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“Managing Human Resources”

An Educational Simulation for University and Organizational Learners

Participant Manual, Section 4

Internal Consulting Projects (ICPs)

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Table of Contents

1. Internal Consulting Projects 1.1. ICP 1: Self-Service Portal 1.2. ICP 2: Stress Management 1.3. ICP 3: Engagement for Innovation 1.4. ICP 4: Disaster Planning 1.5. ICP 5: Organizational Climate 1.6. ICP 6: Ethics 1.7. ICP 7: Harassment 1.8. ICP 8: Suicide Attempt 1.9. ICP 9: Union Activity 1.10. ICP 10: Discrimination 1.11. ICP 11: Learning Organization 1.12. ICP 12: Retirement Planning 1.13. ICP 13: Health 1.14. ICP 14: Sustainability 1.15. ICP 15: Generational Diversity 1.16. ICP 16: Off-shoring 1.17. ICP 17: Recruitment Sourcing Effectiveness 1.18. ICP 18: Selection Process 1.19. ICP 19: Employee Layoff 1.20. ICP 20: Evaluation of HR Programs

Section 4: Internal Consulting Projects (ICPs)

1. Internal Consulting Projects [Back to TOC]

As already mentioned, Internal Consulting Projects are situations and issues confronting various departments in eGS. In addition to enriched HRM practices, ICPs offer an opportunity for HRM to participate strategically in eGS by giving service based on HRM expertise to its internal customers, the other departments in eGS. Just as HRM practices cost money, so do ICP options. As with HRM practices, you may choose any number of options, including none, unless they’re mutually exclusive.. This section describes all 20 ICPs currently available for situations confronting eGS. Your instructor will designate the number of quarters in which your team will participate in the simulation, the number of ICPs in each quarter, and the order in which the ICPs must be considered. Your instructor may inform the class of the entire schedule for ICPs at the beginning of the simulation, at the end of the prior class day, or just prior to the beginning of each new quarter.

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1.1. ICP 1: Self-Service Portal [Back to TOC]

CHRO Marcia Jackson realized that enhancing each HR Coordinator’s responsibilities meant they would ultimately be able to foster greater employee effectiveness, but it would also mean they would have less time to answer routine questions and handle routine requests for employees. Currently eGS has a modest Human Resource Information System (HRIS) that includes basic information about each employee for payroll and government reporting purposes.

In order to maintain and even improve HR responsiveness to employees, Marcia knew it was necessary to expand the database to include a broader range of information and to make it accessible to employee queries on a self-service basis. That way, employees could obtain answers 24/7 without waiting for normal business hours, while the HR Coordinators could better focus on delivery of more strategically relevant services. Each Coordinator made suggestions about additions to the database.

Marcia asked your team to review possible additions to the HRIS. Since the HR budget has constraints, however, your team will need to consider each suggestion’s likely impact on KPIs and BRs. The cost of each suggestion includes installation and maintenance.

Options

1. Choose none of the self-service portal options. Cost $0. 2. Staffing Coordinator Cheryl Robbins suggested the addition of (a) all open

positions with job requirements, and (b) a directory of current employees’ knowledge, skills and abilities. This would help with employment planning, succession planning, job rotations, and decisions about internal promotions and skill-based pay raises. Cost $25,000

3. Allen Selby, Training Coordinator, suggested the addition of (a) records of

employees’ learning days, including training and management development, (b) the current schedule of available learning programs, (c) employee access to an application process for job rotations, transfers, and promotions, and (d) employee access to online career planning resources. Cost $25,000

4. Compensation Coordinator Leslie Stone suggested the addition of (a)

employees’ current salaries, (b) records of performance-related raises, (c) records of profit sharing, (d) records of past performance appraisals, and (e) information on benefits such as an employee’s share of costs for health insurance and how many vacation or sick days remained in his/her account. Employees could access their own records, while managers could access the records of those in their department or those seeking to transfer into their department. Cost $25,000

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5. Dave March, Employee Relations Coordinator, suggested the addition of (a)

the employee handbook so that employees could access the fully updated version any time they had a question; (b) employee access to policies and an application process for grievances, telecommuting, flex-time, and child care; and (c) records of employees’ business travel days. Cost $25,000

6. Leave the current HRIS as is but provide maintenance to keep its operation

consistent and smooth. Cost $10, 000.

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1.2. ICP 2: Stress Management [Back to TOC]

While reading to remain current on recent research and trends, Employee Relations Coordinator Dave March noticed two interesting statistics: (1) stress costs the U.S. economy $300 billion per year in absenteeism, lost productivity, and increased health care costs and (2) a third of U.S. workers forfeit 4 of 14 vacation days each year by not taking them. The two statistics seemed related: perhaps part of the reason for employees’ stress might be too little time off to refresh and renew themselves. How might this information apply to eGS? Dave brought it up at an HR staff meeting. “eGS executives take the issue of stress quite seriously because past research has demonstrated stress’s impact on memory, concentration, and creativity that are all vital for the type of knowledge-based service work we perform at eGS,” offered CHRO Marcia Jackson.

Training Coordinator Allen Selby added, “In addition, studies have demonstrated stress interferes with interpersonal communication and collaboration since people tend to become more emotionally volatile, irritable, and conflict-prone when stressed. “

“My proposals on Work/life Balance have been directed toward helping employees reduce stress due to commuting, business travel, and worrying about their children, but eGS’s policy on time off, including vacation, might need revisiting,” Marcia acknowledged.

After the meeting Marcia asked your team to take on the project of considering if eGS needs to do more to reduce stress in order to improve KPIs and BRs, and if so, what should eGS do? Remember, the cost of any solutions will be billed to HR’s budget for the quarter. Options

1. Choose none of the stress management options. Cost $0.

2. Provide a one-time Stress Reduction workshop. Provide literature and details on healthful exercise and nutrition, sleep, yoga and meditation. eGS has a large unused storage area. Convert this to a dedicated quiet zone, and provide twice weekly Yoga class from 12-1. Cost $20,000. Update cost in DB.

3. Require that employees take all 12 days (10 vacation + 2 personal) off each

year or lose the days. Since eGS employees tend to use only 5 vacation and 1 personal day each year, this solution means many employees will double their current time off. Stress may decrease, but it will be expensive. Cost $50,000

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4. Permit employees to bank any unused vacation days for up to two years. Include employee vacation use as one of the performance criteria for managers, in case managers have been discouraging time off. Cost $20,000

5. Create a task force to develop ways to make work at eGS more fun and/or to

help employees to relax. Dave March and your team could work with the group to develop ideas that would be feasible. If you select this option you can assume that employees respond with interest and involve themselves in creating some good stress reduction solutions. We could also allocate funds for implementing some of the ideas. Cost $10,000

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1.3. ICP 3: Engagement for Innovation [Back to TOC] CHRO Marcia Jackson attended the annual Human Resources Solutions conference put on by the Society for Human Resources Management (SHRM). A key presentation at this conference was on the topic of innovation in customer service and was delivered by Scott Henderson, CEO of InnoTrends. InnoTrends had recently won the Malcom Baldrige Quality award based on innovations in its global customer service process.

After about five minutes into the talk, Marcia began to wonder if she was in the right room. She was hoping to come away with a cookbook approach to replicating InnoTrends’ service process. Instead Henderson was talking more about employee engagement than customer service. Ultimately he pointed out that what every company should look for, and what worked at InnoTrends, was getting employees’ ideas flowing, developing a process for choosing and implementing the best ideas, and then recognizing individuals and groups whose ideas contributed to improving the company’s customer service.

Henderson pointed out that his company’s service innovations were only partially influenced by practices of other successful organizations. Primarily, and he repeated this twice, the company’s best ideas came from open-invitation collaborative discussions with all employees. The key, Henderson claimed, was getting employees highly engaged by requiring and then seriously considering input from everyone. He went on to claim that the innovation that came from this approach was very difficult to imitate by competitors because it was based on the unique individuals at the company combined with the special relationships these people built with customers and their unique needs.

Marcia had long known the value of employee involvement but she began to think about this from a very different perspective at this point. She reflected on the eight or so employees at her company who were known as the “idea people.” She became excited at the prospect of giving all employees the opportunity to participate in a more meaningful way, and she could really see the potential in this approach.

Henderson then re-stated the opportunity – “Build your own innovative service processes by tapping into the collective creativity of your organization. This will distinguish you in the eyes of your customers and provide a competitive advantage.” Henderson closed by holding up the Baldrige plaque and humbly stating “This award was not our goal – our goal was to get everyone involved in the innovation process and improve our customer relationships… but it turned out to be one heck of a reward for our employees.”

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Marcia asked your team to review possible approaches for implementing a program to improve customer service in this manner. Since the HR budget has constraints, however, your team will need to consider each suggestion’s likely impact on KPIs and BRs.

Options:

1. Choose none of the engagement for innovation options. Cost $0.

2. Establish a task force comprised of the eight “idea people,” along with one or

more facilitators and note takers. Determine how these idea people come up with innovative ideas. Capture and distribute these approaches via training sessions. Cost $35,000

3. Hire a communications consultant. Cost $20,000

4. Hire a customer service consultant and go back to the original mission of

finding the “cookbook” service approach. Cost $20,000

5. Create an opportunity for open-invitation meetings, and solicit employee input on how to accomplish this goal. Establish three communities – one to generate ideas on how to improve the flow of employee ideas, a second to create a process for selecting good ideas and a third for determining how employees could be rewarded for contributing. Cost $40,000

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1.4. ICP 4: Disaster Planning [Back to TOC]

The four HR Coordinators from eGS also attended the SHRM conference that Marcia attended. One presentation that all four agreed would be worthwhile was the session on preparing for disasters, such as storms, fires, earthquakes, pandemic diseases, vandals, and terrorist strikes. Since business losses can be substantial, planning ahead can make the difference between a small to medium business surviving or not. The main presenter, Tom Seawell, was the founder of a business that consulted with client organizations on doing just that. He urged his listeners to overcome inertia and at least start with the basics. In a disaster plan, the highest priorities are to protect the company’s employees and data. To protect employees, Tom suggested training employees on preparing and coping with disaster at home, since once their families are safe, it’s easier for employees to return to work. Tom also suggested collecting extensive contact information for employees. He mentioned that Hurricane Katrina taught Office Depot to go beyond the usual (employees’ home and cell phone numbers) to collect spouses’ cell phone numbers, home email addresses, and even phone numbers for friends and family who live out of state. To protect data, especially customer data, allows an organization to stay in operation, even if a bricks-and-mortar facility is destroyed. Data backup options range from CDs and UBS devices to storage on a remote server, the most expensive option. Companies should also consider alternative sites to meet and work, and how to get there, if buildings are unusable. After discussing what they learned and how a disaster might affect eGS at a staff meeting, Marcia asked your team to consider what steps eGS should take to prepare for disaster and how such preparations might affect the KPIs and BRs at eGS. Of course, the HR budget must cover the cost of any preparations. Options

1. Do nothing, since many of eGS’s operations are virtual anyway. Cost $0.

2. Develop training for employees on disaster planning preparations at home. Cost $25,000.

3. Collect extensive contact information and include it in the HRIS. Cost $15,000.

4. Develop an operating plan in the event that eGS headquarters is unusable.

Cost $20,000.

5. Develop customer and employee backup data at three remote servers. Cost $35,000.

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1.5. ICP 5: Organizational Climate [Back to TOC]

During the past six years of steady growth, eGS has been one very exciting place to work. Starting with founders Bob Maxwell and Jennifer Walker, the company grew to 237 FTE over six years. While the hiring of new employees over this time frame came in bursts that coincided with acquiring new customers, a simple annual average shows an increase of about 40 FTE per year. Roughly speaking, this meant that most weeks a new person was coming on board.

