Located in Lima, Ohio, the Lima Tire Plant is one of the top plants among the eight manufacturing enterprises within the Treadway Tire Company faced the problems of high turnover and job dissatisfaction which threaten the morale and productivity.
Defining the root causes of the existing problems, developing the measures for overcoming them and evaluating the following implications against the required costs are the main targets of this strategic plan. The cost-cutting mandate, the current hiring patterns based mainly on informal performance assessment for the following internal promotions, inconsistencies in the foremen’s functions and responsibilities and the lack of communication can be regarded as the main underlying causes of the existing problem. The attempts of changing the hiring patterns and initiating the training program were made by Ashley Wall, the Director of Human Resources but were rejected by the senior management due to the lack of the financial rationale for the strategy. Emphasizing the financial implications of improving the corporate culture through enhanced communication and workers’ commitment would be helpful for explaining the benefits of implementing the strategy to the senior management. The major stages of the action plan include the investigation of the main deficiencies, changes in the hiring patterns trough developing a detailed performance assessment framework including the criterion of the communication skills and enrollment of the employees into the training program intended to enhance their awareness on the importance of effective communication, the strategic plan and the system of rewards for the improved communication.
The changes in the hiring patterns, employees’ enrollment into the training program and the development of detailed frameworks for performance assessment and rewards is crucial for overcoming the high turnover and job dissatisfaction problems and preventing the hazards of reducing the corporate morale and productivity at the Lima Tire Plant.
The Lima Tire Plant as one of the plants of the Treadway Tire Company faces the problem of the high turnover rates and employees’ dissatisfaction with their working conditions and environment. The tire plant located in Lima, Ohio employs 1,120 workers, 970 of whom are hourly employees unionized by the United Steelworkers (USW) and the rest 150 are salaried workers. The line production employees are supervised by the salaried managers called line foremen who are responsible for the four main domains, including Quality Assurance, Material Control, Production and Maintenance. The three main sources put into the basis of the hiring patterns include the internal promotions of highly-performing hourly employees, external hires of the college graduates and the company transfers of the experienced employees from other Treadway plants with the special emphasis upon the internal hires (up to 80% as of December 2006). Ashley Wall as a Director of Human Resources transferred to the Lima Plant 2006 attempted to change this hiring pattern by giving more consideration to the external hires of the college graduates. With the variety of challenges in the tire manufacturing domain, including the increased raw material costs and the intense competition in the market sector, the company has adopted the cost-cutting mandate. However, disregarding the reduced financing, the problems of turnover and job dissatisfaction cannot be ignored due o their impact upon the efficiency of manufacturing processes.
Statement of the problem
The lack of communication between the various levels of management and employees at the Lima Tire Plant, one of the plants at the Treadway Tire Company, resulted in the overall job dissatisfaction and high turnover rates. The threats towards the morale and productivity are the main problems which need to be handled by the human resource department of the Lima Tire Plant in the current context of cost-cutting. The lack of communication and understanding between the management levels and the plant employees caused dissatisfaction of all the participants of the working process. On the one hand, the foremen who are responsible for meeting the industrial targets but may lack knowledge on industrial engineering and unable to influence the disciplinary issues feel disconnected from the rest of the plant. The responsibilities of the foremen were mainly limited to filling the reports and schedules and bearing the responsibility for the production forecasts though actually deprived of power for affecting the outcomes. On the other hand, the hourly employees who may become the victims of the foremen’s dissatisfaction felt the lack of respect from them and were indignant with their managerial style.
In general, the current hiring and managerial patterns have a negative impact upon the working environment, the employees’ commitment and corresponding results. While the offered rotational program and training were rejected by the senior management due to the lack of funds and the current cost-cutting mandate, the problem of turnover and job dissatisfaction are undertreated, proper measures need to be imposed for defining its rooting causes and selecting the appropriate strategies for improving the situation.
The opportunities of possible solution
The solution of the turnover problem is significant for making the Lima Tire Plant one of the top enterprises within the Treadway Tire Company. The recognition of the turnover and job dissatisfaction problems by the senior management of the plant and serious consideration of the measures which need to be taken for improving the current situation are crucial for not only improving the working environment, but also increasing the manufacturing outcomes in general. Taking into account the complexity of the issues involved into the sphere of the high turnover in the foremen positions, a thorough analysis of the root causes of the existing problem is required for detecting the main drawbacks of the current practices and developing the strategies for improving them. The main opportunities of improvements include the changes in the hiring and managerial patterns along with corporate training for enhancing the foremen’s knowledge on the industrial engineering processes, disciplinary issues and improving communication between the line foremen and senior management as well as foremen and hourly employees. The system of monetary rewards for the improved communication between the various groups of employees can become an effective means of motivation. The measures which can be taken for overcoming the problem of high turnover and job dissatisfaction combine the changes in the implemented patterns for hiring the foremen and distributing the responsibilities, thus making changes in the company’s hiring philosophy, developing a system of monetary rewards and training the employees for communicating the idea of the necessary changes and enhancing their awareness of the engineering processes and the recent changes.
