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Light Duty Fabricators (LDF) is a start up company supplying small parts to local manufacturers in the assembly of various products. Their customers are automotive
Light Duty Fabricators (LDF) is a start up company supplying small parts to local manufacturers in the assembly of various products. Their customers are automotive and smaller fabricators of recreational products. Their customers are very aggressive with respect to the cost of their products and place significant pressure on the company to reduce the price of their products. As a result, profit margins are minimal. The operation also recently unionized, and contract negotiations resulted in modest increases slightly above the cost of living posted in the prior year. The companys mission statement is: Lead in the market in quality and cost of products produced. Its Values are: Provide a transparent and open culture. Provide opportunities for employees to contribute to the problem-solving process and thereby improve productivity. Comply with all employee related laws and regulation. LDF began operations five (5) years ago with managers hiring non-union individuals from their personal contacts. Each manager had a standard employment contract but was given authority to pay what it took to get the personnel they required. Since start up there has been some increases to pay, but these increases have not necessarily kept up with inflation. The HR function to date has played mostly an administrative role in maintaining employee files and payroll. They were not typically involved in the process of setting compensation rates for new hires. Some employees have been overheard complaining about the fairness and frequency of merit increases. Your group has recently been hired by the organization and given the directive to review the compensation system and recommend to the owner a merit program that meets the needs the objectives of the company while appearing fair to the non-union employees. The owner of the organization has also given you a total budget of all merit increases of 4.5% of total payroll. CAN YOU A N SWER THIS EXCEL SHEET
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