The first few years the employees were really a tight knit group. Everyone knew each other, large groups of 25 or more would often go to lunch together, and on Friday’s more large groups would converge to socialize at the local restaurants and clubs. In the first two years there was virtually no turnover. The company grew so fast that it provided quick advancement opportunities for its mostly young and energetic workforce.

Over the past two years, however, CHRO Marcia Jackson has noted some changes that are causing her concern. Turnover is decidedly up. Productivity is dropping modestly but steadily. Customer satisfaction scores on projects are also lower. Random exit interviews with 25 percent of departing employees reveal that there may be a general feeling that the company has become somewhat disorganized.

Departing employees claim that the work environment is slowing them down, causing rework, and that customers are feeling this and complaining. For example, one employee related a story about Sustain-Air, an irate customer who recently insisted that there was no need for it to pay for developing a second project methodology since the methodology already paid for on a prior project could be reused. The eGS employee’s boss, however, told him that part of his success would be judged on “bringing in the dollars” based on the project’s proposed price – which included the project methodology costs. The bottom line is that employees are frustrated by feeling “caught in the middle,” as they describe it.

Marcia is concerned that these issues need to be addressed quickly, as they are clearly impacting both employees and customers. She feels it may be a bigger trend that, if left unchecked, could seriously erode the company’s human capital and customer base. She is starting to believe that employees are not as happy as she assumed they were and that managers running work processes may not understand the implications of their approaches. In other words, what was a loose, creative and innovative environment a few years ago may now need to move more towards defining, streamlining, and standardizing processes to enable the company to move to the next level.

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Marcia asked your team to review possible approaches for clarifying the issues in this area. Since the HR budget has constraints, however, your team will need to consider each suggestion’s likely impact on KPIs and BRs. Options:

1. Choose none of the employee survey options. Cost is $0. 2. Since customer service and managerial decision-making are both major

aspects of work performance, contact the vice-presidents of Client Services and Sales/Marketing to develop a task force on best practices for handling customers from initial contact to project completion. Consensus between these two departments could result in much improved customer satisfaction. Facilitating the task force can be an important way for HR at eGS to ensure improved use of human capital resulting in enhanced KPIs and BRs. Cost $20,000

3. Establish a related task force to revise eGS’s performance appraisal process.

Strategically, eGS must focus on accountability and rewards for work behavior that improves KPIs and BRs. Simply maximizing Triple-Bottom-Line Profitability at the expense of customer satisfaction, however, is short-term thinking that will ultimately undermine revenue by impeding positive word-of-mouth and repeat business, as the incident with Sustain-Air demonstrates. Managers in Client Services, Sales/Marketing, and Research need to revisit and agree on the work behaviors most important for fostering KPIs and BRs. Cost $20,000

4. While improved clarity about work design and performance management

policies may reduce customers’ and employees’ frustration, eGS also needs to address the availability of new opportunities for employees both to develop their careers and their cohesion with each other. One promising avenue is to reinvent the lunches and Friday socializing of the past. Another is to develop pro bono teams of eGS employees who can apply their skills for social enterprises in the community during work hours. Both of these can foster social capital, while the community service is consistent with Triple-Bottom-Line-Profitability. Ask for volunteers to form a team that will coordinate the “Renewal of the eGS Spirit.” Cost $25,000

5. Establish a new policy whereby all departing employees go through internally

run exit interviews. Previously employees were picked at random; this new policy would ensure that all departing employees are interviewed and that the company gets the benefit of why they are leaving. Use this information to improve policies. Cost $30,000

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1.6. ICP 6: Ethics [Back to TOC]

CEO Paula Chilton was irate. “$1,100? In one month? That’s completely out of line in any case! You’d better tell me more.”

CHRO Marcia Jackson indicated that Judy Hawkins, an Industry Analyst, had accumulated $1,100 in phone charges this month, and that they were unable to allocate those to clients.

“Have you spoken to her?” asked Paula.

“Yes, briefly,” Marcia replied, “and she at first denied the calls, but then after I called the number and found it was her mother, she recanted and indicated that she did not know that she had run up that amount of personal calls. She indicated that her mother is sick and after recently completing three successful projects for different clients, and putting in lots of overtime, she felt she needed to turn more attention to her mother.”

“I am very sorry about her mother, but we have to hold the line on this somewhere! She needs to be fired, plain and simple. Did she have any other excuse for lying?” Paula wondered.

Marcia responded “She did indicate that she did not know there was any policy against using the phone for personal use.”

“That’s absurd,” retorted Paula, “She can use her common sense, can’t she? We have a clear policy that all calls must be accurately assigned to clients, plain and simple.”

“Yes,” Marcia agreed, “but technically speaking we could perhaps spell personal calls out more clearly.”

“Unbelievable,” Paula frowned. “Next are we going to issue a policy that says don’t take pens home from the office? I tell you this is basic ethics and common sense! “ “There’s more,” Marcia continued. “Her Internet usage is also outside the boundaries of our typical research databases. It appears to be a lot of shopping for her upcoming trip to her mother’s and vacation item purchases as well. So we decided to take a look at this across the company and to evaluate our internet records as well, and we found that there are issues in other departments with both personal calls and internet usage.” “So what are we talking here? Give me an aggregated number then,” Paula exclaimed. Marcia wrote down a number on a piece of paper and slid it across the table to Paula. Paula shook her head as she read the number and slid the paper into her pocket. She picked up the phone and called Donna Gomez, head of accounting.

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“Donna, are you free for the next hour? Good, get your gear and meet me in the parking lot in ten minutes. I want to play racquetball, and I’ll reserve a court. See you in ten.” “Marcia, thanks for alerting me to this. Frankly, if I were making this decision alone this minute, I’d simply fire anyone who has abused phone or internet usage for personal use, but I realize there may be other ways to handle this. Please have your team review the situation and develop some alternative recommendations.” Marcia asked your team to review possible approaches for clarifying the issues in this area. Since the HR budget has constraints, however, your team will need to consider each suggestion’s likely impact on KPIs and BRs.

Options:

1. Choose none of the ethics options. Cost $0

2. Fire Judy for lying. This incident must send a message to employees. Cost

$5,000 3. Inform Judy and other employees who have been abusing phone privileges

that they will have to pay back the costs, and then withhold these amounts from their next paychecks. Cost $10,000

4. Support Judy in time of need. Overlook the lying and abuse, assuming it was

due to stress and family issues and taking into consideration her excellent work of late. Separately issue a blanket policy that clearly prohibits personal phone and Internet use. Cost $10,000

5. Create a task force of various managers and employees to investigate and

inform the company of the situation. Explain clearly the large aggregate costs. Get feedback from employees and managers on their reaction. Develop a clear policy regarding phone and Internet use. Add this information to the company’s ethics statement and employee handbook. Cost $30,000

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1.7. ICP 7: Harassment [Back to TOC]

Loud and boisterous activity was emanating from the Sales/Marketing offices where Matt Jones, Western US Manager of Sales, and his staff worked. Tomas Picone, eGS Manager of Sales for France and Italy was in town. Tomas was revered by most in the Sales/Marketing area. Italian born, he was single, suave, and fluent in several languages with a reputation as a lady killer, mostly created by his own wild stories of life in France and Italy. Whenever he came to town, guys in Sales/Marketing and Client Services would rally around him to swap stories. Interestingly enough, for having such a reputation, he never dated anyone at work. One of Tomas’s favorite jokes was to shout at eGS women who came into the office area or just walked by. He would speak to these women with a seductive tone in a foreign language they did not understand. Some women seemed annoyed and others just laughed it off. After each woman left, he would turn to “the guys” and explain what he had just said. This always brought forth a roar of applause. Gail Rogne, who worked in Client Services had a lot of interaction with the Sales/Marketing group and was frequently the target of Tomas’s jokes. Tomas would always wink at her after tossing a joke her way. She tried her best to ignore him, but she despised the roar of laughter that would inevitably occur as she left. Following this most recent incident, Gail went straight to Dave March in HR and expressed her displeasure with this ongoing situation. While Dave had heard rumors about Tomas, he was very concerned by what Gail described and promised he would investigate. Before questioning Tomas and others present, Dave briefed his boss Marcia and Bill Hamlin, the International Manager of Sales/Marketing. Bill laughed and instant-messaged Tomas to join them in the conference room “Tomas is just kidding around. Let’s call him in and straighten this out.” As Tomas sat down, Bill said, “Tomas, tell us the last comment you made to Gail Rogne, in English please.” Tomas responded, “I told her she was like a beautiful apple, with a red blush.” Dave asked, “Did Gail ever indicate to you that she wanted you to stop making this type of comment to her?” Tomas admitted, “She didn’t seem particularly happy about it, but we were just having a good time. Surely there can’t be a problem with this.” Bill cut in, “No, of course not, Tomas. Go on back to work and congrats again on a great year.” After conferring quietly with Marcia for a moment, Dave explained, “Bill, as Gail’s employer, eGS needs to take her claim of unlawful harassment seriously enough to fully investigate what happened. While we must be fair to Tomas, environmental harassment that created adverse working conditions may have occurred. In any case, Tomas’s behavior is not appropriate for the workplace and must stop. As his

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manager, you need to make that clear to him.” Bill took a long breath and said “Look, Tomas has brought in the most advertising-based revenue of anyone who has ever been in that position. We don’t want to lose him.” “Yes, I’m aware of Tomas’s performance record, but Gail is in line for VP of Client Services when that position opens up. Losing her would also be a great loss to eGS. She has been externally recruited repeatedly over the years, and this potentially hostile environment could sway her to leave. If the environmental harassment caused her to lose or forego a promotion, this could become a case of economic harassment as well,” Marcia paused. “Even if neither Tomas nor Gail were excellent performers, the issue would still be that unlawful harassment, including jokes, comments, and stories, has no place in eGS. Apart from Gail’s right to a workplace without adverse working conditions, eGS and we as individuals can be held personally liable. Tomas’s behavior must change immediately, while we investigate and determine if further action is warranted. Understood?” Bill grimaced as he left the room, “All right. I’ll speak to Tomas again, but try to clear this up quickly.”

Options:

1. Choose none of the harassment options. Cost $0 2. Unlawful harassment cases seem to escalate very quickly in other companies,

so it’s best to avoid conversations that heighten emotions and create negative publicity. Both Tomas and Gail are valuable, and focusing on their productivity makes the most sense. Do not investigate further, so as to avoid distracting either one from work. Console Gail by pointing out that she will soon be promoted and someone else will be going to meetings in Sales/Marketing. Cost $2,000

3. Immediately implement a sexual harassment investigation process, document

all the findings and take action as the facts warrant. Make sure that Tomas understands why his behavior was inappropriate and must change permanently. Cost $20,000

4. Go to Justin Wilson, VP Sales/Marketing, and explain what is going on.

Suggest that Tomas not be invited to the head office for conferences and be kept strictly in the field. Point out that eGS is likely to lose Gail if this continues and that Tomas is more effective in the field at any rate. Be sure to mention that Matt Jones (Western US Manager) and Bill Hamlin (International Manager) are not being team players on this and mostly laugh off Tomas’s behavior. Cost $2,000

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5. Develop a policy on unlawful harassment. Include implementation of the policy in the managers’ performance appraisal instrument. Develop or purchase a training program of at least two hours, and make attendance mandatory within three months. Cost $50,000

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1.8. ICP 8: Suicide Attempt [Back to TOC]

At 9:05 AM on Monday, Robin Costello and Ken Harris from the Industry Analysts group were hurrying to a meeting when they found Marty Wallace on the floor, seemingly unconscious. Ken tried to get a response from Marty, but there was just mumbling. As Ken picked up an empty pill bottle off the floor, Robin called 911 on her cell phone. She did her best to explain what little they knew. The 911 attendant asked Robin to stay on the phone and with the person until help arrived. Further, the 911 attendant suggested that positioning a person outside the building to meet the police and ambulance would be helpful, so Ken headed for the front door.

