TABLE OF CONTENTS

EXECUTIVE SUMMARY ....................................................................................................................................... 2

HRM FACTORS FOR SUSTAINABILITY ......................................................................................................... 3
The Application of Performance Management ..................................................................................... 3
Diversity Management ................................................................................................................................... 4
Managerial On-the-job Training ................................................................................................................. 7
Job Rotation ................................................................................................................................................... 7
Coaching/understudy method ............................................................................................................... 7
THE ACCREDITION: ISO 14001 AND OHSAS 18001 ............................................................................... 8
HARVARD FRAMEWORK ................................................................................................................................ 10
The Model ......................................................................................................................................................... 10
Situational factors .................................................................................................................................... 11
Stakeholders interests ............................................................................................................................ 11
Human resource management policy choices ............................................................................... 12
Human resource outcomes ................................................................................................................... 12
Long-term consequences ...................................................................................................................... 13
Feedback loop ............................................................................................................................................ 13
The Measurements ....................................................................................................................................... 14
RECOMMENDATIONS OF HRM PRACTICES ............................................................................................ 15
CONCLUSION ....................................................................................................................................................... 17
REFERENCES ....................................................................................................................................................... 18


EXECUTIVE SUMMARY
This case study researches on the sustainability of Jia Hsin Co Ltd, a foreign
Vietnam-based company which is the supplier for sandals manufacturing industry.
The first part of this case study is discussing about human resource management
(HRM) practices that help Jia Hsin Co Ltd in maintaining the sustainability in the market.
Main practices are identified include of: (1) the application of performance management;
(2) effective diversity management and (3) effective managerial on-the-job training. All
three applications emphasize on the importance of management level regarding to the
business performance of the company.
Secondly, there will be analysis of HRM practices that contributed in the
achievement of the company regarding to the accreditation of ISO 14001 and OHSAS
18001. The effective communication of management with employees, effective training
program, high collaboration, and ethical incentives are the main factors that support the
company in gaining such management certification.
The Harvard HRM Framework is also applied in order to analyze the
implementation of those practices. Last but not least, the recommendations toward the
adjustment of some HRM policies are conducted to help the company in improving the
performance and reducing the turnover rate.
INTRODUCTION
Jia Hsin Co Ltd is a sandal manufacturing company wholly owned by Jia Cherng
Corp. incorporated in Republic of Mauritius (Jia Hsin Co Ltd, 2011). Jia Hsin means New
and Pretty. The company has the expectation to maintain the sustainable abilities within
the market. The case study is based on the Global Reporting Initiative (GRI) Sustainability
Report 2011 of Jia Hsin Co Ltd to review the activities as well as the glance toward internal
operation process that support the company in achieving ISO 14001 and OHSAS 18001
certifications.
HRM FACTORS FOR SUSTAINABILITY
THE APPLICATION OF PERFORMANCE MANAGEMENT
Concerning to the performance rating process, it seems that Jia Hsin Co Ltd has
applied the performance management instead of conventional methods in the aspect of
performance appraisal. Performance Management and Performance Appraisal have similar
characteristics; however, according to Dessler (2013), three points that can be used to
distinguish them:
1. The organisations conduct the continuous interactions among senior
management and subordinates in order to guarantee the continuous quality
improvements. Jia Hsin Co Ltd stated that the firm has conducted weekly
meeting for leaders and managers and re-formed the employees on the basis of
issues being discussed within the meeting (Jia Hsin Co Ltd, 2011).

2. Performance management is based mainly on goals. The companys performance
is based totally on business results while income of the senior management in
each of department will be calculated with fixed wages plus a performance
bonus (Jia Hsin Co Ltd, 2011).
3. Performance management means continuously re-evaluating and if needed,
modifying how the employee and team get their work done. In the case of Jia
Hsin Co Ltd, through the performance management process is conducted weekly,
staffs will be implemented the career development plan in order to have an
overview regarding to what they can do and do the best to be rotated in suitable
departments or training programs (Jia Hsin Co Ltd, 2011).
DIVERSITY MANAGEMENT
Buckingham (2010) stated that many years ago, the top management and board of
directors had the tendency to establish a homogenous organisations in order to share the
similar organisational behaviours, culture, and so on. However, the homogenous
environment can cause myopic opinion regarding to various types of problems (Morgan &
Vardy, 2009) and especially internal group think phenomenon the staffs share the culture
and mind-set; therefore, they will all agree with incorrect solutions (Marques, 2007).
Labedz & Berry (2013) stated a reason fo efficient diversity management is the proactive
attitude from organisation. In the case of Jia Hsin Co Ltd, the diversity management has
been carried out efficiently. Top management has the tendency to recruit less female
employees since they have high possibility of maternity leave and cannot compare with
male in some heavy tasks (Pieterse, et al., 2013). However, Jia Hsin Co Ltd has the
proportion of female employees in approximately 68% in comparison with 32% of male
employees.

