Abacus Institute of Studies
605 Assessment 1(v4)
Task Learning Outcomes Evidence requirements Judgment criteria
1.1 Critically analyse
Hubbard Foods Limited’s human resource management practices and discuss how well these align to and support their strategic objectives. Your answer must apply two theories and models of
human resource management. LO1
Critically analyse and apply the theories, models and best practices of human resource management towards the strategic objectives of organisations in New Zealand. Student analysis of the organisation’s HRM is evident through the application of two theories and models of HRM. Theories and models could include but are not limited to:
• Human Capital Theory
• Resources-based Theory
• AMO Theory
• Contingency Theory
Student must provide evidence of application of theories on the given organization for achieving its strategic objectives.
Manage Human Capital
Assessment 1 - Individual Assignment (Case Study Based)
1.2 Recommend what best practices for human resource management for Hubbard Food Limited should be and how these might better contribute to strategic objectives discussed in
A recommendation must be made as to which is the best practice for the organisation to apply.
2.1 Identify and discuss the environment in the given case study (i.e.
unionised or nonunionised).
2.2 Critically analyse the responsibilities of
specialists and employees
in managing employment relationships in the identified environment. LO2
Critically analyse the responsibilities of
management, HRM specialists and employees in managing the employment
relationship in a unionized or a nonunionized environment Student identifies and discusses the work environment for the given organisation. The work environment can be identified as a unionized or a nonunionized work environment.
Student presents a critical analysis that identifies the responsibilities of the following parties in the given organisation:
2. HRM specialists and
Student’s ability to critically analyse the role of all the three parties is evident through the description of the role of these parties in the given organisation.
3.1 Given Dick Hubbard’s stance on social responsibility, critically evaluate the codes of values for Hubbard Foods.
3.2 Critically evaluate how well the strategic leadership at Hubbard Foods leads and supports the codes of values and the extent to which this supports the organisation in performing effectively and efficiently.
Critically evaluate the codes of values for an organisation and the role of strategic
leadership in leading
and supporting the codes of values for the efficient and effective performance of the organisation. Student critically evaluates the codes of values of the organisation and the role of strategic leadership in demonstrating and supporting those values in the given organisation.
Further, student must be able to describe the impact of these codes of values in helping the organisation to perform effectively and efficiently.
Student must critically evaluate those codes of values by presenting arguments in both favour of and against those values to reach a conclusion.
Students need to select examples from the case
study to highlight whether these are code of values and then evaluate (judge) whether the students’ justifications are in favour of the code of values or against, based on the examples from the case study.
2. Critical analysis of human resource management practices at Hubbard Foods Ltd. (2 HR models/theories)
3. Recommendations for best practice of human resource management for Hubbard Foods Ltd
4. Discussion of the unionised – non-unionised work environment at Hubbard Foods Ltd
5. Critical analysis of the responsibilities of management – HRM specialists – employees focusing on their employment relationships with each other
6. Social responsibility position of Dick Hubbard alongside a critical evaluation of the Codes of Values at Hubbard Foods Ltd. Include how the organisation supports the Codes through its strategic leadership for further allow the company to perform effectively
8. Reference List.
(NB: As a suggestion, the underlined areas could be used as Section Headings within your assignment.)
Read the following case carefully and complete the requirements which follow.
HUBBARD FOODS LIMITED – Case Study
Dick Hubbard is an extremely well-known business personality in New Zealand. He is known for his entrepreneurial nature and his stance on social responsibility. Dick founded breakfast cereal manufacturer Winner Foods in 1988 and renamed it Hubbard Foods Ltd two years later. By 2000, the company had an annual turnover of approximately NZ$25 million and has a market share of around 20 per cent of the breakfast cereal market in New Zealand.
In the early days of Winner Foods, the company experienced tough times and was within three weeks of going into receivership. Hubbard asked his employees to go home on an extended holiday because he could not afford to pay them. The early days of hardship have not been forgotten and today there is no expensive furniture or company car fleets.
In 1993, the business was growing, and Dick realised he needed to make changes to the way he managed the company. Until then, he had managed the whole business by himself, including functions such as Human Resources Management, Purchasing, Marketing and Quality Management. Now Hubbard Foods have more than 130 employees and managers in place for each of these specific functions.
Hubbard Foods operates under a triple bottom line philosophy that places importance on financial, environmental, and social responsibility. Dick’s management style reflects this policy by being financially responsible, considering all stakeholders in the business and managing its environmental impact. These values drive the concept of a socially
responsible business that is embraced by Hubbard’s organisational culture and Dick’s vision of a sustainable competitive advantage.
