Authors: Hengjulie Song, Mizuno Thay, Norinreaksmey Phalla, Lihour Tang, Sonida Ngy
I.
Introduction
Comin Khmere is an engineer solutions provider
that also specializes in measurement instrumentation and process automation
solutions for the industry. It provides a wide range of engineer services,
which include energy audit, security control, power generation, just to mention
a few. It was found more than 20 years ago in Cambodia and currently employs
more than 1100 employees. Comin Khmere is a subsidiary of Comin Asia, which
operates throughout 5 different countries in Southeast Asia: Cambodia, Vietnam,
Thailand, Laos, and Myanmar.
From our internship at Comin Khmere, we had
noticed several profound organizational behavior problems there. First of all,
there is a high amount of overtime lately, which makes the salary expense of
the company to increase largely. Secondly, there is an increase of turnover
rate in conjunction with a reduction of employment rate due to the amount of
staff leaves is not commensurate with the amount of new entrants. Lastly, the
employee productivity also plummet as a consequence of high turnover and staff
exhaustion due to the declining in the amount of staffs with the same level of
work.
II.
Common Issues within Comin
Khmere
1.
Overtime Working Hours
OT issue is Comin Khmere's most common
and problematic one. Based on data available from January to June, on average,
annual OT working hours is equivalence to 1.7 months working hour. In addition,
OT issue also put a lot of financial burden for Comin Khmere (on average, Comin
Khmere must spent additional $62,763 on top of salary expense for OT pay). On
human resource side, occasionally due to the fact that OT require hire
additional non-contracted employee, thus, OT often meet some difficulty in
finding workers, especially during construction peak period. Because OT in
Comin Khmere is not seasonality, thus, there is room for improvement.
2.
Issue of Productivity
Although we have no concrete data to
show that productivity at Comin Khmere has been declining, such issues often
raised and considered by Human Resource Department as one of common disease.
Productivity issue is closely linked with OT issue as well, because through
observation, comparatively speaking, now the similar type and scope of
construction require more time and workers to be completed.
Less productive => additional time
and workers => additional OT => additional expense.
3.
High Turnover and Low Admission Rate
For recent year, number of employees at
Comin Khmere has declining sharply; this has posted another big concern for
organization. According to the data, on average the turnover rate/termination
rate is roughly 4.2 % of total employees, however the average admission rate is
about 3.1%, resulting in declining employees from
1315 in January 2014 to 1245 in June. Such high turnover also put lots of
financial burden for company, in term of hiring and training new employee. The
reason for high turnover is unknown, however, it is believed that motivation
play a more important role than fierce competition from other construction
companies.
III.
Problems and Solutions,
Overtime
According to Cambodian Labor
Law, the normal legal working hour is 8 hours per day or 48 hours a week (http://www.prake.org/home/labour-law/work-and-wages/work-hours-in-cambodia).
Unlike some countries where employees are permitted to work only 5 days per
week, employees in Cambodia can work up to 6 days per week. In addition, each
employee can voluntarily do a maximum overtime work of 2 hours per day. In
short, one can work up to 10 hours per day in Cambodia, including overtime.
Overtime is paid at a rate of 150% and a rate of 200% if work is completed at
night or at weekends. Cambodian law defines night work as work performed during
10 pm to 5 am. Companies operate in
Cambodia have the right to limit the working hours but not in contrast to what
the law say and should grand their employees at least 30 minutes lunch break.
The excessive uses of overtime
have posed many problems for Comin Khmere lately.
First of all, the highly use of overtime has increased the company’s operating
expenses which in turn negatively impacts the bottom line of the business
operations. As mentioned above, overtime pay is more expensive than normal
working time pay. During the first six months of this year, Comin Khmere has
spent $337,994 for overtime. If there is no policy to tackle this problem, Comin Khmere
estimates their annual overtime working hours for 2014 will be $675,988 which
is equivalent to 1.7 months of their total working time. Second, employee
productivity at Comin Khmere has
declined as a result of high levels of overtime. There has been an increase in
the absence level and decrease in staff productivity at Comin Khmere
recently due to the surge of staff sickness, fatigue, and stress. When
employees have to work excessively every day, they are very vulnerable to
physical and psychological problems as studies have shown (as cited in ). Humans are not
machine, thus they need to have enough rest and entertainment in order to work
at their best. Third, the regular use of overtime has lead Comin Khmere employees
to rely on overtime pay and perceive this additional income as their regular
income. Employees at Comin Khmere have an
incentive to take advantage of overtime due to the lenient overtime policy. In
this way, Comin Khmere is
unable to monitor its employees as most of the company’s works are done outside
its head-quarter. As the company is unable to track the working hours,
employees have an incentive to lower their work pace in order to qualify for
overtime to increase their compensations. Overtime has almost become part of Comin Khmere’s organizational
culture. If Comin Khmere decides
to implement strict policy to tackle overtime, a lot of its employees will
leave the company as a result of lower pay. Comin Khmere is
currently facing a trade-off between losing its current employees and lower its
operating costs. A prudent policy regarding overtime cut needs to put in place
in order to make sure potential employees will not leave Comin Khmere. As a
result, overtime has increased Comin Khmere operating
expenses, reduce employee productivity, and make the employees to rely on
overtime pay.
