SM Supermalls Human Resource Mgt Case Study PDF

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Case Study (A management company of SM PRIME HOLDINGS, INC.) PROFILE OF THE ORGANIZATION HISTORY SM Prime Holdings, Inc. was incorporated in the Philippines in 1994. They started as a mall developer and operator and grew to be the biggest retail shopping center developer and operator in the Philippi...

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Case Study

(A management company of SM PRIME HOLDINGS, INC.)

PROFILE OF THE ORGANIZATION HISTORY SM Prime Holdings, Inc. was incorporated in the Philippines in 1994. They started as a mall developer and operator and grew to be the biggest retail shopping center developer and operator in the Philippines. SM Prime started its mall development business in 1985 with the opening of SM North EDSA. However, it was in the early 90’s when the “malling phenomenon” became apparent with the opening of SM City Sta. Mesa in 1990 and SM Megamall in 1991. Malling has become a way of life for millions of Filipinos as more SM Malls were opened in Metro Manila and provincial areas. The management of the malls is now handled by subsidiary Shopping Center and Management Corporation (SCMC). Today, SM Prime has become one of the biggest mall operators in Southeast Asia. Combined, the company has 60 malls in and outside Metro Manila and 7 shopping malls in China, totaling 9.1 million square meters of Gross Floor Area (GFA). In the Philippines, they have a total of 17,309 tenants and 1,472 tenants in China SM Prime goes beyond mall development and management through its units and subsidiaries. VISION SM Prime envisions to be a leader in a world-class mall development committed to delivering the daily needs of millions by offering a total mall experience and creating a richer better quality of life.

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MISSION SM Prime commits to the following mission: -

To constantly provide customers with a fresh and world-class mall experience through innovative and state-of-the-art facilities and services;

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To undertake wide-ranging corporate social responsibility initiatives that provide greater service for customers with special needs and ensure environmental sustainability through various programs on energy, water, and air conservation;

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To be an employer of choice, offering comprehensive opportunities for career growth and enhancement;

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To deliver sustainable long-term growth and increasing shareholder value; and

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To uphold its role as a catalyst for economic development.

GOALS SM Supermalls, the country’s largest shopping center operator, provides shopping, dining and entertainment options to millions of shoppers daily in over 60 malls in the Philippines and 7 in China. Delivering the ultimate in family fun mall experience is the brand promise. And as we partner with the best local and global retailers, we aim to provide affordable luxury shopping to all. At SM Supermalls, Everything’s Here. BUSINESS PORTFOLIO/MANAGEMENT COMPANIES SM Prime Holdings, Inc. is one of the largest integrated property developers in Southeast Asia that offers innovative and sustainable lifestyle cities with the development of malls, residences, offices, hotels and convention centers. MANAGEMENT COMPANIES SM Supermalls With a history spanning 50 years in the retail industry and over two decades in the shopping center business, SM Supermalls is a multi-faceted institution consisting of stores, malls, banks, residences, resorts, hotels, and business establishments. Beyond business, SM Supermalls also aims to encourage

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unity in the Filipino family by providing a world-class yet wholesome experience that the whole family can enjoy. Alongside the core business areas of the SM Group, SM Supermalls is one of the most wellknown divisions of the Group. SM Supermalls is the Philippines' retail and mall giant because of its onestop shopping concept. With more than 40 malls in the Philippines and abroad, it has become an engine for economic growth, providing jobs for about 40,000 Filipinos. Family Entertainment Center Inc. Family Entertainment Center Inc. manages leisure and learning facilities that are targeted mostly to kids. These are SM Storyland Mall Rides and the Science Discovery Center. It also maintains the operations for the SM Bowling Centers and internationally-affiliated SM Ice Skating Rinks. SM Engineering Design and Development SM Engineering Design and Development is the architectural and engineering arm of the Group’s Retail and Mall properties, responsible for the development and modernization. SM Lifestyle Entertainment, Inc. SM Lifestyle Entertainment, Inc. (SMLEI), commonly known as SM Cinema, is one of the affiliates of the SM Group. Today, it boasts of the largest cinema chain in the country with more than 335 cinemas in 41 SM Supermalls nationwide.

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SM PRIME PRIMEHOLDINGS, INC. ORGANIZATIONAL STRUCTURE

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SM SUPERMALLS INC. (SM NAGA) HUMAN RESOURCE STRUCTURE ***Each management company has its own human resource department that has policies and programs that are separate and distinct from each other.

HR Department (Vice-President for HR)

SM EDD

SM FECI

SMLEI

Recruitment

HR Business Partner

Learning and Development

HR Manager

HR Manager

Asst. Vice Pres.

Asst. Vice Pres.

Asst. Vice Pres.