Other workers began showing up at this point, asking what happened. News of the incident spread around the company and in another minute, the cubicles and hallways near Marty’s desk were swamped with onlookers. Just then Dave March of Employee Relations came by on his way to his office. After asking Robin what was going on, Dave told everyone else to clear the hallway, assuring them he would keep them informed. A few minutes later, the ambulance team arrived, assessed the situation, placed Marty on a stretcher, and dropped the empty pill bottle into a sealable bag. They carried Marty out quickly while one of the ambulance crew relayed additional information to the hospital on his cell phone. Marty began mumbling loudly as they placed him into the ambulance. CEO Paula Chilton pulled Dave March and several other nearby managers aside and urged, “Get people back to work. There’s nothing we can do now. We’ll let everyone know more information when we have it.” CHRO Marcia Jackson asked. “Would it make sense to briefly talk with everyone in the large conference room?” Paula replied, “They’d be better off using work as a distraction.” About an hour later Paula and Dave ran into each other again in the hallway. “I just called Marty’s family,” Dave told Paula. “I just called them about 10 minutes ago because I felt the CEO should express concern and try to console the family,” Paula responded. Although Dave felt handling this situation was clearly his role, he felt it was not a good time to mention that the family had complained that Paula’s comments were confusing and caused them further anguish. Paula then said, “OK, let’s get the troops together and have that brief chat Marcia mentioned earlier. I just want to let people know that before it gets to the point it did with Marty that they can come and talk to someone about their issues.”

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Dave was again surprised by this suggestion since he had previously taken a seminar on crisis management/debriefing techniques and thought that he should be the one to run the meeting. Paula’s idea bothered him mostly because he was concerned it would be counterproductive, and he also realized that they were likely “off the hook” until tomorrow. As he explained to Paula, “Most of the employees were upset and left in groups of various sizes to comfort each other and discuss the matter.” Dave then suggested, “Maybe we should pull together managers who are still here and develop a plan of action for the rest of today and tomorrow, or as far out as needed.” Paula replied, “Fine, make it happen.”

Options:

1. Choose none of the suicide attempt options. Cost $0

2. Provide Marty with time off to recuperate. Conduct an investigation into the situation. Find out from friends and colleagues if there may have been drug abuse or mental instability at play. If no illegal issues are involved, be generous in covering his financial needs during this time. If there is any illicit drug use or mental instability, insist on medical documentation, and then release Marty quietly and immediately from his employment at eGS. Develop sources of support for employees and encourage them to use them as needed. Cost $25,000

3. Add a basic Employee Assistance Program (EAP) that could provide short-

term crisis intervention and referral for longer-term mental health services. Develop a training program to educate employees on how to identify possible employee crisis, such as the one with Marty, and what the process would be for reporting and/or seeking help via the EAP. Cost $60,000

4. Develop a training program to educate employees on how to identify possible

employee crises, such as the one with Marty, and what the process would be for reporting and/or seeking help. Develop external sources of support for employees and encourage them to use these sources as needed. Cost $20,000

5. Develop a full scale crisis management system. Create and train an Incident

Response Team, and develop backup personnel in case a team member is unavailable. Create a basic policy and strategy for assisting employees through the crisis and (assuming there is nothing to prevent the employee from returning to work such as illegal activity) getting back to work. Determine the different possible types of emergencies or crisis, such as personal, fire, terrorism, etc. and develop plans for each. Cost $45,000

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6. Play down the situation with employees, indicating that eGS doesn’t want to make a big deal out of it or embarrass Marty or his family. Cost $3,000

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1.9. ICP 9: Union Activity [Back to TOC]

CHRO Marcia Jackson was surprised when Bill Hamlin, the International Manager of Sales/Marketing, came in to discuss possible union activity among the international sales people at eGS. “Why on earth do you suppose they want to unionize?” Marcia asked. “Unions seem to be mostly in decline, although their appeal has grown more for white collar than blue collar workers these days. But international sales people are not the typical union type, although unions in Europe are more prevalent. Did you hear any details about what they want?” Bill responded, “The international sales folks have indicated that they have been talking to people in Europe who are bragging about their union’s clout in getting better deals for them. There was some mumbling about getting steady pay increases despite poor company performance, and there is general annoyance at our discussion of curtailing the entertainment expense accounts. Those accounts are way over industry average and the average cost per deal for the sales guys is over the top. We know for a fact that our competitors are doing more with less. We are completely convinced that many of the entertainment activities are not needed to close the deals, but if a union comes in here, this will seriously hurt our chances for streamlining expenses and increasing profitability.” “This could actually seriously jeopardize the survivability of this company. Don’t these people remember that we are just staying afloat?” Marcia exclaimed “There’s more,” Bill explained. “It’s been mentioned that the pay structure, which is considered inequitable by many of the sales people, could be fixed by a union. Apparently a number of them also feel the appraisal system is unfair and that any attempts to discuss this with the VP of Sales/Marketing have fallen on deaf ears.” Marcia mused to herself that although employees have a legal right to unionize, a labor contract seriously reduces an employer’s flexibility and then closed by saying, “If this talk spreads to the rest of the company it will hurt morale.” Marcia asked your team to review possible approaches for implementing a program to make a union unnecessary. Remember that the HR budget has constraints, however, so your team will need to consider each suggestion’s likely impact on KPIs and BRs. Options:

1. Choose none of the union activity options. Cost $0.

2. Educate employees with known data and information related to the areas of concern. Present data on where eGS is positioned regarding employee benefits, compensation programs, and norms for business entertainment for international sales reps. Conduct refresher training for managers on conducting performance appraisals objectively and fairly. Cost $45,000

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3. Outsource all international sales positions. While overt discouragement of

union activity and retaliation of any kind are illegal, positions no longer within the company cannot be unionized. Cost $45,000

4. Implement a Grievance Program in order to try to quiet these dissatisfied

employee rumblings in the early stages. Cost $15,000

5. Implement a team-based approach to the employee relations committee. Invite non-management representatives to participate. Set aside funding to cover the likelihood that employees will vote for a different pay structure, health care plan improvements, and friendly substance abuse rehabilitation programs. Cost $100,000

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1.10. ICP 10: Discrimination [Back to TOC]

The rapid growth at eGS has made it quite challenging to keep up with hiring Industry Analysts with expertise in relevant aspects of the changing global economy. For example, due to the changing demographics in California, Arizona, Illinois, Texas, and New York, clients involved with markets there are indicating a need for analysts who understand the Spanish speaking community, and who will be able to build relationships with the Spanish speaking members of these clients’ organizations. Adding this qualification to all the others needed for an effective Industry Analyst has made this a recruitment challenge.

In order to ease the situation somewhat, Staffing Coordinator Cheryl Robbins has invited the hiring managers to be more actively involved in recruiting, screening and interviewing applicants. Cheryl is providing coaching and general direction as well as support for choosing sourcing options and implementing selection procedures. The basic reasoning behind this is that with the right coaching and process support, the ultimate decision should be from among 2–3 qualified applicants, with a more streamlined process that will hopefully result in faster turnaround time on hiring. Recently a hiring decision was made, however, which looks like it may result in an EEOC investigation and possible complaint by a rejected applicant. Cheryl performed a preliminary investigation and gathered some information, and CHRO Marcia Jackson has now asked your group to evaluate this situation and make a recommendation. Background Position: Industry Analyst for consumer products. Job specifications: Bi-lingual English/Spanish with fluency in both languages. Prefer 2–5 years experience doing web-based research with a consumer products focus, or equivalent experience. BS in Marketing or Economics, MS preferred. Hardworking and Internet savvy. Ability to work demanding schedule to meet challenging client time frames. 3 references.

Candidate Language Experience Degree References Notes Maria Alvarado

English first, Spanish as 2nd language

1.5 years web-based consumer research

BS in Political Science

1 excellent reference 2 good references

Seems about 25 years old Aggressive Good Spanish skills

Jose Sanchez Spanish first, English as 2nd language

18 years with 5 years web-based consumer research

BS in History, MS in Economics

3 very good references

Seems about 42 years old, Relaxed, casual Excellent English skills

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Cheryl’s investigation uncovered that during the interview most questions were asked of both candidates, although two questions were asked of Jose that were not asked of Maria. The first was “We work a lot of overtime. Can you handle that, given your age and family responsibilities?” The second was “Do you have any health conditions that would make prolonged computer use a problem?” Cheryl also discovered that Jose and Maria go to the same church, the families know each other, and apparently Maria told Jose that she had been hired, whereupon Jose politely and genuinely congratulated her. Then he hired an attorney and an EEOC action was initiated.

Options:

1. Choose none of the discrimination options. Cost $0.

2. Fight the charges by evaluating all options. Look into business necessity and

legitimate, non-discriminatory reasons as possibilities for denying Jose’s hiring. Conduct an even more extensive background check to try to find evidence for Jose’s unsuitability for employment at eGS. Cost $50,000

3. Invite Jose to negotiate a financial settlement with eGS’s attorney. Cost

$75,000

4. Develop and provide better training in avoiding discriminatory practices. Deliver training program to all managers and employees involved in recruiting and hiring. Cost $35,000

5. Offer a position to Jose. Do not admit to any wrongdoing, indicating only that

there was certainly an opportunity for him at this company. Consider offering him a signing bonus. Cost $25,000

6. Fire the manager who asked the additional questions of Jose and then

decided that Maria was better qualified. Cost $25,000

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1.11. ICP 11: Learning Organization [Back to TOC]

CHRO Marcia Jackson was eagerly eavesdropping on a conversation at a nearby table in the eGS cafeteria. The cafeteria was typically a spirited place, especially with ping-pong tournaments going on. However, the conversation at a nearby table had just gone from casual to somewhat heated, or at least excited. Marcia couldn’t tell if the participants were in fact angry with each other or just excited about something. As she continued to listen it became clear that the four people at the table were on two different client teams. Peter Smith, a Client Rep and Tina Parker, an Industry Analyst, were on the Albeson’s account and the other Client Rep Jack LaRue, along with Industry Analyst Mike Ramsey were on the presentation team of the recently failed attempt to get the Semmco account.

Mike Ramsey was speaking to those at the table. “When we decided to bid on the Semmco account we knew we were short on information and the time to put together the presentation left no room for additional research. It was like they called us on Friday and wanted the presentation on Monday! At any rate we decided to do it for a variety of reasons. However, we lost the Semmco account bid because after we did our presentation we were told our competitive information on the other vendors was a little outdated, our understanding of customer preferences in that market was not as well formed as it might have been, and we could not answer questions about several of the emerging technologies in that market space. And what you are describing, this work you just completed for Albeson’s – it was exactly what we needed. How did Albeson’s decide to target that market? That’s a pretty big change from their usual business line, isn’t it? Why don’t we know when other teams are working on collecting important data and research that would be useful to us or to other teams?” Tina Parker said, “It’s a bummer that you had to do the presentation without the right time to prep. But we all know how Chilton thinks. She thinks we know more than we do at times.” Peter Smith chimed in, “Albeson’s thinks that this market is going to be big and they wanted us to prove it out. They want to buy a company that makes products for that market, preferably located in Europe, and then they want to take advantage of those distribution channels to put that local brand name on their products. So yes, Mike, this is very different than what we have been studying for them. And we did end up uncovering information that would have helped you, but how would we have known that? We are so busy racing to finish for clients that we seldom get time to reflect on whether another team is working on related data collection. But it sure is clear that if we did have some way of knowing that the knowledge could be shared, then you guys could have turned on a dime to impress Semmco.”

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Marcia turned her seat so she was now facing the table where the discussion was taking place. “I couldn’t help overhearing your great ideas,” she said. “I agree that some sort of process to encourage sharing knowledge would be helpful. Can we just take a few minutes and do a brainstorming session right now to generate some ideas I can shop around to other managers and to Chilton? You don’t have any pressing work for a client right now, do you, Mike?” Mike looked like he was going to faint, no doubt still stinging from the Semmco rejection, but then he got the joke and everyone at the table chuckled a bit. “I do have time now,” Mike said, “and I would love to help fix this problem.” The group of them spent a good hour brainstorming all about how to become a learning organization. Marcia wrote up the ideas and asked your team to review and assess these possible approaches and choose one for implementing based on the results of your assessment.

