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SM Supermalls Human Resource Mgt Case Study

Human Resources Management (Ateneo de Manila University)

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(A management company of SM PRIME HOLDINGS, INC.)

PROFILE OF THE ORGANIZATION

HISTORY

SM Prime Holdings, Inc. was incorporated in the Philippines in 1994. They started as a
mall developer and operator and grew to be the biggest retail shopping center developer and
operator in the Philippines.

SM Prime started its mall development business in 1985 with the opening of SM North
EDSA. However, it was in the early 90’s when the “malling phenomenon” became apparent with
the opening of SM City Sta. Mesa in 1990 and SM Megamall in 1991. Malling has become a way
of life for millions of Filipinos as more SM Malls were opened in Metro Manila and provincial
areas. The management of the malls is now handled by subsidiary Shopping Center and
Management Corporation (SCMC).

Today, SM Prime has become one of the biggest mall operators in Southeast Asia.
Combined, the company has 60 malls in and outside Metro Manila and 7 shopping malls in China,
totaling 9.1 million square meters of Gross Floor Area (GFA). In the Philippines, they have a total
of 17,309 tenants and 1,472 tenants in China

SM Prime goes beyond mall development and management through its units and subsidiaries.

VISION

SM Prime envisions to be a leader in a world-class mall development committed to delivering the

daily needs of millions by offering a total mall experience and creating a richer better quality of life. Commented [G1]: Inserted: r
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MISSION

SM Prime commits to the following mission:

- To constantly provide customers with a fresh and world-class mall experience through
innovative and state-of-the-art facilities and services;
- To undertake wide-ranging corporate social responsibility initiatives that provide greater
service for customers with special needs and ensure environmental sustainability through
various programs on energy, water, and air conservation; Commented [G3]: Inserted: ,

- To be an employer of choice, offering comprehensive opportunities for career growth and

enhancement;
- To deliver sustainable long-term growth and increasing shareholder value; and
- To uphold its role as a catalyst for economic development.

GOALS

SM Supermalls, the country’s largest shopping center operator, provides shopping, dining and
entertainment options to millions of shoppers daily in over 60 malls in the Philippines and 7 in China.
Delivering the ultimate in family fun mall experience is the brand promise. And as we partner with the
best local and global retailers, we aim to provide affordable luxury shopping to all. At SM Supermalls,
Everything’s Here.

BUSINESS PORTFOLIO/MANAGEMENT COMPANIES

SM Prime Holdings, Inc. is one of the largest integrated property developers in Southeast Asia that
offers innovative and sustainable lifestyle cities with the development of malls, residences, offices, hotels
and convention centers.

MANAGEMENT COMPANIES

SM Supermalls

With a history spanning 50 years in the retail industry and over two decades in the shopping center
business, SM Supermalls is a multi-faceted institution consisting of stores, malls, banks, residences,
resorts, hotels, and business establishments. Beyond business, SM Supermalls also aims to encourage

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unity in the Filipino family by providing a world-class yet wholesome experience that the whole family
can enjoy.

Alongside the core business areas of the SM Group, SM Supermalls is one of the most well-
known divisions of the Group. SM Supermalls is the Philippines' retail and mall giant because of its one-
stop shopping concept. With more than 40 malls in the Philippines and abroad, it has become an engine
for economic growth, providing jobs for about 40,000 Filipinos.

Family Entertainment Center Inc.

Family Entertainment Center Inc. manages leisure and learning facilities that are targeted mostly
to kids. These are SM Storyland Mall Rides and the Science Discovery Center. It also maintains the
operations for the SM Bowling Centers and internationally-affiliated SM Ice Skating Rinks.

SM Engineering Design and Development

SM Engineering Design and Development is the architectural and engineering arm of the
Group’s Retail and Mall properties, responsible for the development and modernization.

SM Lifestyle Entertainment, Inc.

SM Lifestyle Entertainment, Inc. (SMLEI), commonly known as SM Cinema, is one of the affiliates of
the SM Group. Today, it boasts of the largest cinema chain in the country with more than 335 cinemas in
41 SM Supermalls nationwide. Commented [G4]: Inserted: of
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SM PRIME PRIMEHOLDINGS, INC.

