Student : Tofiq Dadashov

Student ID : 1935510212
Class : SME
Topic of Paper :
Human resources in Mercedes-Benz company
Table of Contents
INTRODUCTION...........................................................................................................................2
MAIN BODY...................................................................................................................................2
Internal and external environment of the organization...............................................................2
Purpose and Functions of HRM..................................................................................................3
Effectiveness of different HRM practices in Mercedes-Benz:...................................................8
Recommendations made by Mercedes-Benz for improvement:...............................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13
INTRODUCTION
Human Resource management is a strategic tool to the effective management of
employees and workers in the company so that they help their organization to achieve its
objectives and gain competitive advantage. It is designed to improve employees performance in
service of an employer's desired objectives. Mercedes-Benz is a German global auto-mobile
marque which is known for luxury buses, vehicles and trucks. This study describes the internal
and external environment of Mercedes-Benz-Benz and effectiveness of HRM practices on the
Mercedes-Benz- Benz to achieve its goals. It also includes the strengths and weaknesses of
various approaches of selection and recruitment and recommendations made by Mercedes-Benz-
Benz for improvement of its performance.
MAIN BODY
Internal and external environment of the organization
Analyzing of particular company environment is basically strategic tools. This is process
for identify all the internal and external elements which are affects the organization environment
directly.
Internal environment of Mercedes-Benz: There are few factors which are includes in internal
environment of Mercedes-Benz i.e.:
 Organization Structure: Organization structures is a composition of independent
directors, Board of directors pf company, management and shares holders of company.
In Mercedes-Benz the nature of organization structure is influence decision making
system of an organization. In company organization structure is very conductive for
taking quick decision and action.
Human Resource System: The human resource department is a import part of internal
environment of a company. The success and growth of the business is mostly depends upon
the employees skills, ability, performance. In Mercedes-Benz company Human Recourse
function are very skilled and capable. Mercedes-Benz is large scale company and it is very
difficult to dealing and communicating each and every employees of firm. Therefore, HRM of
company is divided into different segments of firm. Where manager focus upon the technical
problems of employees and regularly motivate and encourage them towards the goal of
Mercedes-Benz
External Environment of Mercedes-Benz: The external environment also make impact on the
organization, some factors which are includes in:
 Competition: Competition represent similar products and services available in market
and which become hurdle for the growth of the organization. Mercedes-Benz is an
international company and also facing this types of competitive environment of market.
This competition may also impact on performance, products and services of company.
Directly or indirectly competition in market affect the environment of Mercedes-Benz.
 Government Policies: Government policies are also affect the organization
environment. Government may impose their rules, laws and policies on the company and
Mercedes- Benz also facing them. Government design and shape rules for an
organization and it is very important to follow that rules. If government design new tax
policies for automobile companies that is very essential for Mercedes-Benz to accept
them in their company. Which may affect the environment of company
Purpose and Functions of HRM
It is focus upon to improving productivity of company by optimum utilization of
resources.
There are certain functions and purpose of HRM:
 Recruitment and Selection: The recruitment & selection is core function of human
resource management. It is process of selecting right candidate for the right job. The
main purpose of this strategy is attracting and encouraging the applicant for the
particular job. In Mercedes-Benz company also recruitment and selection process is
conducted by the management. They use both practices of recruitment & selection,
internal and external process.
Internal sources of recruitment: In this method of recruitment, recruitment is done through
internal employees of company. Employees are currently working in organization are promoted
on high position and transfer in other branch. The Mercedes-Benz also is this technique for
recruiting. They evaluate the performance of employees and if employees performance is up to
the mark, than they are given am opportunity to occupy higher level position. If there is any
extra skills is requirements than they also provide them training.
 Promotion: Promotion is part of internal recruitment process. In this recruitment is
conducted within the organization. In this method of recruitment, employees are
promoted to the higher level position in the same organization. Mercedes-Benz also
use this
 technique for recruitment. They promoter there eligible employees for the upper level
post. The management of company also provides them necessary training for related to
the job
Advantages Disadvantages

 The main benefit of promotion strategy  The major disadvantage of this strategy
is, employees accomplish their task in is, employees feel bias at workplace
most efficient manner to get promoted that may decrease the performance of
in company. employees.
 The promotion strategy also create
unhealthy competition among the
employees.

