Posted: May 25th, 2022

Treadway Tire Company Case Analysis

Treadway Tire Company Case Analysis

Case Analysis

The case study focuses on Treadway’s Lima Tire Plant, paying close attention to the expressed job dissatisfaction of the plant’s line foremen leading to a high turnover rate. The company had been faced with challenges, and it was forced to implement cost-cutting measures. The cost cutting measures were in reaction to the rising costs of conducting business. The HR advisor Ashley Wall had deemed it necessary to reduce costs by restricting the rising rate of employee turnover in 2007 (Skinner & Beckham, 2008). The Lima plant had all the resources necessary for leveraging the company recovery plan. Wall established that the rate of employee turnover had a direct effect on the costs of running operations. Employee turnover was causing dysfunction within the company at the time. The move from eight-hour shifts to twelve-hour shifts played a huge role in causing the dysfunction. The manufacturing plant operating for 24 hours was a nice strategy for the company because it allowed for the reduction in labor costs and maximizing the plant’s capacity. The main issue Wall was facing was how to reduce the rate of employee turnover, while reducing costs for the company at the same time.

Analysis

Streamlining plant operations is not the only solution for cost cutting, and this was evident in the case for Treadway Tires. There were crucial workforce disparities that resulted in cost overruns. The company had around 1,120 employees at the Lima plant. 970 employees were paid hourly, and 150 were salaried (Skinner & Beckham, 2008). All the hourly employees were unionized workers, and they had union stewards who represented any grievances an employee with the company. Having a union steward handle, all grievances might indicate that there were cordial relations between the employees and the company. However, this was far from true because most of the hourly workers did not have respect for the line foremen, and they would report any minor issue to the union. The union would send a steward, and the line foremen were not allowed to attend the grievance committee meeting. This caused a breakdown in communication, and the union employees would rarely be disciplined for their actions. The line foremen did not have control in terms of enforcing work standards, because the of union interference and no management support.

According to Skinner and Beckham (2008) majority of the line foremen were promoted from hourly employees, and this means that they do not have formal college education. Wall had identified the need for training that most foremen lacked. Wall had developed a schedule that would have enabled the line foremen to gain hands-on experience in Payroll and HR, which would assist them in handling and dealing with employees effectively. The training program was never funded since the company was cutting its costs. The lack of requisite skills was a great contributor towards the high turnover rate within the company. The lack of proper training meant that the line foremen were never qualified to take over elevated management positions. Wall had noted this problem and had pushed for the hiring of external line foremen with college degrees.

Dysfunctional behaviors were taking root in the workforce mostly caused by the increasing duties that the foreman had to undertake. The operational strategy adopted by the company was passing more and more duties to the foreman yet no training was been offered. The line foremen did not have any powers, but they were expected to ensure that the hourly workers were performing as expected. This caused conflict since most hourly employees had no respect for line foremen. Any disciplinary action the line foreman would undertake would be mitigated by the union contract the company had signed (Armstrong & Taylor, 2014). The company was not able to discipline its hourly workers and to have a union steward representing the employee meant the company had to abide by the rules agreed upon in the union contract.

The morale of the foremen was lacking, and this led to the high turnover rate yet the salary was satisfactory for most line foremen. The lack of authority has been noted by most foremen leaving the company, and this should inform the management of a need to improve communication. The hourly workers should understand why they are working at the company and what is expected of them.

Conclusion

It is clear that upper level managers are mostly concerned with meeting targets and profits. The line foremen have been overlooked, and any line issues are directly blamed on the line foremen. Wall should push for proper training of the line foremen in order to ensure they can effectively manage the hourly employees and carry out their daily work routines. With proper training, the turnover rate would decrease, and there will not be a lack of employees capable to take over the upper level management. The current appraisal system employed by the company does not serve any purpose because it does not offer any useful information that could lead to employee development. Jones (2013) posits that communication is a vital and effective tool that a company should implement to improve its employee relations. Communication should improve if the company is going to pull out of this situation. The executive should devise a communication strategy that would ensure that each employee understands what is happening within the company. The union labor policies assisted the Lima plant to maintain a working standard especially since the company was now more focused on production schedules. The rising costs of raw materials had pushed the management to concentrate on profit increment at the expense of its workforce. This was a short-term strategy, and it has resulted in long-term effects that might cause the company to crumble if not tackled effectively.

References

Armstrong, M., & Taylor, S. (2014). Armstrong’s handbook of human resource management practice. Philadelphia, PA: Kogan Page Publishers.

Jones, S. (2013). Importance of Trust and Open Communication in Working Environments. Journal of European Business Management, 3(1), 33-41.

Skinner, W., & Beckham, H. (2008). The Treadway Tire Company: Job Dissatisfaction and High Turnover at the Lima Tire Plant. Boston, MA: Harvard Business School.

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