Options:

1. Choose none of the learning organization options. Cost $0.

2. Set aside space on the company intranet for storing documents that might be sharable. Have Paula Chilton make a passionate speech about sharing knowledge. Follow this with a big Learning Company kick-off party to get people sharing! Cost $10,000

3. Develop a company training program to educate employees on the value of,

and techniques for, creating, acquiring, and sharing knowledge and further to provide examples of how a learning organization looks and behaves when operating efficiently. Cost $20,000

4. Design and implement a training program on life-long learning for employees.

This will facilitate the career development of individuals as well as document the knowledge that the company sees as important. A program like this would integrate individual interests and aspirations with company needs. Cost $20,000

5. Identify one or more pilot groups to spearhead the change. Use these pilot

groups to take a “learning organization approach to implementing the learning organization” – document the process, share it, evaluate it, improve it, etc. Cost $40,000

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1.12. ICP 12: Retirement Planning [Back to TOC]

TO: Marcia Jackson, CHRO FROM: Leslie Stone, Compensation Coordinator Leslie

SUBJECT: Pension Protection Act (PPA) of 2006

The purpose of this short report is to review trends in retirement planning, with particular attention to the newly passed PPA, in order to provide information for eGS’s next step in considering this as a new employee benefit. Perhaps the HR Analyst Team could consider several alternatives and make a recommendation.

The overall trend in employer-based retirement planning has been a reduction in defined benefit (DB) plans in which employers took primary responsibility for providing pension income; by 2005 fewer than 16 percent of U.S. workers were covered by a DB plan and many of these plans are likely to be frozen or terminated due to an aggregate estimated liability of $450 billion. Since eGS has not offered any type of retirement plan up to this point, we don’t have to worry about this.

Since 1978, defined contribution (DC) plans have largely taken the place of defined benefit plans. In a DC plan, employees are primarily responsible for saving enough and for investing the money effectively so that it can provide financial security in retirement. A number of studies have indicated that most people underestimate how much money they’ll need in retirement; overestimate how much money they’ve accumulated so far; admit that they have little interest or knowledge about investment; and fail to participate optimally in 401(k) plans available to them. With this as the backdrop, Congress passed the PPA to ensure full funding of DB plans that still exist and to encourage employers to foster employees’ retirement savings in DC plans.

While eGS has not yet offered a 401(k) plan, research on employee savings and provisions in the PPA offer a strong basis for designing a convenient way for eGS employees to develop financial security for retirement. Recent research has indicated that benefits that enhance convenience for employees are most likely to improve satisfaction and productivity. eGS can apply that finding to employees’ personal financial management. Here are key provisions of the PPA.

• 401(k) pre-tax contribution limits of $15,000 for those younger than 50 with an

additional $5,000 “catch-up” contribution permitted for those 50 and older are now permanent and subject to inflation adjustments in subsequent years.

• Employers may automatically enroll workers into 401(k) plans at no less than

3 percent of their pay and automatically increase worker contributions by 1 percent every year until reaching 6 percent. Workers must opt out to cancel participation and may withdraw their money without penalty within 90 days of the first contribution.

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• The Department of Labor (DOL) is expected to emphasize long-term capital appreciation over ultra conservative cash investments, such as money market funds, for investing automatic contributions. One likely alternative is the life-cycle (target maturity) fund that allocates investments based on investors’ target retirement year, with higher allocations of stocks for younger investors and higher allocations of bonds for investors nearing retirement.

• To avoid “discrimination testing” that may limit the contributions of highly

compensated employees earning $100,000 or more, employers must either (a) contribute 3 percent of salary for non-highly compensated employees eligible to participate in the 401(k) plan, even if they contribute nothing; or (b) match 100 percent of the first 1 percent of salary plus 50 percent of the next 5 percent of pay for non-highly compensated employees eligible to participate in the 401(k) plan. Additionally, matched contributions must be fully vested after 2 years.

• Providers of 401(k) plans can offer personalized advice on investing so long

as it is a computerized model approved by an independent third party. If the provider is an investment firm, its representatives can recommend the plan’s funds if the funds are in the employee’s best interest in order to meet the provider’s and employer’s fiduciary responsibility to employees. Provider representatives must also disclose any conflicts of interest.

Recent research offers more guidance on how eGS could encourage employees’ savings. Employees benefit most from 401(k) plans when they participate at a savings rate of 10 -15 percent (depending on age); with employer matching; in well diversified, low-fee investments. Diversification can be readily accomplished with life-cycle funds or index funds. High quality employee education on personal finance and streamlined employee paperwork can make a big difference in participation.

Costs for establishing a 401(k) plan have become more feasible, and all company costs are tax deductible. eGS need not contract with more than a couple, or perhaps one, plan provider because research has shown that employee participation is highest with only five or six investment fund choices. In order to ensure the lowest possible fees and the best possible service, eGS could use a Request for Proposal (RFP) process that clarifies exactly what is desired. Vendors must then compete to earn the right to be eGS’s sole provider.

While there’s more that eGS could do, e.g., offer a Roth 401(k) or automatic withdrawal for IRA contributions, the information in this report provides a good start. I look forward to seeing what recommendations the HR Analyst Team makes.

Options:

1. Choose none of the retirement planning options. Cost $0.

2. Offer employees suggestions about saving their own money for retirement, but do not adopt a 401(k) plan at this time. Since the PPA’s provisions were

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first effective in 2008, eGS should wait until court challenges have determined exactly what an employer may or may not do with 401(k)’s. Additionally, even though 401(k)’s have become less expensive to run in recent years, 3 percent of payroll for the matching contribution ($492,450) plus administrative costs are just too expensive for eGs right now. Cost $5,000

3. Offer a 401(k) plan without automatic enrollment, automatic investment for

capital appreciation, automatic increase, or matching contributions. This would reduce the cost to administrative fees only. With the fairly high salaries at eGS, employees should respond favorably to the opportunity to reduce current income taxes by contributing pre-tax money, even with no match from eGS. If those earning more than $100,000 are limited in what they can contribute, they can just open an IRA. Cost $50,000

4. Offer a 401(k) plan with automatic enrollment, automatic investment for

capital appreciation, and automatic increase, but without matching contributions. Create a task force of both managers and employees to research and determine the type of training on personal finance for eGS employees as well as to select the 401(k) plan provider after reviewing competitive proposals. This will create employee “word of mouth” without incurring the substantial expense of matching contributions, although highly compensated employees may still be quite limited in what they can contribute. Cost $80,000

5. Offer a 401(k) plan with automatic enrollment, automatic investment for

capital appreciation, automatic increase, and a matching contribution of 1 percent of salary. Create a task force of both managers and employees to research and determine the type of training on personal finance for eGS employees as well as to select the 401(k) plan provider after reviewing competitive proposals. This is a compromise that incorporates the major provisions of the PPA and employee involvement, with a smaller match. Cost $245,000

6. Offer a 401(k) plan with automatic enrollment, automatic investment for

capital appreciation, automatic increase, and a matching contribution of 3 percent of salary. Create a task force of both managers and employees to research and determine the type of training on personal finance for eGS employees as well as to select the 401(k) plan provider after reviewing competitive proposals. This is the option that may cost more but will not restrict the contributions of highly compensated employees (to less than the legal limit). This program demonstrates eGS’s commitment to fostering employees’ long-term financial well-being. Compared to the costs of a DB plan, this is still quite inexpensive. Cost $540,000

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1.13. ICP 13: Health [Back to TOC]

Marcia Jackson and the four HR Coordinators were having lunch in the employee cafeteria. After some small talk about what they did over the weekend, the conversation became more serious. “Dave, even though eGS is aware of the impact of stress and too little vacation time on burnout and health, I think there’s more eGS could do. I just read that overeating, under-exercising, and smoking foster chronic diseases that cost the U.S. economy $117 billion per year, and surely eGS spends its share of that on sick days and higher health care costs,” Leslie Stone, Compensation Coordinator, suggested. “You’re right, Leslie. I’ve read that more companies are screening applicants for smoking behavior because studies have shown it reduces productivity in addition to creating health problems,” agreed Cheryl Robbins, the Staffing Coordinator. “I wonder how many eGS employees are affected by these poor habits and how much eGS spends as a result. Just preaching at people won’t accomplish much, but maybe we could model some ideas from the National Business Group on Health, a nonprofit organization created by 240 large companies trying to solve some of the health care system issues facing the U.S. This group has given 22 ‘Best Employers for Healthy Lifestyles’ awards to companies that encourage employees to live in healthier ways,” Dave March, Employee Relations Coordinator, replied. “Do you know any examples of what the 22 winners did to encourage employee health?” asked Marcia. “There’s a very interesting web site (www.businessgrouphealth.org) that describes what all 22 did, but the focus was on encouraging exercise and weight management while discouraging tobacco use. The ideas put into practice by the winners include walking paths around workplaces, online customized health plans, employee discounts for gyms and weight-loss clinics, personal coaching, and offering healthier choices in employee cafeterias and vending machines. I sure appreciate that eGS has started offering more fresh vegetables and fruit in the cafeteria. Just notice, we’re all eating a salad today!” Dave smiled. “While health care costs at eGS have increased significantly almost every year since we started offering health insurance to employees, I wonder if many of these ideas aren’t too intrusive. After all, exercising and eating are very personal choices,” Allen Selby, the Training Coordinator, frowned. “That may be, but employees’ health has a major impact not only on their personal lives and longevity, but on their performance at work. It makes sense to me that eGS would at least look into alternatives for encouraging healthy employee habits. Maybe this would be a good project for the HR analyst team to take on,” Marcia decided.

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Options

1. Choose none of the health options since eGS already offers enough to foster health and balance. Cost $0

2. Information from eGS’s health insurance company has indicated health care

costs, and therefore premiums, have risen over the past three years. The report indicated that 35 percent of eGS employees do not take advantage of age-appropriate preventive care. This could result in even higher costs for illnesses that receive no attention until more expensive, advanced care is required. Ask Justin Wilson, VP of Sales and Marketing, to have some of his people design a persuasive message campaign for eGS employees and families to take full advantage of the available preventive care. Cost $15,000

3. The Patient Protection and Affordable Care Act (PPACA) of 2010 will mean

some changes for eGS but not many. eGS has provided health coverage for employees for several years already. eGS is not a “small” business (50 or fewer employees) given special tax credits for providing coverage. In 2010 policies for families must continue to cover children until they are 26, so this provision must be added to eGS’s policy. The law also bars eGS’s insurer from imposing a lifetime coverage cap, so this change must be made. By 2018 eGS’s premiums must remain below $10,200 for single coverage and $27,500 for family coverage or employees will pay a 40 percent excise tax. While the law has indeed been passed, the ways in which it will be implemented will continue to evolve. Ask Leslie Stone to attend a conference on the new law at the Employee Benefit Research Institute (EBRI) and subscribe to its newsletter so she can knowledgeably advise eGS on how to comply fully with the PPACA. Cost $5,000

4. People often underestimate socially undesirable behavior such as smoking or

overeating when completing a survey. Additionally, since people often cannot predict how useful or enjoyable something like a walking path around the workplace might be, a survey of eGS employees’ views on the ideas used by 22 winners of the award might not add much to making decisions. It makes more sense to create a task force of employees to review the ideas on the web site and select five for implementation. Given the costs of health care, sick days, and lower energy at work, any idea that might foster healthier habits could be well worth it. Cost $30,000

5. The Patient Protection and Affordable Health Care Act of 2010 permits

employers to offer employees the incentive of steeply discounted premiums for reaching health-related goals such as maintaining “normal” weight, blood pressure, blood sugar, and cholesterol. If someone has a medical condition that prevents reaching one goal, s/he must be offered a reasonable alternative. Some eGS employees may believe that people who make healthy choices that keep health care costs low should not be subsidizing the premiums of those who do not live a healthy lifestyle. Others may believe that those with health problems should not be further burdened with higher

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premiums. Initially, discounts for reaching health goals cannot exceed 20 percent of an employee’s premiums, but are allowed to increase to 30 and even 50 percent in 2014. Employees’ co-payments and deductibles could also be waived for reaching health goals, while other employees could receive surcharges. Cost $25,000

6. Consistent with the law, develop three tiers of health insurance coverage,

premiums, deductibles, and co-pays. Employees who are overweight and/or smoke but refuse to participate in eGS programs for healthier lifestyles will pay the highest percentage of their costs. Employees who are overweight and/or smoke but agree to participate in eGS programs for healthier lifestyles and make progress will pay an intermediate percentage of their costs. Employees who are not overweight and do not smoke will pay the lowest percentage of their costs. This approach will place the responsibility for healthier choices on individuals and will hopefully provide incentive for change. Cost $25,000

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1.14. ICP 14: Sustainability [Back to TOC]

Chief Financial Officer Sam Richards stuck his head into CHRO Marcia Jackson’s office door. “Marcia, do you have a minute?”