Asst. Vice Pres.

HR Managers

Regional Managers

Plans and Programs (AVP)

Compensation and Benefits

Human Reource Management System

HR Managers

HR Managers

Mall HR Managers/HRBP's

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NARRATIVE DISCUSSION

EMPLOYEE ABSENTEEISM SM City Prime holdings Inc. is one of the biggest chain stores in the country. It has 60 plus stores

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nationwide and 7 in China with plans for more expansion within and outside the country. The organization maintains thousands of merchants as the main retailers of various goods and services to consumers nationwide. The huge number of its units and subsidiaries is housed with thousands of its employees both contractual and permanent workers. The ever-growing number of chain stores is also tantamount to ever growing a number of workers. One of the challenges that SM is facing with regards to a vast number of

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talents is how to manage 100% commitment to attend to work daily to sustain its daily operation. Employee absenteeism has been a concern by most organizations but should be considered especially a threat to overall human talent management of SM considering their huge workforce. This is due to the fact that it has severe repercussions in the entire operation especially in terms of productivity and profitability. Absenteeism as defined by Irish Business and Employers Confederation (1999): “Absence is a natural and expected phenomenon in every organization. Absenteeism is the unscheduled disruption of the work process due to days lost as a result of sickness or any other nonstatutory leave”. On this light, absence seems to be a normal phenomenon of life. However, this presents a huge cost

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to the company and thus should be monitored closely. Based on the literature found on all knowledge resources, causes of absenteeism can be categorized into two, both have a direct and indirect impact on the company productivity and profitability. Factors causing absenteeism can be classified as:

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Controllable/ Voluntary: job satisfaction, organizational commitment, management or employee relations, job stress; and Uncontrollable/ Involuntary: sickness, emergency, maternity, domestic/family relations, accident. There is no single factor that can be attributed to absenteeism. This phenomenon though a normal part of working life presents a huge cost to the company and thus should be monitored closely. Absence incurs

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a significant cost, both in terms of direct costs (replacement, recruitment, and selection, temporary staff, management time) and also (perhaps more significantly) in terms of indirect costs ( morale, pressure on remaining staff, costs of learning, product/service qualities. 6|Page

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ANALYSIS OF THE CASE STUDY PROBLEM The issue has been identified which is the high turnover of work absence of SM employees. SM as one of leading companies with high standard policies on managing employees is inevitably facing this uncontrollable phenomenon, the Employee Absenteeism. Absenteeism, as related by SM, is not attributed to a single factor. Multiple factors cause an employee to leave or stay away from work. Companies are not generally concerned about short-term

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leaves. Properly scheduled short term and one and two sick leaves are okay with SM company according

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to them. However, long-term absenteeism becomes a liability in the long run if not properly managed. So,

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to quantify severity or impact of absenteeism on the company’s productivity, initial step should be to

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calculate said turnover through this formula from a human resource book. This gives SM Naga an accurate

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view or status of the impact of absences and will serve as a guide for specific courses of action to take.

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RELATED LITERATURE TO ABSENTEEISM

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The causes of absenteeism are attributed to complex nature of factors as mentioned earlier and are associated with the following ideas of:

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Graham and Bennett (1995) believe that the factors contributing to non-attendance include the nature of

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the job, personal characteristics of the worker and motivating incentives.This explains why no single

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factor or cause has been identified because if it were true, then the companies have found solutions to

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solve it.

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Nicholson (1977) in his model of attendance motivation believes that attendance is normal behavior,

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whether people will attend given a particular set of circumstance depends on a number of variables such as age, sex, gender, work conditions, group cohesion etc. Steers and Rhodes (1978) suggest in their model of absenteeism, that job satisfaction, and pressure to attend work interact to determine attendance and motivation.

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RELATED THEORIES TO ABSENTEEISM

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B.F. Skinner’s Reinforcement Theory – based on his "law of effect" theory, behavior with positive

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consequences tends to be repeated, while behavior with negative consequences tends to be repeated. This is related to rewards like a bonus, compliment or promotion that keeps employees motivated to work and

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stay at work 100%. David McClellands Three Needs Theory. Proposed the three major motives or needs in work situations ( Need for Achievement, Need for Power, Need for Affiliation ). These help companies assess or identify

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what drives employees to go to work.

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Abraham Maslow’s Hierarchy of Needs. That person have a complex set of five categories of needs which are arranged in order of priority. He suggested that as a person satisfies each level of needs, motivation shifts to satisfying the next higher level of needs. Thus, employees with satisfied needs tend to be more motivated to work.

