B A N D A G A U T O M O T I V E

Jim Bandag took over his familys auto supply business in 2005, after helping his father, who founded the business, run it for about 10 years. Based in Illinois, Bandag employs about 300 people, and distributes auto supplies (replacement mufflers, bulbs, engine parts, and so on) through two divisions, one that supplies service stations and repair shops, and a second that sells retail auto supplies through five Bandag Automotive auto supply stores.

Jim's father, and now Jim, have always endeavored to keep Bandags organization chart as simple as possible. The company has a full-time controller, managers for each of the five stores, a manager that oversees the distribution division, and Jim Bandag s executive assistant. Jim (along with his father, working part-time) handles marketing and sales.

Jim's executive assistant administers the firm's day-to-day human resource management tasks. However, the company outsources most HR activities to others, including an employment agency that does its recruiting and screening, a benefits firm that administers its 401(k) plan, and a payroll service that handles its paychecks. Bandags human resource management systems consist almost entirely of standardized HR forms purchased from an HR supplies company. These include forms such as application and performance appraisal forms, as well as an honesty test Bandag uses to screen the staff that works in the five stores. The company performs informal salary surveys to see what other companies in the area are paying for similar positions and use these results for awarding annual merit increases (which in fact are more accurately cost-of-living adjustments).

Jim's father took a fairly paternal approach to the business. He often walked around speaking with his employees, finding out what their problems were, and even helping them out with an occasional loan for instance, when he discovered that one of their children was sick, or for part of a new home down payment. Jim, on the other hand, tends to be more abrupt, and does not enjoy the same warm relationship with the employees as did his father. Jim is not unfair or dictatorial. Hes just very focused on improving Bandags financial performance, and so all his decisions, including his HR-related decisions, generally come down to cutting costs. For example, his knee-jerk reaction is usually to offer fewer days off rather than more, fewer benefits rather than more, and to be less flexible when an employee needs, for instance, a few extra days off because a child is sick.

Its therefore perhaps not surprising that over the past few years Bandag's sales and profits have increased markedly, but that the firm has found itself increasingly enmeshed in HR issues. Indeed, Jim now finds himself spending a day or two a week addressing HR problems. For example, Henry Jacques, an employee at one of the stores, came to Jim's executive assistant and told her he was irate about his recent firing and was probably going to sue. Henrys store manager stated on his last performance appraisal that Henry did the technical aspects of his job well, but that he had serious problems interacting with his coworkers. He was continually arguing with them and complaining to the store manager about working conditions. The store manager had told Jim that he had to fire Henry because he was making the whole place poisonous, and that (although he felt sorry because he had heard rumors that Henry suffered from some mental illness) he felt he had to go. Jim approved the dismissal.

Gavin was another problem. Gavin had worked for Bandag for 10 years, the last two as manager of one of the company s five stores. Right after Jim Bandag took over, Gavin told him he had to take a medical leave to have hip surgery, and Jim approved the leave. When Gavin returned from leave, Jim told him that his position had been eliminated. Bandag had decided to close his store and open a new, larger store across from a shopping center about a mile away and had appointed a new manager in Gavin s absence. However, the company did give Gavin a (nonmanagerial) position in the new store as a counter salesperson, at the same salary and with the same benefits as he had before. Even so, this job is not like my old one, Gavin insisted. It does not have nearly as much prestige. His contention is that the laws requires that the company bring him back in the same or equivalent position, and that this means a supervisory position, like what he had before he went on leave. Jim said no, and they seem to be heading toward litigation.

In another sign of the times at Bandag, the companys controller, Miriam, who had been with the company for about 6 years, went on pregnancy leave for 12 weeks in 2005, and then received an additional 3 weeks leave under Bandags extended illness days program. Four weeks after she came back, she asked Jim Bandag if she could arrange to work fewer hours per week and spend about a day per week working out of her home. He refused, and about 2 months later fired her. Jim Bandag said, Im sorry, its not anything to do with your pregnancy-related requests, but weve got ample reasons to discharge you your monthly budgets have been several days late, and weve got proof you may have forged documents. She replied, I don t care what you say your reasons are, you're really firing me because of my pregnancy, and thats illegal.

Jim felt he was on safe ground as far as defending the company for these actions, although he didn't look forward to spending the time and money that he knew it would take to fight each. Although Jim's father is semi-retired, the sudden uptick in the frequency of such issues troubled him, particularly after so many years of labor peace.

However, hes not sure what to do about it. Having handed over the reins of the company to his son, he was loath to inject himself back into the company s operational decision making. On the other hand, he was afraid that in the short run these issues were going to drain a great deal of Jims time and resources, and that in the long run they might be a sign of things to come, with problems like these eventually overwhelming Bandag Auto. He comes to you, who he knows consults in human resource management, and asks you the following questions.

QUESTIONS

1-Given Bandag Autos size, and anything else you know about it, should we reorganize the human resource management function, and if so why and how?

2-What, if anything, would you do to change and/or improve upon the current HR systems, forms, and practices that we now use?

3-Do you think that the employee that Jim fired for creating what the manager called a poisonous relationship has a legitimate claim against us, and if so why and what should we do about it?

4-Is it true that we really had to put Gavin back into an equivalent position, or was it adequate to just bring him back into a job at the same salary, bonuses, and benefits as he had before his leave?

Please read the text and answer the questions with your own ideas.