Congratulations! You are the principal partner of your very own human resources consulting firm. You have accepted the contract to work with Scott Coates of Hard Pressed (the background story is attached to the Assignment in iLearn.)

One of the first actions by Scott is creating a five-year business plan that will turn the company around (from financially troubled to profitable), and part of his plan involves creating a strategic framework for compensation (your consulting work assignment.)

Review the background information on Hard Pressed, provided in the file attachment.

Answer the subjects/questions contained in the following four subjects/question areas (which are part of the Five Steps to Effective Compensation.) Be sure to label each answer (Subject 1 through Subject 4), and provide specific references/citations for each answer. (Check the Rubric.)

Subject 1 Managerial Strategy

What managerial strategy is used at Hard Pressed?

What specific evidence from the case study supports your answer (use two contextual variables Chapter 2?)

Subject 2 Group Performance Pay

The company is in financial trouble, what type of group performance pay would you recommend for the production department at Hard Pressed?

Explain how this type of group performance pay would have no additional financial liability or risk to the company.

Subject 3 Job Families (create a table)

Determine (create) four job families for the company (based on the information in the case study.) Create a two-column table that lists the four job families and beside each job family list each position within the job family (be sure all positions in the case study are included.)

Subject 4 Distributive Justice

State 3 compensation changes would you initiate in order to improve the perception of distributive justice. For each, explain what is the current state, the change you propose, and how the change would improve or support the perception of distributive justice.

Hard Pressed is a small manufacturer and reseller of pine tree extract custom products (i.e. beverages, lotions, and concentrates.) The company has annual sales of about $8 million, mostly around the town of Foam Lake and the province of Saskatchewan. The owner, Trish Sullivan, built up the business over 40 years. She uses high-quality materials resulting in high production costs and high retail prices. Resetting the equipment for relatively short production runs of customized products takes extra time and increases costs. Scott Coates recently started his new job (recently promoted to general manager.) Scott is a recent graduate of a community college business program. There are a few supervisors who oversee production, their responsibilities are clearly spelled out, so the supervisors often support one another. There is no system for scheduling production; in fact, there are few systems of any kind. Trish tends to resolve most decisions and issues. Most of the firm employees (35) work in production. The company also has several salespeople, some travel around Saskatchewan (usually the entry level recruits.) Additionally, there is one book-keeper to keep records and issue the paycheques. Several office employees handle routine administrative tasks. Trish manages most areas of the company without supervisors (accounting, marketing, human resources.) Trish feels she is a generous employer. The company cannot sustain the recurring cost of any formal employee benefits. Sometimes, sick workers are kept on payroll for a considerable time, especially if Trish knows the worker has a family to support. There is little interest by employees in unionization due to Trish's personal interest in her employees. Hard Pressed has no formal system for determining compensation. Trish tends to make all pay decisions on the spur of the moment, so almost everybody has a different pay rate. There is no policy for annual raises, so any employee who wants a raise has to approach Trish. Depending on her mood (and how much she knows about you), Trish gives raises to most people who approach her. When the company is profitable raises are higher. They are also higher if she knows the employee has a family to support, or if the employee's spouse has been laid off, or if the employee has added a new member of the family. Every Christmas, if profits allow, Trish gives grocery gift cards to employees (based on what she says are their contributions to Hard Pressed.) In early December, she sits down with her employee list, by each department, and pencils in an amount next to each name. Everybody gets something, but the amounts vary greatly. If Trish can associate a face with the name (which is difficult sometimes, because new employees seem to turn over a lot), she tends to give larger bonuses. Longer-term employees tend to receive much higher bonuses than new employees. Trish has noticed this tendency, but assumes that if an employee has been with the firm longer, that person must be more productive, so this is fair. Trish personally distributes the gift cards on the last working day before Christmas. Since Trish has been with the business 40 years, she is planning to gradually step away from the business over the next year or two and turn the operation of the business over to the new General Manager Scott Coates (Scott was not aware of this when he accepted the promotion at Hard Pressed.) In addition to Scott's new challenge, the company bookkeeper informed Trish and Scott that there wasn't enough money in the bank to meet payroll. F22 HRP113 Hard Pressed is a small manufacturer and reseller of pine tree extract custom products (i.e. beverages, lotions, and concentrates.) The company has annual sales of about $8 million, mostly around the town of Foam Lake and the province of Saskatchewan. The owner, Trish Sullivan, built up the business over 40 years. She uses high-quality materials resulting in high production costs and high retail prices. Resetting the equipment for relatively short production runs of customized products takes extra time and increases costs. Scott Coates recently started his new job (recently promoted to general manager.) Scott is a recent graduate of a community college business program. There are a few supervisors who oversee production, their responsibilities are clearly spelled out, so the supervisors often support one another. There is no system for scheduling production; in fact, there are few systems of any kind. Trish tends to resolve most decisions and issues. Most of the firm employees (35) work in production. The company also has several salespeople, some travel around Saskatchewan (usually the entry level recruits.) Additionally, there is one book-keeper to keep records and issue the paycheques. Several office employees handle routine administrative tasks. Trish manages most areas of the company without supervisors (accounting, marketing, human resources.) Trish feels she is a generous employer. The company cannot sustain the recurring cost of any formal employee benefits. Sometimes, sick workers are kept on payroll for a considerable time, especially if Trish knows the worker has a family to support. There is little interest by employees in unionization due to Trish's personal interest in her employees. Hard Pressed has no formal system for determining compensation. Trish tends to make all pay decisions on the spur of the moment, so almost everybody has a different pay rate. There is no policy for annual raises, so any employee who wants a raise has to approach Trish. Depending on her mood (and how much she knows about you), Trish gives raises to most people who approach her. When the company is profitable raises are higher. They are also higher if she knows the employee has a family to support, or if the employee's spouse has been laid off, or if the employee has added a new member of the family. Every Christmas, if profits allow, Trish gives grocery gift cards to employees (based on what she says are their contributions to Hard Pressed.) In early December, she sits down with her employee list, by each department, and pencils in an amount next to each name. Everybody gets something, but the amounts vary greatly. If Trish can associate a face with the name (which is difficult sometimes, because new employees seem to turn over a lot), she tends to give larger bonuses. Longer-term employees tend to receive much higher bonuses than new employees. Trish has noticed this tendency, but assumes that if an employee has been with the firm longer, that person must be more productive, so this is fair. Trish personally distributes the gift cards on the last working day before Christmas. Since Trish has been with the business 40 years, she is planning to gradually step away from the business over the next year or two and turn the operation of the business over to the new General Manager Scott Coates (Scott was not aware of this when he accepted the promotion at Hard Pressed.) In addition to Scott's new challenge, the company bookkeeper informed Trish and Scott that there wasn't enough money in the bank to meet payroll. F22 HRP113