DATE: February 26, 1999
TO: Mr. Tom Douglas
FROM: Hunaid Sulemanji
RE: Integrated Circuit Group
Reorganization
EXECUTIVE SUMMARY
Because of radically changing semiconductor business environment,
the current Human Resources model at Integrated Circuits Group (ICG) needs
to be restructured. The primary problems at ICG appears to be in the organizational
structure and design (see revised organizational chart for effective business
operations), understaffing (especially with technical professionals because
of cross-utilization of engineers in management), communication, compensation,
planning, stress, and distribution of responsibilities.
ICG needs to re-invent and align the culture with the
current competitive semiconductor industry climate with clear functional
organization structure that is centralized to perform the duties of Human
Resources management as a separate entity and allow other sub-units such
as Advance Design, Material, and CAD Group to focus on technical, manufacturing,
and operational aspects of business at ICG. Once the Human Resources department
is in place, it will have the responsibility of addressing further problems
in understaffing, communication, compensation, and so on.
CONCEPT AND STRATEGY
Integrated Circuit Group (ICG), a subsection of Medical
and Environmental Electronic Devices (MEED), purchases, designs, and manufactures
semiconductor components and integrated circuits for MEED. The culture
at ICG (and MEED) is best defined as ambiguous, free, flexible, risk-taking,
and supportive attitude towards employees. The strategy of MEED and ICG
is to continue to provide the businesses with custom and standard equipment
that meets the product demand in this highly demanding and competitive
information age. MEED’s (ICG) growth and financial highlights are reflection
of successful business strategy over the past ten years, and now a revised
strategy is required to continue to perform successfully for the next ten
years.
HUMAN RESOURCES PROBLEMS
In my opinion, MEED (ICG) needs to shift the paradigm
so that the culture and climate are aligned with the current semiconductor
culture and climate (re-invent the culture and the climate). This fundamental
shift will allow MEED to analyze and redefine the corporate objectives
and focus on new initiatives that will make MEED a strong and competitive
company in the next century. Analysis of the operations shows that there
are several key major human resources and organizational development problems
at MEED, and if not handled properly, could ruin the financial growth of
the company. In my opinion, some of the key major problems with ICG are
as follows:
Organizational Design
Semiconductor culture at ICG is not consistent with the current
semiconductor industry, and therefore not as aggressive in reaching goals
in the fast moving and growing pace of the computer industry. ICG appears
to be less structured, regimented, and disciplined compared to semiconductor
industry.
ICG is a backward-integrated organizational design in the
semiconductor industry.
It appears that many different sub-units had recruiting responsibilities,
and this overlapped and clouded the decision making away from the core
activities of the organizations or sub-units.
Employee mobility was too rampant within the organization,
and therefore often shifting jobs during the course of a project. In addition,
performance appraisal process is not consistent across the organization.
Some conducted them and some did not.
Understaffed Technical Professionals, Lack of Management
Depth, and Training:
ICG requires a combination of engineers and technicians with
specialized skills. Understaffing is major concern for ICG presently and
in the future. Attrition average is expected to rise to 15% per year for
exempt, and 35% per year for non-exempt.
Recruitment of managers is limited to within the organization
with formal program of management development or qualified individuals.
Lack of proper technical training in providing career track
and development for engineers and other technical professionals.
Poor planning and forecasting (personnel, financial, engineering).
Communication and Compensation
Detection of mistakes left until final test (instead of vigorous
beta testing of the prototype), and therefore creates downtime in production
schedules and unnecessary costs.
Some employees felt that the compensation process was unfair.
Some recent hires were being compensated more than people who had been
at ICG for a period of time.
Stress and Distribution of Responsibilities
Stress appears to take toll because overwhelming cross-responsibilities
due to understaffing. Engineers are being utilized to perform management
duties and therefore engineering responsibilities are not followed through
for IC designs. In addition, some engineers and other professionals were
working two or three jobs and taking work home.
Problems with distribution of responsibilities, competency,
and retention. The explanation of one of the engineer with reference to
competency and retention, and working long time with them if necessary
poses a schedule problem. Perhaps ICG needs to restructure job that is
best suited for individuals.
RECOMMENDATIONS
If these issues of organization design, understaffing,
communication, compensation, stress, and distribution of responsibilities
are not addressed, the business maybe heading for trouble especially with
growing industry. The following are my recommendations and solutions to
alleviate the current negative organizational climate:
Although ICG is organized functionally to provide link between
manufacturing and assembly operations at MEED, ICG needs to make further
changes in the functional organizational structure by creating centralized
departments to handles issues such as employment and recruiting, employee
benefits and compensation, and organization development and training. Perhaps
all these could be centralized into Human Resources Department with sub-units.
These will alleviate the problems of human resources within other sub-units
such as Advance Design, Material, and CAD Group. This functional change
will allow these core sub-units to focus on manufacturing and operations
issues of ICG (see revised organizational chart).
Once the functional organizational structure is in place
with centralization of Human Resources Department, ICG can perhaps concentrate
on staffing, compensation, and distribution of responsibilities. This can
be achieved by hiring technical and management professionals, in additional
to the current college recruiting and relations. Design job descriptions
and responsibilities based upon the job requirements. Technical professionals
should be utilized specifically for design and manufacturing duties and
managerial professionals for managerial functions, planning, scheduling,
and financial forecasting. Recruit managerial talent (experienced and entry
level MBA’s) from outside industries to perform the management functions
of ICG. This will open up engineering and technical professionals (who
are currently performing engineering and management duties) to concentrate
and focus on technical aspect of ICG, which appears to be greatly understaffed
due to the demand.
Design a fair compensation system across the organization.
Survey and compare the current semiconductor industry across the nation
and determine salary, cost of living, inflation, and compensation issues
for fair integrated compensation for ICG.
Develop a centralized performance appraisal system with policies
and procedures. Perhaps implement a system that requires employees to prepare
a self assessment and follow up with a performance appraisal and compensation
system based on achievement and output. The policy and procedural issues
should be left to Human Resources for development, and actual appraisals
conducted by the mangers and supervisors of the sub-unit of the employee.
Develop a centralized training program through organizational
development for training related to general functions of the ICG (such
as conflict resolution, effective writing, effective supervision, and human
resources training such as sexual harassment, EEO, and so on). Other specialized
training should be developed within the requirements of the department.
This will allow the sub-units to focus on the requirements of their own
departments.
REFERENCES