Strategic Human Resource Management
- Assessment: Individual Assignment (Research based Case study)
- Case Study: Whirlpool’s Diverse Talent Retention Strategy
Whirlpool Corporation (NYSE: WHR) is the number one major appliance manufacturer in the world, with approximately $21 billion in annual sales, 93,000 employees and 70 manufacturing and technology research centers in 2016. The company markets Whirlpool, KitchenAid, Maytag, Consul, Brastemp, Amana, Bauknecht, Jenn-Air, Indesit and other major brand names in nearly every country throughout the world.
Whirlpool recently revamped their HR strategy into a People Excellence Strategy, establishing an operating system based on specific analytics they had gathered. In reviewing their diversity scorecard, it became apparent that Whirlpool had a “leaky bucket” problem. While they had made strides in the attraction and hiring of diverse talent, they were losing that talent at the same, if not a faster, rate. Clearly something needed to be done to engage and retain that talent.
To address this issue, Whirlpool’s talent management and diversity organizations developed a retention risk assessment toolkit. The toolkit includes three phases:
- Assessing the impact Whirlpool would face should an employee leave
- Understanding the likelihood that an employee will leave
- Creating action plans to prevent this regrettable loss
To test this retention risk assessment toolkit, Whirlpool targeted a pilot group of 65 employees at the senior manager, director and senior director levels, who had been identified as the organization’s top diverse talent. Managers were trained on the toolkit and were provided with a “Retention Risk Manager Guide” and a “Stay Interview Manager Reference Guide.”
All of the initial assessments were done within the “Risk assessment Workbook” that was designed to automatically analyze the data entered into it and compute the level of impact and risk that existed for this employee.
To assess the impact on Whirlpool if an employee should leave, managers were asked to answer each of the following yes or no questions:
- If this employee left Whirlpool, in the current business environment would we sustain a significant revenue loss or increased risk?
- If this employee left Whirlpool, would we lose significant intellectual capital?
- Is this employee in a critical role or on a Succession Plan for a critical role?
- Is there a weak or non-existent contingency plan for if this role were vacant?
- Would this role be difficult to fill both internally and externally?
The risk retention assessment includes 25 yes or no questions managers were asked to answer about their employees and their relationship to those employees. Questions are grouped into four areas: job/role, development and alignment to career goals, manager/employee relationship and external support system. Answers are then calculated to measure that employee’s level of “retention risk.”
Whirlpool quickly discovered that many managers had difficulty answering a significant number of questions about their employees. Understanding the importance of the manager/employee relationship to retaining talent, Whirlpool created a template for stay interviews as a way to help managers answer those questions, and to create dialogue between managers and employees. This approach directly impacted the level of interaction between the diverse talent and their individual supervisors.
After the first round of interviews was completed, both managers and employees were given a survey about the process. The two major findings from that survey were:
- Managers assessed their relationship with their employees as being stronger than the employees’ assessment.
- There were some engagement factors that were specifically called out by employees as important to them that were missed by managers. They were:
Working with Great People
Managers were able to reference the “Retention Risk Manager Guide” throughout the process. In the action planning section of the guide, for instance, managers could find concrete examples of actions they may take with their employees like:
- Have the employee complete their Development Plan / Career Compass. Gain alignment on the plan.
- Ensure you are recognizing your employees for their contribution either publically or privately.
- Recommend that the employee get involved with WHR Employee Resource Groups (Diversity Networks) or in the local community; foster these connections
- Identify 1 developmental opportunity for the employee to attend in the next 90 days; commit to supporting with time, resources etc.
- Ensure regular 1-1 check-ins to discuss work progress and any issues/concerns with achieving the employee’s objectives. Ensure at least one discussion per month focuses in on longer-term development as well. This could be a supervisor, a manager once removed or a functional leader.
As an extra layer of support during the pilot process, Whirlpool created focus groups for both the managers and employees to discuss the process. These quarterly meetings have been particularly valuable for the managers who have appreciated the opportunity to share their experiences with their peers and to learn from each other.