Solutions to Overtime Working Hour
We have come up with some
solutions Comin Khmere can
use in order to reduce overtime. From our cost and benefit analysis, we find
out that Comin Khmere can
save up to $ 8173.61 by recruiting new employees to cancel overtime (Figure 1).
Comin Khmere should
hire an addition of 86 employees for three main job areas where overtime hours
mostly come from: 62 for helpers, 14 for technicians, and 10 for team leaders.
The use of casual workers is not very efficient for Comin Khmere since casual
workers may demand higher pay and there are costs associated with hiring new
workers. In addition, temporary workers may not be as productive as permanent
staffs because they may require training and it takes time for new employees to
perform their jobs efficiently. According to our Organisational Behaviour
studies, flextime can help organization to reduce overtime and increase
employee productivity
(Book). Flextime is the term used for variable work hours that permit
flexibility in starting and ending times within limits set by management
(http://publicaffairs.uth.tmc.edu/worklife/worklife/flextime.html). Comin Khmere can
increase its employee satisfaction and productivity while also reduces its
overtime expenditures by allowing its employees to have flexibility in their
working hours. The use of flextime provides freedom for employees to choose
their working hours that are conform to their personal needs and employees also work overtime hours without receiving
overtime rates. Cross training also can help Comin Khmere to
mitigate its overtime challenge. Cross-trained workers can help other employees
to perform their jobs during their idle working time and they also can help fill
in for absences, vacations and peak demand periods. There are a couple of cross
training structures that Comin Khmere can
implement such as job rotation, job enrichment, and job enlargement. However, Comin Khmere has to
be careful in selecting the employees to be cross-trained because not all
employees are comfortable with learning new things. Not only does cross
training help reduce overtime, but it also motivates employees. “Cross-trained
employees usually feel that their jobs have been enriched, and they often
suggest creative and cost-effective improvements. Cross-training can lead to
productivity gains that help you
stay competitive" Rogerson noted (as cited in http://www.referenceforbusiness.com/small/Co-Di/Cross-Training.html). Low pays and low fringe
benefits also contribute to the overtime problem at Comin Khmere. From
our internship there, we learnt that the pay scheme at Comin Khmere is not
so good in comparison to its peer competitors; that’s why employees there try
to qualify for overtime in order to compensate for their low fixed salaries. We
would like to suggest Comin Khmere to
restructure its pay structure and try to introduce/increase rewards for its
outstanding employees. By increasing the pay scheme and fringe benefits,
employees will try to work harder because they know there are many people out
there want to work for this company. The use of modern tools and latest
technology will help increase productivity at Comin Khmere which
in turn will reduces overtime hours. But, it should be noted that latest tools
and technology are expensive, so before choosing any technology or replacing
any tool, it is wise for Comin Khmere to do
cost and benefit analysis first. Comin Khmere should
automates process operations wherever possible and use technology to monitor
its employees. The automation of processes will increases the work pace and
reduces the scrap rates at Comin Khmere. By
tracking its employees, Comin Khmere can
discourage its employees from wasting their time and try to increase their
productivity.
IV.
Problem and Solution, Low
Productivity
Low productivity within Comin Khmere could be caused by
several factors, which are the mismatch between employees’ values and
organizational objectives, ineffective teamwork, lack of employee empowerment,
lack of motivation, and lack of job satisfaction.
Mismatch between employees’ values and organizational
objectives: Values represent basic conviction that “a
specific mode of conduct or end-state of existence is personally or socially
preferable to an opposite or converse mode of conduct or end-state existence,
laying foundation for our understanding of people’s attitudes and motivations and
influence our perceptions (Robbins & Judge, 2014) . Comin
Khmere’s organizational objectives are to deliver high added value and
innovative engineering solution in all industry sectors, including
infrastructure, industry, and construction (Mission & Vision, n.d.) . From design,
supply, installation to maintenance, our capabilities include all technical
electro mechanical solutions based on equipment, systems, and services (Mission & Vision, n.d.) . Even though,
we do not have the data concerning that match between employee’s values and
organizational objectives, we cannot rule out the possibility that this may be
the factor affecting the level of productivity because when there is a mismatch
between employee’s values and organizational objectives, productivity decreases.
