Human Resource Management for Liquefied Natural Gas (LNG) Tanker Shipping Company
One of the company’s basic internal organizations is the Human Resource Management team, which is highly responsible with the maintenance of the company’s employees. The Human Resource Management or HRM team does a variety of tasks and functions, and is crucial in its objective concerning the work and interests of the employees in the company. Being a crucial team in any company, it is essential that it will be able to promote the development of their employees, not only in relation to job performance, but in terms of effective communication and interrelations as well. These functions will be useful for the operations of a shipping company, especially in relation to operations in the foreign or international market.
With the importance of such functions, this paper intends to propose Human Resource Management strategies that would be useful in ship management. These strategies would encompass management of tankers, and its crews. In addition, a critical analysis of the strengths and weakness of the proposed strategy or strategy will be indicated, including the reasons why a specific country was selected to obtain labor supply.
International Human Resource Management
As an increasing number of organizations seek to operate in foreign markets, it is vital that management practitioners develop a better understanding of, and sensitivity to, the impact of different national settings on the management of tasks (1999). In addition, because HRM it is particularly concerned with all the activities that contribute to successfully attracting, developing, motivating, planning systematic approaches, and maintaining a high-performing workforce that result in organizational success (2002), Human Resource Management then, becomes important in the control of the labor force of any organization, especially in the shipping industry. Moreover, because it gives an increasing emphasis on the personal needs of the organization and its members, the challenge on its functions is to create an organizational environment in which each employee can grow and develop to his or her fullest extent. Its use would contribute to the success of the shipping industry, specifically to the case in point, as it aims at developing strategies for the total organization focused on clarifying its current and potential problems and developing solutions for them (2002).
In relation to this, a business organization will not be able to adopt and implement useful strategies without assessing the objectives or aims of the organization. Because the new shipping line is based within the European Union, its level of strategy is based on multiple countries, such that there can be an increased need for integration with different corporate headquarters. Nevertheless, at this level of international strategy, the shipping lines would have significant operations, including assembly, manufacturing, service centers, Research & Development, and branch offices, in many countries and may well reach the condition where half or more of its sales and employment is in foreign countries (2004). With this in mind, an effective and efficient human resource management strategy must be developed, adopted and implemented to ensure and guarantee the smooth operations of the new tankers, and the management of its labor force.
Liquefied Natural Gas
Handling nine new LNG tankers for the new Human Resource Director would be an additional and tedious task and responsibility. Primarily, a Liquefied Natural Gas or LNG is a hazardous fuel frequently shipped in massive tankers in different countries, and is manufactured domestically and stored near population centers (2003). Its infrastructure consists of tankers, import terminals, and inland storage plants and its facilities are receiving great deal of public attention due to their increasingly important role in the nation’s energy infrastructure. Concerns about rising natural gas prices and the possibility of domestic gas shortages have recently been driving up demand for LNG imports. However, liquefied natural gas tankers contain hazardous chemicals transported and stored in large quantities ( 2003), and with its mishandling, it can cause accidents that may bring about serious damages to the environment, to many animals, and to humans as well.
It has been reported that natural gas is combustible, and its uncontrolled release poses a serious hazard of explosion or fire (2003). In addition, the threat for it to cause serious damage is due to its coldness. Some catastrophic events that could arise from mishandling these tankers include pool fires, which is an intense fire, burning far more hotly and rapidly than oil or gasoline fires and cannot be extinguished. Another catastrophic event is the flammable vapor clouds that may drift some distance from the spill site, and if it encounters an ignition source, the portions of the cloud with a combustible gas-air concentration will burn. Though not as toxic, vapor cloud can cause asphyxiation by displacing breathable air. Lastly, accidents from LNGs can cause flameless explosions, and although this may not be as violent as vapor clouds and pool fires, they could contribute to the destruction of the environment, properties, and lives (2003). With the accidents and catastrophic events that could arise from the mishandling and mismanagement of such LNG tankers, the role of the ship crews is highly important in its maintenance.
Human Resource Strategy
The strategy or strategies that could be used by the Human Resource Management team are based on three theoretical perspectives among others. These theoretical perspectives include the General Systems Theory, the Role Behavior Perspective, and the Human Capital Theory. The General Systems Theory is used to describe a competence management model of organizations, where skills and abilities are treated as inputs from the environment, employee behaviors are treated as throughput, and employee satisfaction and performance are treated as outputs (1995). In the Role Behavior Perspective, it shifts the focus from individuals to social systems characterized by multiple roles, multiple role senders, and multiple role evaluators, instead of using specific behaviors and job performances as the fundamental components. By implication, HRM in this perspective, it helps employees meet the expectations of role partners within the organization at organizational boundaries, and beyond (1995). Lastly, Human Capital Theory can also be used as a basis, for human capital or the productive capabilities of people, such as his or her skills, experience and knowledge, have economic value to organizations because they enable it to be productive and adaptable. Thus, all costs related to eliciting productive behaviors from employees, including those related to motivating, monitoring, and retaining them, which constitute human capital investments made in anticipation of future returns (1995).