 Retired employees for part-time and freelancer position: Company also use this
technique for internal recruitment process. In this method of recruitment company hire
those employees who are retired firm the organization. The reason behind this is
company can easily learn from them because they are eligible and experienced persons
of company. The Mercedes-Benz also use this technique to retaining their old employees
in company. This method is not so expensive, company can save charges of interviews,
training etc.
Advantages Disadvantages

 The main advantage of this technique is  This technique of recruiting reduce the
that its is less costly method. chances of new talent in company.
 Company can learn from their trained
and experienced employers.

External sources of recruitment: In this method of recruitment is conducted outside the

organization. Because many times, suitable candidates are not found in internal recruitment. So,
company use this technique of recruitment.
 Advertising: It is the very basic aspect of external recruitment. In this method company
gives detail knowledge about the job so, the suitable candidate can apply for. This
method also exploding the choice of management authority. In Mercedes-Benz company
also this
 technique use for recruiting. By this method company can easily get huge number of
candidates for similar job. So, management of the company can easily select suitable
candidate for the job
Advantages Disadvantages

 The benefit of this strategy is, company  It is consume extra time of the
can get pool of candidate with high management, because large numbers of
skills and capabilities. candidate can make process of
recruitment is complex.

Placement Agencies: Placement agencies are work upon the certain needs and demands of the
companies for the employees. This agencies are specialist in providing particular categories
workers. Company hire them for fulfilling needs and demands of employees in an organization.
Mercedes-Benz company also hire them, for their recruitment process. This placement agencies
find the candidates as per the demand of the company.
Advantages Disadvantages

 They are selecting skilled candidates  Whereas, negative impact of this

for the company, which may save the strategies, they are charge high rate of
time of human resource department. commission to the company for their
employment services.

 Orientation: Orientation is the basic function of human resource management. This is