Ineffective teamwork: Comin Khmere classified
teamwork as operating values in all of their projects (Values, n.d.) . Alike, the natures
of work at Comin Khmere that must be performed by employees are large projects
that require teamwork. Effective teamwork could lead to great success, yet not
all teamwork results successfully as it takes more time and resources than
individual work, while it have increased communication demands, conflicts to
manage, and meetings to run (Robbins & Judge, 2014) . Hence, if
teamwork, which is core activity of Comin Khmere, is ineffective, productivity
of Comin Khmere will inevitably falls.
Lack of employee empowerment: Comin
Khmere’s organizational structure is very formal that it takes a long time to
reach each decision as each manager needs time to evaluate and approve it
before anything can take place. Moreover, some projects need to spend a lot of
time being in queue before each manager can have the chance to see them, which
decreases productivity due to excessive waiting time. This issue arises because
there is lack of employee empowerment. This can also lead to employees feeling
insignificant that in turn reduces job satisfaction as well.
Lack of motivation: Motivation is the processes
that account for an individual’s intensity direction, and persistence of effort
toward attaining a goal (Robbins & Judge, 2014) . According to
the data, it illustrates that employees at Comin Khmere perceive their salaries
to be lower than what other multinational organization would pay to their
employees. This perception lowers their productivity because they think their
efforts are not justified, so that they decrease their level of input, leading
to a decline in their level of output.
Lack of job satisfaction: Job satisfaction is
defined as a positive feeling about a job, resulting from an evaluation of its
characteristics (Robbins & Judge, 2014) . When an
employee is satisfied with the job they are performing, it is more likely that
the productivity will increase. However, according to the data we have obtained
from Comin Khmere’s employees, it is evident that they think their pay is not
sufficient, which can lead to job dissatisfaction that in turn affects the
level of low productivity.
Solutions to low productivity
Potential problems that lead to low productivity are
identified and elaborated above are numerous, yet we do not have sufficient
evidence to back the claim of mismatch between employees’ values and
organizational objectives, ineffective teamwork, and lack of employee’s
empowerment as causes of low productivity. On the other hand, our data backed
our claim of lack of motivation, causing lack of job satisfaction, which
eventually lead to decline in productivity. Therefore, in order to tackle the
issue of low productivity within Comin Khmere, we shall focus on increasing
motivation prior to making any other changes without clear ground of results
generated. As employees at Comin Khmere perceived their pay as being lower than
other multinational companies, due to Maslow’s hierarchy of needs, the first
step is physiological needs, followed by safety needs before they can climb the
steps to higher level (Robbins & Judge, 2014) ; then,
although the salary at Comin Khmere is able to fulfill employees physiological
needs, they lack the needs of safety since they may not be able to save much
for their future emergency needs that reduces their motivation within the
workplace. Hence, the main solution would be to increase monetary benefits for
the employees to a more reasonable level. By doing so, Comin Khmere would be
able to motivate their employees, leading to more job satisfaction, and
increases productivity.
V.
Problems and Solution, Turnover
and Admission Rate:
As has mentioned above, the number of employees at Comin Khmere has
declining sharply due to the mismatch between the turnover and the admission
rate in the company, from 1315 employees in January 2014 to 1245 in June. Such mismatch
posted a big concern for the company as it put lots of burden on the company
pool of employee as well as financial aspect, in term of hiring and training
new workers.
Solutions to Low Admission Rate
The issue concerning with reduction of admission/employment
rate can be resolved to a certain extend by being more prepared in regards to
the employment process. In the case that the company only starts to look for
new employees when there is an available position, it would cause quite a
number of problems. Some of the problems include the fact that the human
resource department would be pressed of time therefore they would not have the
luxury to gather as many applicants as they would wish to. This would results
in having a lesser chance at finding someone who is a good fit for the job in
addition to the fact that they would need to make the decision as soon as
possible which might not be the ideal option.
One way of dealing with this issue is for the human resource
department to be more prepared regarding hiring or simply adopt a system that
allow for a larger pool of potential candidate. First, they could cooperate
with a third party company such as CBC (Cambodia Business Cosultant), whose
main role is to find a job for the unemployed Cambodians. Through this, Comin
Khmere can simply pull the list of potential candidate from the third party
company which will help save time and possibly cost, then if they were instead
to advertise the job position themselves.