In one of the manager focus group sessions, a leader shared that he was struck by how much more he knew about the male employee than the female employee that he did the retention risk assessment with. Upon deeper reflection it was clear that he knew more about the male employee because of the connections they had outside work through their shared interests. He noted that you would undoubtedly have natural connections with people who are similar to you, and that it was imperative to put more effort into getting to know people who are different from you. This acknowledgment demonstrates the value of inclusion as interaction with employees who are different from each other creates an intentional focus and effort.
As time goes by, Whirlpool is seeing that communication between employees and managers that are involved in the pilot is getting better and employees are saying that these conversations are getting easier to have. Through building stronger relationships with their managers, these employees have also commented that opportunities for professional growth have been presented to them that may not have been in the past.
And, the numbers are speaking for themselves. The attrition rate of female employees who were in the pilot program was 12 points lower (9 percent vs. 21 percent) than those not in the program and 14 points lower (14 percent vs. 28 percent) for underrepresented minorities (URM).
Things to note
The first rounds of stay interviews were awkward conversations for many of the managers and employees. For example, there were several instances in which a manager thought he or she knew an employee well, but really didn’t.
Advice: Stick with it. If the managers and employees followed the outline and stuck with the process, the conversations got easier over time and many employees reported an improvement in their relationship with their manager.
It is important to understand the current relationship between a manager and their employees before moving forward with the process. It is not going to be a productive process if the relationship is severely broken.
Advice: Don’t try to fix these relationships using this process. The main objective is to retain talent and engaging in this process within a difficult relationship will not help. Leverage another senior leader, a mentor or sponsor for instance, to conduct the retention risk assessment and stay interviews.
It was important for Whirlpool to pilot this process as a stand-alone tool in order to accurately measure its impact and make any needed adjustments. In addition to the pilot group, the HR leadership team has started to utilize the tools within the HR organization. The vision is that the retention risk assessment and stay interviews will be fully integrated into the personal development planning process already being used by managers across the organization in the next year and a half.
Training for all managers will be provided to ensure maximum engagement. The retention/stay interview training has also been recorded so that managers can view it on their own time. In addition, a toolkit for this process for HR Business partners including a discussion guide has been created to facilitate post-training conversations.
London, J. (8 Sep, 2015). Retrieved on 21st August, 2017 from http://www.diversitybestpractices.com/news-articles/case-study-whirlpools-diverse-talent-retention-strategy
Assume that you are an expert Human Resource Management consultant brought in by the Whirlpool board of directors to advise on their Retention Strategies and Labour relations policy. Carefully investigate the information above and conduct a thorough research from the company website to identify the retention strategies and labour relations policy for this organisation. And prepare a formal report for the board of directors outlining their take for managing relationship with various stakeholders involved.
You report should encompass the following points:
- Discuss the importance of retention strategies in the current global competitive environment for human capital recruitment. (LO6) (12 marks)
- Identify at least three major retention strategies of Whirlpool and evaluate the effectiveness of these strategies. (LO6) (21 marks)
- Recommend two more retention strategies for Whirlpool which are not mentioned in the case study and discuss why these may be effective in retaining valuable human capital. (LO6) (20 marks)
- Conduct a further research in to the Whirlpool’s relationship management practices including the relationship with trade unions. Provide comparative analysis with two other companies. (LO4) (15 marks)
- Evaluate Whirlpool as a growing organization with a global scope in terms of their human capital management practices and recommend five strategies that manage key relationship issues including the relationship with trade unions. (LO4) (22 marks)
- You are further required to summarize your answers in a report that reflect professional standards of practices within business organizations. (5 marks)
- You must also use correct referencing style throughout the report. (5 Marks)
This is a report which will analyze the case study of whirlpool, a global market leader in manufacturing of appliances all over the world. The focus of the report will be on the significance of global retention strategies in global competitive environment and the major strategies that has been taken by the organization for improving the retention rate so that the can prevent the reduction in turnover rate in the organization. However, the report will also highlight the relationship management practices in Whirlpool which will identify the relationship with the employees, trade unions and consumers. The report will conclude by providing a reflection on global business standards in an organization.
