Caselet: Managers and HR clash at ABC Company ABC is a mid-sized company located in Chakan, Pune. It manufactures spare parts for OEM in the automobile industry. The company had just 100 employees in 2010 with just two people in the HR department for carrying out mostly administrative functions. Back then, the respective departmental managers and supervisors were held accountable for people related issues including hiring, training, rewarding and firing. Over the last ten years, ABC has grown rapidly and today has 1000 employees and a full-fledged HR department and a full time Director of HR with 12 other appropriately qualified people handling Staffing, compensation, training and also conducting Employee happiness surveys. ABCs top management wants the HR department to handle employee and personal related issues, rather than leaving it to line managers and supervisors. ABCs management believes that a good HR department will keep line managers in check. The top management also believes that the line managers are already busy handling productivity related issues and it would be helpful if HR handles certain tasks, giving them more time to focus on their main roles. Some of the key responsibilities assigned to the HR department relate to hiring, compensation, Employee surveys and employee appraisal. The Line managers role in these functions has reduced over a period of time. In the hiring domain, the HR manager shares a limited list of 3-5 candidates, forcing line supervisors to make a choice. Similarly, for employee appraisals, HR scrutinizes the appraisal forms closely and it is not unusual for the line manager to be summoned for exceptionally high or low rating. The Line managers are also unhappy that Employee happiness surveys have become a popularity contest among them and issues like discipline and productivity are taking a back seat. Recently some Line managers have complained to the top management about their authority being eroded due to HRs frequent interference in how they run their departments/functions. The HR director however feels that the Line managers are not looking at the Long-term benefits and only upset due to perceived diminished authority. In the context of the case, do you think the Line managers complaints are legit? Justify your response in the context of what we have studied related to Line and Staff functions. As the CEO of ABC Company, what would be your course of action to diffuse the emerging situation at an early stage? If you are the Director HR, are you and your colleagues overstepping your staff authority?