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Instructions

Congratulations! You are the principal partner of your very own human resources consulting firm. You have accepted the contract to work with Coleen Jones of Black Book Publishing. The background story / scenario is attached to the Assignment in iLearn.

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

Review the background information on Black Book Publishing, 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.

Subject 1 Employee Behaviour- using the reward system to achieve positive employee behaviours.

Create a table which compares the three key employee behaviours (Chapter 3.) The table should have a column which states the current behaviour example (supported by fact(s) in the scenario) and a column which states the desired behaviour outcome (changes to the current behaviour you hope to achieve with compensation changes.)

Example:

Current Behaviour

Desired Behaviour

Task

Membership

Organizational Citizenship

Choose only one behaviour (above) then state one single change to the current Reward System that you would implement in order to achieve the desired behaviour of one of the key employee behaviours listed in the table you created, and the reason you are proposing that change.

Subject 2 Organizational Justice can lead to job dissatisfaction.

What are the two main components or types of organizational justice? (maximum 4 word answer, no definitions required)

The Black Book scenario has several examples where employees may have a perception of unfairness. List one example (including which main component of organizational justice may apply to the perception of unfairness), and two steps or actions you recommend to Colleen Jones in order to change the perception to one of fairness.

Subject 3 Applying the compensation mix.

State your recommendation to Colleen Jones whether the pay policy should Lag, Lead, or Match the market (one-word answer.) State (one sentence) your most important reason for choosing this pay policy (supported by evidence in the attached scenario Black Book Impressions.)

Explain the outcome you propose to achieve.

Subject 4 Performance Pay.

The scenario suggests that Black Book Publishing is in a poor financial situation (cannot meet payroll.) Some Performance Pay Options would not increase financial liability to Black Book Publishing. There are ten (10) different Performance Pay options within the three (3) types (Individual, Group, Organization)

State only one Performance Pay Option example and which type of Performance Pay Type it belongs to.

Explain how the Performance Pay Option you chose does not increase financial liability to the company, and how it would motivate employees.