Importance of retention strategies in the current global competitive environment
Global retention strategies will have a significant impact on maintaining competitive advantage and long-term sustainability. The increase in the turnover rate within an organization will increase the overall cost structure a and will have a negative impact on the performance and productivity of the organization. Thus, it is essential that the employees remain in the organization by maintaining the required level of productivity and performance (Deery & Jago, 2015). However, the implementation of the global retention strategy not only ensures that turnover is decreased but also attracts new talents in to the organization. Moreover, retention strategies are focus on developing effective between the employees and the management. The various retention policies used by the organization are the means of keeping the employees satisfied. Effective retention strategy will reduce the overall cost as cost of replacing an employee is high and if the turnover rate is high it will affect the organization significantly. Thus, retention strategy will reduce the replacement cost of the employees in the organization. High retention rate will ensure high productivity and enhances the recruitment processes. The employees stay in the organizations that tend to fulfill their promises made during their recruitment and global retention strategies ensures transparency in the human resources parties within the organization. Moreover, it will boost the morale of the employees and improve their level of commitment to the organization.
Three major retention strategies of Whirlpool and effectiveness of these strategies
The three retention strategies taken by Whirlpool are as follows:
- Measuring the influence of resignation of an employee on the organization
- Understanding the probability of resignation of a particular employee< /li>
- Developing plans which will be able to prevent this loss
These retention risk tool kit has been a success for the organization and it can be understood form the pilot study they have conducted within the organization. The talent management and diversity unit within the organization developed a set of questionnaires which were asked to the managers. The questionnaire consisted of 25 close ended questions that attempted to find out how much the managers were aware about their employees and their relationship with the employees. These methods have been effective as the organization has been able to identify the extent of the managers interaction with their employees and the underlying problems in it. Thus, the problems that were addressed were mitigated with effective strategies which included quarterly meetings where they shared their experiences and learned form each other. Thus, it was seen that the employees and managers that were involved in pilot test were able to develop a better communication among them.
Relationship management is important as improve the quality of the organizational culture. Whirlpool’s strategy of implementing relationship management ensured that the retention rate decrease especially among the employees that took part in the pilot test. Moreover, the managers and the employees were able to identify their lacking which enabled them to grow at a personal level. Thus, these strategies show that whirlpool focused on developing a better communication between the workforce and the managers within the organization. Communication in an organization has to be two-way as flow of information is important for better understanding of the goals and objectives of the jobs they are performing. Thus, the tool that the organization developed is incorporated with the human resources and the managers use this tool to develop effective relationship with the employees. This enables them to know more about the problems the workforce is facing and how it can be mitigated to retain the employees that are getting dissatisfied with the policies within the organization. Moreover, the organization also developed programs for training the managers so that they can improve their interpersonal skills. Thus, Whirlpool focused on improving the manager and employee engagement within the organization which will motivate them and facilitate in being more productive.
Recommended retention strategies for Whirlpool and its effectiveness
The recommended retention strategies for Whirlpool are as follows:
- Planning of careers instead of filling of roles
- Investing in line managers
The organization will consist of top performers and it would be wrong to think that they would stay in their position forever. The employees have their short-term and long-term goals and it is the responsibility of the organization to provide them with the opportunity of moving forward towards their career objectives. Thus, the organization will have to provide more challenging roles, enable them to grow at a personal level as well as at an organizational level. Individual growth is important for the employees as stagnancy ion growth will demotivate the employees and they will look for better options for fulfilling their goals and objectives (Dennis, 2016). Thus, it is essential for the organization the needs and wants of the employees so that they can develop paths for each of them in their own way. Thus, if employees want to shift to different roles, it is feasible to provide them with the desired job profile they are looking, it may happen some employees wants to move up the ladder and reach a level of a manager. Thus, it is the responsibility of the organization to provide him/her with the opportunity of moving up the ladder. It may also happen that an employee is driven my money and so it is viable to provide him/her with the opportunity of earning more.
It is essential to invest in the managers as they have the maximum level of interaction with the employees. The turnover rate is dependent on the environment the manager creates among its workforce and it can be said that most of the employees quit because of their managers. Thus, it is essential to spent on training and development program for the managers so that they can improve their interpersonal skills and leadership skills. The managers should have essential skill of communicating the goal, objectives and role of each of employees within an organization. Moreover, the managers should be able to motivate their workforce and discuss with them about their career goals (Bryant & Allen, 2013). This will enable to keep their p0erosnla goals in alignment to the organizational goals. Thus, it is essential to have individual conversation with employees on a regular basis so that it increases the team bonding. Thus, it can be seen that the responsibility of the manager are crucial in highly motivated and effective workforce. Thus, maintaining skillful leaders within the organization will improve the retention rate and productivity.
