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Strategic Human Resource Management In Hyundai

Paper Type: Free Essay Subject: Business
Wordcount: 4565 words Published: 1st Jan 2015

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Strategic human resource management is the process of linkingthe human resource function with the strategic objectives of the organization in order to improve performance.

‘If a global company is to function successfully, strategies at different levels need to inter-relate.’ 

‘An organization’s [human resource management] policies and practices must ¬t with its strategy in its competitive environment and with the immediate business conditions that it faces.’ 

‘The [human resources-business strategy] alignment cannot necessarily be characterized in the logical and sequential way suggested by some writers; rather, the design of an HR system complex and iterative process

1.2.The Purpose of strategic Human Resource Management activities in Hyundai

Over the past decade, HR researchers and practitioners have focused their attentionon other important questions. First, what determines whether an organization adoptsa strategic approach to HRM, and how is HR strategy formulated? Of interest is whichorganizations are most likely to adopt a strategic approach to HRM. Is there, forexample, a positive association with a given set of external and internal characteristicsor contingencies and the adoption of SHRM? Another area of interest concerns thepolicies and practices making up different HR strategies. Is it possible to identify acluster or ‘bundle’ of HR practices with different strategic competitive models? Finally,much research productivity in recent years has been devoted to examining the rela-tionship between different clusters of HR practices and organizational performance.Does HR strategy really matter? For organizational practitioners who are looking forways to gain a competitive advantage, the implication of HR strategic choices forcompany performance is certainly the key factor.

1.3.contributions of strategic Human Resource Management to the achievement of Hyundai Motors Objectives

Management PolicyIn 2000, Hyundai Motor and Kia Motors merged to form the Hyundai Automotive Group and implemented a Òhorizontal management system in September 25 of that year. The horizontal managementsystem gives departmental teams extensive power to carry out corporate policies and implement their own action plans based on those policies. The horizontal management system is guided by three principles: 1) Trust-Based Management 2) Site-Intensive Management 3) Transparent Management. These principles, together with the environmental policy mentioned later in this report, give direction to the management strategies that drive our business. In 2003, we established four objectives to be met in the mid- to long-term strategies: 1) enhance product value, 2) establish a global production system, 3) increase brand power, 4) improve environmental management systems.

2.1.the business factors that underpin human resource planning:

According to company officials, Hyundai’s six assembly plants with a yearly production capacity of 1.65 million vehicles, were operating at only 40 percent of their capacity. In May, 1998, Hyundai reacted to this grim situation by announcing plans to lay off 27 percent of its 46,000 workforce in South Korea and to cut pay bonuses and benefits in a bid to save 230 billion won.

Unfortunately for the management of the company, Hyundai had one of the most powerful and militant unions. The decision of the company to lay off workers sparked off agitations not only in Hyundai but in other companies too. The unions were particularly offended at the government’s approval of Hyundai’s decision.

In a demonstration in Ulsan, where Hyundai has its biggest automobile plant, 32,000 employees participated in rallies. All across South Korea almost 1,20,000 employees from about 125 companies participated in demonstrations against Hyundai and the government’s decision. The government had to deploy nearly 20,000 riot police to control the demonstrators…

2.2. assessment of human resorce requirements

Hyundai Motor Co., formed in 1967, was a part of the large South Korean Chaebol – the Hyundai Group – until the group split in September 2000. In the last four decades, Hyundai managed to establish itself all over the world as a company producing reliable, technically sound and stylish automobiles. 

In the 90s, the company started aggressive overseas expansion programs. By the late 90s, when Southeast Asian crisis struck, the company like all the other chaebols, faced serious financial problems. To survive, it had to cut its labor force. The company offered various retirement schemes, unpaid leave for two years, etc. to workers, and expressed its inability to support its entire workforce in the slack period.

The unions refused to compromise and the management too held its ground. Finally, the government intervened to force a negotiated settlement between the union and the management.

2.3. Human Resorce Plan in Hyundai

Hyundai Motor Co., formed in 1967, was a part of the large South Korean Chaebol – the Hyundai Group – until the group split in September 2000. In the last four decades, Hyundai managed to establish itself all over the world as a company producing reliable, technically sound and stylish automobiles.

In the 90s, the company started aggressive overseas expansion programs. By the late 90s, when Southeast Asian crisis struck, the company like all the other chaebols, faced serious financial problems. To survive, it had to cut its labor force. The company offered various retirement schemes, unpaid leave for two years, etc. to workers, and expressed its inability to support its entire workforce in the slack period.