These theories and perspectives can be used as a basis for the strategies to be adopted and implemented, as they are based on the performance of an organization’s employees. Primarily, the shipping company must be able to generate a highly effective and efficient Human Resource Management team that will contribute to the profitability, quality and safety of processes in the facility, including its close integration, careful planning, and decision-making. This is possible through planning and implementing strategies, in accordance to the improvement of the Human Resource Management team.
In managing the new nine Liquefied Natural Gas tankers, a strategy, which would be most beneficial, includes the improvement of the five strategic areas including leadership, people, policy, partnership, and resources (2003).
Leadership – The leadership of the new Human Resource Director must be improved and developed to ensure the improvement of his or her skills in handling new responsibilities in the company. Details of the improvement of the leadership characteristics of the HR Director include the following:
Ø The new HR Director can adopt any or all of the six styles of leadership, namely, authoritative or charismatic, affiliative, democratic, coaching, pace-setting, and coercive leadership styles (2000).
Ø He or she can learn the advantages and disadvantages of handling and mishandling of the LNG tankers. This involves the thorough accumulation of knowledge through continuous research in finding innovative ways to prevent accidents and in maintaining the tankers.
Ø Promoting effective communication between all the members of the team and its director, including consultation regarding issues that affect them and their work
Ø Implementing all the company’s policies and procedures to guarantee the ship’s smooth operations
People – The improvement and development of the members of the HR team is also crucial and can be implemented through the following strategies:
Ø Like the new HR Director, because the HR team is under new management, the members or the new selected officers can undergo newly improved employee training and development to help them acquire knowledge regarding the new responsibilities that they have.
Ø The whole team can encourage greater flexibility to meet the service demands through rewards, incentives, and frameworks for career and personal development ( 2003).
Policy – the policies in the HR team must be in line with the overall policy of the whole business organization
Ø It must ensure the health, safety, and welfare of all employees through a clear policy framework based upon legislative requirements
Ø Monitoring and review of the effectiveness of all existing policies and procedures for further improvement
Partnership – this includes establishing a pleasant and effective relationship and communication with the company’s partners
Ø Developing and maintaining the company’s employment policies and report on the resultant findings and implications
Ø Supporting departmental and corporate initiatives intended to improve access to services and employment by members of disadvantaged and minority groups
Ø Developing a clear policy to balance the changing needs of a diverse workforce with service priorities including a commitment to review work-life balance initiatives
Resources – This involves the efficient and adequate allocation of resources, in accordance to the needs of its members.
Ø Identifying the needs, requirements and priorities for all functions in line with corporate objectives, the corporate plan, and the departmental service plans of all departments
Ø Establishing qualitative and quantitative performance targets and indicators to continually improve standards
Ø Promoting the role and continuously developing the members of the teams engaged in service delivery, supporting and enabling them to deliver quality and cost-effective services
Reason for the Strategy
The strategy proposed in this paper is the development and improvement of the five strategic areas in the aspect of Human Resource Management because the development of these areas encompasses the development of the entire HR team and the whole organization as well. The leadership and skills of the new appointed HR Director must first be improved to be able to ensure the development of the whole HR team. If the members of the team will be able to perceive this development, then it would be easier for the whole team to coordinate with one another and promote teamwork. Thus, this will be useful for the management of the whole company’s workforce, and enable the HR Director effectively communicate with employees to manage the new LNG tankers. The continuous accumulation of knowledge of the new HR Director would also be helpful to achieve the loyalty, motivation and satisfaction of the company’s employees, for they can recognize the efforts of the director to help them in managing new responsibilities. This would not be possible without the help and support of the rest of the employees, for their ideas are also crucial for the improvement of its management. The support and help of the rest of the employees can boost the morale of the officers and even complement their actions, thus, resulting to loyalty and satisfaction.
In addition, this strategy would surely promote and encourage efficient and effective management of the new LNG tankers, in accordance to the implementation of effective policies. This can be possible, as these policies serve as guide for the proper actions of each selected officers and the workforce of the company, in encouraging peace and order in the whole organization and in the vessels. With these policies, the partners of the company will be able to perceive security of their assets, as being protected by the management of the company. Thus, the implementation of such policies would also provide adequate and systematic allocation of resources in the company. These effects would surely contribute to the satisfaction, motivation, and loyalty of the selected officers and crew of the nine new LNG tankers. With such strategy, the new crew who would be in charge of the management of the nine LNG tankers would perceive and recognize the efficiency and effectiveness of the whole company to develop, adopt, and implement strategies and procedures, with putting first the welfare and safety of its employees and the reputation of the company.