Black Book Publishing Black Book Publishing is a small to medium-sized manufacturer of account books, ledgers, and various types of record books used in business. Located in Sherbrooke, the company has annual sales of about $20 million, mostly in the Atlantic provinces. Colleen Jones had an uneasy feeling of apprehension as she arrived at the corporate office, following her father's 60th birthday. The owner, Tom Daley, is a firm believer in making a high-quality product that will stand up to many years of use. He uses only high-grade paper, cover stock, and binding materials. Of course, this has led to high production costs and high prices. He also believes in a high level of customer service and is willing to make the products to customers' specifications whenever they so request. However, resetting the equipment for relatively short production runs of customized products takes considerable extra time and, of course, also drives up costs. The firm employs about 80 people, most of whom work in production. The firm has a few supervisors to oversee production, but their responsibilities are not clearly spelled out, so the supervisors often contradict one another. There is no system for scheduling production; in fact, there are few systems of any kind. Whenever there is a problem, everyone knows that you have to go to Tom Daley if you expect a definite answer. The company also has several salespeople who travel throughout the Atlantic region; most of them are relatives of Tom or his wife. The company has one book-keeper to keep records and issue the paycheques, and several office employees to handle routine administrative chores. The firm has no specialists in accounting, marketing human resources, or production; Tom handles these areas himself, although he has no real training and little interest in any of them except production. He focuses most of his attention on ensuring product quality and on dealing with the countless problems that everyone brings to him every day. He has often been heard to exclaim, in his usual good-natured way, 'Why am I the only one who can make decisions around this place-as he deals with each of these problems. When Tom was growing up, both his parents (his father was a lithographer and his mother was a seamstress in a garment factory) had to work hard in order to scratch out a living for their family. In those days, employers who showed little consideration for their employees were the norm, and Tom resolved that things would be different if he ever became an employer. Today, Tom tries hard to be a benevolent employer. Although he feels the organization cannot afford any formal employee benefits, he often keeps sick workers on payroll for a considerable time, especially if he knows the worker has a family to support. Tom is well liked by most employees, who have shown little interest in unionization during the few approaches made by union organizers. Tom has no formal system for pay and tends to make all pay decisions on the spur of the moment, so almost everybody has a different pay rate. He has never gone around to giving annual raises, so any employee who wants a raise has to approach him. He gives raises to most people who approach him, but the amount depends on his mood at the time and on how well he knows the employee. For example, if the firm has just lost a major customer, raises are lower, and if the firm has just booked a large order, they are higher. They are also higher if he 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. Tom believes that a good employer should recognize the contributions made by employees during the year. So, every Christmas, if profits allow, he gives merit bonuses to employees, which he says are based on their contributions to the firm. One day in early December, he sits down with his employee list, in alphabetical order, and pencils in an amount next to each name. Everybody gets something, but the amounts vary greatly. If he can associate a face with the name (which is difficult sometimes, because new employees seem to turn over a lot), he tends to give larger bonuses. And if he can remember something such as a cheerful attitude, the bonuses are higher still. But if he remembers anyone complaining about that employee for some reason or another (he usually can't recal the exact reasons), the employee gets a smaller bonus. Not surprisingly, longer-term employees tend to receive much higher bonuses than new employees. He 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. He personally distributes the bonus cheques on the last working day before Christmas. Since he has just turned 60 , Tom is planning to retire in the next year or two and turn the business over to his daughter, Colleen Jones, who is just finishing her commerce degree at the University of British Columbia. Ironically, it was on the day of his 60th birthday that his bookkeeper informed him that there wasn't enough money in the bank to meet payroll. Black Book Publishing Black Book Publishing is a small to medium-sized manufacturer of account books, ledgers, and various types of record books used in business. Located in Sherbrooke, the company has annual sales of about $20 million, mostly in the Atlantic provinces. Colleen Jones had an uneasy feeling of apprehension as she arrived at the corporate office, following her father's 60th birthday. The owner, Tom Daley, is a firm believer in making a high-quality product that will stand up to many years of use. He uses only high-grade paper, cover stock, and binding materials. Of course, this has led to high production costs and high prices. He also believes in a high level of customer service and is willing to make the products to customers' specifications whenever they so request. However, resetting the equipment for relatively short production runs of customized products takes considerable extra time and, of course, also drives up costs. The firm employs about 80 people, most of whom work in production. The firm has a few supervisors to oversee production, but their responsibilities are not clearly spelled out, so the supervisors often contradict one another. There is no system for scheduling production; in fact, there are few systems of any kind. Whenever there is a problem, everyone knows that you have to go to Tom Daley if you expect a definite answer. The company also has several salespeople who travel throughout the Atlantic region; most of them are relatives of Tom or his wife. The company has one book-keeper to keep records and issue the paycheques, and several office employees to handle routine administrative chores. The firm has no specialists in accounting, marketing human resources, or production; Tom handles these areas himself, although he has no real training and little interest in any of them except production. He focuses most of his attention on ensuring product quality and on dealing with the countless problems that everyone brings to him every day. He has often been heard to exclaim, in his usual good-natured way, 'Why am I the only one who can make decisions around this place-as he deals with each of these problems. When Tom was growing up, both his parents (his father was a lithographer and his mother was a seamstress in a garment factory) had to work hard in order to scratch out a living for their family. In those days, employers who showed little consideration for their employees were the norm, and Tom resolved that things would be different if he ever became an employer. Today, Tom tries hard to be a benevolent employer. Although he feels the organization cannot afford any formal employee benefits, he often keeps sick workers on payroll for a considerable time, especially if he knows the worker has a family to support. Tom is well liked by most employees, who have shown little interest in unionization during the few approaches made by union organizers. Tom has no formal system for pay and tends to make all pay decisions on the spur of the moment, so almost everybody has a different pay rate. He has never gone around to giving annual raises, so any employee who wants a raise has to approach him. He gives raises to most people who approach him, but the amount depends on his mood at the time and on how well he knows the employee. For example, if the firm has just lost a major customer, raises are lower, and if the firm has just booked a large order, they are higher. They are also higher if he 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. Tom believes that a good employer should recognize the contributions made by employees during the year. So, every Christmas, if profits allow, he gives merit bonuses to employees, which he says are based on their contributions to the firm. One day in early December, he sits down with his employee list, in alphabetical order, and pencils in an amount next to each name. Everybody gets something, but the amounts vary greatly. If he can associate a face with the name (which is difficult sometimes, because new employees seem to turn over a lot), he tends to give larger bonuses. And if he can remember something such as a cheerful attitude, the bonuses are higher still. But if he remembers anyone complaining about that employee for some reason or another (he usually can't recal the exact reasons), the employee gets a smaller bonus. Not surprisingly, longer-term employees tend to receive much higher bonuses than new employees. He 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. He personally distributes the bonus cheques on the last working day before Christmas. Since he has just turned 60 , Tom is planning to retire in the next year or two and turn the business over to his daughter, Colleen Jones, who is just finishing her commerce degree at the University of British Columbia. Ironically, it was on the day of his 60th birthday that his bookkeeper informed him that there wasn't enough money in the bank to meet payroll