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Edwin Locke’s Goal Setting Theory. This theory is applied by establishing goals that are specific and

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challenging and by letting employees participate in setting goals. This keeps employees more involved and committed employees. Victor Vroom’s Expectancy Theory. To perform well, people must know what to do, be able to do it, and want to do it. John Stacy Adams’ Equity Theory. This theory suggested that individuals are motivated when they experience satisfaction with what they receive from an effort in proportion to the effort they apply and then comparing their rewards to the rewards others are receiving Clayton Alderfer ERG Model. This theory looks at motivation as following a hierarchy and describes how need satisfaction and need frustration affect motivation. Frederick Herzberg's Motivation-Hygiene Theory. Also, a motivation theory that suggested distinct

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kinds of experience produce job satisfaction(motivators) and job dissatisfaction(hygiene factors).

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SOCIAL AND ECONOMIC FACTORS TO ABSENTEEISM Nature of work.Boredom due to a routine system of daily activities, for example, lowers their drive to

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work.

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The size of the Organization- When an organization grows and expands, employees may feel they no longer matter or fail to see where they fit anymore.

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The quality of Supervision- supervision is one important factor in managing absenteeism. The relationships built up between managers, supervisors, and staff will have the biggest effect on the commitment to the organization. The level of commitment of a person towards their job will determine

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their level of absenteeism.

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Job situation consisting of variables that characterize the nature of the job and the work environment

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such as Job scope, Job level, Role stress/tension and work group size also affects the behavior of an employee in the job.

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ALTERNATIVE COURSES OF ACTION Absenteeism is a complex subject and there is no universal solution to managing absence. There are, however, a whole range of policies/interventions that the SM Human Resource can apply to solve the issue. These are: Improved Communications- SM should not only consistently train its managers and supervisors, but teach them how to relate, listen and counsel people. It is the responsibility of the Human Resource Department to communicate the attendance policy clearly to the employees. Employee Commitment - if the individual is aware of what the organization is striving to achieve and can identify where they fit in, then they are going to be more committed to the organization and thus more likely to attend in order to make their contribution. HR should invoke to employees the following behavior through proper training: ▪

Strong commitment to work in general;

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Strong commitment to a specific job;

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Commitment to the organization (which includes an intention to stay and have low absenteeism) 9|Page

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Discipline/ Personal Work Ethic -personal values systems can also motivate one to attend, however, the ‘work ethic' differs among individual workers. Those with a strong work ethic are more likely to attend than those with a weaker work ethic. It is the management challenge to instill a work attitude that makes

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them disciplined workers.

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Incentive/reward Schemes – Examples are rewarding their employees for attendance, or flexi-time, whereby individuals are able to alter their hours somewhat to suit their personal needs. Job Satisfaction in the Workplace - Human resource department to employ various effective policies and programs that meet varied and dynamic needs of its human talents.

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BEST COURSE OF ACTION Job Satisfaction in the Workplace The application of job satisfaction in the workplace is a difficult concept to grasp due to its individualistic and situational nature. What one employee desires from work, another may not. For instance, one employee may put salary in high regard, while another may find autonomy the most important. Satisfying employees in all aspects or facet of his work and life is what I consider the best measure that SM Naga should implement and include in their wide range of policies and programs. All theories and factors mentioned beforehand regarding absenteeism originate all from this one key element, that is

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JOB SATISFACTION. If SM Naga can meet at least most of employee needs if not all, this leads to greater benefits in the long run which include employee productivity, boost employee morale and reduction in overhead costs.

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Below are specific aspects of a job through which SM Naga can increase satisfaction in their workplace: ▪

Company Policies - Policies that are transparent, fair and applied equally to all employees will decrease dissatisfaction. Therefore, fairness and clarity are crucial in improving employee attitude. For example, if a company has a policy for lunch breaks having the same length and time for all, it will be seen as a norm and will help cut down on wasted time and low productivity. 10 | P a g e

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Salary/Benefits - Making sure employee salaries and benefits are comparable to other organization salaries and benefits will help raise satisfaction. If a company wishes to produce a competitive product they must also offer competitive wages. Furthermore, this can help reduce turnover, as employees will invariably be more satisfied when paid competitive wages as opposed to being underpaid.

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Interpersonal/Social Relations - Encouraging employees to develop a social aspect to their job may increase satisfaction as well as develop a sense of teamwork. Co-worker relationships will benefit the organization as a whole since teamwork is a very important aspect of organization productivity and success. Employee involvement groups are a great way to help employees interact with individuals outside their department or organization.

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Working Conditions - upgrading facilities and equipment and ensuring employees have adequate personal workspace can decrease dissatisfaction. A cramped employee is a frustrated employee plus faulty equipment leads to frustration in trying to get work done.

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Achievement - Ensuring employees are appropriately placed to utilize their talents may enhance satisfaction. When employees are given the proper role and feel a sense of...