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Case Study of HRM

The Canadian company found that its specialized automobile equipment had become unprofitable due to high labor costs required for operation. It decided to replace the equipment with more automated machinery. The old equipment, still having economic value above scrap, was shipped to the company's Brazilian operations where labor costs were lower and the facility received profitable new orders from Brazil's growing automotive industry.

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0% found this document useful (0 votes)
404 views5 pages

Case Study of HRM

The Canadian company found that its specialized automobile equipment had become unprofitable due to high labor costs required for operation. It decided to replace the equipment with more automated machinery. The old equipment, still having economic value above scrap, was shipped to the company's Brazilian operations where labor costs were lower and the facility received profitable new orders from Brazil's growing automotive industry.

Uploaded by

Ketki Wadhwani
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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Whirlpool of Voluntary Retirement Schemes ( VRS)

Case Study in Human Resource Management

Industry : Manufacturing

Industry: Well established, smooth running, multi-crore manufacturing giant, aspiring to be the "No.1" on not only
business fronts but political and management horizons too.

You are about to complete tenth year of service in this business house. You are happy and expecting a second
promotion.

Situation: One fine day you board the bus in the morning to notice a very special silence. All the chirping, joking,
gossiping has come to a stand still .You get to know that your company has accepted the VRS recommendations by
the central government. Your bus partner enquires about your age and the number of years of service.

Grapevine: The company may shut down this plant possibly in the next fiscal year due to taxation and infrastructure
problems. To begin with they want to cut down the manpower, beginning with managerial cadre, then the vendors
followed by the workers…

Facts: Earlier the govt did not allow job termination so easily. The recently elected govt. has a commitment of "job
creation" in their electoral "Magna charta" of promises… One brainy idea has come in the form of termination of "old,
experienced but sometimes difficult" employees under the disguise of offering "golden shake hand" or "voluntary
retirement" Contrast: On one side the country is facing grave shortage of skilled, experienced manpower on the other
they are promoting schemes like VRS!!

Challenge:

 You have family of five to support.


 You have to shoulder a housing loan and a car loan.

 Having spent ten years in a particular industry it may not be easy to find a new job.

 VRS is for the employees above forty years of age and / or have completed ten years of service.

 Maximum package of Rs Five lacs is for those having completed 15 years and above.

 You can get a max. Of 2.90 Lacs. Only.

 Once you accept VRS, getting a new job may not be easy.

 If you do not opt for a VRS, possibility of transfer to a remote place or you may be asked to resign , and go
without any compensation being in management cadre.

Case Study Questions


Task : You have to make your choice and justify it in not more than five sentences.

Job Evaluation Redesign at Bayer Group


job evaluation , compensation & benefits, Managing Change, M&A , ODD,strategic
management,teams and groups
Industry : Chemicals

Bayer Corporation is a subsidiary of Bayer Group AG, a Germany-based global chemical company. Several years
ago, Bayer Corporation was created by combining three different operating companies, each with its own markets,
products, and cultures—Mobay Chemicals, Miles, Inc., and Agfa. Bayer executives recognized that compensation
systems were a critical component of creating a corporate culture that embodies the values and visions developed
during the strategic planning for the new firm. Once the merger of the three entities had occurred, a new
organizational structure was implemented. This structure had fewer layers and levels, and was developed to give
Bayer employees the flexibility to move across organizational units and internationally. Bayer, like many organizations
today, compensated people for doing specific jobs. But they wanted to reward people for their flexibility in playing
different roles in the organization and moving between jobs. At the same time, Bayer executives wanted a simple
compensation system that was tied to the core values and culture that Bayer hoped would evolve.

Bayer began its transition to a different compensation system by establishing a task force of 14 executives chaired by
Bayer’s Vice-President of Benefits. This Job Advisory Committee, as it was labeled, was to recommend the
processes needed to move to a job evaluation system more aligned with the new organization. Job evaluation, the
systematic process of determining the internal value of jobs in relation to other jobs, had previously been done in two
of the companies using a traditional point factor system; however the third entity had not used a formal job evaluation
system.The committee began by identifying the advantages and disadvantages of the existing point system. The
committee identified many features of the old system that were working well, particularly the involvement of managers
and employees in the job evaluation "pointing" process. But the committee felt that the existing point factors and
dimensions were too task based, and they did not reflect the flexibility desired as part of the organizational culture.
Also, greater recognition of employees’ capabilities, not just their jobs and budgetary responsibilities, needed to be
considered. Assisted by a major consulting firm over a period of time and a number of meetings, the committee
decided to redesign the job evaluation system and focus on work-value competencies.

