PT Adaro Indonesia Company is a leading coal mining company exporting to international markets, and the second largest domestic producer of thermal coal in Indonesia. It was set up in 1992 and started its commercial operations in 1993. The operations were preceded by an agreement reached between Adaro and the Indonesia Government for the 358Km²Tabalong concession in Kalimantan (The largest coalmine in Indonesia). Adaro Company has recorded continued growth since its inception. In its first year, Adaro produced 1 Million tons of coal. By the end of 2013, Adaro’s production had increased to 52.3 Million tons. The increase in production between the 1993 and 2013 is 5130 %.

Overtime, the company has evolved into a vertically integrated mining company. It has subsidiaries in mining, dredging, barging, marketing, ship loading, port services, and power generation. Internationally, the company is ranked among the top five exporters of thermal coal. It is however the largest supplier to the coal domestic market in Indonesia. Adaro produces a low pollutant and high quality coal with a moderate heat value. The sub bituminous coal is trademarked, marketed, and sold as envirocoal.

In addition to Kalimantan, Adaro mining company is involved in processing and selling of thermal coal through two other dynamic mining centers in Sumatra and Java. The business also has two business segments that are grounded on the coal basin where it operates. Today, the PT Adaro Mining Company controls nearly 12 billion tons of coal resources including 921 million tons of probable coal reserves. Adaro has a total workforce of 6,000 workers who work in the mining, production, hauling and marketing of coal.

The mining industry is a highly stratified and competitive business. The successful mining company is one, which has control of its overhead costs and has reliable and dependable employees. Working for a company, which has a high number of employeescan be challenging and limiting.As a company increases in size, managing its employees in terms of better working environment and conditions normally take a back seat. It focusses more on expansion and development of new business but misses the management of employees. Its employees thus become just another factor of production.

To achieve its targets Adaro has to push its workers to work harder in order to reach its growth targets. Such a strategy resultsin a workforce that is under immense pressure, which leads to stressful conditions.This was displayed from the point that the employees were often much stressed whenever they worked at the business due to the long hours that they were exposed. The human bodies are designed to rest for them to function in a proper manner. If overworked, the bodies can become fatigued. This will cause the employees to become non-productive in the workplace.

Problem Statement

How can the high level of stress affecting the workers of PT Adaro Indonesia Company be tackled so that their productivity is improved and the profits of Adaro increase?

According to PT Adaro Indonesia Company mission statement, the company seeks to satisfy their customer’s needs, develop its employees, maximize shareholder value and support community and national development. Its employees are a major component and aspect of that development, since they are involved in 100% of the companies activities. The employees do scouting, undertake field surveying, and operate the mining, processing, and hauling machines. They are also involved in marketing Adaro’s products both domestically and internationally.

However, the majority of the workers who are currently working in the mining, hauling, and processing departments are overworked. Most of them work for 14 hours-a-day shift with only a single hour break. They feel overburdened with the workload and lack of adequate resting time. On top of that, their pay does not reflect the work input and the conditions they are subjected to work in are a health hazard. Many of the workers report respiratory and breathing problems because of the high levels of soot and dust. Others report accidents in the mines because of inadequate personal protective clothing. These conditions are not only dangerous but they also inhibit work productivity.

In response to these problems, this proposal proposes to investigate several existing options, which can improve not only the immediate working environment but also the workers’ motivation. The proposal seeks to carry out an inclusive participatory investigation in search of options for machines that remove particulate matter, methods of providing the workers with the appropriate personal protection equipment and better remuneration of the workers. It will show and explain to management the benefits of having shorter shifts per hour but with increased productivity and output.

 

Literature Review

The employees who work in any organization often face a multitude of problems. One of the challenges that they face is the lack of control of the terms of employment. The organization as the employer always is the one that determines the terms of employment accorded to a person. The employer also provides a conducive environment that enhances team building and promotes worker’s productivity. However, employees are sometimes subjected to poor work terms. For example, long shifts, poor protective equipment and poor remuneration. The poor work terms lead to loss of productivity and stress. These negatively affect the profit margins of the organization.

Cooper, Sloan& Williams(1988) examined the factors, which cause stress in the workplace environment, their sources, and the effects on the worker and the organization in general. These workplace factors causing stress and health risks are categorized into intrinsic, organizational, career development and relationship at work.The intrinsic factors associated with the job include work overload, lack of breaks, time pressure, and sub-standard physical work conditions. These intrinsic factors are the major cause of stress for workers in Adaro. The stress often leads to job dissatisfaction.

Unclear roles or conflicting work schedules are also causes of stress. The managers who assign the roles to the people working under them can be demanding, critical and unsupportive. By demanding workers to perform certain activities, the managers may cultivate the development of stress (Cooper et al., 1998).Griffiths (1995) also stresses the role played by an organizational culture where the workers are unpaid during the overtime worked. It leaves the workers feeling unappreciated and demotivated.