Whirlpool’s relationship management practices
Whirlpool has focused on developing good relationship with the consumers and the indirect stakeholders in the organization. Thus, the organization has focused on using customer relationship management to provide the organization with better customer experience. Thus, the organization focuses on developing cooperative, ongoing and long-term relationship with the customers. Whirlpool has implemented CRM in to their business model where they are using technology to provide the consumers with a better customer experience. On the other hand, they are using the retention strategies to develop a smooth relationship with the employees (Terera & Ngirande, 2014).
Various instances suggest that Whirlpool have had issues maintaining good relationships with the trade unions. Whirlpool follows all the global trade laws maintaining diversity and providing equal opportunity to the workers. Thus, the organization is focusing on maintaining a good relationship with the trade union as they belong to the manufacturing sector. The organization is highly dependent on the labors working in their factories and thus, Whirlpool is focused on maintaining all quality standards in terms of health, safety and work environment.
Comparative analysis of relationship management
The comparative analysis of Whirlpool suggests that the major competitors in the industry are making use of similar strategies to develop a good relationship with the consumers. Jenn-Air is using similar strategies as they are belong to the manufacturing sector and highly dependent on their workforce. Similarly, Indesit is following similar strategies in maintaining appropriate relationship with the trade unions (Ahammad et al., 2016).
Whirlpool as a growing organization with a global scope
Whirlpool is a growing organization in terms if their global human resource practices. The diversity in the global human resources is increasing at a rapid rate and the organizations will have to keep on changing their human resources to improve the quality of their workforce. Thus, there are new challenges faced by the organization on a day-to-day basis and the organization is focused on acquiring talent that is more global. Thus, they want to increase their intellectual property and use innovation gain competitive advantage in the market.
Five strategies that manage key relationship issues
The five strategies, which will facilitate in managing global relationship issues, are as follows:
- Focusing on relationship with customers and suppliers: It is essential to maintain good relationship with the suppliers and the customers at the same time, as they are the indirect stakeholders in the organization. Thus, communication is one of the most essential parts of building a relationship with the customers and the suppliers (Howard, Turban & Hurley, 2016). The organizations will have to communicate effectively with the suppliers to develop a bond, which is based on mutual understanding.
- Changes in the expectations: The organizations will have to be focused on the quality and the quantity of the inventory. This will enable to identify the weaknesses of their suppliers in the market and data analysis will ensure them to create a competitive strategy for business. Thus, they will be able to manage effectively their relationship with respective suppliers by keeping track of their data (Shaw, Park & Kim, 2013).
- Maintaining trust, loyalty and openness: The relationship between the organization, suppliers and the customers are based on the trust, loyalty and openness. The organizations should be transparent about their policies and should develop a relationship based on trust. This will provide competitive advantage in the long run. The suppliers should be treated equally as partners, which will facilitate in achieving innovation and collaboration. Thus, this increases the success are of the organizations (Hancock et al., 2013).
- Setting standard agreements on beforehand: The organization will have to set standard agreement with the trade union even though they have minimum in this age of globalization. However, they may cause problems so it is necessary to maintain all the necessary factors. However, there are differences in trade union laws in different countries, their effectiveness vary and the organizations will have to evaluate the situations carefully.
- Use of technology: The organization should make use of technology so that they can manage their supply chain and relationship with the customers in a better way. Thus, innovation in technology and vertical integration is required to maintain this.
Reflect professional standards of practices within business organizations
This report has highlighted organizational human resources in terms of marinating relationship with the employees and the trade unions. Whirlpool was going through a phase where they had high turnover rate but they were able to change this by implementation of global retention strategies within the organization. Thus, the repot has been able to highlight the retention strategies that are implemented to improve relationship management.
Thus, it can be concluded from the report that Whirlpool had issues with their retention rate but they have been able to make changes to their retention strategies, which have had positive impact on the human resources of the organization. The manufacturing companies always face problems with trade union and even though the significance of trade union has decreased significantly, there are some implication which has been able to portray.
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