Five issues in the case
The first problem is that competitors are offering higher overtime payments for their employees. A significant concern is that the company may witness employee exodus implying that it will lose unique talents and skills (Sathyanarayana, & Maran, 2011). The secretary is also working too much overtime, and she is putting a burden on the company’s budget. In fact, the executive management is considering retitling her job. Another issue is about job evaluation where the wood shop employees are complaining about the ranking system of job evaluation. On the other hand, the employees do not trust their supervisor with the evaluation process since they feel that he favors some individuals. The employees also believe that their jobs have evolved thus they are advocating the organization to upgrade their jobs. Another issue from the case study is how the supervisor treats the Union Workers. He grants permission to other employees to attend some chores, but denies an employee who wanted to attend to a family issue. to attend the daughter’s play. The action has prompted the Union steward to request a meeting with Santa.
There is also a problem with the toy designer who is threatening resignation if the company does not offer him pay increment. The Sales Manager is pointing at the abandonment of the company’s base salary with minimum discretionary bonus and focus on incentive-based payment approach to the sales staff. The Manager is having difficulties in retaining or recruiting candidates with the inadequate payment plan. Lack of payment incentive is, therefore, the reason as to why many employees are leaving after a short period (Sathyanarayana, & Maran, 2011). There is also a problem with underpayment of workers. For instance, the North Pole and South Pole salary ranges are different. The employees suspect that company is not adhering to the National Labor Salary Range Act Book.
Before deciding on the compensation plan, company should consider the implication of poor remuneration to the company’s performance (Sathyanarayana, & Maran, 2011). Better still, Santa can avoid the secretary’s demands by implementing a new compensation policy that will ensure that employees receive more insurance benefits. However, before arriving at the decision, it is imperative to consider implications on the company’s competitive advantage. If an increment on employee overtime can convince them to stay, then it will be best to implement it since replacing talents is always difficult. About job evaluation, the supervisor should use performance-based evaluation strategy rather than depending on the ranks of employees (Sathyanarayana, & Maran, 2011). The responsibility lies with the executive management that designs and recommends systems of managing business. A possible solution to the relationship problem between Union Workers and their supervisor is that the company should re-evaluate its human resource management practices. There should be much emphasis on the plight of the employees.
Issues about pay increment require refocusing on retaining top talents in the organization (Sathyanarayana, & Maran, 2011). Employees are justified with their quest for payment increase since some have stayed long in the company. A possible solution to the problem is the establishment of an organization culture that favors training and development of employees. However, any approach that an organization adopts in rewarding its employees should also focus on cost effectiveness. Though it is necessary to increase the compensation rate of the employee, the decision should least affect the organization’s expenditure. A good advice to Santa is that indirect benefits like education, health, and insurance are also perfect ways of rewarding the employees. In fact, increment on insurance benefits as a strategy may not be present in the competing firms, and this can be a prompt solution to remuneration problems affecting the company.
Sathyanarayana, K. S., & Maran, D. K. (2011). Job Stress of Employees. International Journal of Management (IJM), 2(2), 93-102.