Question 1: What effects do you think HRM has on the gap between projected and actual profits, if any?

The management of The Black Pearl had an unexpected encounter with financial losses despite the project having encouraging prospect. The management report on the situation found everything right and almost perfect except the human resource department. Though Mr. Sparrow appointed an excellent manager in the department, the report indicated that there are some aspects in the department that could be the reason why The Black Pearl is not performing to its full potential. The HR department had recruited employees with decorated CVs, provided proper salaries, which satisfied employees. And they also made job description and believed that the employees had complete knowledge about the jobs. But the problem lies in the fact that the head of HR department, Mr. Barbossa did not make correct strategies to manage human resource which include job analysis and the result of it: job evaluation. Job analysis is the systematic exploration of the activities within a job. It is a technical procedure used to define a job duties, responsibilities, and accountabilities. This analysis involves the identification and description of what is happening on the job, accurately and precisely identifying the required task, the knowledge, and the skill necessary for performing them, and the conditions under which they must be performed. Again, job evaluation is the activity to specify the relative value of each job in the organization using the information from the job analysis. This process seeks to rank all jobs in the organization in a hierarchy that reflects the relative worth of each. The Black Pearl recruited able and professional employees from the market but as they did not do a proper job analysis which includes proper job description and job specification, employees were not fully aware of their core and also their secondary responsibilities and objectives. A proper job analysis would have specified the duties and boundaries of actions for the employees and also made the company clear about the competencies needed for the job to prepare the right combination of jobs and employees. The hotel management received complaints about the general cleanliness in hotel. For a 5 star hotel chain like Pirates Inc. this is a worst-case scenario. But all the employees were very sincere about the job and have the needed skill. Still they failed to perform on the job. Lack of proper co-ordination in them is one of the main reasons behind it. They do not have a clear planning on what to do, when to do, and how to do. So, they lack efficiency in their job even though the skill is there. This inefficiency leads to creating the gap between the expected profit and the actual profit. On the other hand, the Company was trying to solve the problem by: Increasing the number of staff members per floor. Increasing the number of Administration and Maintenance staff. Increasing the salary of all employees on a fixed line basis.

The strategy of increasing the number of staff per floor and in the administrative and maintenance jobs without any sort of refined job analysis will bring even bigger confusion among them. In this case the recruitment would be made to solve problem with the quantity instead of solving it with the quality and planning. Adding more employees cannot solve the problem that The Black Pearl is facing, a clearly defined job description is needed. This inefficiency leads to creating the gap between the expected profit and the actual profit. Using the information from the job analysis, the company makes the evaluation of those jobs. Job evaluation has direct relation with the compensation and benefit system. If an organization is to have an equitable compensation program, jobs that have similar demands in terms of skills, knowledge and abilities should be placed in common compensation group. In short, the job evaluation determines the payment structure on the basis of the demand for the skills and abilities needed for the jobs. The Black Pearl had employees with good salaries comparing with the market. The HRM manager had set up a traditional organogram of the organization with a proper chain of command, and a compensation and benefit system based on the chain of command. The compensation and benefits and promotion were managed on a basis of experience and time spent as a company employee. But still it incurred employee motivation were low leading to low job output. Not doing a proper job evaluation can be the reason of this. Job evaluation program would help them establish pay rates or ranges compatible with the ranks, classification or points. Thus, they would have a complete payment structure. The company's practice to pay salaries at the best values without judging other factual data (compensation survey in similar industry, wages curves, wages structure etc.) has made their pay structure disorganized. As a result they have actually paid more than the job would value or the company could afford. In this process they have lost a large amount of money. So the companys third decision to increase the salaries in order to increase the effort from the staffs will be a failure. But they have planned it without finding out what actually they need to think of to solve the problem. Increasing spending on employees is not the solution. Rather they should invest to have a proper Job Analysis and Evaluation process to increase the efficiency of their excellent work force and bring the company back on track. It is not the staffs that are the problem; the problem lies in how they are being managed.