“Sure, Sam, come on in,” said Marcia, gesturing for Sam to sit down. “As you and I both know, eGS is challenged with growing past its financial break-even point, so most of us around here are pretty obsessed with eGS’s quarterly numbers. But it’s also true that when Bob and Jennifer founded eGS, their vision included the triple-bottom-line of social, environmental, and financial performance. That vision was part of what drew me to eGS, and I think that’s true for quite a number of employees: the desire to be part of a company that stands for more than just making money. Lately I’ve been wondering how we can tackle some element of social or environmental performance in a way than can also have a financial return for eGS. Today I saw an article that just might give us a good starting place,” Sam said enthusiastically. “Don’t keep me in suspense, Sam. What’s your idea?” asked Marcia. “Even though eGS tries to structure work to be virtual as much as possible, employees still log thousands of business-related miles on their cars each year. If their cars were hybrids getting 45 miles or more per gallon, reimbursement costs for business travel would decrease and carbon emissions due to eGS’s business activities would plummet. This would be a good step toward improving eGS’s environmental performance. Several companies, including Bank of America, Timberland, and Google, are already giving their employees cash incentives to buy hybrid cars,” Sam answered. “Do you have any more details?” Marcia probed. “The cash incentive is taxable, of course, and can be included with an employee’s paycheck. Bank of America offers a $3,000 cash incentive for employees who live within 90 miles of their workplace. Timberland offers the $3,000 incentive plus a reserved parking space near the front of their office building. Google, of course, has offered even more: either a rebate of $5,000 on a hybrid purchase; $2,500 toward a leased hybrid; or a donation to charity for walking or biking to work. Since the federal government’s tax credit on most hybrid purchases has ended, workplace incentives are more important than ever to encourage people to buy cars that reduce greenhouse gas emissions. What do you think?” Sam paused. “I think it’s a great idea for an employee benefit if eGS can afford it. Let’s turn this over to my HR Analyst Team and see what its recommendation is. Leslie Stone and I will get back to you in a few days, OK?”

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“Sounds like a plan. Talk to you soon,” Sam smiled as he stood up and headed for the door.

Options:

1. Choose none of the sustainability options. The other companies that Sam mentioned are much larger than eGS and have more money to spend. Cost $0

2. Offer a rebate of $500 to those employees who log 1,000 business-related

miles or more per year in a hybrid car. This will keep the costs down but allow eGS to issue a press release on the program. Hopefully, this will make eGS more attractive to potential clients and employees with a sustainability orientation. Cost $20,000

3. Develop and post a half-time position to coordinate sustainability efforts in

eGS. The selected employee’s manager will be consulted and assisted with redistributing the employee’s work so that operations continue smoothly. This will provide an opportunity for eGS to identify employees passionate about the company’s environmental performance. It will also create an internal developmental opportunity and greater momentum for pursuing one element of Triple-Bottom-Line-Profitability. Cost $25,000

4. Offer a rebate of $1,000 to all employees for purchasing a hybrid reaching 45

or more MPG. In all likelihood, $500 won’t provide much incentive. This is a concrete idea that can create some “buzz” in eGS while the task force is gathering more systematic data. Cost $50,000

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1.15. ICP 15: Generational Diversity [Back to TOC]

Gail Rogne, VP of Client Services; Christopher Wong, VP of Research; and Justin Wilson, VP of Sales/Marketing, were having their weekly meeting to coordinate new and prospective clients’ work. “It may be just me, but have you noticed how the three new people we hired seem smart and knowledgeable enough to do a good job, but not at all willing to put in extra time at night or on weekends if we need to give an extra push on a project?” Christopher asked.

“What I’ve noticed is a belief that technology will ‘fix’ any errors or inattention to details, which means that I have to check more of their work before it goes to clients. As our client base grows, I’m feeling increasingly concerned about guaranteeing quality control since this takes more and more of my time,” commiserated Gail.

“I haven’t wanted to complain, but since you brought it up, Chris, I’m finding the last couple of sales reps I hired have the attitude ‘it’s only a job’ combined with ‘when will I be promoted even though I’ve only worked here a short time.’ How do we motivate employees who think this way? And how do we retain them since we obviously can’t promote them before they’ve even mastered the job for which they were initially hired? Or do we even want to retain employees with attitudes like this?” Justin wondered.

Training coordinator Allen Selby overheard part of the conversation as he walked by the doorway of the conference room, paused a moment, and turned back to stick his head in the doorway. “I couldn’t help overhearing the concern and frustration in your voices about some of our new employees. Sounds to me like we may have a case of differences between generations going on here,” Allen offered.

“What do you mean, Allen?” asked Justin.

“Have you read anything about Generation X, the Baby Boomers, or the Millennials? A generation is a peer group born over a period of 15-20 years that tends to have similar values and expectations because they experienced common phenomena while growing up. The state of the economy during one’s youth can have a major impact on work values and spending patterns as an adult. The differences in outlooks on life and work for people in different generations are as profound as the cultural differences we normally associate with workplace diversity – and can cause as many misunderstandings if not addressed,” Allen explained.

“Can you give us any examples?” asked Christopher.

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“Sure. The older generations consist of the Matures (born prior to 1946) and the Baby Boomers (born 1946-1964), while the younger generations are the Generation X’ers (born 1965-1980) and the Millennials (born 1981-1999). Matures and Boomers tend to have the following beliefs: A job is what you are. Good things come to those who wait. We have to have a system for everything. Technology will never overcome the value of hard work. In contrast, X’ers and Millennials tend to develop these beliefs: I work to live, not live to work. A job is a contract not a calling. I have little patience for anything I see as a meaningless task. I must prepare for when (not if) I need to change organizations. Management should be partners with employees. Life is too short to pay dues. As you can see, these are significantly different views of what should go on at work,” Allen continued. “As I listen to your descriptions, Allen, I agree that the problems we’ve been discussing today are probably due to generational diversity. But what should we do about it?” Gail wondered.

“Well, solutions could range from doing some reading to completely redesigning work processes at eGS. Maybe I should mention this to Marcia and ask her to delegate it to the HR Analyst Team,” suggested Allen.

“Please do and ask them to hurry. We need help before we lose our patience with the new employees – or the new employees lose theirs and go somewhere else,” Chris laughed.

After hearing Allen’s diagnosis of the management issues with the younger employees, Marcia agreed that your team should consider alternatives and make a recommendation. As always, consider the impact on KPIs and BRs as well as costs.

Options

1. Choose none of the generational diversity options. Cost $0.

2. Send an email to all employees directing them to www.gentrends.com to do some low-cost reading about generational diversity. If employees want to discuss the readings, they could meet over lunch in the company cafeteria – on their own time. Cost $1,000

3. Have Allen design a two-hour online training required for all employees. This

will allow everyone at eGS to become aware of the issues without taking people away from their work for long. Cost $15,000

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4. Have Allen design and deliver a half-day face-to-face training that permits discussion. In addition to some basic information about the four generations, the training could emphasize short cases and role-plays based on incidents at eGS. Allen could obtain the material for the learning activities by asking employees to contribute anonymously through group brainstorming software. Cost $40,000

5. Create groups with four to six people, half from the younger generations and

half from the older generations. Provide the budget for each group to go out to lunch. In addition to building rapport, ask the groups to determine how the members of different generations can exchange mentoring from each other. For example, Boomers and Matures could provide coaching on managerial dilemmas while X’ers and Millennials could offer guidance on social networking. Alternatively, groups might want to identify a community project they could collaborate on. This approach could enhance social capital, intellectual capital, and eGS’s community contributions.. Cost $20,000

6. Have Allen work with Compensation Coordinator Leslie Stone to redesign

eGS’s work processes and reward systems to be more motivational for X’ers and Millennials. Conduct a brief training with Matures and Boomers to ensure they understand the reasoning behind the changes. Cost $60,000

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1.16. ICP 16: Off-shoring [Back to TOC] CEO Paula Chilton called a meeting of her executives for 10:00 Monday morning. CFO Sam Richards, CHRO Marcia Jackson, and the three VPs were seated around the conference table, ready to work by 9:55. Newly promoted Gail Rogne, VP of Client Services, leaned over to Christopher Wong, VP of Research, and whispered, “I wonder what Paula wants to discuss. It’s unusual for her not to send an agenda before the meeting.” VP of Sales/Marketing Justin Wilson shrugged, “I guess we’ll know soon enough.”

Just then Paula Chilton walked to the end of the conference table and began a power-point presentation. “Good morning everyone. As you know, growing eGS to full profitability by providing excellent service to our clients at a competitive price is our ongoing goal. While our clients mostly seem satisfied and our revenues are acceptable, profits are lower than we’d like to see them. Up until now, about 95 percent of our mostly virtual workforce has consisted of U.S. citizens living in and operating from the U.S.” She continued, “The time has come to revisit that decision. Strategic question: Would our key performance indicators and business results improve if the national origin and location of at least some of our employees changed? While this appears to be primarily a question that I should address to Marcia, many of the changes would affect analysts in Client Services and Research, so to save time, I called you all together today to raise the issue. What I propose is to hire people in India to perform at least 50 percent of the analyst work in order to save money. Our current employees can travel to India to train their replacements as a condition of receiving their severance packages. That would ensure continuity. In addition, Allen Selby can coordinate training for the new employees in India to ensure they’re fully knowledgeable and up to speed. Initial reactions?”

The five executives sat in stunned silence for 90 seconds, looking around the table and at their notebooks. Finally, Marcia began, “You’ve taken us by surprise, Paula. While off-shoring has provided reduced costs and in some cases more productive IT workers for many U.S. companies, it works best as a strategy when intimate knowledge of the home culture isn’t required and when the work performed isn’t highly interdependent with client interface. Both of those conditions apply in eGS’s case. I suggest that your proposal remain completely confidential – that nothing be said to anyone outside of these four walls until we’ve had a chance to evaluate the advantages and disadvantages of the idea. This idea, if prematurely disclosed, could cause us to lose some of our best analysts. I’d also like to suggest that we broaden the question to brainstorming ways to cut costs and increase revenues. Maybe off-shoring isn’t the only or even the best way to accomplish our strategic goals.”

Paula and the others nodded in agreement with Marcia’s comments. “OK, you may be right Marcia. Maybe I’ve jumped the gun to action before considering all the angles, but can we at least agree that we need to improve our business results and that we’re all committed to achieving that in the next six months, even if significant

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changes need to be made?” The five executives again nodded. “While some ideas may concern human capital in eGS and others may not, I’d like to offer the services of the six of us in HR as internal consultants as you proceed with research, benchmarking, brainstorming and strategy sessions in your units. Additionally, my temporary HR Analyst Team can help us all to summarize findings and develop our recommendations. Just let me know what you need,” Marcia said.

