Scenario A: Compensation

Read Thompson Technology: A Case Study in Controlling Labor Costs Scenario A: Restructuring After a Hiring Freeze.Links to an external site. Include your recommendations about the following in your business brief:

• What should be done about the numerous employee requests for compensation review, and how can Thompson Technology ensure equity in the compensation system?
• How can compensation at Thompson Technology reinforce the organization's strategic advantage of product innovation and exemplary customer service?

article to answer questions:

Scenario A: Restructuring After a Hiring Freeze

Players

Scott Montgomery, CHRO

Sally Werner, technical support supervisor

Maria Gonzales, payroll specialist

Betsy Reynolds, customer service employee

David Adams, accounting employee

The hiring freeze was successful; the overall staff numbers were down by about 5 percent. As Scott Montgomery had expected, however, simply reducing staff by attrition wouldn't ensure that reduction goals would be met or that reductions would occur in needed areas. Some departments had suffered serious talent loss when key personnel resigned, but other departments still had excess staff and duplication of effort. Reorganization was needed.

After the strategic planning retreat, Montgomery scheduled a series of meetings with COO Jack Albright and several department managers whose areas suffered most from the labor imbalances. Montgomery had a reorganization plan in mind, but he wanted input and agreement from those who would be affected before he implemented it. He knew it wouldn't be easy getting agreement. From discussions during the retreat, it was clear that everyone recognized the need to realign and further cut costs, but some managers seemed more interested in protecting their turf than designing a feasible plan.

It took a lot of negotiation, but a plan was finally agreed to and approved by Kessler. Montgomery's HR staff was ready to move ahead with implementation. Like the previous reorganization, work groups were again realigned, teams were re-formed and job assignments changed.

Even the facility changed. Partitions were removed and cubicles disappeared to reconfigure the office into an open floor plan. It was expected that the open plan would foster a sense of unity and ease communication among co-workers and managers. The managers would no longer be isolated in private offices; they would sit side by side with those they supervised. A number of managers objected to the open floor plan. They didn't like giving up their personal work space or the status inferred by a private office.

How can I talk privately with a staff member when I'm out in the middle of the floor and everybody's hanging around listening? Sally Werner, a technical support supervisor, grumbled to her friend Maria Gonzalez, a payroll specialist. You're the only one left with a private office, Maria, and that's just because you do payroll!

Well, there are private conference rooms on each floor, Maria replied. You can always use those.

They've all got windows that look right out onto the floor. Everyone knows who you're in there with. As soon as I call someone in for a private conference, everybody will assume they're getting reprimanded.

I hadn't thought of that. If that's the assumption, Sally, maybe you have an image problem, teased Maria.

It's not funny, Sally said. I just think this whole thing is a lousy idea. And what are those people in marketing going to do? They bring their dogs to work. Before this, they had to keep their dogs in their cubicles. How's that going to work now?

I don't know, said Maria. Maybe there won't be any more dogs around.

I suppose, they're cutting back dogs, too, Sally grumbled cynically. Just like everything elseeven our benefits are going away. No more tuition reimbursement, no more free coffee. This place is just not what it used to be. There is less of everything around here except the workload. That gets bigger all the time.

Well, I'm swamped too, said Maria. HR's really scrambling with so many people reassigned. Scott's desk is piled high with requests from employees for compensation reviews. Everyone thinks a little change in job assignment means more money. The only ones not complaining are the dogs!

Well, what did they expect? said Sally. I've never seen such a dispirited, burned-out bunch of people. You know, Maria, it's never a little changeit's a lot! Most of us are working longer days, and no one even says thank you anymore. You know David Adams in accounting? He told me he hasn't had a performance review in nearly two years.

Wow! How can that be? asked Maria. We're supposed to have one every year.

I know, but managers aren't doing them. David said every time he asks his boss about it, his boss just shakes his head and says he has so many people to supervise now he just doesn't have time to do performance reviews anymore. David thinks they're really just trying to delay everyone's raise so they can save a little money.

Maybe so, but that's terrible! said Maria, I'm surprised Scott lets them get away with that.

Well, maybe he doesn't even know. I think he's pretty out of touch with what's going on around here. What about that ridiculous policy telling us not to talk about compensation? How do they think they can enforce a policy like that? Everybody's talking, and some people are just plain angry. Betsy Reynolds in customer service has already had three different job assignments in the past year. Each time someone leaves, she moves into a new position, reports to a new boss and just gets more work piled on. She's working longer and longer days just to keep up, but there's never any more money! She told me she's had it. She's looking for a new job!

Betsy? asked Maria. She's been here for years. She knows everything about the company. She's the best customer service person we have.

I know, but management doesn't even notice what's going on. If she leaves, it's just one less body on the payroll, and that seems to be what they want. Frankly, I don't think we can take any more reorganization!