The unions refused to compromise and the management too held its ground. Finally, the government intervened to force a negotiated settlement between the union and the management.

2.4.Human Resource Plan contribute to meet Hyundai objectives::

Company strategies and Government policies each arise from the decision-makers’ views of their own bargaining strengths and those of other relevant actors, as well as their assessments of opportunity

costs and their willingness to forego any dealings with the other party. Among the many actors that are relevant to policymaking, TNCs constitute a particularly significant group, since they affect employment, generate and distribute income, alter the

balance of payments, assist in regional development, create technology and impinge on other policy areas.Governments are crucial in affecting company strategies, since they set the rules of the game. These conditions lead to the bargaining relationship between TNCs and Governments. That relationship

can be viewed as a jointmaximizing (or mini-max) problem as in the theory of games with each side seeking to pursue its goals constrained by its resources, its dependence on the other party and its relationships with other actors.

3.1. The Purpose of Human Resource Management Policies In Ashok Leyland.

Human resource management policies are vital for organizations that are serious about resolving personnel issues and finding hr solutions. HRM policies are intended to help maximize the effectiveness of your Human Resources function. 

• HR should ensure that HRM policy you have consistent, well-written & legal policies and procedures.

• HRM policy should provide hr advices for the organizations needing help with specific HR-related issues

• Individuals and organizations who are serious about human resources should understand the bottom-line importance of job evaluation, job descriptions and effective policies. 

Types of HRM Policies:

• Attendance Policy Attendance Policy

• Recruitment Policy Recruitment Policy 

• Leave of Absence Policy Leave of Absence Policy

• Performance Planning and Evaluation Performance

• Probationary Period

• Compensation

• Compensatory Leave

• Overtime Leave

• Annual Leave

• Educational Leave,

3.2. The Impact of regulatory requirements on human resource policies in Ashok Leyland:

The Human Resources regulatory compliance arena continues to be a myriad of ever changing state and federal mandates.  The cost of ensuring compliance continues to climb with each new regulation however, in many cases, small and medium sized businesses simply cannot keep up.

AlphaStaff provides Human Resources Regulatory Compliance services that control costs, systematically address key compliance issues, and provides legal liability protection.

AlphaStaff’s unique approach develops a Human Resources regulatory compliance foundation and tailors it to meet your business needs.


HR Audit – Unsure if you are in regulatory compliance? We will review your hiring practices, record keeping, policies and past practices and make recommendations.

HR Posters, Forms & Handbooks – We will supply regulatory compliance posters, provide forms (hard copies and online) and develop customized employee handbooks that ensure your compliance.

Hiring Assistance – We will assist with job descriptions, interview training, handle background and drug screening and post your jobs.

Administration – Tired of records retention? Let us do it all – personnel files, verifications of employment, unemployment responses, FMLA and your EEOC reports and charge answers.

HR Consulting Services – Call us with your employee issues and we will provide creative solutions that best fit your needs but maintain your compliant Human Resources foundation.

Training – We can provide online or classroom training on Human Resources business issues ranging from Diversity to Management Training to Dealing with the Difficult Customer.

EPLI – You will be protected from discrimination, wrongful termination and harassment suits through our premier Employment Practices Liability Insurance coverage.

EAP – Employee Assistance Programs that provide counseling and guidance to your employees available 24/7 through an 800 hotline.


4.1.Analyse the impact of organizational structure on the management of human resources:

Organizational design and structure. As we mentioned earlier, modifying the organization’s basic structure may be a way of changing the existing norms, and hence the culture. For example, a culture of mistrust between the leaders and the members of an organization may be exacerbated by a “line” structure that discourages vertical communication.

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Organizational systems and procedures. The simplest definition of culture is “that’s the way we do things around here.” Routines or procedures can become so embedded that they become part of the culture, and changing the culture necessitates changing those routines. We can all think of organizations where a weekly or monthly meeting takes on a life of its own, becomes more formalized, lengthy, and elaborate, and becomes the only way information moves within the organization. Changing the culture to improve communication may only be possible by changing the meeting procedures or eliminating the meetings altogether.

Design of physical space, facades, and buildings. The impact of the design of buildings on culture can easily be illustrated by considering the executive perks in an organization. Which organization do you think will have a more open and participative culture, one where top executives have reserved parking spaces, top floor offices, a special elevator and an executive dining room, or one where the executive offices are not separated from the rest of the company and executives park and eat in the same place as their employees?

Stories about important events and people. This is a way that culture is perpetuated in an organization, in that it helps define and solidify the organization’s identity. By what events and stories they emphasize, leaders influence that identity.