Figure 1. Jia Hsin companys workforce by gender in 2011 (Jia Hsin Co Ltd, 2011)
Marques (2008) made a statement that one of problems in diversity was that a lot of
firms manage the diverse workforce mainly on the basis of profits instead of building a
serious cultural and moral matters. Additionally, Daft (2010) stated that management has
tend to promote people that share the same cultural background and this leads to the
narrow solutions in problem-solving perspectives. Jia Hsin Co Ltd, in another hand, is
serious in promoting both local and expat:

Figure 2. Companys senior management regarding to nationality in comparison
between 2010 and 2011 (Jia Hsin Co Ltd, 2011)


Although the companys GM (General Manager) is a Taiwanese; however,
Vietnamese senior management increased to 8 people (2011) with a rate of 35% and took
some of important senior positions such as Operation Manager and Human Resource
Manager. Menezes (2012) stated that efficient diversity management can help the
organisation reduce the turnover rate. Jia Hsin Co Ltd actually had the turnover rate reduce
0.11% in 2011 and kept the yearly turnover rate be stable at 4% (Jia Hsin Co Ltd, 2011).
MANAGERIAL ON-THE-JOB TRAINING
According to Dessler (2013), the managerial on-the-job training include approaches
of job rotation, coaching/understudy method and action learning. In the case of Jia Hsin Co
Ltd, the company has applied the job rotation and coaching/understudy method.
Job Rotation
Job rotation is defined as conducting a cross-department training for managers or
supervisors in order to enriching their knowledge and understanding in the aspect of tasks
and business; moreover, it is also used to test their abilities (Noe, et al., 2011). Jia Hsin Co
Ltd has rotated the supervisors among divisions in order to train them to become senior
management in the future that can supervise several departments (Jia Hsin Co Ltd, 2011).
Coaching/understudy method
Dessler (2013) stated that the employees will be worked with different supervisors
or managers for broadening coaching. Jia Hsin Co Ltd with the motto Right people will lead
to more growth has been applying the policy for identifying potential staffs and put them
in training program through complex functions for the stable development in the future (Jia
Hsin Co Ltd, 2011).
THE ACCREDITATION: ISO 14001 AND OHSAS 18001
Jia Hsin Co Ltd achieved the accreditation of ISO 14001 and OHSAS 18001
management system (Jia Hsin Co Ltd, 2011). Range of practices have contributed into the
accreditation achievement include:
Invest in training programs to improve employee skills (Gomez-Mejia, et al.,
2012): For ISO 14001, the strong emphasis concentrates on training as well as
communication in order to support realizing changes and continuous improvement (Kaur,
2011). Jia Hsin Co Ltd built and applied the CSR (Corporate Social Responsibility) software
for data collection and performance measurement. Beside the establishment of
Sustainability Team, the supervisors also took part in the rotation traning to enhance their
knowledge in the aspect of system and software. So, they can adapt promptly in order to
support operating the process system. Jia Hsin Co Ltd also invested for training programs
US$ 12,957.42 in the year 2011 (Jia Hsin Co Ltd, 2011).
Sharing information and effective communication (Tan & Nasurdin, 2011):
Effective communication from management positions will support and ensure the clear
understanding in the aspect of EMS/ISO 140001 and OHSAS 18001 for the staffs as well as
the systems function, and employees role in identifying and controlling environmental
issues (Kaur, 2011). Jia Hsin Co Ltd implemented 3 additional channels over 7 total
channels for communication between top management and employees (Jia Hsin Co Ltd,
2011) a total implementation of 43%.