Strengths and Weaknesses of Strategy
The strengths of the strategy include the continuous development of the skills and leadership of the HR Director, thus, this event would further him or her to lead the company. The development of such skills and talents can be helpful in setting a good example for other employees and leaders of other departments. Another strength in implementing such a strategy is ensuring the continued processes of the company, in accordance to its mission and vision. This would contribute to the continued success of the company in its industry. Third, the development of the five strategic areas of management would enable the company to adopt advanced and innovative techniques, such as adopting new information systems and software programs, which would help the company promote and encourage effective and efficient internal and external communications. Fourth, the satisfaction of the company’s employees and key players can promote employee retention, thus, reducing employee turnovers, which would help the company reduce its costs in hiring employees. In addition, strength of the strategy also includes the maximization of the potential of each employee in the company, to contribute his or her ideas, actions, and skills for the success of the operations of the whole company. The success of the strategy would also contribute to the further establishment of the reputation of the shipping company that would help with its retention in the industry. In addition, the success of the strategy would decrease the accidents or catastrophes related in the mishandling and mismanagement of the LNG tankers that would endanger the lives of many organisms and of humans, including the environment and a number of properties. Lastly, the success of the strategy would ensure and guarantee the overall development of the company, not only in terms of the improvement in its management, but also with the improvement of the allocation of its resources.
However, despite the number of advantages or strengths of the proposed strategy, a few weaknesses can still be identified. Primarily, the rapid and drastic development in the company may lead to the under-development of other employees who may fail to cope with the changes and high standards that the company may employ, thus, leading to inefficiency. In addition, the rapid and drastic changes and development may result to conflicts within teams of different departments, due to the issue of pragmatism and too much involvement in the businesses of others to show dominance. This would lead to the increase in competition among employees, thus, creating more conflict and decreasing teamwork and coordination. Lastly, the use of such strategy may drastically raise the standards of the employees, which may create conflicts within the organization, if their standards are not met or satisfied.
Source of Labor
Because the base of these LNG tankers is in Europe, it would be beneficial for the company to employ or hire individuals near their base. However, employment rates from the countries in Europe are high, compared to the employment rates in Third World countries. In addition, labor is cheaper in Third World or developing countries, thus, enabling the companies from the West to hire employees from developing nations, such in the regions of Asia. It would be beneficial for both parties if the company will be hiring qualified employees belonging to developing nations, such the Philippines, India, Malaysia, China, and many others. Hiring workers from these countries would help with their economy, lessening their unemployment rate, and utilizing their talents and skills in the operations of the company. They will be hired to be responsible for the management of the new LNG tankers for these individuals are used to in working in risky and dangerous environment, thus, working in the new vessels and maintaining them would be much easier for them. In addition, the workforce from these countries are known to be hard-working and intelligent individuals, whose skills and talents can be maximized for the operations of the company.
Meeting the Requirements of International Legislation
To restrict and control the operations of shipping companies, including this company, it is guided by the regulations and procedures under the United Nations Convention on the Law of the Sea or the UNCLOS. This can serve to be a good guide for the shipping company in relation to its proper management to prevent having conflicts with other shipping companies and in passing through territories. In addition, the UNCLOS is a good guide for all shipping companies in terms of committing crimes or violations, which caused water pollution or destruction of the environment and all the organisms in it that, are related to neglect or mismanagement of ship crews and the shipping company. Part of the development of the company and the management of additional vessels, the company will be strictly complying with the rules under the UNCLOS. In addition, the company will also have its strict compliance with the regulations set by the European Union Shipping Laws. As a response to the new initiatives working on by the EU and the United States in relation to making shipping trade and travel more secured (2005), the company will be making sure that the natural gas contents of the new tankers would only be the sufficient amount required for its storage. In addition, the company would be making sure that overloading of supplies and of crew would not be allowed to ensure the safety of the ship and its crew. Moreover, as a response to this, the company would have to make sure that the regular maintenance of the new ships would be done, to guarantee that the vessels are functioning well, without the threat of causing serious and deleterious accidents that may endanger the lives of many individuals, expensive properties, and the environment.
Conclusion
The Human Resource Strategy proposed in this paper would be essential in the operations and management of the new LNG vessels. The company must first focus in internal development and improvement before targeting the overall performance of the company. However, the company must also consider other options to be able to fully maximize the potential and the performance of its employees, which in turn, contribute to the success of the shipping company. From this, it can be deduced that the interaction of all the factors in the company must be assessed before coming up with strategies that would enable success.
Credit:ivythesis.typepad.com
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