bespoke needs in mind” (Annual Report and Financial Statements for year ended 31 December 2020). Engagement with customers and suppliers is key to support the organisation’s aim to build strong partnerships with its customers based on trust, driven through reliability and positive experience.
The Logistics Centre is the largest of 10 warehouses located in 8 countries (UK, China, France, Italy, Portugal, Serbia, Spain and Singapore). Covering 212,771 square feet it employs around 200 employees, in a clean and pleasant warehousing environment which benefits from natural lighting, heating and ventilation.
Goods are delivered to the Logistics Centre, from the groups own manufacturing units in Germany and other suppliers, where they are received into the ‘goods in’ section of the warehouse. A sample is taken from here to the dedicated, 3 person quality control department. Safety components in particular are subject to the strictest specifications in checking the material quality and fitting accuracy. The company’s stringent quality checking procedures are vital to support the three year guarantee on all replacement parts in their three prestigious brands, Febi, Blue Print and SWAG, and to maintain the centres ISO 9001 quality accreditation.
Goods are moved from the ‘goods in’ area into the large storage system. Warehouse operatives in the ‘pick and pack’ area are then able to use the automated order picking system (OPS) to retrieve the required items to fill customer orders, which are displayed to them on electronic screens. Bulky items, referred to as ‘ugly stock,’ which cannot be handled by the system are stored in an adjacent area and retrieved by forklift truck. Orders are boxed ready for delivery in the ‘kitting area,’ where they are weighed to ensure the order is correct, before being sent on to the ‘goods out’ area ready for dispatch to customers. Maintenance of the OPS is vital to the smooth running of the Centre and is supported by an on-site workshop, staffed by specialist contract workers 24 hours per day. It is also important for the company to continue to develop these systems to accommodate more parts in the future, to support its strategy to expand the range of vehicle parts on offer. This wide range is a key reason why customers choose Ferdinand Bilstein over its competitors. The company also has a tradition of embracing change to repeatedly reinvent itself to open up new markets
Ferdinand Bilstein UK measure their performance through both financial and non-financial key performance indicators (KPI). Financial performance indicators include turnover and gross profit. Revenue fell alongside the gross profit margin in 2020 by £5.39m compared to the previous year contributing to an operating loss of £1.91m. Non-financial indicators include product availability and staff retention of key personnel. Turnover of permanent staff is relatively low compared to the industry average but is considerably higher for temporary staff, approximately 80 employees recruited from two local agencies. The company also considers the impact of its operations on the community and environment. At the Logistics Centre, the focus on the warehouse shopfloor is on safety, efficiency and accuracy e.g picks per hour, number of picking errors and cost per pick. Recruitment of warehouse staff therefore concentrates on testing numerical recognition and language skills and training focuses on operational procedures.
Despite the impressive automation in the centre, the groups employees are fundamental to the delivery of the organisation’s business plan according to the UK Director. In the 2020 Annual report he states “we aim to be a responsible employer in our approach to the pay and benefits our employees receive. The health, safety and well-being of our team members is our primary consideration in the way we conduct our business.” This is in line with the parent group’s philosophy which emphasises the importance of collaborative working – “Individually Strong, Unbeatable as a Team,” and five behavioural values; teamwork, communication, integrity, versatility and motivation. However, the work of most warehouse employees is busy, demanding and repetitive. On ‘Glassdoor’ one previous employee noted that the work “can become tedious as it’s not challenging” and a senior manager admitted that the values may not be as well embedded at shopfloor level. Work is more varied in the small backroom departments (Finance, Marketing,
Technical support, Customer Service and Sales and pricing) but this is only a very small percentage of the workforce.
The Centres employment structure is relatively flat. Shopfloor employees report into team leaders (Key Operatives) and then onto managers who report directly to the Centres Operations Manager. Day time employees work on a shift basis alternating between a morning (5.30-14.30) and evening (14.30-22.30) shift on a two-week basis. A third group work permanently on the night shift (22.30-5.30) and all employees are required to work a half Saturday shift every three weeks. Rate of pay increases after a 6 month probationary period and night shift workers receive an additional payment for unsocial hours. Amazon, a key labour market rival, pay more however and there are no overtime payments, although employees who work over their contracted hours of 42.5 hours per week may be given time of in lieu (TOIL) instead. In addition to monthly salary, the Centre runs a quarterly bonus scheme which is awarded based on attendance and the achievement of team based KPI’s (key performance indicators) set for each department. The bonus is only paid to permanent members of staff and employees with a disciplinary are also excluded.
Permanent staff are recruited from the temporary pool but some employee reports on ‘Glassdoor’ suggest further development opportunities are limited. Although the company say they have a preference to promote staff through from the shop floor to back office service roles and senior positions, only about 30% of the current office based staff in the Logistics Centre started in the warehouse. Management abilities are another source of criticism on Glassdoor. One former employee stated the atmosphere was awful and “management have no clue.” Even a more positive reviewer who rated the company 4/5 noted there was “not a great deal of leadership or direction.” Mangers at the centre have observed that staff tend to go straight to the Human Resource Department with problems and questions instead of their direct line managers.
Staff are communicated with through short daily meetings. There is also an employee forum but senior managers suggest that the topics covered in this are generally superficial. Due to the pandemic, the Centre has not run an employee satisfaction survey for over two years but only 63% of former employees on glass door said they would recommend working for the company to a friend. The Logistics Centre does not operate an annual appraisal scheme. However, all warehouse employees are assessed in a monthly meeting between HR and team leaders on three areas: attitude, attendance and health and safety. Employees are given a numerical score for each area and an overall rating, using a traffic light system, of green, amber or red. Agency staff who are rated as red are not re-employed. Permanent staff rated as red will have an informal conversation with a manager which is recorded on their file. Continued poor performance is investigated further and could lead to action being taken through the disciplinary process.