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Assignment #$2$: Part B $-$ Case Study Analysis

OVERVIEW

This assignment addresses course Learning Outcomes $1,2,7,10$ and $11$

Upon completion of this assignment, you will be able to:

$$ Discuss the theories of employee behaviour and explain their connection to total rewards.

$$ Summarize and explain the advantages and disadvantages of job evaluation methods.

$$ Analyze the various influences on changing compensation.

$$ Monitor and analyze external and internal environmental trends that contribute to developing and maintaining an effective compensation system.

$$ Evaluate the components of a total rewards system and recommend changes or new strategies that reflect best practices.

This assignment is:

$$ an individual assignment

$$ in two parts, Part A and Part B

$$ worth $30\%$ of your final grade

$$ comprehensive and requires you to read a case study and discuss key concepts from several modules.

Instructions

$$ Read the Performance Plastics Products Company Cast Study.

$$ Use the questions following the case study to guide your analysis of the case, formulate your recommendations and develop your assignment.

Case Study: Performance Plastics Products Company

Family$-$owned Performance Plastics Products Company in Niagara Falls, Ontario was recently purchased by a much larger company, Cambridge Plastics Ltd$.$ When the Human Resources Director of Cambridge Plastics, Michelle Schwartz, reviewed Performance Plastics Products compensation policies, she became concerned that some of them were questionable and in some cases violated the law. When she asked the Plant Manager, an

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engineer, who also acts as the Human Resources Manager, how he determined pay rates, the Plant Manager explained that he would ask applicants what they had earned in the previous job and just add $25$ to $50\%$ to this amount, depending on their job experience. To make matters worse, two recently hired visible minority machinists complained that they were paid less for the same work than non$-$minority workers. The Machine Shop Supervisor disputed their claim, asserting that the non$-$minority employees had more work experience and deserved higher pay. Michelle also discovered that productivity in the subsidiary was lower than in the other plants of Cambridge Plastics. A Human Resources Consultant was hired to assess the compensation practices for Performance Plastics Products.

The key points of the Consultant$$s report are summarized below:

$$ Executives in the past have received an annual bonus determined by the owner at his discretion.

$$ Wages for hourly employees ranged from $$16\mathrm{.}00$ an hour for employees during their probationary period to $$28\mathrm{.}00$ for the more skilled or experienced employees.

$$ The amount of overtime paid by Performance Plastics Products was very modest; overtime was paid for all hours over $180$ per month.

$$ The wage rates for different workers varied widely even on the same job; those employees who were not visible minorities receive approximately $18\%$ more than those who were.

$$ Visible minority employees were paid $10$ to $20\%$ less in all job categories.

$$ On highly technical jobs, the company paid a rate of $20\%$ above the prevailing wage rate for these jobs. All other jobs were paid an average of $15\%$ below the prevailing rate.

$$ Production workers were eligible for a $$200$ draw each month if there were no accidents during the month.

$$ Sales personnel were paid commission and received a $$200$ bonus for every new customer.

$$ Whenever sales went up $10\%,$ all hourly workers got a day off with pay or could work one day at double the time rate.

$$ Turnover averaged a modest $12\%.$ However, in technical jobs turnover was less than $2\%$; in nontechnical jobs turnover was nearly $20\%.$

$$ Absenteeism followed the same pattern.

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Part B $(20\%$ of Final Grade$)$: Develop An Action Plan

$1.$ Michelle had read about new approaches to pay policies such as variable pay and profit sharing and wondered whether either one would be suitable to increase low productivity at Performance Plastics Products. She also was wondering if the company should also look to offering benefits to the employees as a means of showing that the employer does care about them.

How would you advise her on the new approaches to pay policies and benefits that would work for this company? Address the following in your answer:

$$ Discuss whether employee benefits, variable pay and$/$or profit sharing can be used to motivate employees.

$$ Whether employee groups are treated equitably.

$2.$ Suppose you were the Human Resources Director of Performance Plastics Products.

Develop a step$-$by$-$step action plan you would submit to the owner to address the compensation issues.

For your Action Plan:

$$ Summarize the existing compensation problems.

$$ Provide clear, supported recommendations that address these problems.

$$ Format:

o Include your student number, the assignment title and the course name in the header of each page

o Number the pages

o Include