Perfect Pottery (HR Objectives & Influences and Interpreting HR Data)

Specification  topic:  HR  Objectives  &  Influences  and  Interpreting  HR  Data  
Case  Study:  Perfect  Pottery’s  imperfect  strategic  change  
Perfect  Pottery  are  considered  the  benchmark  for  quality  high-­‐end  giftware.  Founded  more  than  200  years  
ago,  the  firm  has  remained  close  to  its  origins  with  their  manufacturing  plant  in  the  heart  of  the  midlands  in  
the  UK.  The  firm  employs  1,600  workers  with  the  vast  majority  of  these  working  on  the  factory  floor  creating  
a  variety  of  pottery  products  for  sale  in  the  department  stores  such  as  Debenhams  and  House  of  Fraser.  The  
firm  operates  a  tall  organisational  structure  with  centralised  decision  making.  Perfect  Pottery’s  CEO  and  
Operations  Director  have  both  worked  at  the  company  for  over  20  years  and  are  quite  autocratic  in  their  
leadership  style.  

In  2012  the  firm  was  bought  by  American  Private  Equity  firm  HBGC  and  the  first  change  they  made  was  to  
appoint  a  new  HR  Director,  Stanley  Watson.  His  HR  objectives  center  on  improving  labour  productivity  which  
has  been  declining  in  the  last  three  years  (2009-­‐2012).  He  also  has  identified  staff  absenteeism  as  being  
another  area  of  concern  and  wants  this  to  improve.  The  average  staff  absenteeism  rate  across  other  HBGC  
firms  is  1.3%.  He  also  has  noticed  poor  morale  amongst  factory  workers  having  walked  the  production  line  
and  met  some  of  employees.  Stanley  Watson  believes  consulting  staff  on  process  improvements  is  crucial  to  
achieving  improved  results  on  the  factory  floor  and  this  is  his  third  objective  –  to  empower  staff  and  consult  
with  them  on  process  change.  

However,  the  one  process  change  they  have  no  say  in  is  the  firm’s  decision  to  move  towards  the  use  of  
robotic  machinery  to  speed  up  production.  This  has  been  a  decision  made  by  the  new  parent  company  in  
2013  in  response  to  worrying  levels  of  profit  and  rising  costs.  The  technological  change  has  resulted  in  630  
members  of  staff  being  made  redundant  and  the  threat  of  even  further  cuts  should  the  change  result  in  
significant  cost  savings  over  time.  The  machines  went  active  at  the  beginning  of  2014  and  a  full  year  of  
operations  in  this  manner  has  occurred.    
Key  Operational  &  HR  Data  

Year   2012   2013   2014  

Labour  productivity   263   242   372  

(Per  week  average)  

%  Staff  Absenteeism   2.1%   6%   8.2%  

%  Defective  Items   3%   7%   6%  

Exam-­‐style  questions  

1.  Analyse  the  HR  problems  that  Perfect  Pottery  is  experiencing  with  the  operational  changes  
being  made?  (9  marks)  
 
2.  To  what  extent  do  you  believe  that  the  HR  objectives  are  being  achieved  by  Perfect  Pottery?  
Justify  your  view.  (16  marks)  
 
 

© Tutor2u Limited 2015 www.tutor2u.net

 
Perfect Pottery (HR Objectives & Influences and Interpreting HR Data)

1.  Analyse  the  HR  problems  that  Perfect  Pottery  is  experiencing  with  the  operational  changes  
being  made?  (9  marks)  
Possible  arguments  include:  
• Morale  is  suffering  due  to  the  move  to  robotic  technology.  This  is  evident  by  staff  
absenteeism  rates  increasing  hugely  at  the  same  time  as  when  the  redundancies  were  
announced.    
• There  appears  to  have  been  a  lack  of  consultation  with  staff  over  the  technological  
change.  This  is  probably  due  to  the  style  of  leadership  (autocratic)  that  the  CEO  and  
Operations  Director  have.  The  centralised  decision  making  meant  that  this  was  going  to  
be  a  decision  that  never  was  consulted  at  factory  floor  level  
• The  labour  productivity  of  staff  severely  diminished  between  2012  and  2013.  This  
coincides  with  the  decision  to  implement  technological  change.    
• The  operational  changes  have  meant  workers  have  felt  more  like  a  resources  than  an  
asset.  This  is  a  feature  of  Hard  HRM  and  workers  esteem  needs  and  job  security  needs  
are  not  being  met  according  to  Maslow’s  Hierarchy.    
2.  To  what  extent  do  you  believe  that  the  HR  objectives  are  being  achieved  by  Perfect  Pottery?  
Justify  your  view.  (16  marks)  
Possible  arguments  for  include:  
• Although  it  didn’t  happen  immediately,  the  labour  productivity  for  Perfect  Pottery  
improved  in  2014.    
• The  use  of  robotic  machinery  has  increased  speed  of  production  and  at  the  same  time,  
less  workers  are  needed  (redundancies  occurred)  so  each  worker  is  now  responsible  for  
more  output  as  it  is  now  a  capital  intensive  process  in  the  factory  
Possible  arguments  against  include:  
• Staff  absenteeism  has  increased  significantly  over  the  three  years  2012-­‐2014.    
• This  is  higher  than  the  HBGC  group  average  of  1.3%  and  has  been  made  worse  by  the  
announcement  of  redundancies.    
• Although  it  can  be  argued  that  the  absenteeism  rate  was  due  to  other  factors  also  as  in  
2012,  it  was  higher  than  the  group  average  and  this  before  the  announcement  of  
redundancies  was  made  
• Staff  morale  is  suffering  and  this  will  only  worsen  as  they  have  not  been  consulted  on  
the  changes  that  are  occurring  in  the  firm.  Stanley  Watson’s  objective  of  empowering  
staff  is  going  to  be  difficult  to  achieve  because  other  senior  managers  have  a  different  
management  style  to  him  and  they  believe  in  decision  making  occurring  higher  up  the  
chain  of  command  (centralised  HR  structure).  
Evaluation:  
• Not  all  of  the  HR  Objectives  have  been  achieved  in  the  years  2012-­‐2014.  Only  labour  
productivity  figures  have  improved  and  this  only  happened  in  2014,  it  actually  got  
worse  in  2013.    
• The  operational  changes  have  had  made  it  difficult  for  the  other  two  HR  objectives  to  
be  achieved  due  to  sensitive  nature  of  the  change  (job  losses  etc.)  
• It  can  be  argued  that  the  objectives  would  always  be  difficult  to  achieve  due  to  the  
management  style  being  adopted  by  both  the  CEO  and  the  Operations  Director.  
 

© Tutor2u Limited 2015 www.tutor2u.net