Encourage team work so that employees are more willing to collaborate with
each other (Gomez-Mejia, et al., 2012): the training development can lead to better team
members and cohesive teamwork. Nee (2011) claimed that teamwork can have positive
and significant relationship with the implementation of ISO 14001 EMS. The company has
the corner stone of Respect, Share and Care and establishes every necessary method for
make connection between the management and employees, include of: (1) weekly meeting;
(2) policies, notices posted on notice board; (3) suggestion box and (4) face to face meeting
between management and employees no bureaucratic system was applied (Jia Hsin Co
Ltd, 2011).
High compensation contingent on organizational performance (Tiwari,
2012): Paille et al. (2014) said that another core component for the effective
implementation of environmental management system is motivating employees and
implying appraisal and reward related to environmental performance. In this aspect, Jia
Hsin Co Ltd stated that the investment company appraises Top Management performance
not only by reviewing company business results but also based on achievement in social
and environmental aspects (Jia Hsin Co Ltd, 2011).
Building ethical incentives culture (Dessler, 2013): although the reward and
appraisal system is needed for implying those management system; however, financial
performance-oriented incentives without ethical standards may cause unethical behaviour
and even culture (Dessler, 2013). For illustration, in the aspect of environmental
protection, Jia Hsin Co Ltd outsourced a third party company for waste disposal in order to
remove adverse impact to employees health (Jia Hsin Co Ltd, 2011).
HARVARD FRAMEWORK
THE MODEL

Figure 3. Harvard human resource management model (Torrington, et al., 2005)
Harvard human resource management model is an analytical framework developed
by Beer et al. (1984) and include of six components (Bratton & Gold, 2012):

Situational factors
Regarding to Bratton & Gold (2012), these factors will influence managements
choice of human resource strategy. Concerning to the workforce characteristics of Jia Hsin
Co Ltd, the average annual turnover rate was 4%, 856 new employees joined in 2011 and
the number of leave was 901 (Jia Hsin Co Ltd, 2011). In another hand, 74.53% of new
employees were under-30 years old. It meant that the companys workers ages were quite
young and they can change job anytime they want (Jia Hsin Co Ltd, 2011). Therefore, the
number of new employees was large enough to consider. Training supports employees in
mastering understanding, knowledge, abilities, skills that can make contribution not only to
management practices in daily routine operation but also in term of innovated products
and production process (Tan & Nasurdin, 2011). Based on Paille et al. (2014), training and
development environmental knowledge is the first core component for motivating the
endorsement of environmental management system (EMS) such as ISO 14001.
Stakeholders interests
The stakeholder interests help to identify the importance of trade-offs between
the owners interests and those of employees and their organizations, the unions (Bratton
& Gold, 2012). The company has considered enhancing the understanding among the
partners is an important factor for the business success and development. Therefore, Jia
Hsin Co Ltd had to implement the communication effectively by sharing with the
employees in the aspect of strategies of company, business policies, targets and objectives,
the expectations from the customers, suppliers, and board. The company also notifies its
requirements toward employees cooperation and contribution (Jia Hsin Co Ltd, 2011).
Human resource management policy choices
The human resource management policy choices concentrates on the aspect that
management's decisions and actions in human resource management can be completely
appreciated on the basis that it is resulted from an interaction between constraints and
choices (Bratton & Gold, 2012). Based on the employees survey result, 33.3% of employees
wish the company would have more policies in supporting living conditions (Jia Hsin Co
Ltd, 2011). Therefore, a high contingent reward system based on the organisational
performance can help to create an environment in which employees were motivated to do
their best and had chance to improve the living condition through working progress.
Human resource outcomes
The human resource outcomes are high employees commitment to organisational
and high individual performance which lead to the cost-effective products or services
(Bratton & Gold, 2012). The managerial on-the-job training helps to discover employees
competencies in various aspects. This also creates the opportunity for their career
development and enhances their commitment toward the organisation. Moreover, since
they made the commitment with the organisation; the performance management process
will help to make the congruence between the employees goals with the firms strategic
goals. Last but not least, together with the commitment of employees, the ethical incentive
culture lead to the successful implementation of OHSAS 18001 which can bring
tremendous benefits for company including of decreasing less work-related accidents
which can lead to absenteeism and turnover, downtime and associated cost, adapting with
the legal requirements as well as public insurance costs (To, et al., 2012).
Long-term consequences
The long-term consequences are divided into three levels: individual, organizational
and societal (Agyepong, et al., 2010). In the aspect of individual, the job rotation is a part of
job enrichment attempt developed by Herzberg (1957) in a book by Torrington et al.
(2005). This adapts well with one of the motivation strategies of Armstrong (2009) beside
the financial motivation, in which employees can be motivated with the opportunity to
grow by developing abilities and careers. In the organisational area, keeping the stable pool
of talent management would help the company be sustainable and maintain the
competitive advantage in comparison with other competitors. Last but not least, taking
account to the stable human resource pool means the organisation also has to take care the
community or society around the employees. For instance, beside conducting a new waste
disposal system, Jia Hsin Co Ltd also carried out the training and education classes
concerning to various types of diseases for both employees and their families (Jia Hsin Co
Ltd, 2011).
Feedback loop
The situational factors influence HRM policy and choices but long-term
consequences can have impact toward the situational factors, stakeholders interests and
HRM policies (Bratton & Gold, 2012). This means that long-term output can help to
improve the situation of the organisation, through the evaluation and lead to continuous
improvements. For illustration, although the company can keep the stable and has a slight
decrease in turnover rate, Jia Hsin still decided to implement Human Resource
Management System (HRMS) and organisation reformation to improve the company
structure in order to help improving the turnover rate, and absenteeism (Jia Hsin Co Ltd,
2011).
THE MEASUREMENTS
The company has applied some of these approaches in order to measure the
outcome of human resources practices:
Human Resource and Business Result: regarding to Huselid (1995), the investment in
HR practices can have impact toward business results, both in financial and market value.
In the period 2010 2011, Jia Hsin Co Ltd appointed more local staffs in senior
management level and implementation of OHSAS 18001 and Human Resource
Management System (HRMS), the retained earnings increased 99.38% while the sales
volume increase 31.42%.
Human Resource Audit: in order to ensure the sustainable compliance, Jia Hsin Co
Ltd built up the labour management system and do the periodically internal audits (Jia Hsin
Co Ltd, 2011). Through the HR audit, the company can identify the roots in quality
improvement and conduct two important approaches:
Adding human power for CSR system implementation.
Conducting rotation training for employees to maintain multi-function HR pool.
Employee Survey: the employee survey is also conducted in order to identify the
requirement as well as expectation of employee regarding to the companys operation.