ORGANIZATIONAL STRUCTURE

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SM SUPERMALLS INC. (SM NAGA)

HUMAN RESOURCE STRUCTURE

***Each management company has its own human resource department that has policies and programs
that are separate and distinct from each other.

HR Department
(Vice-President
for HR)

HR Business Learning and Plans and

SM EDD SM FECI SMLEI Recruitment
Partner Development Programs (AVP)

Human Reource
Compensation
HR Manager HR Manager Asst. Vice Pres. Asst. Vice Pres. Asst. Vice Pres. Asst. Vice Pres. Management
and Benefits
System

Regional
HR Managers HR Managers HR Managers
Managers

Mall HR
Managers/HRBP's

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NARRATIVE DISCUSSION

EMPLOYEE ABSENTEEISM

SM City Prime holdings Inc. is one of the biggest chain stores in the country. It has 60 plus stores Commented [G6]: Inserted: s

nationwide and 7 in China with plans for more expansion within and outside the country. The organization
maintains thousands of merchants as the main retailers of various goods and services to consumers
nationwide. The huge number of its units and subsidiaries is housed with thousands of its employees both
contractual and permanent workers. The ever-growing number of chain stores is also tantamount to ever
growing a number of workers. One of the challenges that SM is facing with regards to a vast number of Commented [G7]: Inserted: a

talents is how to manage 100% commitment to attend to work daily to sustain its daily operation.
Employee absenteeism has been a concern by most organizations but should be considered especially a
threat to overall human talent management of SM considering their huge workforce. This is due to the fact
that it has severe repercussions in the entire operation especially in terms of productivity and profitability.

Absenteeism as defined by Irish Business and Employers Confederation (1999):

“Absence is a natural and expected phenomenon in every organization. Absenteeism is the

unscheduled disruption of the work process due to days lost as a result of sickness or any other non-
statutory leave”.

On this light, absence seems to be a normal phenomenon of life. However, this presents a huge cost Commented [G8]: Inserted: s

to the company and thus should be monitored closely. Based on the literature found on all knowledge
resources, causes of absenteeism can be categorized into two, both have a direct and indirect impact on
the company productivity and profitability. Factors causing absenteeism can be classified as: Commented [G9]: Inserted: a

Controllable/ Voluntary: job satisfaction, organizational commitment, management or employee

relations, job stress; and
Uncontrollable/ Involuntary: sickness, emergency, maternity, domestic/family relations, accident.
There is no single factor that can be attributed to absenteeism. This phenomenon though a normal part
of working life presents a huge cost to the company and thus should be monitored closely. Absence incurs Commented [G10]: Inserted: a

a significant cost, both in terms of direct costs (replacement, recruitment, and selection, temporary staff,
management time) and also (perhaps more significantly) in terms of indirect costs ( morale, pressure on Commented [G11]: Inserted: a

remaining staff, costs of learning, product/service qualities.

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ANALYSIS OF THE CASE STUDY

PROBLEM

The issue has been identified which is the high turnover of work absence of SM employees. SM
as one of leading companies with high standard policies on managing employees is inevitably facing this
uncontrollable phenomenon, the Employee Absenteeism.
Absenteeism, as related by SM, is not attributed to a single factor. Multiple factors cause an
employee to leave or stay away from work. Companies are not generally concerned about short-term Commented [G12]: Inserted: a

leaves. Properly scheduled short term and one and two sick leaves are okay with SM company according Commented [G13]: Inserted: ,
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to them. However, long-term absenteeism becomes a liability in the long run if not properly managed. So,
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to quantify severity or impact of absenteeism on the company’s productivity, initial step should be to
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calculate said turnover through this formula from a human resource book. This gives SM Naga an accurate
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view or status of the impact of absences and will serve as a guide for specific courses of action to take. Commented [G18]: Inserted: a

RELATED LITERATURE TO ABSENTEEISM Commented [G19]: Inserted: S

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The causes of absenteeism are attributed to complex nature of factors as mentioned earlier and are
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associated with the following ideas of: Commented [G25]: Deleted:t
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Graham and Bennett (1995) believe that the factors contributing to non-attendance include the nature of
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the job, personal characteristics of the worker and motivating incentives.This explains why no single
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factor or cause has been identified because if it were true, then the companies have found solutions to Commented [G26]: Deleted:is
solve it. Commented [G27]: Deleted:o
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Nicholson (1977) in his model of attendance motivation believes that attendance is normal behavior,
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whether people will attend given a particular set of circumstance depends on a number of variables such
as age, sex, gender, work conditions, group cohesion etc.

