Case Study : University Commercial Services Plymouth Ltd (UCSP)
This is an individual piece of work which encompasses all aspects of the module content, and considers the application of theory to practice. You will be required to complete a range of tasks relating to effective people management practice in organisations. Your completed case study should be 3000 words in length.
Case Study : University Commercial Services Plymouth Ltd (UCSP)
Background to the case study
Plymouth University (PU) is an organisation providing higher education in the South-West of England. The organisation is built on a rich heritage dating back to 1862 when the Plymouth School of Navigation was established. The organisation has grown from what was initially the adult self-help movements-Mechanics Institutes in Plymouth and Devonport in 1825. After years of development, Plymouth’s polytechnic was granted university status and degree awarding powers in 1992. While it has grown in terms of size, reputation and impact, the organisation remains true to its values of social inclusion with a strong sense of place and civic responsibility. The organisation embraces its leadership role in the city, region and beyond and is an engine of transformational change through education and innovation. With an annual turnover of around £160, the university has almost 3000 staff and 30000 students. The vision of the organisation is ‘to be the enterprise university’. This vision sets out the type of organisation that PU aspires to be. It is the only university in the world to have been awarded the Social Enterprise Mark in recognition of its work in support of the sector.
Establishing a subsidiary
In 2009, the conservative government asked Lord Browne to lead a commission to review higher education funding. This led to higher tuition fees for students of not less than £21000 for a three year degree programme. As with any other higher education institution, PU faced several challenges as HE changes in funding meant withdrawal and/or reduction of capital grants which helped in provision of services such as nursery and catering for students. In addition, there were also changes in nursery provision which needed to be adhered to such as staff-to-child ratios among others.
In the spirit of enterprise and sustainability the management felt that there was a need to continue providing these services (Nursery and Catering) for the students as a way of enriching student experience. The HR and management set about considering other ways of continuing the provision of these crucial services which in many ways enrich student experience. The aim was not to establish a money making business but rather having control of services offered. It was hoped that whatever alternative was to be chosen would ensure that the organisation remains efficient in the delivery of services to the staff, students and partners of the university. Options explored included outsourcing the two services. A decision was finally taken to set up a subsidiary company, namely: University Commercial Services Plymouth Ltd (UCSP). The Head of employee relations and well-being who was the HR representative on the project team also noted that she wanted the new service to have well-being as a core value of the business. This would mean providing an array of healthy food stuffs in the university cafés as well as having customer focused employees who understood the needs of the clients.
There were several staffing issues to be dealt with. Setting up the subsidiary implies that the staff in the nursery and catering services will be transferred from University of Plymouth as an employer to the new business entity- UCSP. A total of 85 employees were affected by this change, the majority being on part-time contracts. In addition, these employees were predominantly female. Although redundancy was not an option, those who did not want to be transferred to the new service had an option to apply for voluntary redundancy. This of course had its own advantages in that there was an opportunity to bring in new blood with fresh ideas.
In terms of rewards, the staff under PU enjoyed being on university terms and conditions as well as a national pay scale which was reasonably higher in comparison to other local employers. However, it was agreed that there would be new terms and conditions of work under UCSP which would be based on local conditions rather than the national pay scale. The decision on salaries was made by undertaking a survey, then settling for middle ground meaning that employees still enjoy a reasonable package. By implementing the local conditions of pay, there was a serving of 14% in costs.
Whereas PU recognises unions, UCSP places considerable importance on employee representation. In this respect, an employee representative forum- ‘Futures’ was established. The members of staff seem to be happy with the arrangement for now, no concerns have been raised.
As with any subsidiary, UCSP depends on the HR department in the parent company- PU. However, the main HR department is geared for the university rather than the business. This affects the efficiency in UCSP and has been a source of frustration.
The future of UCSP
One of the main challenges that has come to light in the running of the business is a lack of skills among the catering team. The catering staff lack higher level skills and creativity to enable them cater for high-end university functions and important guests. As a result, UCSP have had to bring in more competent chefs when they have to cater for guests at very important functions. There is recognition that in order to advance this business unit offerings and raise revenues, there is need to grow the necessary competences as an organisation. Another challenge to have emerged is that after the initial decision to set up the subsidiary, one of the profitable units based in the Isaac Foot building had to close due to demolition of the building for further development plans.
The nursery is well-equipped and offers a safe, varied and stimulating learning environment for children. The nursery has outstanding Ofsted reports. Having started running the nursery under UCSP, it has been observed that the client group is not just students but the staff of the university as well. While university staffs are happy to have a yearlong childcare contract, students prefer shorter periods such as 9 months for the time that the university is in session. This has implications for financing the business.
1. Catering Structure
2. Nursery Structure
3. Governance structure
4. Staff transfer list
5. UCSP Employee handbook
Task: For each question below, you should show that you have considered theoretical perspectives, legal requirements, commercial needs and potential responses from the workforce to come up with balanced solutions and demonstrate that you are aware of any associated risks.
1. Taking into account, political, cultural and the organisational context, discuss the main triggers of this change in the light of people management.
2. UCSP mainly relies on the main HR department in the parent company- PU which is geared for the university and not the new business.
a. Suggest ways in which UCSP employees can be better served by the HR department.
b. What role can HR play in building the necessary competences for effective running of the catering department?
3. In exploring possible ways of maintaining the provision of catering and nursery services to the students, the management did not want to use outsourcing. Discuss the advantages and disadvantages to the business of avoiding outsourcing.
4. Although redundancy was not an option, voluntary redundancy was allowed in setting up UCSP. If at all redundancy was an option, what would be the main criteria you would use in order to avoid potential cases of discrimination and unfair dismissal?
5. Setting up the subsidiary implies that the staff in these services will be transferred from University of Plymouth as an employer to the new business entity- UCSP.
a. Explain the process you would recommend to transfer the staff to the new business unit and your approach to the difference in the pay and terms and conditions as the staff will now have to work for a different employer.
b. Terms and conditions of service including salaries under UCSP would be different. Identify ways in which you may have to come up with a new reward package that is fair and attractive.
c. Identify the stages you might take in transferring and setting the staff in the new business and your timeframe for this.
d. Explain how you propose to ensure that employees in the new business unit – UCSP feel secure and develop a strong psychological contract.
6. While university staffs are happy to have a yearlong childcare contract for their children, students prefer shorter periods such as 9 months for the time that the university is in session.
a. What are the possible employment issues that arise from this difference in customer needs?
b. In what ways can UCSP Ltd make staffing costs effective to cover for the differences in the cash-flow while ensuring meeting customer needs effectively? How would they deal with fluctuating staffing needs?
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