“Let’s meet again in one month’s time with at least three recommendations each. Thank you, Marcia, for adding some larger perspective this morning and for offering to help all units,” Paula shook each person’s hand before leaving the meeting.

While the other executives are determining what they need, Marcia has asked your team to prioritize changes related to human capital in eGS that could improve KPIs and BRs. Since cutting costs seems to be on the CEO’s mind, any additional expenditures will have to more than pay for themselves in what they yield.

Options

1. Choose none of the off-shoring options. Cost $0

2. The CEO’s idea on off-shoring analyst work could be very effective. Bank of America is known for having U.S. employees train replacements in India as a condition of receiving their severance package. Move ahead aggressively and lay off about half the analysts from both Industry Analysts (no client contact) and Client Project Analysts (heavy client contact.) Proceed to research the firms in India that could serve as providers. Naturally, this tactic is risky, and will make many employees unhappy, but it could cut costs substantially. Perhaps the work of all three accountants could be off-shored too. Cost $100,000 (but with the potential to save far more in the first year)

3. Take a deliberate but rational approach to considering off-shoring. While the

Industry Analysts are a smaller group than the Client Project Analysts, and so would be a lower cost savings, they have no client interaction so the change would not affect customers directly. Consider targeting the Industry Analysts who have no client contact. At a minimum, prior to taking any layoff action, thoroughly investigate potential providers, and try to determine if initial cost savings can be used to facilitate the transition of displaced employees into other positions or other companies. Cost $20,000

4. Implement a small test program with select clients and a pre-selected India-

based provider firm. Target the Client Project Analysts who have client interface responsibilities. Run the program for a brief time and assess the results. Cost $25,000

5. Focus on cutting costs. Consider furloughing all analysts at 10 percent or

laying off 10 percent of analysts. With a furlough, all analysts would receive a 10 percent cut in pay and work 10 percent less each month. With a lay-off, the remaining analysts will simply have to take on all client work. While either

39

plan may meet with resistance, more jobs in the U.S. would be preserved than with off-shoring 50 percent as the CEO initially proposed. Cost $75,000 (but with the potential to save far more in the first year)

40

1.17. ICP 17: Recruitment Sourcing Effectiveness [Back to TOC] At a recent company meeting, CEO Paula Chilton was proud to announce that eGS has a number of large new clients in the sales/project pipeline. In light of this news, company executives organized a meeting with the Board of Directors to discuss various strategic plans to expand the company’s operations to serve their growing customer base. Currently, eGS has 237 full-time employees. Of these, 155 (or 65%) employees are analysts who work directly with the customers in the Client Services Department. These employees are at the heart of eGS’ operations and are vital to the success and growth of the company. Unfortunately this group has also had the highest turnover among the various groups at eGS. After hearing this news, CHRO Marcia Jackson and Cheryl Robbins immediately called an internal meeting within the HR Department to determine how to meet the expansion requirements for this group of important employees. The decision was made to analyze the historical results of the recruitment sources used by eGS. eGS is seeking to expand their Client Service Department by hiring perspective candidates who will continue to grow within the company and will remain loyal, long-term employees. However, not every recruitment source has produced valuable employees in the past. Thus, Marcia Jackson and Cheryl Robbins have tasked your group with evaluating the company’s recruitment sources. They have also asked your group to make recommendations, if needed, on which recruitment sources you believe the company should focus upon more heavily as opposed to others. Yield-ratios express in numeric terms a percentage or ratio of applicants who move from one stage in the recruitment process to the next. For example, 26 applicants applied for an analyst position through Careerbuilder.com, but only 20 were determined to be potentially qualified for the position. Thus, the yield-ratio of “potentially qualified” applicants from “Careerbuilder.com” is 1.30 (26 / 20). This value expresses the fact that in order for eGS to generate 1 potentially qualified applicant from Careerbuilder.com 1.30 applications must be received from this particular recruitment source. Yield-ratios closest to 1.00 are the best, although this may not be achievable in practice. Ratios can also be used to express the costs associated with recruiting candidates. For example, total recruitment costs for eGS are $8,100 and 35 candidates accepted positions within the company. Therefore, the total average recruitment cost per new hire is $231.42 ($8,100 / 35). Recruitment costs are focused on the outward facing costs. Internal process costs are considered to be similar on average for all candidates and are not included in these calculations. Our focus is on quality yields of candidates from sources. Calculate the yield-ratios for each of the recruitment sources throughout the various stages within the recruitment process on the appropriate spreadsheet provided. Once these ratios have been calculated, discuss within the group the implications of the data generated. Next, as the internal consulting team for eGS, your group must select one of the options found at the end of the case.

41

To assist you in completing your task, your group has been given a data sheet for which key metrics need to be calculated and evaluated to uncover the most viable recruitment sources that produce top performing employees (see below.)

Recruitment Source

Number of Apps.

Potent. Qualified

Invited for

Inter.

Qualified and

Offered Job

Acc. job

One-Year

Surviv-al

Above-Ave.

Rating

Total Recruit

Cost

1 Careerbuilder.com 26 20 15 7 5 3 1 $ 313.35

2 Monster.com 20 14 8 7 5 2 0 $ 313.65

3 Hotjobs.com 21 16 10 5 2 2 1 $ 225.00

4 Employee Referrals 6 5 3 2 2 1 1 $ 214.28

5 Newspaper Ads 19 5 3 1 1 0 0 $ 675.00

6 4-Year University 18 12 8 6 5 4 3 $ 725.00

7 2-Year Junior College 11 6 3 2 1 1 0 $ 130.00

8 Technical Institute 10 4 2 2 1 1 0 $ 125.00

9 Campus Recruitment Fairs 17 7 5 4 3 2 1 $ 675.00

10 Mailed-in Resumes 11 4 3 2 1 0 0 $ 375.00

11 Internship Programs 15 12 7 6 4 3 1 $ 1,200.00

12 Informational Interviews 12 10 6 4 2 1 1 $ 600.00

13 Job Postings in Trade Magazines 6 4 2 2 1 1 0 $ 228.33

14 Private Employment Agencies 8 6 4 3 2 2 2 $ 2,400.00

Totals for all sources 200 125 79 53 35 23 11 $ 8,200

42

Use a table like this to store your results. Build this in Excel for ease of handling and computing the values.

Recruitment source

Potentially Qualified

Invitation for

Interview

Qualified and

Offered Job

Accepted job

One-Year

Survival

Above-Average Rating

Avg. Cost Per Hire

1 Careerbuilder.com

2 Monster.com

3 Hotjobs.com

4 Employee Referrals

5 Newspaper Ads

6 4-Year University

7 2-Year Junior College

8 Technical Institute

9 Campus Recruitment Fairs

10 Mailed-in Resumes

11 Internship Programs

12 Informational Interviews

13 Job Postings in Trade Mag.

14 Private Emp. Agencies

Average for all sources

Options:

1) Do nothing since the data shows that the recruitment sources utilized by eGS have been sufficient. Cost $0.

2) In order to cut costs and become more efficient in the recruiting process, eGS will eliminate all physical print media to post jobs (i.e. newspaper ads and job postings in trade magazines). Cost $0.

3) Entice employees to recommend more colleagues in the future by creating an extrinsic reward system based upon the hiring of these referrals in the form of monetary bonuses. This reward system should increase employee morale. Cost: $6,500.

4) Create a more competitive paid internship program in which only the “best-of-the-best” will be selected to work at eGS. Interns will be selected solely upon their educational backgrounds and detailed essay on a selected topic relevant to the industry. Cost: $0.

5) Eliminate recruiting through Private Employment agencies due to the costs. Cost: $0.

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6) Increase budget of online recruiting sources only, eliminating all other recruiting sources, since this is the way of the future and the costs are reasonable. Cost: $0.

7) In order to cut costs associated with recruiting, eliminate the internship program since it is ineffective. Cost: $0.

8) Improve presence at campus recruiting fairs by dedicating a team of recruiters to work in conjunction with colleges and universities to increase the awareness of eGS among students. This also will allow eGS' recruiters to work more closely with colleges and universities to prescreen candidates and offer presentations to students directly through student-run organizations. Cost: $5,000.

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1.18. ICP 18: Selection Process [Back to TOC]

Since the inception of the company, co-founders Bob Maxwell and Jennifer Walker believed that effective utilization of intellectual capital would create a distinct competitive advantage for eGlobalServe among their competitors. In order to fulfill this vision, CHRO Marcia Jackson and Staffing Coordinator Cheryl Robbins have found it beneficial to hire candidates with knowledge, skills and abilities (KSAs) that include congruence with the core values held at eGS. During a recent presentation to the company, Bob Maxwell described part of the eGS Mission as follows: “It is our goal to provide our customers creative solutions to their dynamic business challenges based upon the vast knowledge, creativity, and diversity of our human capital. We value people who are innovative leaders and take the personal initiative to develop deep expertise in the industries of our clients in the Health Care, Education, and Sustainability industries.” Last month, Eric Shero, who was a top performing Industry Manager for the Switzerland and Germany region, retired from the company and must be replaced. Eric was an outstanding employee who was admired and valued for his insight, knowledge and experience. He was a maverick in the sustainability industry and took to heart many of the sustainable initiatives while the movement was still in its infancy. Eric was a highly sought knowledge worker at eGS and epitomized its deepest values. During the last month, the Human Resource recruitment committee has been hard at work to narrow down the applicant pool to the final five. Cheryl Robbins has asked your group to evaluate the strengths of each of the final five candidates and rank them accordingly based upon the position description and company values. eGS has a strong tendency to promote from within whenever possible. During the last several years of growth, current employees have been given opportunities to step into bigger and more important roles. To complicate matters in this case, however, co-founder Bob Maxwell has adamantly pressed CEO Paula Chilton to hire his nephew Kevin Maxwell for the position; in fact he seemed to act as if it was a done deal. Kevin has been selected as one of the final candidates. Read all of the materials within this case study to become more familiar with the problem. This exercise requires a spreadsheet where you will rank the KSAs most important to eGS and then rate candidates based on their relative position to each other with respect to those KSAs. Build a “Candidate Ranking and Rating” spreadsheet as follows:

45

Experience Education Leadership Innovation Diversity Sustain. Lang. Software Candidate / Rankings 8 7 6 5 4 3 2 1 Total

Jocelyn DeSalle

Marcus Richardson

Selena Rodriguez

Kevin Maxwell

Scott Larson

Read through each of the final five resumes and rate the strength (based on a scale of 1 – 10; 1 being the lowest and 10 being the highest) of their KSAs in accordance with those which are important to eGlobalServe. Each KSA has already been ranked in order of importance (for example Experience is ranked 8 – the highest.) To calculate the weighted total for one attribute for a candidate, multiply the KSA ranking (for example 8 for Experience) by the KSA rating your group assigned each candidate. For example, maybe you rated one candidate with 5 for Experience. That candidate would get 40 points (8x5=40) for the Experience KSA. Sum all the KSA Ranking/Rating scores to get the weighted total. Cheryl Robbins has asked your group to evaluate the strengths of each of the final five candidates and rank them accordingly based upon eGS’ position description and important company KSA’s.

Begin Job Description

Industry Manager/Senior Market Research Analyst

Exciting opportunity to bring your Market Research and Competitive Intelligence skills to this multi-industry trends analysis company! Primary focus on German corporations and associated industry and market trends. Responsible for providing complete, objective, comprehensive information about current and future markets, product performance, customers, and competitors. Working individually and in teams, provides content and generates intelligence via research of multiple data sources, including the internet, commercial, government, and proprietary databases. Manage secondary and primary market research analysis, creates financial and market models, and provides analytical assistance to support decision-making within the organization and for clients. Must be willing to take responsibility for developing expertise.

