Volvo’s HR Practices

Job Enrichment Approach

- Siju
- Ramu
- Naval
- Annadurai
- Plakilla
- Narayan
- Rajaram
 Objective

• Bringing out the Volvo’s conscious efforts to implement job

enrichment concepts to improve Human resources productivity

• Its subsequent fallback

• Suggestions for improvement

 Background Note

•Volvo started its enterprise in the year 1924.

•1939 – Volvo established as a profitable automobile

manufacturer with a broad product range

•Employee strength – 51,000

•1970 – Volvo experience Labor related problems for the 1st
time
•Turnover/ Revenue
The Problem

• Increased Absenteeism

• Employee Turnover as high as 46%

• Government expenditure on education

increasing the number of educated citizens –
decline in blue collar resources

• Increase in foreign staff in Volvo’s workforce

causing groupism & lack of unity

• Work Culture affected.

 Changes Initiated

• Focus on Training & Development for the

workforce

• Leadership sensitization programs to

improve communication skills, labor welfare
& group behavior

• Job enrichment through decentralization

• Invested money xxxxxx millon usd in
• Empowerment
• Restructure tall to flat
 Job Enrichment
•Job Rotation:
Shifting around of jobs which was
physically & psychologically different.

Benefits
Flexibility
Empowerment
Drop in Turnover from 40% to 10%

•Management Employee Councils:

16 councils across manufacturing &
staff to handle issues related to
production, marketing surveys &
financial reports.

Benefits
Develop plans for improving work
conditions, employee policies, health
& safety.
Employee participation in key
decisions.
• Change Implementation
- The traditional assembly line changed to
keeping in mind the worker’s requirement &
Job Enrichment
nature of work .

Benefits
- Jobs of repetitive nature now automated
- Employees involved & contributing to the
change strategy

• Small Work Groups:

- 3 to 9 member team consisting of a leader,
foreman & spokesperson, to work on specific
tasks & divide work among themselves & have
periodic meetings .

Benefits
- Decentralization caused quick solutions for
pressing issues
- Workers encouraged to talk about quality
control related issues harnessing a sense of
belonging
- Employee felt more involved resulting in
positive results
 Job Enrichment

• Employee oriented technology:

- Instead of workers assembling the car body, the car body moved around the
plant
Benefits
- Increased interaction among workers
- Sub tasks divided in an organised way
- Each team had personalised facilities
 Limitations of the Approach

• External forces in the automotive industry changed – decline in the demand

for cars in the global mark

• Volvo productivity low (32 hrs per car) compared to Japanese (21 hrs per
car) & American plants(25 hrs per car)

• Experts felt that there was a strong mismatch between the amount of money
spent on good training & the results

• The Volvo car was not performing well which further led to the non feasibility
of the Job Enrichment Approach
 Suggestions

• Workforce planning – Attract economical wage workers from developing

countries

• Out source operations where labor & labor related laws are affordable.

• Creating the right balance between people & task management – the
approach adopted was skewed.

• The process improvement measures are always continuous & not one time.

• Sufficient encouragement in the area of R&D to keep up with market trends.

 Conclusion

• Job Enrichment is extremely important & yet must be well calculated

to strike the right balance between people & production after
analysing the possible developments that come up in the future.