Steers and Rhodes (1978) suggest in their model of absenteeism, that job satisfaction, and pressure to
attend work interact to determine attendance and motivation. Commented [G30]: Inserted: ,

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RELATED THEORIES TO ABSENTEEISM Commented [G31]: Inserted: S

Commented [G32]: Deleted:S
B.F. Skinner’s Reinforcement Theory – based on his "law of effect" theory, behavior with positive
consequences tends to be repeated, while behavior with negative consequences tends to be repeated. This
is related to rewards like a bonus, compliment or promotion that keeps employees motivated to work and Commented [G33]: Inserted: a

stay at work 100%.

David McClellands Three Needs Theory. Proposed the three major motives or needs in work situations
( Need for Achievement, Need for Power, Need for Affiliation ). These help companies assess or identify Commented [G34]: Inserted: e

what drives employees to go to work. Commented [G35]: Inserted: e

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Abraham Maslow’s Hierarchy of Needs. That person have a complex set of five categories of needs
which are arranged in order of priority. He suggested that as a person satisfies each level of needs,
motivation shifts to satisfying the next higher level of needs. Thus, employees with satisfied needs tend
to be more motivated to work. Commented [G37]: Inserted: n
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Edwin Locke’s Goal Setting Theory. This theory is applied by establishing goals that are specific and
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challenging and by letting employees participate in setting goals. This keeps employees more involved
and committed employees.

Victor Vroom’s Expectancy Theory. To perform well, people must know what to do, be able to do it,
and want to do it.

John Stacy Adams’ Equity Theory. This theory suggested that individuals are motivated when they
experience satisfaction with what they receive from an effort in proportion to the effort they apply and
then comparing their rewards to the rewards others are receiving

Clayton Alderfer ERG Model. This theory looks at motivation as following a hierarchy and describes
how need satisfaction and need frustration affect motivation.

Frederick Herzberg's Motivation-Hygiene Theory. Also, a motivation theory that suggested distinct Commented [G40]: Inserted: -

kinds of experience produce job satisfaction(motivators) and job dissatisfaction(hygiene factors). Commented [G41]: Inserted: ,

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SOCIAL AND ECONOMIC FACTORS TO ABSENTEEISM

Nature of work.Boredom due to a routine system of daily activities, for example, lowers their drive to Commented [G42]: Inserted: a

work. Commented [G43]: Inserted: ,

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The size of the Organization- When an organization grows and expands, employees may feel they no
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longer matter or fail to see where they fit anymore. Commented [G47]: Deleted:S
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The quality of Supervision- supervision is one important factor in managing absenteeism. The
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relationships built up between managers, supervisors, and staff will have the biggest effect on the
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commitment to the organization. The level of commitment of a person towards their job will determine Commented [G49]: Inserted: the
their level of absenteeism. Commented [G50]: Inserted: ,

Job situation consisting of variables that characterize the nature of the job and the work environment Commented [G53]: Deleted:s

such as Job scope, Job level, Role stress/tension and work group size also affects the behavior of an
employee in the job. Commented [G52]: Inserted: the

ALTERNATIVE COURSES OF ACTION

Absenteeism is a complex subject and there is no universal solution to managing absence. There
are, however, a whole range of policies/interventions that the SM Human Resource can apply to solve the Commented [G54]: Inserted: ,

issue. These are:

Improved Communications- SM should not only consistently train its managers and supervisors, but
teach them how to relate, listen and counsel people. It is the responsibility of the Human Resource
Department to communicate the attendance policy clearly to the employees.

Employee Commitment - if the individual is aware of what the organization is striving to achieve and
can identify where they fit in, then they are going to be more committed to the organization and thus more
likely to attend in order to make their contribution.