Employers are required to source and provide for their employees personal protective equipment. It is in accordance with the Occupational Health and Safety standards (OSHA). The OSHA standards require that organizations provide safety equipment, clearly mark areas where caution need to be taken. They also provide training about safety at the workplace (David 2010).However, most organizations neglect this important area. The result of which is the employees being exposed to hazardous situations in the workplace. The organization may fail in the OSHA standards by providing inferior or sub-standard equipment, inadequate equipment or it fails to enforce the OSHA standards. In case the safety equipment is missing, it makes the employees be at risk. Working under such conditions is demotivating and will cause stress to occur (Stephan & Johnson 2007)

Organizations in a bid to save money spent on paying salaries sometimes decide to employ only a handful of staff.The small numbers of staff have to work for long hours in order to cover the same amount of work. The long hours put the workers under pressure (Lehmkuhl, 1999). The staff does not get adequate time for rest. It leads to a build-up of stress causing the workers’ productivity to decline. The decline eventually leads to loss in profitability by the company. Golden(2002) advises companies to observe a balance between the number of employees and the production targets they set.It is an important step carried out in the production process since the staff can work in shifts and have adequate time to rest.

Analysis

There is much pressure while working in such an environment. This is because of the hard labor that is often endured by the workers. The mining company involves many manual activities, which means that the employees are constantly being forced to work very hard since machines cannot be used in some part of the production line. Therefore,to minimize the operational costs, the business usually overworks the workers instead of employing them in shifts. This would be much more expensive for the business, which would eventually eat into their profit margin.

Employees within the mining company are often stressed, as a result, of the conditions they are exposed to in the course of their work. Coal mining involves much hard manual labor, which causes people to become tired very quickly. However, there are ways that the problem can be addressed to ensure that the employees all have a good time in the workplace. Stress is a factor that can greatly reduce the employee motivation. It will result in than not working as much as they would have worked thereby making them less productive in the workplace. Both the management and the employees need to play a role in addressing this issue (Jensen, Tom & Mel, 2007)

Not all workplaces are similar to the Adaro Company. For example, companies that deal with non-tangible products such as software development usually do not have intensive labor. Most of the employees just sit all day and work on their computers. This is a very favorable working environment for most employees. Employees working in such an organization usually enjoy their working conditions, and they would not like to leave working there. This is caused by the fact that they are not stressed, and they get some free time to perform their other social obligations with their families and friends.

Different companies implement their own policies, which they believe will work best for their own setting. For the companies that are often involved in hard labor activities, employees are employed on a shift basis. For example, in a BMW vehicle-manufacturing factory, employees work in shifts. Though there are several machines that are used in the production process, humans are still required in the production line as well. Human expertise is required in several situations. However, in this company, the employees usually work for several hours after which they are exchanged with other people who will continue in their place (Robbins, Stephen & Timothy, 2012).

The problem that the coal mining company is facing is that the employees are stressed as they work. The management of the business has the power to change the current state of affairs completely and make it better for them. Once employees are stressed, they are not productive, which will reduce the profits generated by the company (Robbins et al., 2012). The company needs to remain profitable, and for this to happen, all the employees need to have the same interests as the management of the organization. They all need to be working towards achieving the same goals.

Motivated employees are more productive than employees who are not motivated. Therefore, the cause of this problem is the manner the organization is being run by the management. The company is making losses since the employees are not working as hard as they ought to. These problems are evidently very common in most organizations within the same industry. The returns of the business are not as much, and as they hope to get, hence they are forced to overwork the employees (Pritchard, Robert D, & Elissa, 2008).

Solutions

The solutions to the high stress level exhibited by the workers in Adaro can be reduced and possibly eliminated. The means of reducing the stress among the employees include:

The company can develop new policies that monitor and ensure the employees are not stressed at all. The policies will include health and safety plan, where a supervisor will ensure that all safety and health guidelines are adhered and observed. The supervisor will also take accurate stock of the personal protective equipment and advice the manager on those that need repair or those that have to be replaced (David, 2010).Some of the disadvantages that arise because of the new policies are:

• Putting up policies on protective equipment however may not be implemented fully. An organization may lack capacity of developing such policies.
• The employees do not put into use the safety equipment provided

To maintain high levels of motivation among its staff, PT Adaro Mining Company can create a reward system.Their fellow members of staff will vote for the most productive employees. The employees who emerge top will receive recognition from the top management and agift such as a cash reward or a salary bonus. Rewarding the best performing employees will motivate the other workforce to work harder. The improved working environment will be great for the Adaro’s business. It will lead to increased sales and revenue collection. The cons of an employee reward scheme include:

• Reward schemes can breed discord and resentment among the teams and workers. Quantifying the work done by a section of staff is sometimes hard. For example, the input made by a hauling driver is hard (John, 2008).
• Lack of long-term benefit- Incentives as cash give only a reprieve after which the employee will go back to what they felt before being given the gift.
• Increase in costs. The gifts given to employees are an expense that will eat into the profits of the organization. It can translate into a significant expense if a large number of employees are given gifts (Javitch, 2007).
• Due to the expectations by the employee to be given gifts, the spirit of motivation may be lost since they will see the gift as their entitlement rather than a motivational tool.
• The gifts can be seen as favoring a particular employee unless they are given to everyone. Other employees may lose motivation because of the feeling that some other employees are favored.

Adaro Mining Company should introduce a rotational shift system, which will enable the workers to work in shifts. Thus,the company can maintain a 24-hour working system and at the same time; it will not overwork the employees. The benefit of introducing a shift system is to provide the workers with less working hours. They would have adequate rest and therefore not suffer from fatigue. However, Adaro Company in the short run will have to incur additional expensesbecause of the new shift system.In the end when the company is running for 24 hours, its output will increase further. Higher output will translate to increased sales and increased profit margins for the business. The best solution however, that is preferred is the shift system since it will guarantee a continuous production on a 24 hour basis using three shifts of 8 hours each (Javith,2007). Its cons include:

• Unsettling normal schedules of people who have a set time of doings things in their lives. For example, an employee who is accustomed to waking up daily at 6 or 7 AM in the morning, and he is slotted to work in a shift that ends up at 8 AM.
• Senior people sometimes use their influence to be given the best shifts thus making the other employees feel unequal when the shifts are being given.
• Some shifts like the night shifts in a hospital are very busy since most casualties occur at night. The staffs who are assigned to the shift may feel overworked and be overburdened by the amount of work.

Stress at any level is known to be dangerous. Apart from the health repercussions, stress in the work environment causes an employee to lose productivity and become demotivated.

At a personal level, this assignment has provided a deep understanding of why some employees often become ill during their working years. It makes a person appreciate the presence of stress in the work environment. The problem and solution have an influence on a person’s opinion of the workplace and or the management of employees. Through this newly gained knowledge, one can know the best way to run an organization if they are ever put in such a situation. In addition, a person can understand that employees need to be motivated for them to work properly and efficiently. The assignment prepares one on what to expect in the working environment. As an academic, through research on the causes of stress in organizations a person develops the understanding of challenges facing the employees. An academic can therefore explain the causes and the symptoms and provide background on stress. The academic also understands the various means of dealing with the stress hence he can become a consultant.

This assignment clearly opens up the thinking of a person in managerial development. The managerial issue of finding the correct mix of factors of production to produce profitability arises. As a manager, one has to plan the resources in an organization in an effective manner. In this assignment, a manager appreciates that the employees are the ones who determine the amount of output a company directly produces. The employees, therefore, have to be given fair terms of employment, they should have suitable shift periods with adequate pay and safe working environment with personal protection equipment provided.

References

Sloan, J., Cooper, C.,& Williams S. (1998). Occupational Stress IndicatorManagement Guide.                   Winsor: Nfer-Nelson Publishing

Cox, T., &Griffiths A. (1995). The nature and measurement of work stress: theory and practice.               London: Taylor & Francis,

David L. (2010). Occupational Safety and Health for Technologists, Managers and Engineers.                  UK: Prentice Hall
Golden L& Jorgenson H. (2002). Time after time: mandatory overtime in the U.S. economy.         Economic Policy Institute Briefing Paper. Retrieved June 18, 2014 from          http://www.epinet.org/content.cfm/briefing papers

Javitch, D. (2007) “Rewarding Employees Creatively” Retrieved June 18, 2014 from             http://www.entrepreneur.com

Jensen, D., Tom M., and Mel S. (2007) The Manager’s Guide to Rewards: What You Need            to Know to Get the Best For–and From–your Employees. New York:    American Management Association.

John F. (2008). How to Run Successful Employee Incentive Scheme: Creating Effective                                    Programs for improved Performance. United Kingdom: Kogan Page

Lehmkuhl, L, (1999). Health effects of long work hours. Retrieved June 18, 2014 from             http://www.web.net/32hours/Health%20effects%20v2

Pritchard, Robert D., and Elissa Ashwood. (2008) Managing Motivation: A Manager’s Guide to   Diagnosing and Improving Motivation. New York: Psychology.

Robbins, Stephen P., and Timothy A. (2012) Organizational Behavior. N.P: Prentice Hall.

Stephan K. & Steve J. (2007). Work Design: Occupational Ergonomics. Scottsdale, AZ:   Holcomb Hathaway, Publishers