Management Principles Week 6 Tutorial Activity. The Right Way with Employees? As senior manager for a global player in car manufacturing and sales, Kirby Ellis had like thousands of fellow employees joined in the excitement surrounding the production of the companys new hybrid vehicles. But barely two years into production, embarrassing component shortages, delivery delays, and recall of the first models had a ripple effect, presenting the company with mounting concerns. In the confusion, many customers canceled orders and turned to competitors for the purchase of eco-friendly vehicles. Elliss company was facing a financial downturn. With three decades of service to the company, Kirby led a contingent of managers intent upon keeping together as much of the company and as many employees as possible. We know there will be some necessary cuts, Kirby admitted. But this company has a long history of sticking by its people. Our first priority should be internal streamlining of how we do things and making sure we have the right people on board. Many managers liked what they heard from Kirby. He was well respected and had an unequalled reputation for his leadership and collaborative skills and his ability to work with managers, as well as line workers on the factory floors. People marveled at the number of individuals he knew on a personal level throughout the company. Drew Cunningham influenced a second contingent within the management group. A brash go-getter with a reputation for fixing companies in crisis, Cunningham proposed across the board cuts in employees in order to implement a solution as quickly as possible. He proposed the immediate creation of a forced ranking system in order to identify and get rid of lower ranking employees. Kirby raised his hand and rose to his feet in objection. So were going to create a system to fire.. I didnt say fire .. OK. Cut our own hardworking people? It sounds like some lame government commission, Kirby said. Weve got bright people. This thing simply got worse faster than we thought. We can work with the people we have in setting up more efficient workflow, establishing reasonable deadlines to increase output and Kirby, these are not the days of knowing everyone in the plant, Drew said. Youre not throwing out your wifes uncle Harry. We are taking a serious look at what to do, how we do it and streamlining everything by keeping the right people in the organization and cutting the rest.

1. What kind of social contract is assumed by Kirby and Drew? Explain.

2. If you were an HR manager at the company, which view would you support and why?

3. HR departments hire and develop human capital to serve the organizations strategy and drive performance. Which approach Kirbys or Drews is more likely to have a greater positive impact on performance and why?