Responsibilities include:

• Conduct primary market research in conjunction with key customers. Manage vendor relationships and the research process. Investigate key questions,

46

summarize findings and provide information to commercial customers and product teams.

• Work with Sales Operations to identify and track key performance metrics for brands and prepare quarterly updates for senior management

• Use secondary marketing research sources, understand their applications and limitations, and effectively apply data resources to projects. Summarize secondary data, critically evaluating information and drawing appropriate conclusions.

• Monitor the competitive landscape and provide regular updates of any developments of competitors such as clinical trial completion, publication of data, or change in regulatory status

• Support the Life-Cycle Management process with revenue forecasts and commercial assessments as needed

• Support business development with commercial assessments as needed. • Create and/or refine forecasts as needed for different indications in response to

different market events as requested

Required:

• 5+ Years experience in successful market research environment assessing industry trends.

• BA degree with demonstrated high academic achievement, ideally in business or field relevant for market research.

• A relevant Master’s degree would be a plus. • 2+ years successful leadership experience in a market research environment.

Preferred:

• Fluency in German extremely helpful and highly desirable. • Experience with market research tools such as (in order) Mintel Oxygen,

IBISWorld, and SRDS Local Market Audience Analyst (or Lifestyle Market Analyst.)

• 2+ years applying strong logical skills associated with numbers and proficient with computer skills with focus on Microsoft Excel. MS Word and PowerPoint experience needed as well.

• Demonstrated interest in sustainability. • Demonstrated general leadership experience.

End Job Description

47

Begin Candidate Summary Sheet Name: Jocelyn DeSalles Education: Université de Montreal, BS in Business Administration, BA in Communication, 2003 Software: IBISWorld, Mintel, MS Excel, MS Word, MS PowerPoint, MSSQL Language command: Fluent in: French, English, German Employment: Unity Online INC, Research Analyst Associate, 2003-2005 Palm Advertising, Market Research Analyst, 2005-2007 Palm Advertising, Team Leader -Senior Research Analyst,

2008 – Present Awards and Recognition: Top Performing Analyst, Palm Advertising, 2007 Excellent Customer Service Award, 2006 Sustainable Initiative: Urban GreenSpace, Volunteer Name: Marcus Richardson Education: University of Northern Iowa, BS in Accounting, 2001 Software: IBISWorld, Mintel, MS Excel, MS Word, MS PowerPoint, Peachtree, Quick Books, Lifestyle Market Analyst Language command: Fluent in: English Employment: Keypoint Solutions Inc., Accounts Receivable Clerk,

2001 - 2003 Armond & Platt, CPA Firm, Staff Accountant, 2003 – 2006 Global Market Research Inc., Project Leader -Market Analyst, 2006 – Present Awards and Recognition: Received $5,000 in bonuses for innovative ideas, 2008 Named leader of innovative group, 2008

Award for Excellence, Community Contribution, NAACP Rochester Youth Council, Iowa

Sustainable Initiative: Community leader of urban gardening group Teaches classes on performing energy auditing Performed an energy audit at Armond & Platt, CPA Name: Selena Rodriguez Education: Arizona State University, BS in Marketing, 2006 Software: IBISWorld, Mintel, MS Excel, MS Word, MS PowerPoint, MSSQL Language command: Fluent in: Spanish, English, German Employment: Nikels Research Inc., Marketing Intern, 2006 Nikels Research Inc., Project Leader - Research Associate, 2007 - 2009 eGlobalServe Inc., Analyst, 2009 – Present Awards and Recognition: Highlighted within company newsletter as an up-and-coming

48

industry star, 2010 Named Innovative Employee of the Year, 2009 for her leadership role on the Innovation Committee

Hired at Nikels Research, Inc. based upon her Outstanding Intern award during internship, 2006 Received $2,000 for performance appraisal bonus, 2009 Sustainable Initiative: Named leader of group which implemented cost saving sustainable practices at the San Francisco Chronicle President of GreenImpact group at Arizona State Univ., 2005 GreenPeace Volunteer, assisted in Hurricane Katrina relief efforts, Relief Division-Leader, 2005 Name: Kevin Maxwell Education: University of California, Davis, BS in Biology, 2002 Software: MS Excel, MS Word Language command: Fluent in: English / Intermediate: German Employment: Generaltech Inc., Clinical Laboratory Technician, 2003 – 2007 AFB Research, BioMedical Research Analyst, 2007 – 2008 BiologicSolutions, Inc., Senior Lab Technician, 2008 – Present Awards and Recognition: Won “Best Contribution” in idea generation group, 2007 Received $3,500 for Innovative Process Award, 2007 Received top performing employee reward, 2006 Recognized by CEO for outstanding performance, 2008 Sustainable Initiative: Regular guest lecturer at various sustainability conferences in biomedical field

Member of local victory garden collective Name: Scott Larson Education: Northeastern University, BS in Economics, 2005 UCLA, Masters in Business Administration, 2007 Software: Mintel, Lifestyle Market Analyst, Excel, Word, PowerPoint,

Access, Publisher Language command: Fluent in: English, / Intermediate: French Employment: US Dept of Labor, Occupational Research Analyst, 2007 – Present Awards and Recognition: Winner Individual Contributor Award of Idea Incubator

Initiative, 2009 Sustainable Initiative: Home gardener and composter, Urban GreenSpace, Volunteer End Candidate Summary Sheet

49

Options

1. Choose none of the candidates. Our team believes that none of these has the right mix of skills. Cost $0

2. Heed the wishes of co-founder Bob Maxwell by welcoming his nephew Kevin

into the organization. Kevin is very familiar with the company’s founding and vision from hearing his uncle Bob talk about the company’s growth throughout the years. Cost $54,000.

3. Hire Scott Larson. Throughout Scott’s interview, the interviewer was

extremely impressed with Scott’s personality and spoke highly of his accomplishments. He also pointed out Scott’s desire to work individually on projects. Previous employers spoke extremely highly of Scott’s performance and made it a point to highlight various contributions he made with his individual performance. Cost $68,000.

4. Hire Selena Rodriguez. The interviewer who sat with Selena described her as

ambitious, respectful, motivated, and someone who fits well into the ranks of eGS. She is currently well-respected by her peers and managers. Also, Selena fits into various minority demographics (Hispanic and female) and increases the company’s diversity. Cost $64,000.

5. Hire Marcus Richardson. Marcus’ interviewer was impressed by his

background and dedication and commitment to sustainable initiatives both in his community and globally. She stated that Marcus is a dedicated and motivated individual, but was concerned that his personal interests did not match those of the company’s culture, although she did not elaborate. Cost $75,000.

6. Hire Jocelyn DeSalle. During her interview, the interviewer made several

notes regarding Jocelyn’s answers to situational questions and was very impressed with her quick thinking and innovativeness. He also found out that Jocelyn is relatively new to the sustainable movement, but has spearheaded an urban gardening group and has become her group’s voice to lobby city council to create more green spaces in her community. Cost $71,000.

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1.19. ICP 19: Employee Layoff [Back to TOC] “We just lost the Biggs account.” CHRO Marcia Jackson announced to the Human Resource Coordinators. “It was our second biggest account and without that extra revenue we have to cut $500,000 from our expenses. I think layoffs are the only way.”

Leslie Stone, the Compensation Coordinator, spoke up. “How soon do we need to decide?”

“Rumors are already circulating which, of course, is hurting morale. Plus, the company benefit packages are renewing in one month, so we need to have the layoffs in effect before then. Because of this we are getting a lot of pressure from the CEO to make this decision swiftly. She wants this handled, so you must move on this immediately to finalize all aspects of the layoff. Let’s just get this done,” Marcia answered.

The Coordinators compiled a list and went through the possible layoff candidates. They determined that two of the project teams, the two that worked with the Biggs account, were on the cutting block. The two managers on the separate project teams are Erin Cory and Andrew Chilton. Erin is uniformly respected for her management skill, but the two teams have had a number of cooperation issues. The cause is believed to lay mostly with Andrew, who is considered aggressive and uncommunicative. He has even, on occasion, instructed members of his team to redo work done by Erin’s team and then handed this into the client. Significant inter-team friction and lower productivity have resulted.

Once the list was compiled, the Coordinators approached Marcia Jackson with the potential layoffs. Marcia responded with a couple concerns, “Just remember that Andrew is Paula Chilton’s cousin and that Mary Lee, one of Erin’s support staff, is dealing with serious illness. You will need to proceed carefully with who goes, especially on the legal side. I do not want a wrongful termination lawsuit that we have to cover on top of the budget crises that we are facing.”

The Coordinators are facing a hard decision: to anger and potentially place themselves in an untenable situation with CEO Paula Chilton for laying off her cousin, to stir up possible backlash from other employees for keeping Paula’s cousin employed, to create added stress for someone struggling with a difficult illness, and/or to risk legal action for wrongful termination. Before finalizing the layoff list, the Coordinators asked your team for recommendations. From the compiled list, your team must decide the necessary layoffs.

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eGS Employee Data & Worksheets

Name Pos Annual Cost

Knowledge/ Education Prod. Innovate

Perf. Review

Cult. Fit Sustain. Sen

Ave Sick Per Year

Andrew Chilton Mgr 246,631

BS Business Admin 45 0.6 2 2 0.01 4 19

Erin Cory Mgr 252,431 MA Accounting 60 0.4 4 4 0.01 5 9

Erin Tink SS/E 98,565

BA Marketing 54 0.6 3 3 0.01 2 15

Jerry Spree SS/E 105,631

BA Economics 79 1.3 5 2 0.02 4 14

Lily Arnold SS/E 102,014 AA 77 0.9 4 5 0.03 4 11

Carrie Breshner

SS/E 97,461

BA Economics 56 0.5 3 3 0.01 3 16

Jessie Tore SS/E 99,566

BA Economics 56 1 4 4 0.02 3 14

Jacob Newman

SS/E 100,021

BA Communica-tion 60 0.9 4 4 0.02 2 17

Mary Lee SS/E 103,998 AA 46 0.4 2 3 0.01 3 38

Josh Schmidt

SS/A 107,005

BA Economics 80 1.3 5 2 0 4 10

Emily Low SS/A 95,009

MA Accounting 65 0.8 3 3 0.01 2 17

Anthony Cisneros

SS/A 99,800

MA Marketing 64 0.4 3 2 0 5 18

Mark Ayala SS/A 100,321

BA Journalism 67 0.9 4 5 0.03 4 9

Juan Mesa SS/A 101,231

BA Marketing 64 1.1 4 5 0.03 4 7

Kelsey Evans

SS/A 110,098

BA Communica- tion 82 1.4 5 5 0.03 4 8

SS/E = Erin’s Support Staff SS/A = Andrew’s Support Staff In the table above are the values for each employee at eGS and their relative benefit to the company.

1. Annual Cost refers to the cost of the annual salary including benefits and raises that the employee earned throughout the year.

2. Knowledge/ Education refers to amount of schooling and degree that each employee has. AA = Associates in Arts BA = Bachelor of the Arts BS = Bachelor of the Sciences HS Diploma = High School Graduate

3. Productivity refers to the amount of units indexed annually. 4. Innovativeness refers to the number of new and usable ideas generated per employee in the past year. At

eGS innovativeness is an important metric that the company measures. 5. Performance Review refers to the bi-annual performance reviews that eGS conducts and places a value

from 1 to 5, five being the highest possible points. 6. Sustainability refers to the interest that the employee shows in helping with sustainability initiatives along

with participating in community events. 7. Seniority refers to the time that the employee has been employed by eGS. 8. Sick Days is the average sick days per year over the past year.

The bottom line is that $500,000 must be cut from the budget.

52

Rank the Employees in Importance.

Name Ranking Justification

53

List the Key Employees from Most Important to Least (you may not need all of the slots).

