Volvo’s HR Practices

Job Enrichment Approach

- Siju- Ramu- Naval- Annadurai- Plakilla- Narayan- Rajaram

Objective

• Bringing out the Volvo’s conscious efforts to implement job enrichment concepts to improve Human resources productivity

• Its subsequent fallback

• Suggestions for improvement

Background Note

•Volvo started its enterprise in the year 1924.

•1939 – Volvo established as a profitable automobile manufacturer with a broad product range

•Employee strength – 51,000•1970 – Volvo experience Labor related problems for the 1st time

•Turnover/ Revenue

The Problem

• Increased Absenteeism

• Employee Turnover as high as 46%

• Government expenditure on education increasing the number of educated citizens – decline in blue collar resources

• Increase in foreign staff in Volvo’s workforce causing groupism & lack of unity

• Work Culture affected.

Changes Initiated

• Focus on Training & Development for the workforce

• Leadership sensitization programs to improve communication skills, labor welfare & group behavior

• Job enrichment through decentralization

• Invested money xxxxxx millon usd in

• Empowerment

• Restructure tall to flat

Job Enrichment•Job Rotation: Shifting around of jobs which was physically & psychologically different.

Benefits FlexibilityEmpowermentDrop in Turnover from 40% to 10%

•Management Employee Councils: 16 councils across manufacturing & staff to handle issues related to production, marketing surveys & financial reports.

BenefitsDevelop plans for improving work conditions, employee policies, health & safety.Employee participation in key decisions.

Job Enrichment• Change Implementation- The traditional assembly line changed to

keeping in mind the worker’s requirement & nature of work .

Benefits- Jobs of repetitive nature now automated- Employees involved & contributing to the

change strategy

• Small Work Groups: - 3 to 9 member team consisting of a leader,

foreman & spokesperson, to work on specific tasks & divide work among themselves & have periodic meetings .

Benefits- Decentralization caused quick solutions for

pressing issues- Workers encouraged to talk about quality

control related issues harnessing a sense of belonging

- Employee felt more involved resulting in positive results

Job Enrichment

• Employee oriented technology:

- Instead of workers assembling the car body, the car body moved around the plant

Benefits

- Increased interaction among workers

- Sub tasks divided in an organised way

- Each team had personalised facilities

Limitations of the Approach

• External forces in the automotive industry changed – decline in the demand for cars in the global mark

• Volvo productivity low (32 hrs per car) compared to Japanese (21 hrs per car) & American plants(25 hrs per car)

• Experts felt that there was a strong mismatch between the amount of money spent on good training & the results

• The Volvo car was not performing well which further led to the non feasibility of the Job Enrichment Approach

Suggestions

• Workforce planning – Attract economical wage workers from developing countries

• Out source operations where labor & labor related laws are affordable.

• Creating the right balance between people & task management – the approach adopted was skewed.

• The process improvement measures are always continuous & not one time.

• Sufficient encouragement in the area of R&D to keep up with market trends.

Conclusion

• Job Enrichment is extremely important & yet must be well calculated to strike the right balance between people & production after analysing the possible developments that come up in the future.