RECOMMENDATIONS OF HRM PRACTICES
Providing recognition to staffs with both financial-oriented and non-financial
rewards (Gomez-Mejia, et al., 2012): the annual turn-over rate kept constantly at 4%. In
which, 77.25% of under-30 age employees left because as Jia Hsin Co Ltd stated, for
opportunities that can helped them gain more earning. Therefore, the company should
develop policy that can give prompt and appropriate recognition toward employees in
order to keep the turnover rate down beside the remuneration or salary.

Figure 4. Number and age of leave employees (Jia Hsin Co Ltd, 2011)
Making the staffs become part-owners of the organisation with stock (Tiwari,
2012): the remuneration and salary that Jia Hsin Co Ltd offers for basic employees was
VND3,158,881. Indeed, if the company does not want to break the salary floor, it can offer
the potential employees with stock. By this way, it can motivate the staffs to work better
because now their performance and bonus can stick with the business performance of the
company.

Figure 5. Basic salary and remuneration by category and function (Jia Hsin Co Ltd,
2011)
Develop a screening trainee selection program to recruit best potential staffs
(Armstrong, 2009): although the company has the career development program for
potential staff to practice complex functions; however, with the turnover rate of 4%, there
is high chance that these staffs would leave the company during the training period.
Therefore, the company can make implementation by screening the potential applicants
right during the recruitment and selection progress and put them in managerial on-the-job
training right in the first time.

CONCLUSION
In conclusion, Jia Hsin Co Ltd successfully implemented the human resource
practices of performance management, diversity management and managerial on-the-job
training. Especially in the aspect of training and development, with the promotion of the
local senior management together with the job enrichment policy for supervisors, the
company can ensure the cohesive teamwork for better performance. Moreover, the
enhanced communication among stakeholders together with an open and multi-channels
environment, it augments the company in the information flows from management to
employees as well as the collaboration spirit. However, the company would needs to make
the implementation in the aspect of motivating employees with recognition and make them
become a part of the organisation in order to reduce the turnover rate. A talent screening
and development program would be useful for head-hunting potential employees.

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