Secondly, internship program can also spur the potential employee for
the company. Comin Khmere can possibly go into an MOU (Memorandum of
understanding) with universities and have the student in the upper percentile
to intern in the company. This can function as a source of cheap labor and at
the same time, allow the company to assess and build relationship with the
interns, and ultimately improve the pools of employee for the company in the
long term. In addition, by accepting in interns, it gives a better view of an
individual’s performance in comparison to simply hiring them after interviewing
them. When completing their internship, the intern’s skills are shown more
clearly however interviewing an individual might not accurately represent their
skills. Thirdly, job advertisement should be improvised in according to the
current market trend. More specifically, since more and more people are using
the internet on a daily basis now, the HR department should focus its resource
on online advertisement. Specifically, the company can push the job position to
career site such as BongThom or they can use social network site such as
LinkedIn or Facebook to advertise the job position as well as to search for
potential candidate more dynamically. Overall, by having easy access to this
pool of potential employees, it would help save company the time to go through
various CVs in a short-period of time and can easily find someone who they
deemed to be fitted for the position. Having a list of potential employees is also
very beneficial in the case that there is a sudden resignation and the position
should be refilled as soon as possible.
Another way that can possibly improve the employment rate
lies on the specification on the job announcement. Quite frankly, the specification
in a job announcement can be somehow overwhelming. For instance, one might need
up to 5 years of experience to qualify for a job. Although this act as a
mechanism to screen-out undesirable candidate from applying, it can also back
fire as well. Basically, this also mean that the company would be screening out
the candidate who are just as qualify and could be potentially more outstanding
than those who meet the requirement. As much as experience is considered to be
important, it does not necessarily means that the person is always the best-fit
for the job because there is a possibility that an individual might not have
the required experience but he/she is perfect for the job. Thus, HR department
need to adjust the specification in the job announcement so that it would not
overwhelm the job seekers. This however does not necessary mean lowering the
hiring standard of the company but rather, increasing the pool of acceptance
and assess them in the later hiring stage (interview, training...).
Solutions to High Turnover Rate
Nonetheless, the more pressing issue is in regards to the
increase of turnover rate. Perhaps a way to improve this situation is to have a
clear-stated employment contract. That is to say that by clearly stating the
resignation process (for instance inform HR 3 month in advance) and the
consequence of unnoticed leave, it can help the organization from an unexpected
leave and give the HR some room to search for candidate to fill the position.
The important step however is to tackle the factors that
lead to the rise of turnover. There are various causes for turnover which
include the excess overtime, low pay or working condition. According to a study
conducted by an intern, overtime has recently become an issue. There are
various ways to deal with this problem as had been mentioned previously and by
minimizing overtime in the company, it could lead to an improvement in the
turnover rate. Another possible cause of the rise in turnover is low pay
especially if it is in conjunction with high overtime work. If the employees
deem that they are getting paid for less than they deserved and they are also
able to find a higher paying job, then they would most likely resign from Comin
Khmere. The company should thus implement a better compensating plan for the
employee. The study conducted solely focused on the factor of overtime however
it should be taken into consideration that the working condition could also be
a factor that influences the decision to leave the company. Managers should
take a look into these aspects to reevaluate and make changes if necessary.
There is a possibility that the working condition is not very motivating, too
much pressure or unsafe which could potentially lead to a higher turnover rate.
VI.
Conclusion:
Overall, we can see that the
issue of organizational behavior is very persisting in modern day companies and
despite being a subsidiary of an international organization, Comin Khmere still
faces with many unresolved issue which include the excess use of overtime, low
productivity and mismatch between turnover and employment rate. These 3 issues
are not unique and rather interrelated with one another. Low productivity
within the company lead to additional overtime needed and this increase the
company expense. Similarly, additional overtime required by the firm, in
conjunction with undesirable compensation plan, can lead to an increase in
employee turnover rate.
As we tackled the issues that
persisting in Comin Khmere, we have come up with some recommendations that
management can use to improve the organization effectiveness. To better manage
the excess overtime, we suggested management to recruit new employee and use
other strategies such as flextime and cross training, to cut down cost and
increase the flexibility of the organization. In term of productivity, we find
that the most desirable approach is to tackle down the issues that led to
unproductive behavior. While many issues were identified, management should
focus on the aspect of motivation and job satisfaction within the company.
Finally, to reduce the spread between employment and turnover rate, we
suggested management to adopt strategies that can ensure a large and readily
available pools of potential employee and at the same time, address the factor
that lead to the high employee turnover.
This study has many limitations
however such as the unavailability of data, limited data points and the time
constrain imposed. This imposes potential for future research in which the
company has larger pools of data that can be access more easily.
Bibliography
Mission & Vision. (n.d.). Retrieved
January 13, 2015, from Cominasia: http://cominasia.com/about-us/mission-vision/
Robbins, S. P., & Judge, T. A. (2014).
Essentials of Organizational Behavior (12th ed.). Essex, England: Pearson
Education Limited. Retrieved January 13, 2014
Values. (n.d.). Retrieved January 13, 2015,
from Cominasia: http://www.cominasia.com/engagements/values/
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