HR should invoke to employees the following behavior through proper training:

▪ Strong commitment to work in general;

▪ Strong commitment to a specific job;
▪ Commitment to the organization (which includes an intention to stay and have low absenteeism)

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Discipline/ Personal Work Ethic -personal values systems can also motivate one to attend, however, the
‘work ethic' differs among individual workers. Those with a strong work ethic are more likely to attend
than those with a weaker work ethic. It is the management challenge to instill a work attitude that makes Commented [G55]: Inserted: ,

them disciplined workers. Commented [G56]: Inserted: s

Incentive/reward Schemes – Examples are rewarding their employees for attendance, or flexi-time,
whereby individuals are able to alter their hours somewhat to suit their personal needs.

Job Satisfaction in the Workplace - Human resource department to employ various effective policies
and programs that meet varied and dynamic needs of its human talents. Commented [G57]: Deleted:s

BEST COURSE OF ACTION

Job Satisfaction in the Workplace

The application of job satisfaction in the workplace is a difficult concept to grasp due to its
individualistic and situational nature. What one employee desires from work, another may not. For
instance, one employee may put salary in high regard, while another may find autonomy the most
important.

Satisfying employees in all aspects or facet of his work and life is what I consider the best measure
that SM Naga should implement and include in their wide range of policies and programs. All theories
and factors mentioned beforehand regarding absenteeism originate all from this one key element, that is Commented [G58]: Deleted:s

JOB SATISFACTION. If SM Naga can meet at least most of employee needs if not all, this leads to
greater benefits in the long run which include employee productivity, boost employee morale and
reduction in overhead costs. Commented [G59]: Deleted:s

Below are specific aspects of a job through which SM Naga can increase satisfaction in their Commented [G60]: Inserted: a

workplace:

▪ Company Policies - Policies that are transparent, fair and applied equally to all employees will
decrease dissatisfaction. Therefore, fairness and clarity are crucial in improving employee
attitude. For example, if a company has a policy for lunch breaks having the same length
and time for all, it will be seen as a norm and will help cut down on wasted time and low
productivity.

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▪ Salary/Benefits - Making sure employee salaries and benefits are comparable to other
organization salaries and benefits will help raise satisfaction. If a company wishes to produce a
competitive product they must also offer competitive wages. Furthermore, this can help reduce
turnover, as employees will invariably be more satisfied when paid competitive wages as opposed
to being underpaid.
▪ Interpersonal/Social Relations - Encouraging employees to develop a social aspect to their job
may increase satisfaction as well as develop a sense of teamwork. Co-worker relationships will
benefit the organization as a whole since teamwork is a very important aspect of organization
productivity and success. Employee involvement groups are a great way to help employees
interact with individuals outside their department or organization.
▪ Working Conditions - upgrading facilities and equipment and ensuring employees have adequate
personal workspace can decrease dissatisfaction. A cramped employee is a frustrated employee
plus faulty equipment leads to frustration in trying to get work done.
▪ Achievement - Ensuring employees are appropriately placed to utilize their talents may enhance
satisfaction. When employees are given the proper role and feel a sense of achievement and Commented [G61]: Inserted: the

challenge, their talents will be in line with the goals best suited for them. Commented [G62]: Deleted:,

▪ Recognition - Ensuring a job well done is duly acknowledged increases the likelihood of
employee satisfaction. Positive and constructive feedback boosts an employee's morale and helps
them work at the desired level and towards the desired direction.
▪ Autonomy - Giving employees the freedom and sense of ownership of their work may help raise
job satisfaction as the individuals realize they are responsible for the outcome of their work.
▪ Advancement - Allowing employees showing high performance and loyalty, the room to advance
will help ensure satisfaction. A new / higher position and sense of responsibility can often increase
job satisfaction in an employee.
▪ Job Security - Especially in times of economic uncertainty, job security is a very crucial factor in
determining an employee's job satisfaction. Giving an employee the assurance that their job is
secure will most likely increase job satisfaction.
▪ Work-life Balance Practices- In times where the average household is changing, it is becoming
increasingly important for an employer to recognize the delicate balancing act that its employees
perform between their personal life and work life. Policies that cater to common personal and
family needs can be essential to maintaining job satisfaction.