fundamental step of HRM for providing help to new joiners in the company. In this
program of human resource management includes objectives, vision, mission and goal of
the company. Mercedes-Benz company also use this function for their new candidates.
They are provide them briefly knowledge about the company.
Maintaining employee relation: This is also main function of HRM. In this function HR
department work upon the maintaining healthy relationship among the employees.
Mercedes-Benz company also use this techniques and for managing employee relationship
they are plan some activities which give chance to know employees at personal and
professional level.
Soft and Hard skills of HRM:
Human Resource Management is a function of management which includes hiring,
selection, motivating and managing peoples at the organization.
Soft skills: Soft skills are includes traits, attitude, career attributes, communication, leadership
skills etc. This skills are essentials for daily HR works.
 Communication skills: Communication skills is very important ion HR function.
Because in HRM person have to deal with many peoples. The person have the quality of
negotiation, for dealing their employees and other parties. Communication skills also
important for solving the conflict om the management. With the good communication
skills manager can clearly provides the information to their employees.
 Leadership skills: Leadership skills are must in HRM. It is very helpful for guiding and
motivating employees towards their and organization goals. Good leadership skills
provides knowledge about the business and their operations.
Hard skills: Hard skills are those skills which are measurable, specific and teachable.
 Decision making skills: For HR functions knowledge of decision making is very
important. In this skills of HRM, manager have the quality of taking quick decision in
critical situation.
 Training and Development skills: Training and development skills is also part of hard
skills of HRM. This skill is essential for providing training to the new and existence
employees. This skills also focus upon the development of knowledge and abilities of the
employees.
Pestle Analyses of Mercedes-Benz: Pestle analysis is a tool for analysis business environment
of company. It has some factors which affect the industry environment i.e.
 Political Factors: Political factors are those factors which may affect the profitability of
the company directly. Government norms, policies and rules are also may affect the
environment of Mercedes-Benz. The rules and norms that political parties implement, on
the business of Mercedes-Benz, such as contact law as they rule the Mercedes-Benz and
it is not permit to do. Political factors also protect the intellectual property of company.
 Economical Factors: Economical factors are impact the performance and economy of
the business. This factors includes unemployment rate, inflation rates , raw material
and
 foreign exchange rate. This factor also may impact the performance of the Mercedes-
Benz business. The rate of gross domestic product affect, how fast Mercedes-Benz is
grow in future. The exchange rate of country may impact the profitability of Mercedes-
Benz business because company is engage in international business.
 Social Factors: Social factors are those factors which are base on the belief, attitudes
and behavior of the country populations. The social factors of the country may directly
influence business environment of Mercedes-Benz Benz. The class arrangement among
the country populations is of predominant, Mercedes-Benz wouldn't promote their
premium products to the general public, if the population is high class than they are able
to purchase but if they are lower class than Mercedes-Benz Benz have to trust on very
recession marketing
 Technological Factors: Technological factors are those factors which affect the
business environment by the new technology in the market. Mercedes-Benz Benz also
affect by the technological factors. Adoption of new technology in company is very
difficult to accept for the employees and very risky to implement in their products.
Because if the improvement drastic than it will be impact the goodwill of company in
market.
 Legal Factors: Legal factors are those factors which includes different laws like health
and safety law, employment law, consumer's law, data protection laws etc. which are
very important to follow. Mercedes-Benz Benz services are also impact by the legal
factors. In Mercedes-Benz Benz company discrimination laws are set by the government
to protect the employees of the company and ensure that Benz treated all employees
equally and give them equal opportunity.
Environmental Factors: These factors include weather, climate and resources of particular
country. This factors affect the business environment for creating awareness about their
climate and protecting the resources of county. This factors may influence business of
Mercedes-Benz Benz, company pays pollution fines to the government, because company
produce large amount of waste which may destroy the weather and climate of country.
 Illustration 1 : PESTLE Analysis
Effectiveness of different HRM practices in Mercedes-
Benz:-
Human Resource management practices play a major role in Mercedes-Benz. Human Resources
managers of Mercedes-Benz are responsible for defending the interests of both the employer and
employee. However, these practices may include employee empowerment, training and
development, job and workplace design and reward management and others.
 Job and Workplace Design:-The main aim of Job design is to organize and outline the
responsibilities, duties and tasks into a single unit of work for the accomplishment of
certain goals or objectives. Job design is an effective tool for Mercedes-Benz as it is used
to meet the requirements of employees and also to satisfy the interests of the company. It
makes the job more interesting and challenging which enables the employees to
participate in decision making process. If Mercedes-Benz provide acquire this tool for
the development of their employees then it will become easy for the employers to
monitor and supervise them which will ultimately help the company to achieve its goals
effectively and efficiently
A good job design helps the management of Mercedes-Benz to motivate the employees
and get good feedback from them which will also enhance the performance of employers
and the company.
However, Workplace design is also equally important for Mercedes-Benz as it positively
affects the well being of the employees while enhancing resource efficiency. Basically
workplace design refers to the process of organizing and designing the workplace to
improve the worker performance and safety. Generally the employees of Mercedes-Benz
face health and safety issues in high risk environments as well as low risk workplaces so
 this tool helps the management to promote health and well being of the employees and
workers. And if the employees would be satisfied then they will be able to communicate
with employers without any hesitation and provide the feedback to them which will
help the employers to improve their performance in the company.
 Reward Management:-Mercedes-Benz aims to evaluate the reward management
practices and its effect on the performance of employers and employees. The main
objective of reward management is to reward employees equitably, fairly and
consistently to motivate them to work towards achieving strategic goals which are set by
Mercedes- Benz
It is often said that Reward management is interconnected with various motivational theories as
it plays a major role in motivating the employees. However, rewards can be of two types such as
intrinsic and extrinsic rewards.
Intrinsic rewards include:-
 Information or feedback:- This reward offers guidance to employees whether
negative or positive which adds the value to the bond or relationship of
managers and employees.
 Recognition:-It mean recognizing the employee's work by verbal
appreciation. This reward helps to boost employees self-esteem and happiness
which will lead to achievement of strategic goals of Mercedes-Benz.
Extrinsic rewards include:-
 Salary raise:-Mercedes-Benz can give this reward to those employees who
make extra efforts in acquiring new skills and achieving the goals of the
company. This reward offers long term satisfaction to employees and
encourages them in improving their skills which is also an investment for the
company.
 Gifts:-This is a short term reward which can be provided by Mercedes-Benz
to its employees as The employees appreciate the tangible matter that
improve their self-esteem and efforts to achieve higher returns