This approach flows throughout the organisation and reinforces Dick’s strong vision for the business. There is no documented management structure at Hubbard’s, which illustrates another philosophy of a non-hierarchical business.
To promote social responsibility, Dick founded the Business for Social Responsibility in 1998. not sure what this is, does it need more explanation However, Dick does not pretend that financial success is not important to Hubbards. In order to maintain employment levels, the company must be financially viable.
Dick has a distinctive, simple, no nonsense style of management. At the premises in Mangere, Auckland , there is a large sign in front of the main doors. It states:
‘This is a ‘no nonsense’ management zone. No management excesses, corporate ego trips, committee decisions, inter-company memos, buck passing, back stabbing, or any other dubious management decisions allowed on these premises’
This statement sums up his management philosophy and Dick practices what he preaches
An illustration of Dick’s no-nonsense approach to managing staff has become folklore at Hubbard’s. One employee told Dick she felt intimidated by him wearing a tie. Dick immediately took off the tie and cut it up. The tie is now framed in the offices at Hubbard’s and is a strong visual statement of Dick’s commitment to his philosophy of management.
Dick believes employees go to work for more reasons than merely earning money and that people want to feel valued. By taking a socially responsible stance, Dick believes he is a better manager and can gain and retain excellent staff. Customers are also responding to and enjoying the personal approach that he brings to the company and its products. In 2000, the company faced disruption when it got into a controversial
public relations war with striking unionist employees. The union facilitated improved communication between the parties and the dispute was resolved quickly Dick got hundreds of faxes and emails of support during that time and the goodwill generated from that unexpected crisis still exists.
Hubbards’ commitment to building a sustainable future for the community is integrated with business strategy and this has an influence on brand strategy. “We have to look at what we do as a brand, so that’s another key pillar of our community activity. If we do any marketing it’s looking at what we can do across the broader community in New Zealand,” says Rebecca Bergs, Marketing Manager at Hubbard Foods.
Social responsibility and staff engagement
Because of strong growth, a new factory was purpose built in Mangere on the outskirts of Auckland in a low-income, high unemployment area where the population is largely Maori and Pacific Islanders. This move demonstrated Hubbard recognising the benefit he could bring to the low socio-economic area.
Dick believes in creating and maintaining employment and not replacing people with machinery unless there is no alternative. Many of the manufacturing processes at Hubbard’s are manual, such as the mixing of cereals.
An internal survey showed that 80 per cent of Hubbard Foods’ staff live in South Auckland and the company is focusing its resources on further commitments to the improvement of the local community. Hubbard states its support for the community is fundamental to what it does, and that staff engagement is key to this. One of Hubbards’ key commitments is to the South Auckland Breakfast Club, an initiative that provides breakfast free of charge to children in need. Through the initiative, Hubbards provides more than 1,000 breakfasts a week to children across the eight breakfast club regions in Auckland.
Hubbards has been involved in a whole host of good community causes. From supporting students studying food technology at Massey University, to spending time and energy on local projects and charities such as Outward Bound and Ronald McDonald House. It is the principal sponsor for the Hubbards Head2Head Walk event which fundraises for local community projects that benefit the young people of Auckland.
Another instance of being a leader in workplace relationships, was in 2008 when
Hubbard Foods Limited launched a DVFREE™ HR programme with the help of Preventing Violence in the Home. It is a workplace programme specifically aimed at supporting victims of domestic violence and thus benefiting participating businesses. It recognised domestic abuse as a serious, recognisable, and preventable problem like any other workplace health and safety issue that can affect a business and its bottom line.
Dick believes in sharing his company’s success with his employees and achieves this by taking employees on trips. In 1998, he took all 100 staff to Samoa at a total cost of $150,000 to celebrate the 10-year anniversary of being in business. The trip was a tribute to the Pacific Islands workforce’s culture and heritage. In subsequent years, other trips have been taken within New Zealand.
Hubbards Market Position
Hubbard's has grown from a micro-business into a large business with 100+ staff, while maintaining a family based culture. In 2000-2001, Hubbard's exported 14.4% of its production, mainly to Australia, but a small amount was exported to the United Kingdom, Singapore and Hong Kong. In this respect, the company is potentially vulnerable to the fluctuating New Zealand dollar. There are three strong direct competitors to Hubbard's in the New Zealand market - Sanitarium, Uncle Toby's and Kelloggs. In 2001, Hubbard's had an 18.5% share of the cereal market in New Zealand.