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ACTION PLAN MATRIX

PERSON/OFFICE
ACTIVITIES OBJECTIVES KEY RESULT AREA TIME FRAME
IN CHARGE
FIRST WEEK ON THE
Improve 100%
Educate employees on Human Resource JOB for new employees;
Seminar on Employee Employee Attendance
the impact of attendance Communications On REGULAR BASIS as
Attendance or Reduce Absence due
on productivity Department part of the training
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to culpable reasons
employees
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Work-Life Balance EVERY MONTH:
Activities Employees can register
Molding skills on time Human Resource Holistic Employee with
( e.g. health and fitness through the HR portal and
management and setting Career a healthy work-life
programs, fun runs, sports choose from the varied
priorities Development Team balance
tournament, volunteer on work-life balance activities
social cause,etc.) available

Direct control on
Foster working
employee behavior
relationship and Immediate
Buddy System at Work particularly on absences EVALUATED DAILY
accountability with a Managers
through the reporting
work partner
partner employee Commented [G66]: Inserted: on
Demerit on Employee
Promotion or Salary Inculcate personal work Human Resource Employee commitment EVERY YEAR on
Increase if Minimum ethic particularly Compensation and to work and to the Performance Appraisal or
Absence requirement is not attendance discipline Benefits organization in general as needed
Met
Employee recognition, EVERY YEAR on
Awarding of the Employee Human Resource
achievement, and Employee satisfaction Performance Appraisal or
of the Year Department
advancement as needed
Commented [G67]: Inserted: ,

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CONCLUSION

Absenteeism is a multifaceted issue and often a symptom of a more fundamental problem. Thus,
organizations like SM is challenged to search and experiment with new strategies, structures and control
systems. Their policies and methods should be reviewed daily, monthly or on annual basis especially
methods managing the employees’ absenteeism. Dealing with workers to commit themselves to work
poses a challenge to HR Management as it deals with employees’ attitude which is very dynamic in nature
and with changing needs.

Admittedly, there will be no single best solution to this phenomenon as it is caused by complex Commented [G68]: Inserted: o

factors. It is the duty of the SM HR together with the supervisors especially the front-line managers to Commented [G69]: Deleted:wi
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implement the policies and communicate these policies clearly to employees. Motivation plays a major
part on underlying reason why employees stay away from work. SM Human Resource Department is
working on this as part of their programs or policies that cater these needs. But with the recurrence of this
problem like in SM employees means they need to revise or develop new policies to raise the motivation
levels of employees and decrease absenteeism due to culpable reasons. Employee engagement on top of
other methods is one of the keys to eliminate absences and let them enjoy their work. Commented [G71]: Deleted:in

Employees behavior is a mirror of how successful the HR implements its policies. It an alert for
the HR department if absenteeism becomes habitual. I admit the fact that regardless of any approach to
control the problem, HR cannot totally eradicate this phenomenon called absenteeism. Changing people's
attitudes takes time, patience and perseverance. But if this problem is not deal with immediately, this may
cause more problems. So, immediate attention is required even for minor absences. After all, managing Commented [G72]: Inserted: i

attendance is a great deal easier than managing serious absences. Commented [G73]: Deleted:e
Commented [G74]: Deleted:e
Organizations must realize that any initiatives to address the causes of absence will require
significant investment, both in monetary and commitment terms, but when offset the costs of absenteeism, Commented [G75]: Deleted:t agains

it will yield bigger benefits in the long run.

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REFERENCES

Resource Person:

Journal:

Irish Business Employers Confederation, (2002). “Absence Management Report”, www.ibec.ie

Books:

Crispina R. Corpuz.Human Resource Management. Third Edition.2014.

Rhodes S.R, & Steers R.M, (1990). “Managing Employee Absenteeism ” Addison – Wesley.

Steers R.M, & Rhodes S.R, (1984). “Absenteeism; New Approach to Understanding, Measuring and
Managing Absence”, San Francisco, Jossey Bass.

Graham & Bennett, (1995). "Human Resource Management " (8,h Edition), London: Pitman.

Website:

www.smprimeholdings.inc.

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