Human Resource Management – Strategy & Policy Sembcorp Marine

Executive Summary:

The purpose of this report is to provide insight on analysis of three HRM strategies’ impact on competitive strategy of Sembcorp marine company. The report discuss in depth framework of those HRM strategies and company’s competitive strategy. This report also highlights the core business of the Sembcorp marine company. Moreover, to organize the entire discussion, report has been continued into three parts; first, the company’s business and its competitive strategy have been defined. Second, identification of three HRM strategies has been discussed and third part contains the impact of those three strategies on company’s competitive strategy. Lastly, conclusion has taken place after analyzing each aspect. Possible areas of HRM strategy’s application in company’s competitive strategy to make it worth for the growing complexities, is also a part of discussion in this report. It is believed that, an inclusive understanding of the idea behind each part of analysis will help update better judgment on the discussion.

Introduction:

Sembcorp Marine’s business: Sembcorp marine company activates a 25-hectare manufacturing working area, which is furnished with one of the premium facilities in the region. It is a Singapore based company, known as a global marine and a leader in engineering and construction of offshore production platforms. It also provides a complete range of incorporated solutions in ship repairing, shipbuilding, ship conversion, rig building (Sembcorp Marine Ltd, 2011). Sembcorp internationally has gone over fast in turnkey construction of semi–submersibles, jack-ups and in the design of rigs and drillships as well. It is also identified as a principal role player in the design and new construction of ample range of vessels, from 2,600 TEU containerships, bulk carriers, cable laying vessels to icebreaking tugs (Sembcorp Marine Ltd, 2011).

Company’s competitive strategy: As far as Sembcorp Marine Company’s competitive strategy is concerned, it keeps motivating, training & developing and retaining the employees to maintain its leading edge (Sembcorp Marine Annual Report, 2008). Therefore, people centeredness (human capital) can be considered as one of the most competitive strategies of Sembcorp Marine. The company identifies its human capital as most valuable and respected resources. It inculcates a sense of belonging and enhances the employee welfare through fair employment practices, manpower and talent development, culture and working environment development and promoting total wellness. To stay at the forefront of industry developments and innovations, Sembcorp Marine recruits talents through a series of channels i.e. scholarships, internships and job fairs. In sum, company also has a different and new policy for health and wellness programs which helps to make its employees healthier and to win the competencies. In respect of its efforts in endorsing workplace health, Sembcorp Marine was presented the prestigious work-life excellence award in 2010 by Singapore’s tripartite committee on work-life strategy.

Human Capital Strategy and Policies

(Source: Sembcorp Marine Ltd, 2011)

Furthermore, descriptions of three HRM strategies and their impact on Sembcorp’s competitive strategy have been taken into consideration below.

HRM Strategies:

If successful organizations around the world are noticed, use of a finite number of HRM strategies in those organizations can be seen. HRM Strategies are formulated in an organization to cultivate the competencies, cultures and composition of employees that motivate an industry’s competitive potential. Strategies are the common framework that offers a standpoint for selecting specific policies and course of actions. From this standpoint, human resource management strategies can be discussed broadly with the trend of the time.

1. Total Reward Strategy: In this context, one of the primary dimensions of HRM strategy, total reward strategy comes into light (Jiang, Xiao & Qi, 2009). Total reward has usually been divided into four groups: pay, benefits, learning & development, and working environment. Each group is defined below:

Pay: It includes base pay, variable salary, long term incentives and share options.

Benefits: The benefits provided under this strategy are healthcare, retirement including pension, cars, holiday, voluntary benefits, etc.

Career development: It consists of learning experiences, performance management, succession planning and training.

Work environment: Organization climate, leadership, performance support and work life balance are the requirements of work environment.

This strategy is much familiar to the modern managers and scholars. Application of this strategy will help gaining outstanding performance and profit. Total reward strategy not only improves employee performance but also effective in decision making process of an organization. On the other hand, strategy comprising of several reward benefits makes it successful in solving existing compensation issues as well.

Strategic HRM

(Source: ACE, 2008)

1. Workforce Composition strategy: Furthermore in the spectrum of strategies, the second dimension of HRM strategy has always been workforce composition. That is, getting the right person for the right job at the right time and doing things that promote both of them as a personnel and the industry as a whole. At the center of workforce composition, workforce composition strategy focuses on the growth of cadre of employees’ information that is central to an industry’s advantage. At the same time, HRM strategy is leaning toward preserving existing relationships with employees in more traditional work provisions as well as making more use of conditional employees that includes part-timers, temporary workers, freelancers and long-term partners. This strategy also encompasses attracting the high quality employees, developing their work performance and retaining them in the industry. Moreover, this strategy obtains, analyzes and provides the report on the data that informs the direction of value adding people management those helping in strategic, investment and operational decisions.

1. 3.      Knowledge management strategy: Similarly, the third key strategy of human resource management might have been used in the organizations is, knowledge management. It is referred by the organizations to manage their intellectual capital and also to utilize the knowledge in a better way for the benefits (Sherif, 2006). This strategy articulates the business case and recognize potential benefits and also provides a clear, communicable plan overall. A knowledge management strategy should have the factors listed below (Smith, 2005):

• purpose and problems that will be addressed
• Approach
• An action plan including activities and timelines in order to gain the benefits
• Budget addressing resources, outside expertise, technology and subscriptions
• Cost benefit analysis
• People, process data and assessment of technology
• Measurement of success and progress made

Taken together, these three HRM strategies can be considered the most adaptive strategies to manage the environmental changes and competitions. Here, the next part of this report contains the impact of these strategies over Sembcorp’s competitive strategy.

Impact of above listed three HRM strategies on Sembcorp Marine Ltd company:

Returning to the competitive strategy of Sembcorp Marine, the company constantly attempt to achieve high quality standards in everything and follows the strategy of people focus and sustainability to continue with the leadership in industry.

Here, the impact of above defined three strategies over company’s strategy has been taken forward for the discussion. All these strategies impact the Sembcorp’s strategy equally. According to Sembcorp Marine, an individual performance should be rewarded in order to motivate the performance and to retain that talent. Here, HRM strategy of total reward system is seen into practice. Company follows this strategy for all management levels; top management, middle management and lower level management. Additionally, impact can be observed in solving compensation issues of the Sembcorp. The Company provides compensation consists of salary, allowances, bonuses and share based incentives based on meeting certain performance targets. To solve the compensation issues, company has prepared different compensation framework for both executive and non-executive directors (Sembcorp Industries Annual Report, 2011).

From the viewpoint of categories defined under total reward strategy, key executives of Sembcorp Marine are rewarded based on their actual performance. These rewards include long-term share based incentives, appraisals, training and providing work-life balance, which would further ensure the retention of highly talented and outperforming employees in the company. Sembcorp Marine company considers that the current reward system strategy is in line with market norms and put together to motivate employees to give their best to the company (Sembcorp Industries Annual Report, 2011).

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