By the end of 2010, it dropped to 9.3% of the total cereal market.
Hubbard now aims to increase its brand presence and thus increase sales in the coming year by 10 per cent. With booming migration numbers combined with the change in NZ demographics over the last 10 years, Hubbards is now thinking to introduce products which cater to the taste of migrant communities as well. If Hubbards wants to pursue these growth objectives it could bring a change to the way firm is managed.
The Human Resource Function
The functions and roles of Human Resource Management (HRM) are traditionally centralised in many NZ companies. Whilst this may work effectively in some companies, it is not a one-size-fits-all philosophy. Experienced Human Resource management practitioners articulate their own experiences to the fit of the organisation they are working in. In Hubbard Foods, the decision was made to decentralise the function of HRM out to the line managers. For large organisations, or growing organisations, this can cause more problems than solutions, particularly if line managers are not experienced, trained, or have any expertise in HRM processes and procedures. The newly appointed HR Manager has decided to continue with decentralising the HRM functions and roles, despite the following problems that it has been causing the organisatio
Human Resource Issues
There are number of staffing issues that currently exist within the organisation. Staff turnover fluctuates from 15-20% because of numbers of casual staff and fixed term staff. Many of the casual staff are university students who only want part-time work when available. Staff turnover has been an ongoing issue at Hubbard Foods, despite recruiting and selecting competent managers to take up functional portfolios across the organisation.
There have been a number of staff members who have breached codes of conduct of the organisation, which were mainly serious misconduct issues. These have led to a
number of mediation meetings and Employment Relations Authority determinations, against the organisation. Some employees who were dismissed, managed to win their cases against Hubbard Foods, resulting in reemployment.
There have also been issues relating to management bullying or harassing employees to improve productivity, particularly in the manufacturing areas of the organisation. Some of these employees were interviewed by the NZ Herald, which was detrimental to the reputation of Hubbard Foods.
Another major issue concerned the compilation of the individual employment agreements of staff who chose to take this option over a collective employment agreement. Four staff signed a 12-month period Fixed Term Agreement with the company, however the agreement failed to stipulate the justification for the contract being fixed term. These employees took their case through to the Employment Court, who found in favour of the employees, stating that Hubbard Foods breached S66 of the Employment Relations Act 2000.
A Health & Safety Committee (HSC), with representatives from across the company is one of the initiatives that Hubbard Foods have established under the Health and Safety at Work Act (2015). However, this is a new initiative, and many of the representatives require training and development to cover their responsibilities. As many of the HRM functions and roles have been decentralised to line managers, much of the Health and Safety responsibilities have been allocated to these managers. Again, there are problems with the level of capability that the managers have in dealing with health and safety issues and working toward resolutions. The H SC is chaired by line managers in rotation and they only have meetings when issues arise i.e. reactive vs. proactive leadership. This has caused another problem, the company has no Management of Risks Plan in which any possible or probable risks can be minimised or eliminated. Each line managers maintains their own records of health and safety issues, these are managed in isolation to other departments within the organisation. Hubbard Foods have been issued with two (2) Improvement Notices from a Health &Safety Inspector, for
breaches of the Act, pertaining to unsafe practices in the use of chemicals and substances within the manufacturing areas of the organisation. Hubbards Foods needed to remedy any breaches immediately, so that the Improvement Notices can be satisfied. These remedies have been implemented
There are also problems with the training and development of new and current staff at the organisation as the HR manager has continued to keep this function decentralised. Many managers have had no formal external qualification or certification in training and developing staff, as normally this responsibility is owned by HRM. Much of the training of staff is on-the-job training, which is often not documented, evaluated, or implemented consistently. Despite staff making requests to have a formal Training and Development programme for all employees, no response or action has been forthcoming from line managers, HRM, or senior management.
Adapted from Human Resource Management Action – Contemporary New Zealand Cases. Volume 2
(2001) Palmerston North, N.Z.: Dunmore Press
Sustainable Business Network. (2015). Hubbards: Community investment a pillar of good business, Website, Retrieved from http://sustainable.org.nz/sustainability-news/hubbards-community-investmenta-pillar-of-good-business#.WVwspIiGPIV
Scoop Media. (2008). Hubbards Shows Leadership in the Workplace, Website, Retrieved from http://www.scoop.co.nz/stories/PO0803/S00097/hubbards-shows-leadership-in-the-workplace.htm
O’Neill, R. (2011). Crunch time for cereal maker, Website, Retrieved from Stuff
NB: Some excerpts in the case study have been created to provide a balance of strengths and weaknesses of the organisation.