Regarding the proposed opportunities for solving the problem of the high turnover and the lack of communication between the various groups of employees at the Lima Tire Plant, the issues deserving consideration include the costs of the required changes against the possible benefits of the implemented changes. In the context of the cost-cutting mandate, the prior rotation program has been rejected by the senior management. In that regard, a complex analysis of the main underlying causes of the turnover, communication failures and dissatisfaction and their financial impact upon the plant’s manufacturing outcomes is required for illustrating and justifying the offered strategy. Through the research, it has been discovered that the informal system for measuring the employees’ performance without any definite assessment criteria appeared to be ineffective for selecting the internal candidates for the promotion to the foremen positions. Complimenting the criterion of meeting the business forecasts with the parameters of overall competence and successful communication with senior management and hourly employees would allow conducting a more complex evaluation of the performance and selecting the best candidates for the promotion. Regarding the training programs aimed at enhancing foremen’s knowledge on industrial engineering and building the communication bridges between the participants of the working process, it is important to discuss the impact of the communication failures upon the working environment, employees’ commitment and manufacturing outcomes.
Along with exploring the significance of improved communication through training the employees, the system of monetary rewards for any significant success can be valuable for improving their motivation and involving them into the process of implementation of a new strategy. The proposed solution includes the changes in the company’s hiring and promotion patterns, training for enhancing competence and communication and a system of monetary rewards for the merits in implementing a new strategy which however require proper consideration of the implied costs against the advantages and disadvantages of undertaking the changes.
The strengths and limitations of the prior research
The prior research conducted by Ashley Wall as a Director of Human Resources at the Lima Tire Plant was valuable for providing the insight into the main underlying causes of the high turnover and job dissatisfaction problems but lacked consideration of the financial impact of the existing drawbacks against the costs required for undertaking the changes and the motivational factor important for involving the employees into the implementation program. Thus, shedding light upon the drawbacks of hiring practices, certain inconsistencies in the foremen’s responsibilities and the lack of communication between the various groups of employees, the prior research touched upon the major root causes of the existing problem. The changes in the hiring patterns and rotation training offered by Wall could be effective at the initial stage of changing the current practices within the plant.
The lack of consideration of the financial impact of the problem can be regarded as the main reason for which the initiative was rejected by the senior management on the premise of the cost-cutting mandate. Another limitation of the prior research is the lack of attention towards the employees’ involvement into the change making process. The monetary compensation for the additional efforts is significant for increasing the workers’ commitment and ensuring the success of the initiative.
A plan and strategy statement
The action plan for solving the problems of high turnover and job dissatisfaction at the foremen level includes a comprehensive analysis of the financial impact of the discussed problems upon the plant’s overall performance, changes in the current hiring patterns and consideration of the opportunities of corporate training and a system of monetary rewards for improving the employees’ motivation. The first part of the strategy includes the analysis of the implications of the current practices for providing the rationale for undertaking the changes. This goal was partially achieved by Wall who has collected the information from the employees’ profiles and interviews. The following research stages require consideration of the financial side of high turnover and lack of communication. Development of a detailed hiring framework is another significant stage of the action plan aimed at selecting the best candidates for the foremen’s positions. Another important part of the strategy is the training program aimed at communicating the idea of the changes to the employees, enhancing their competence and developing the communicative skills which are necessary for the successful business performance of the plant in general. The integration of the information on the system of monetary rewards into the training program is crucial for improving the employees’ motivation and commitment during the reformation of the current practices.
A strategy aimed at overcoming the existing turnover and communication problems should integrate the changes at all levels of the plant, including the hiring patterns employed by senior management, the training program involving all employees and schemes used by all workers in their daily professional communication.
Implications of the strategy
The implementation of the offered solution will affect various dimensions of the Lima Tire Plant performance, including the corporate culture in the form of the hiring patterns, promotion perspectives and business communication, the human resource level and the financial performance of the plant. Due to the mutual relationships between the different dimensions, a complex perspective should be adopted for evaluating the program outcomes. Changes in the hiring patterns and proper training of the foremen are expected to have impact upon their performance and job satisfaction, improving the working condition for the hourly employees at the same time.
The system of monetary rewards is intended to improve the workers’ motivation and commitment. On the other hand, taking into account the fact that the discussed changes would require certain investments, the following benefits need to be measured against the required costs.
In general, it can be concluded that regardless of the cost-cutting mandate, the changes in the current practices of the Lima Tire Plant are needed for overcoming the high turnover, communication and job dissatisfaction problems at the foremen level and improving the overall business performance of the enterprise.
The reconsideration of the hiring patterns, development of the detailed performance assessment framework, training programs and monetary rewards system are crucial for the successful implementation of the discussed strategy.
Skinner, W. & Beckham, H. (2008).
Treadway Tire Company: Job dissatisfaction and high turnover at the Lima Plant. Harvard Business Review.