Formal statements of organizational philosophy, creeds, and charts. This is the way leaders most often try and influence their organizations, and encompasses the vision or mission statement and statements of the organization’s (or the leader’s) values and philosophy. By themselves, however, formal statements will have little effect on the organization’s culture. They must be linked to actions to affect culture.

4.2. Analyse the impact of organizational Culture on the management of human resources:

Why is culture so important to an organization? Edgar Schein, an MIT Professor of Management and author of Organizational Culture and Leadership: A Dynamic View, suggests that an organization’s culture develops to help it cope with its environment. Today, organizational leaders are confronted with many complex issues during their attempts to generate organizational achievement in VUCA environments. A leader’s success will depend, to a great extent, upon understanding organizational culture.

Schein contends that many of the problems confronting leaders can be traced to their inability to analyze and evaluate organizational cultures. Many leaders, when trying to implement new strategies or a strategic plan leading to a new vision, will discover that their strategies will fail if they are inconsistent with the organization’s culture. A CEO, SES, political appointee, or flag officer who comes into an organization prepared to “shake the place up” and institute sweeping changes, often experiences resistance to changes and failure. Difficulties with organizational transformations arise from failures to analyze an organization’s existing culture.


There is no single definition for organizational culture. The topic has been studied from a variety of perspectives ranging from disciplines such as anthropology and sociology, to the applied disciplines of organizational behavior, management science, and organizational communication. Some of the definitions are listed below:

A set of common understandings around which action is organized, . . . finding expression in language whose nuances are peculiar to the group (Becker and Geer 1960).

A set of understandings or meanings shared by a group of people that are largely tacit among members and are clearly relevant and distinctive to the particular group which are also passed on to new members (Louis 1980).

A system of knowledge, of standards for perceiving, believing, evaluating and acting . . . that serve to relate human communities to their environmental settings (Allaire and Firsirotu 1984).

The deeper level of basic assumptions and beliefs that are: learned responses to the group’s problems of survival in its external environment and its problems of internal integration; are shared by members of an organization; that operate unconsciously; and that define in a basic “taken -for-granted” fashion in an organization’s view of itself and its environment (Schein 1988).

Any social system arising from a network of shared ideologies consisting of two components: substance-the networks of meaning associated with ideologies, norms, and values; and forms-the practices whereby the meanings are expressed, affirmed, and communicated to members (Trice and Beyer 1984).


4.3.the effectiveness of human resources management is monitored in organisation:

Cultural forms function as the linking mechanism by which networks of understanding develop among employees. (Trice, 1988) The cultural forms shown in the table on pages 293-94 act as a medium for communicating ideologies, values, and norms. Cultural forms enable leaders to transmit messages about desirable culture to influence thinking and ways of behaving. Cultural forms also address the emotional aspects of organizations that are commonly referred to as cohesion or camaraderie. Organizational scholars Janice Beyer and Harrison Trice elaborate on this point:

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Cultural forms not only aid sensemaking through the meanings they convey; they also aid the sensemaking process through the emotional reassurances they provide that help people persist in their coping efforts. Forms provide a concrete anchoring point, even if the meaning they carry are vague and only imperfectly transmitted….Also many cultural forms involve the expression of emotion and, by this venting of emotions, help people to cope with stress.

Federal agencies are replete with cultural forms that serve these purposes. However the challenges facing strategic leaders of these agencies involve creating and orchestrating cultural forms that can foster change and have longevity beyond their tenure.Cultural forms that have longevity by their nature such as rites and ceremonies reaffirm the organization’s core ideologies, values and norms.

4.4. Recommendation to improve the effectiveness of human resources management in an organisation

Strategic leadership needs to be transformational if it is to serve the organization. Transformational leaders must operate from a foundation of high morality and ethical practices and

Culture is deep seated and difficult to change, but leaders can influence or manage an organization’s culture. It isn’t easy, and it cannot be done rapidly, but leaders can have an effect on culture. Schein outlines some specific steps leaders can employ:

What leaders pay attention to, measure and control. Something as simple as what is emphasized or measured, over time, can have an effect on an organization’s culture. One example of this is an emphasis on form over substance. If leaders pay more attention to form, an organizational culture can develop where people start to believe that the substance of a recommendation is less important than the way it is presented. One can recall when more attention was paid to the format of viewgraphs used in a briefing than what was said; what we characterize as “eyewash.”