Name Team Reason Employee is Vital to eGS Final Decision

54

Options

1. Do nothing and hope that the budget situation resolves itself. Recommend waiting it out. Cost: $0.

2. Recommend that the layoffs be done simply by encouraging poor performers

to leave. Your team saw this done in a previous environment with a troublesome employee and it worked quite well. The thought here is that this will cause very little disruption and cost nothing since the employees will quietly leave and severance will not have to be paid. Cost $0.

3. Lay off Erin Cory, the manager for one of the project teams along with three

of her support staff including Mary Lee, the woman struggling with serious illness. This will allow eGS to have a fresh start without the worry of dealing with a sick employee or angering the CEO for terminating her cousin. Cost: $46,743

4. Lay off Andrew Chilton, Paula Chilton’s cousin, and three of the lowest

performers in the support staff of either team. However, due to Mary’s condition the company has decided to continue to employ her even though she is the lowest performer in the support staff group so her performance is not as relevant to the analysis. By laying off Andrew, the project team will be restructured and a single new team will emerge. Cost: $45,185

5. Lay off five support staff in order to cover the budget issue, and keep the

managers employed so that both teams will continue to function. Only the lower levels of these employees will be affected. Cost: $42,330

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1.20. ICP 20: Evaluation of HR Programs [Back to TOC] CHRO Marcia Jackson approached Cheryl Robbins, the Staffing Coordinator at eGS. “Cheryl, we have a potentially serious situation. The CEO and other executives are closely scrutinizing costs and productivity from the past several years. Because we are in a fairly significant downturn, they are looking for areas to cut costs and so are requiring justifications for growth and expenditures from all departments. So while HR is not alone in this, you will need to think hard about the best way to demonstrate a return on investment in your department. You should heavily leverage your consulting team since this is one of the areas they excel in. Provide the consulting team with the books and data, and any ideas you might have. Get your consulting team working on this immediately. I will let them know that I need the results on Monday since I am presenting the information to the other executives and CEO.”

Cheryl called a hasty meeting of the Human Resources staff and asked them to submit their budget information. Leslie Stone, the Compensation Coordinator, arrived looking very upset. “This doesn’t sound good! Are we losing our jobs? Why are we being scrutinized?” Cheryl replied “Marcia only told me that she needed to present the information and that it would be a good idea to show the benefits of our department in measurable results.” The team put their heads together and made a list of the programs that they had implemented over the last three years. The list was long and impressive. “What if we looked at the reduced turnover? Several of our programs have increased retention. The turnover rate has been decreasing over the last three years. We could look at the cost of hiring someone new and possibly use that information to prove that our department is pulling its weight,” Cheryl contributed. After a brief discussion, all four Coordinators agreed that computing turnover would be the most quantitative measurement for their department. Cheryl Robbins collected the turnover ratios for the last four years as well as the metrics that eGS had set for turnover. Allen Selby, the Training Coordinator, collected the cost of training the three different tiers of employees. Leslie Stone collected the amount of the budget used by the Human Resources department over the last four years. Dave March, the Employee Relations Coordinator, presented all this information to your group for analysis and recommendation.

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Your team must determine if the added value of HRM programs for increasing retention at eGS justifies the cost. In general this is accomplished by calculating the cost of the Human Resources Department personnel added since the CHRO, and then demonstrating a savings in costs from HR programs that increased retention. The assumption made is that the added HR employees implemented programs that were designed to reduce turnover so that it is a fair comparison. Note that these tables can be pasted into an Excel spreadsheet and formulas can be constructed to help generate the data needed to make a decision. Decision Process The basic question we are asking is “Does the added value of HRM programs for increasing retention at eGS justify the cost?” In order to answer this question we need to calculate supporting information.

57

STEP 1 Begin by considering the data that is given in Table 1: Employee Data, which includes the salary and benefit costs for all employees.

Table 1: Employee Data

Employees Band

FTE Individual Total

Benefits Count Salary in 1,000's Salary

President and CEO

1 1 350 350,000 21,631.46 Paula Chilton

Executive Assistant 3 1 75 75,000 21,631.46

Chief Financial Officer

1 1 150 150,000 21,631.46 Sam Richards

Accountant 3 6 75 450,000 129,788.76

Chief Human Resource Officer Marcia Jackson 1 1 175 175,000 21,631.46

Staffing Coordinator

2 1 80 80,000 21,631.46 Cheryl Robbins

Training Coordinator

2 1 80 80,000 21,631.46 Allen Selby

Compensation Coordinator

2 1 85 85,000 21,631.46 Leslie Stone

Employee Relations Coordinator Dave March 2 1 80 80,000 21,631.46

VP Client Services Eric Greene followed by Gail Rogne 1 1 175 175,000 21,631.46

Client Account Manager 2 5 125 625,000 108,157.30

Client Project Manager 2 25 90 2,250,000 540,786.50

Client Project Analyst 3 95 75 7,125,000 2,054,988.70

VP Research

1 1 125 125,000 21,631.46 Christopher Wong

Industry Manager 2 5 85 425,000 108,157.30

Analyst 3 60 65 3,900,000 1,297,887.60

VP Sales/Marketing

1 1 150 150,000 21,631.46 Justin Wilson

US Manager 1 1 100 100,000 21,631.46

Western US Manager

2 1 80 80,000 21,631.46 Matt Jones

Account Executive 3 7 60 420,000 151,420.22

Eastern US Manager 2 1 80 80,000 21,631.46

Account Executive 3 7 60 420,000 151,420.22

International Manager

1 1 85 85,000 21,631.46 Bill Hamlin

Country Managers 2 12 65 780,000 259,577.52

Totals 237 18,265,000 5,126,656.02

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STEP 2 In this step review the average salary and benefit costs per band of employees which is given. This information comes from data in Table 1. The Average Salary and Benefits per employee at each band is needed to help determine the costs of turnover. Turnover costs are typically described as a percentage of the Average Salary and Benefits of an employee at a specific band.

Table 2: Average Salary and Benefits Per Band

Title Band Total Salary & Benefits

Number of Employees

Average Salary and Benefits

Executives Band 1

1,483,051.68 8 185,381.46

Coordinators and Managers Band 2

5,711,467.38 53

107,763.54

Analysts and Support Staff Band 3

16,197,136.96 176

92,029.19

STEP 3

Next review Table 3: Annual Turnover Rate Data, which is also provided. This gives the turnover for each band in each year. The data demonstrates that turnover was .385 in Year 1 reducing to .18 in Year 4, due to the HR Retention initiatives. This data is used to help determine by how much retention is increasing, or turnover decreasing, and allows a cost to be assigned to each specific level of turnover.

Table 3: Annual Turnover Rate Data

Title Band Year 1 Baseline Year 2 Year 3 Year 4 Executives 1 0.085 0.045 0.03 0.02 Coordinators and Managers 2 0.09 0.07 0.05 0.03 Analysts and Support Staff 3 0.21 0.18 0.16 0.13 All Categories 0.385 0.295 0.24 0.18

STEP 4 Review Table 4: Cost of Turnover per Band. This data includes costs for separation, replacement and training. The following is a general description of these costs. Separation Cost: exit interviews, administrative work related to termination, separation/severance pay, any possible increase in unemployment compensation. Replacement Costs: attracting applicants, entrance interviews, testing, travel/moving expenses, pre-employment administrative expenses, acquisition and dissemination of information.

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Training Cost: formal and informal training as well as performance differential (the costs of lost productivity while a new employee comes up to speed.)

Table 4: Cost of Turnover Per Band Employee

Title

Separation % Cost Per

Band Employee

Separation Cost Per

Band Employee

Replacement % Cost Per

Band Employee

Replacement Cost Per

Band Employee

Training % Cost

Per Band Employee

Training Cost Per

Band Employee

Total Turnover Cost Per

Band Employee

Executives 0.07 12,976.70 0.15 27,807.22 0.08 14,830.52 55,614.44 Coordinators and Managers 0.03 3,232.91 0.1 10,776.35 0.1 10,776.35 24,785.61 Analysts and Support Staff 0.02 1,840.58 0.06 5,521.75 0.12 11,043.50 18,405.84

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STEP 5 At this point begin constructing information from the given tables. Calculate the Year 1 annual turnover count and the Year 2 through Year 4 turnover count. Establish turnover count without any HR turnover reduction programs in place.

Table 5: Year 1 & Year 2 through Year 4 Turnover Counts (Rounded)

Title

Number of Employees in

Band

Year 1 Turnover

Ratio in Band

Year 1 Employee Turnover

Year 2-4 Employee Turnover

Executives Coordinators

and Managers Analysts and

Support Staff

STEP 6

Next construct the costs associated with turnover in the case where there were no HR initiatives to increase retention/reduce turnover.

Table 6: Years 2-4 Turnover Costs Without HR Initiatives

Title

Employee Turnover in Y2 - Y4

Cost of Turnover Per Band Employee Total Cost

Executives

Coordinators and Managers

Analysts and Support Staff

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STEP 7 Calculate the reduction in turnover. This is done by applying the decreasing turnover rates to the full number of employees at each band. Use the full number, assuming that each year eGS hires back to full capacity.

Table 7: Reduction in Turnover Y2-Y4 (Round up if over .5 and down if under .5) Year 2 Year 3 Year 4

Title # Emps. Rate Turnover Rate Turnover Rate Turnover Executives

Coordinators and Managers

Analysts and Support Staff

STEP 8 Next calculate the savings achieved from the reduced turnover. This is accomplished by comparing the projected turnover without HR initiatives, calculated in Table 5, to the reduced turnover calculated in Table 6.

Table 8: Savings From Reduced Turnover

Title Projected Turnover

Reduced Turnover

Employees Saved

Savings Per Band Employee

Total Savings Per Band

Executives Coordinators

and Managers Analysts and

Support Staff

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STEP 9 Now calculate the HR costs above and beyond the CHRO, for Years 2 through 4. This is done using the data in Table 1 by finding the 4 HR personnel and summing their combined salary and benefit costs. Assume here that there are no salary increases.

Table 9: Budget allocation beyond CHRO (assume no salary increases) Employee Year 2 Year 3 Year 4 Total

Cheryl Robbins Allen Selby Leslie Stone David Marsh

STEP 10 The final analysis is done by comparing turnover costs without HR initiatives and the savings from increased retention with the additional costs of HR salaries and benefits. Table 10: Final Comparisons

Turnover Costs without HR Initiatives

Savings from Increased Retention from HR Initiatives Additional Costs of HR Salaries and Benefits

Total Savings: Turnover Costs without HR Initiatives over Additional HR Costs

Total Savings: Increased Retention over Additional HR Costs

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Does the added value of HRM programs for increasing retention at eGS justify the cost?

Options

1. Take no action. Argue that the HR department is a critical support function that does not need to be analyzed for ROI. Further argue that the HR department has created an excellent culture at eGS and should be allowed to continue to operate without this sort of scrutiny. Cost: $0.

2. Your calculations show that HR cannot cover its costs. Recommend

reducing the salaries of all HR personnel (except the CHRO) by 20% immediately. This amount is significant, especially when considering the impact of all departments applying this level of reduction. Implement training in Cost/Benefit analysis for considering future HR programs and initiatives. Cost: $15,000.

3. Your calculations show that HR cannot cover its costs. Recommend firing

Dave March, Employee Relations Coordinator. Point out that any initiatives to improve employee relations could possibly be better served by spreading that work among the remaining coordinators. The reduction in HR costs overall from this action would be seen as significant enough to quell any further desire to reduce HR costs at this time. Implement training in Cost/Benefit analysis for considering future HR programs and initiatives. Cost: $15,000.

4. Your calculations show that HR is covering its costs. Since the HR

department covered its costs, you recommend keeping their budget flexible and open to future investments in this area. The implemented programs are maintaining morale, decreasing turnover, and steadily reducing any existing dissatisfaction in employees. Cost: $0.