Case: Getting it Right at “Ann’s Baking World”

Concepts to consider in analysis:

Human Resource Management | HRM Planning | Diversity | Organization Culture |

Recruitment and Selection | Compensation | Training and Development | Job Design | Job

Evaluation | Outsourcing | Automation | Employee Satisfaction | Organizational Success|

Health and Safety

SITUATION

“Ann’s Baking World” (Ann’s), is a leading Food Services Provider for the hotel and restaurants' high-value market, offering high-quality food products and services using wellestablished and local food brands. Ann’s has been in business for about 15 years and has grown to revenues of $60M annually from a small mom and pop kitchen that Ann and her husband Dan started in Chilliwack, BC. They now operate their own commercial kitchen and have built successful and productive relationships with local food producers in the Fraser Valley. Their main products are pies, cakes and pre-made sandwiches and deli items. They are recognized amongst lower mainland hotels and restaurants for consistent quality, value for money and unwavering reliability. They have busy business operations, with over three thousand food items prepared each day, although in the from May to December, that number can increase by four times. Their This case is based on a fictitious situation and does not represent any real organization or characters.

Developed by P. Martinez – Spring 2021 v. 1.0 Page 2 of 7 very busiest time is just before Mother’s Day, when demand for cakes and pies is huge. Families are in the spirit of celebration and that trickles down to Ann’s. Ann’s Baking World prides itself on its culture of innovation, product quality, being customer driven, plus having employee diversity and most importantly, employee safety. In this competitive world, Ann’s recognizes that it must maintain a culture that encourages a fresh and innovative approach to providing customers with competitive products and services. Ann’s recognizes that customers are increasingly looking for quality, convenience and value.

The company has been growing successfully from its launch in Chilliwack, Canada in 2004, when it sold only fresh baked fruit pies to local restaurants. They now have a staff of 45 employees plus an operations manager as well as Ann and Dan who are hands-on managers. Ann holds the official title of President and Dan helps out with operations management. Neither of them has ever had a formal job description or even title, for that matter. Everyone just sort of knows their own job as their organization structure has grown organically through the years.

Until 2017, the company had always had a flat organization structure with almost all staff reporting to Bob Topaz, the Operations Manager. Bob has been with the Ann’s since its early days and used his giant ledger to keep track of everything, including employee hours and payroll. In 2017, Ann decided they needed some more management, since Bob was complaining that he was being overworked. They always assumed that Bob was ok, since This case is based on a fictitious situation and does not represent any real organization or characters.

Developed by P. Martinez – Spring 2021 v. 1.0 Page 3 of 7 he never grumbled and therefore took immediate action when he voiced his concerns. Now, Bob seemed to be again complaining that he didn’t like the new Manager of Payroll, Alice Walker and the new Customer Service Manager, Tom Chou. Bob thought that Alice and Tom should report directly to him, but they seemed to discuss everything with Dan or the Manager of Accounting, Sally Ring.

Meanwhile, Ann spent a lot of her time in the test kitchen developing new product recipes. Her most recent success was her “Molten Lava One-Bites”, a delicious concoction of chocolate goodness that could be re-heated with a few seconds in the microwave. In fact, Ann and Dan had recently been talking about opening an online store to sell directly to customers, since they were always bombarded with requests.

Corporately, Ann’s Baking World was very profitable and was growing at a rate of about 20% per year in revenue. Of the recent $60 million in earnings, about $5 million was for labour, well below the expected $12 million that would be normal in the food industry. Ann attributed this to the low cost of living in Chilliwack and she and Dan were happy to set aside almost $7 million per year in recent years as profits. “That profit is for all of our hard work, especially in the early years”, she would say.

Recently, Alice had prodded Ann to conduct an employee survey and Ann had hired a company to do one. It was the first employee survey ever and Ann was shocked to find such low employee satisfaction. When asked, “How happy are you working at Ann’s”, the mean was 2 out of 5, where 5 was “very happy” and 1 was “extremely unhappy”. Forty This case is based on a fictitious situation and does not represent any real organization or characters.

Developed by P. Martinez – Spring 2021 v. 1.0 Page 4 of 7

employees had answered the survey and Ann was dismayed that so many employees would be unhappy working at Ann’s. In answer to the question “How safe do you feel  working at Ann’s”, Ann was worried that over sixty percent of workers feel “somewhat unsafe”. Since early 2020, the absenteeism rate had skyrocketed from about 2% per year to about 5%, meaning that employees were off “sick” over 12 working days in 2021. This was unexplainable since there had been no reports of Covid19 positive employees. Didn’t these employees have enough time off during the year with the basic two weeks of holiday that they were entitled to under BC’s Employment Standards Act?

