Question

You work for XYZ as HR Manager. The company differentiates itself from its competitors by selling unique products and capturing segments of the environmental product-line market. XYZ needs your HR help to expand its substitute for plastic product lines by establishing a new division. The division will produce an exciting new line of products that are reusable and compostable (e.g. cellulose bags to replace plastic bags and hemp containers to replace clear plastic containers that berries and tomatoes etc. are sold in) and are accepted by municipalities for the compost stream (unlike most “compostable” bags and containers on the market today that are not accepted by municipalities as compostables as they take too long to compost and instead go into the waste stream).

XYZ has calculated that the new division will need to hire and determine compensation for 1000 new employees this year, 2,000 next year and 1,000 in year three. The hires will have a wide range of jobs since the company is decentralized and this division will operate independent of head office which is in the U.S. There are no other XYZ divisions in Canada. This means the division should be designed like its own company. The new division will be in Ottawa. The jobs in the division include but are not limited to: Production line workers, sales staff, marketing staff, HR, chemists and R&D, IT workers, finance staff, accounting staff, customer service and managers for all the departments: production, sales, marketing, R&D, customer service, finance, HR and accounting.

Question(s): a. Explain how (steps with explanation) you would recommend XYZ recruit and select employees for the next three years? The new hires will be 20 per cent managers and 80 per cent non-managers.

b. Explain in detail how (steps with explanation) you would determine compensation.

c. How does your compensation plan retain and motivate XYZ employees?

d. Should XYZ have a policy of pay secrecy or not? Explain.

Answer 1

Answer a:

XYZ Company is establishing its new division in Ottawa, Canada. For its new division, the company requires 1000 new employees for this year, 2000 employees next year and 1000 employees in the third year.

For the next three years following steps and strategies would be followed in the sequential manner:

Step 1: Identify the departments required to be created in the new division of the XYZ Company.

Step 2: Identify the organisational structure such as functional divisional structure, matrix structure, etc. to be applied within the new division of the XYZ company.

Step 3: identify the key responsibilities that are required to be performed at the new division of XYZ Company.

Step 4: the company should determine the eligibility criteria, experience and qualification required for each position within the various departments of the organisation.

Step 5: the company should hire the 80 percent of non manager employees for the first year through the references and through the hiring agencies so as to get the employees with the needed eligibility, experience and qualification criteria.

Step 6: Since the company requires 20 percent of the employees in the managerial position, they can be hired from the references of the existing employees of XYZ Company.

Step 7: once the company starts it’s functioning, from the next year, it can start the hiring process through its own human resource department by conducting campus interviews in the institutions and the universities, direct interviews through walk-ins, etc.

Answer b:

Process of determining compensation:

Step 1: Clearly specify the responsibilities that all the staff members are required to accomplish.

Step 2: Use salary survey of the companies that are into the businesses of the same category and match the pay structure of various roles for the similar responsibilities that are needed to be executed within the new division of XYZ Company.

Step 3: If the responsibility of the role in the salary survey matches with that of the company, then that salary structure from the survey can be utilised and if the responsibilities do not match for the role with the one that is required in the new division, then blend the various responsibilities of the survey to obtain the precise one that matches with that of the new division.

Step 4: while selecting the pay structure, the valuation of the job should be carried out appropriately. This could be done by assigning the rank and weightage to the job and then deciding the value of the job accordingly.

Step 5: conduct a detailed analysis of the budget that an organisation has allocated for the payment of the salary and other compensations including the incentives and other monetary benefits to the staff.

Step 6: Combine the salary structure with the valuation of the job and the allocated budget for the salary and compensation and then finally decide the payment that is required to be paid to a particular employee for his particular role and responsibility.

Answer c:

The compensation plan has been designed according to the prevailing market structure and by applying the industry standards. Most of the companies fail to pay the employees the basic salary structure as per the industry standards. Moreover, in the name of cost cutting, most of the companies deduct the hidden amounts from the salary of the employees.

The compensation plan of the new division of XYZ Company is according to the salary survey, valuation of the job and the allocated budget according to the industry standards will help in retaining the employees as they will be ethically paid for their work. Moreover, incentives and other monetary benefits help the organisation in keeping their employees engaged with the company and the employees always try to elevate their performance to gain more and more benefits out of their hard work.

Basic and fixed salary is definitely a reason for the motivation and if the salary is attractive as far as the industry standards are concerned, and then the employees always remain motivated to give their best for getting the performance appraisal at the end of the financial year. Monetary and non monetary benefits also act as the motivating factor for the employees.

Answer d:

Company should not adopt the policy of pay secrecy. The policy of pay secrecy is illegal and unethical on the part of the employer since the employer cannot force the employees to communicate in a particular manner and cannot restrict them for free communication at the work. This will also result into the de motivation and distrust among the employees and an environment of conflict will be created among them. Rather, company should define the role and responsibilities and pay structure and compensation policies accordingly in its preamble and regulation book. This will reduce the conflict at the workplace and employees will focus on their key responsibility areas.