 Interconnection of motivational theories with Job design techniques:-

 The management of Mercedes-Benz can evaluate management theories as these are
interconnected with job design techniques of the company like the company tries to
develop the skills of employees in the process of job design that helps to boost the
confidence of employees which will automatically motivate them to accomplish
strategic goals of the company.
Mercedes-Benz may acquire Maslow's Hierarchy of needs to motivate their employees.
This theory describes the series of physiological needs such as water, food, shelter and
rising to the apex where self actualization needs include creativity and morality. The
management needs to fulfill these levels of needs in a sequence from bottom to top as
the proper sequence will contribute to recognition and sense of belonging and such
recognition boost employees self esteem which will ultimately help the company to
grow in the market. So if Mercedes-Benz applies the job design techniques then the
employees will definitely get motivated as motivational theory is interlinked with
these techniques
Recommendations made by Mercedes-Benz for improvement:-
The management can make various recommendations for enhancing the performance of
the company. Mercedes-Benz has been increasing its focus on alignment of its business strategy
with human resource strategy as it concentrates on designing and executing solutions, cultivating
a new mindset and developing new capacity and capability.
Mercedes-Benz may adopt these strategies for enhancement of its performance and
accomplishment of strategic goals or objectives:-
 Continuous staff training and development:-The managers of Mercedes-Benz needs to
analyze the development needs of the employees so that the company can provide
training programmes according to their needs. Effective training programmes conducted
by the management build an employee profile of poor performance and also helps the
company to decide who deserves the promotion or bonus.
 Competitive Salaries:-The Mercedes-Benz must provide remuneration according to the
skills and efforts made by the employees as this strategy motivates the employees to
improve their efforts to get competitive salary. The managers need to eliminate the
possibility of adverse selection like the employees should not be treated as inferior to
others so the management needs to be fair and equal with the employees.
  Freedom to be creative:-The management should not force their decisions on the
employees and workers and they should give the opportunities to them to participate in
the management. The managers may take suggestions and ideas from the employees in
decision making as this will help them to create innovative ideas and improve their
mental strength
 Transparent and regular communication:-If the management of Mercedes-Benz
would ask for suggestions, complaints, ideas and problems of employees then it will
make them comfortable to communicate with the employers. This will lead to the
transparent communication in the company which helps in achieving the strategic goals
of the company.
 Evaluation of HR policies:-The mangers must evaluate the Mercedes-Benz policies and
procedures related to the employees. When the management evaluates its HR policies it
can use the strategic plan's goals and objectives to study each HR process. So the
company's strategies must be linked with human resources strategies to promote
employee relations and better workplace environment.
 Investment in Corporate Social Responsibility:- The Mercedes-Benz needs to
contribute towards corporate social responsibility as the company uses the resources of
the society so the company has to do something for the society. The contribution made
by the management helps the company to improve the brand loyalty and to achieve its
objectives
 Promotion Opportunities:-The human resources of a company always differentiates it
from the competitors so if the employees of the company would be skilled and trained
then they will definitely help the company to achieve its goals. And this can be achieved
only if the Mercedes-Benz provides the promotion opportunities to the employees as it
will encourage them to make extra efforts.

CONCLUSION
From the above study it has been concluded that human resource management strategies
have a huge impact on the operations of the Merceds-Benz. This report concludes that the
Mercedes-Benz-Benz must consider the internal and external environment and study the various
approaches of recruitment and selection to improve the performance and to achieve the
performance of the company. Merceds-Benz must evaluate the job design and extension
techniques and link it with the motivational theories for better results. This report also focus on
the various recommendations that Mercedes-Benz-Benz needs to consider to grow in the
economy.
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