The new work-value clusters defined were:

 Improvement opportunity
 Contribution

 Capability

 Expertise and complexity

 Leadership and integration

 Relationship-building skills

For these six clusters, the committee identified scales and point values.The process of developing the new factors
and points took about a year. Once the new system had been tested by pointing jobs on both the old and new
systems, fine-tuning was needed. Ultimately, a cross section of benchmark jobs was pointed using the new system
and the results calibrated statistically to the old system, rather than having all jobs in the organization repointed
again.

The ultimate test of the new job evaluation system has been its acceptance and use throughout Bayer. Based on
feedback from managers and employees alike, the new system is working well. Bayer’s job evaluation system has
become the means of aligning its compensation system with the business values of the new corporate culture being
created. The compensation plan also supports business strategies and rewards employees as Bayer grows and
meets its strategic objectives. Greater recognition of employees’ capabilities, not just their jobs and budgetary
responsibilities, needed to be considered.

Case Study Questions


Outline the key accomplishments of the task force in redesigning the job evaluation
system.
Post your answer All Answers
What are your views on strategic planning at Bayer Group?
Post your answer All Answers
"Rewards can be both intrinsic and extrinsic." Does the compensation plan at Bayer
support this statement?
Post your answer All Answers

Succession Planning at Wadia Group


succession planning, LT&D, human resource management, leadership development

Industry : Hospitality

Silvermoon Hotels have been run by the Wadia family since the 1940s. Wadia Group, through it subsidiary
companies is also into travel and tourism, event management, and marketing services. Dina Wadia is the present
Chief Executive . Her only son and heir apparent, 18 years old Shiraj Wadia recently died in an air crash.

Dina has now decided that her successor would be someone outside of her family. As the CEO's position was always
held by family members there has been neither internal competition nor grooming of other managers at Silvermoon
Hotels for the CEO spot resulting in a deficiency of internal candidates. With the support of the Board, Dina has hired
an external firm to lead the search process for her successor, which would consider candidates both inside and
outside the company.

Case Study Questions


If you are the external firm consultant, how would you approach the selection of the non
family CEO?
Post your answer All Answers
Succession planning is important , yet many companies neglect this aspect. Elaborate
Post your answer All Answers

"You HR people seem to have no other work.” Shouted Praveen, the Managing director
of Apex Financial services. “You keep coming with great ideas on how to spend money.
Where is the money? Now get me the hard facts on why we should change our benefits
plan? “Continued Praveen. He has reason to lose his cool. Chetan, the HR manager felt
it was time to review the benefits and hence he mooted the idea before his boss.
Chetan did not expect Praveen to be so intemperate, but he was a bit comforted when
Chetan was asked to get back with facts to justify revision of benefits. Back in his office,
Chetan called in Maya, his deputy, for help.

Questions:
1. Assume that you are a part of the HR team assigned by Chetan and Maya to survey
the present range to benefits offered by Apex Financial services.
i) Design the questionnaire to survey (with the help of earlier units)
a) Employee perception of the company’s present benefits programme.
b) The ranking the employees give to the existing or alternative benefits and.
c) Any changes the employees want to be introduced to the present programme.
ii) Conduct a survey among the employees by using Maslow’s hieracly of needs analyse the employee ranking of benefits.
2. Prepare a report for Chetan and Maya on your findings.

A large, well known Candian company had found full depreciation of the equipment which
was used to make specialized automobile companies for north-American automobile
producers. Although the equipment had been well maintained and worked well, it required
to be handled by a large number of labourers. The result was the high labor costs that
made the company’s brake assemblies, manufacturer, and related products unprofitable. A
decision was made to replace the equipment with more highly automated, numerically
controlled machine tools. Since the economic value of the old equipment exceeded its value
as scrap, the equipment was shipped to the company’s Brazilian operations, where labour
costs were considerable lower.

Upon arrival and after the setting up of a new facility, the company received numerous
profitable orders from Brazil’s rapidly growing automobile industry. Though the labour
hours per product remained about the same the lower Brazilian labour rates allowed the
new facility to be profitable. Soon a second shift was added and with it problems began.

The equipment began to experience a growing “downtime” because of machine failures and
quality- particularly on part dimensions- declined dramatically.
At a staff meeting the Brazilian plant manager met his staff, including several industrial
engineers who had been trained in Canada and the United States. The engineers argued
that the problems were almost certainly caused by maintenance since the machinery had
worked well in Canada and initially in Brazil. The HR director agreed that it was perhaps
the question of maintenance of the old machinery but he also noted that many of the on-
machine instructions and maintenance manuals had not been translated into Portuguese.
He also observed that the problems began after the second shift was hired.
Questions:
1. From the discussion of job analysis information and job design, what actions would you
recommend to HR department?
2. Given the problems associated with the second shift, what differences would you look for
between first shift and second shift workers?
3. Since the Canadian workers had considerable experience with the equipment but the
workers particularly in second shelf in Brazil had very little experience, what implications
do you see for the job design?

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