Where do you think people will focus their effort once it becomes accepted that a slick presentation is what the leaders are looking for? How could you go about changing that aspect of the organization’s culture? Consider cultural assumptions and beliefs underlying a “zero defects” organizational mentality. “You must always be perfect; mistakes aren’t allowed.” If this assumption reflects a dysfunctional aspect of an organization’s culture, how would you go about changing that perception?

Leader reactions to critical incidents and organizational crises. The way leaders react to crises says a lot about the organization’s values, norms and culture. Crises, by their nature, bring out the organization’s underlying core values. Often, this is where rhetoric becomes apparent. Reactions to crises are normally highly visible, because everyone’s attention is focused on the incident or situation. Disconnects between actions and words will usually be apparent, and actions always speak louder than words. Additionally, a crisis not only brings a great deal of attention, it also generates a great deal of emotional involvement on the part of those associated with the organization, particularly if the crisis threatens the organization’s survival. This increases the potential for either reinforcing the existing culture, or leading to a change in the culture. Such a crisis can provide an opportunity for a leader to influence the organization’s culture in either a positive or a negative way.

Deliberate role modeling, teaching, and coaching. Nothing can take the place of leaders “walking their talk.” The personal example of a strategic leader can send a powerful message to the members of an organization, particularly if it is ethical and consistent. Reinforcing that example with teaching and coaching will help others to internalize the desired values.

Criteria for allocation of rewards and status. The consequences of behavior-what behavior is rewarded and what is punished-can significantly influence culture. If the organization reacts to new ideas by ridiculing the ideas and those who propose them, it won’t take long before people believe that new ideas are not welcomed or desired. One belief of perceived organizational culture is reflected in the statement: “Don’t raise questions or suggest improvements, because nothing will come of it and you will just get in trouble.” If you were in an organization’s strategic leader, what steps could you take to alter the reward system to change this aspect of the culture?

Criteria for recruitment, selection, promotion, retirement and excommunication. One of the powerful ways of changing an organization’s culture is through the type of people brought into, retained, and advanced in the organization. You should be able to establish a desired culture base in an organization by bringing in and advancing individuals with the values you want, and eliminating those with undesired value bases.

1. Don’t oversimplify culture or confuse it with climate, values, or corporate philosophy. Culture underlies and largely determines these other variables. Trying to change values or climate without getting at the underlying culture will be a futile effort.

2. Don’t label culture as solely a human resources (read “touchy-feely”) aspect of an organization, affecting only its human side. The impact of culture goes far beyond the human side of the organization to affect and influence its basic mission and goals.

3. Don’t assume that the leader can manipulate culture as he or she can control many other aspects of the organization. Culture, because it is largely determined and controlled by the members of the organization, not the leaders, is different. Culture may end up controlling the leader rather than being controlled by him or her.

4. Don’t assume that there is a “correct” culture, or that a strong culture is better than a weak one. It should be apparent that different cultures may fit different organizations and their environments, and that the desirability of a strong culture depends on how well it supports the organization’s strategic goals and objectives.

5. Don’t assume that all the aspects of an organization’s culture are important, or will have a major impact on the functioning of the organization. Some elements of an organization’s culture may have little impact on its functioning, and the leader must distinguish which elements are important, and focus on those.


An understanding of culture, and how to transform it, is a crucial skill for leaders trying to achieve strategic outcomes. Strategic leaders have the best perspective, because of their position in the organization, to see the dynamics of the culture, what should remain, and what needs transformation. This is the essence of strategic success.



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Adler, N.J. (1991). International dimensions of organizational behavior. Boston: PWS-Kent Publishing Company.

Book – Multiple Authors, Second or Subsequent Editions.

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Chapter in Edited Book.

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Chapter in Edited Book, Several Volumes.

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Alch, M.L. (2000, July). Get ready for the net generation. USA Today, 129, 26-27.

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Thin blue line ‘has no future’, (2002, October 27th). The Sunday Times, Perth, Western Australia, 26.

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Anderson, G.F., & Hussey, P.S. (October, 1999). Health and population aging: A multinational comparison. [On-line]. International Health Policy. Available http://www.cmwf.org/programs/international/aging_chartbook.asp [2003, March 4th].

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Daboval, J.M. (1998). A comparison between baby boomer and generation X employees’ bases and foci of commitment. Dissertation Abstracts International, University Microfilms No. AAT 98-23312.

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Finkelstein, L.M., Gonnerman, M.E.J., & Johnson, B.A. (April, 1999). The development of measures of age and generation identity. Paper presented at the poster session presented at the 14th annual meeting of the Society for Industrial and Organizational Psychology, Atlanta, GA.

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