Ann had always left operations matters in the hands of Dan and Bob and thought that since production was good, that employees must be happy. With no major health and safety incidents and profits that kept rolling in, Ann assumed the company was being wellmanaged. She believed that Bob was aware of and following all public health orders, although was stressed by the grapevine chatter reported by Alice that some employees were not wearing their masks. She remembered Tom’s comment of customers coming in to pick up orders without the proper face masks but expected that this had been sorted out by now. It was important to her that employees be satisfied, safe and enjoy working at Ann’s.

At the commercial kitchen, the majority of positions are food handling positions and utility staff for preparation and clean-up. There are two frontline staff who serve walk-in business customers, but most products are delivered by drivers directly to the businesses.

There are two supervisors for the food handler positions and also two customer sales This case is based on a fictitious situation and does not represent any real organization or characters.

Developed by P. Martinez – Spring 2021 v. 1.0 Page 5 of 7 positions in addition to Bob and Sally and now the two new managers. At the moment, all food handling and preparation staff are paid $15.00 per hour with modest benefits of about 12% of salary. The supervisors earn $16.50 per hour and the highest paid positions are the drivers, earning $35.00 per hour. The Managers earn $65,000 per year, plus benefits and the salespeople earn $40,000 per year, plus benefits. Holiday time are the minimums set out in the Employment Standards Act. Typical employee turnover is 30%, and the average age of employees is nearing 45 years of age. Ann’s has a large pool of on-call employees, mainly university students, but the pool has been dwindling in recent years and sometimes it is difficult to hire enough additional food handling staff in the busy months.

“It was time for a meeting”, thought Ann. She assembled the management team as well as the supervisors and Dan for a Saturday morning breakfast meeting.

“Look Team”, she began, “Some of us have been here for decades and others for months, but I know that we all believe in innovation, product quality, customer service, employee diversity and employee safety. Our customers count on our quality, value and reliability. Recently, I have come to understand that many of our employees are not happy to work here. Many don’t feel safe at work. We need to find balance between our profits and employee needs. I need your help to fix this.” Ann explained that she would be hiring an HRM Consulting team to come up with a plan that takes into account the need for expansion and growth as well as a significant improvement in employee satisfaction. This case is based on a fictitious situation and does not represent any real organization or characters.

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Ann has set aside a substantial annual budget of an additional 500 thousand dollars, and would even increase wages if needed. Her quick calculation shows a one dollar per hour increase for everyone would mean an additional $100,000 in salary expense per year. She wants realistic, cost effective and sustainable solutions that will allow Ann’s to be an employer of choice in the coming years. The company has previously considered automation as well as outsourcing and may consider those again, should they be viable strategies to ensure a successful future. The consulting team is to also recommend an organizational structure that supports production operations at all levels and the culture needs of the organization.

Consulting Team Instructions

Your team has been hired as HRM consultants to advise the President as well as the rest of the senior management team on human resources related strategies and actions required to address a number of challenges. You need to not only understand Ann’s Baking World’ needs and issues, but your team also has to provide realistic and competitive solutions. We look forward to your report and presentation on the following recruitment and engagement challenges.

Challenges:

Due to a period of anticipated growth, from existing business as well as a planned storefront expansion, Ann’s Baking World needs to have an estimate of the upcoming position needs and a recruiting strategy to ensure that vacancies and new positions as a result of growth, are identified and filled in a timely manner. First, your team must design a simple but effective organization structure, then identify key skills, knowledge and abilities of strategic positions. It is also vital that new hires support the organizational culture at Ann’s Baking World. It is important that the candidates recruited to these positions be an ideal fit to contribute to the continuing success of the company.

Explain your assumptions and analysis. A sample job description and job specifications for the Supervisor, Operations is to be presented to ensure that the consulting team clearly understands the work that must be done in a sample role. The consulting team must also identify strategies that Ann’s Baking World can use to attract, recruit, select and retain high performers, including contract staff needed in the busy months. This case is based on a fictitious situation and does not represent any real organization or characters.

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Your team report and presentation must specifically address the following recruitment

related needs:

1. The organization structure and how it supports the culture at Ann’s Baking World. This should include a discussion of whether a job analysis or job re-design should be considered for any of key positions.

2. A high-level description of any recommended new positions and a sample job description and job specification for the Supervisor, Operations.

3. The approximate number of employees to be hired in the coming year, including any new positions, as well as strategies that will be used to attract, recruit, select and retain high performers.

4. An explanation of how employee satisfaction could be improved, including the levels of compensation required so that compensation becomes a strategic incentive for this improvement. Also what strategies will support the cultural and diversity needs at Ann’s Baking World and position the company for future success.