Employer, Acme Inc., a Medium Sized Industrial

¶ … employer, Acme Inc., a medium sized industrial company, has conducted a Strengths, Weaknesses, Opportunities, and Threats (SWOT) Analysis and has determined the strategic goals and objectives for the organization. One of the opportunities identified from the SWOT was the current economy and the high unemployment rate. In addition, a strategic goal was established as a result of the SWOT for Acme Inc. To maintain status quo on recruiting and focus specifically on retention (keeping Acme's best employees).

Simulation: As the HRM for Acme Inc. And based upon the situation, describe how you would develop a "Compensation Plan" for this organization. Discuss how your plan would align and be effective with the above mentioned strategic goal. In addition, discuss how you would control the costs associated with your compensation and benefits plan.

In the form of an abstract, clearly state the issue or problem.

a. Express the problem in multiple ways to clarify its meaning and scope.

ACME has conducted a SWOT analysis of its company. One of the identified opportunities is the current recession and high unemployment rate. This means that ACME seeking talented workers may be able to have more of an opportunity in attracting them given the present need for jobs. Likewise, workers may be induced to join ACME for lower wages and reduced benefits than ACME may ordinarily have to provide due to the high rate of unemployment and the great need for work. This is an opportunity right now: it means that ACME may be able to attract extraordinary workers at a cheaper rate than it ordinarily would. The problem, however, would occur in the future once the recession lifts in that these same workers would then scout around for places that offer more attractive benefits and salaries. The problem may actually start even before the recession lifts since companies are always searching for remarkable talent and even during a recession some companies are prepared to offer higher prices for superb workers.

For ACME, therefore, the economic downturn is currently a blessing in that they can afford to attract skilled workers for reduced rates. On the other hand, ACME wants to retain these skilled workers -- turnover may cost the company more in the long run and talent is irreplaceable. The problem that ACME, therefore, faces is creating a strategic goal that would continue to attract these workers and induce them to continue working for ACME despite higher inducements that another place may offer them.

The goal; that ACME implemented was one that would maintain status quo on recruiting and focus specifically on retention (keeping Acme's best employees).

2. Identify and justify your assumptions used for shaping your point-of-view.

a. Clearly identify your assumptions and explain why or why they are not justifiable.

b. Explain how your assumptions are shaping your point-of-view.

My assumptions are that:

1. The recession causes as lot of companies to close resulting in skilled people losing their jobs

2. These skilled people may be willing to take up any job as short-term gap measure in order to receive the needed money

3. Appreciating their potentials, these skilled people will be on the look-out for a job that pays more. Alternately,

4. Other jobs may compete for their services offering them higher pay and better services.

3. Identify appropriate concepts from the text or other research to support your ideas. Identify key concepts and explain them clearly.

b. Consider and explain other concepts or alternative definitions of concepts.

The most significant kind of research that I have for this is from real life where the U.S.A. Today (Rugaber, 2010) quotes a Labor Report that noted that "There are about 6.3 unemployed workers competing, on average, for each job opening." Employers had fired a total of 7.2 million workers during this economic downturn and hiring had yet to begin. At the same time, "the number of unemployed Americans doubled from the beginning of the recession to 14.9 million in August" (ibid.), many unemployed were suffering horribly, and economists feared that "the job market will take years to recover." (ibid.)

Quoting Heidi Shierholz, an economist at Economic Policy Institute in Washington, USA Today (Rugaber, 2010) reported that the economy faced a "jobs gap" of almost 10 million which required more than 500,000 new jobs per month alone to close that gap.

Incidents are telling:

That same report tells of someone who attended a job opening looking for a handful of workers. The place was looking for skilled workers; the pay was not particularly attractive. The job-seeker "turned back after seeing a line snaking around the building. She later heard that 3,000 job seekers showed up to vie for the attention of a handful of employers." (Rugaber, 2010)

The recession is certainly an opportunistic time for ACME to attract top talent. The problem would be retaining this top talent when times improve and this top talent would be lured by higher prices elsewhere.

4. Clearly stated a solution to the problem presented.

a. Explain your solution to the problem based on the data from both the situation and the concepts from your readings and your research.

b. Offer alternate solutions to the problem

c. Explain the consequences to the organization for using and/or not using your solution

There are at least two options that ACME can adopt:

1. Employees are certainly attracted by salary but salary is not necessarily an exclusive inducement. Many are also attracted by the attitude of the management. A management that compliments employees and provides those psychological incentives and recognition for their job services creates an environment that may be far more attractive to many workers than high wages that do not provide the psychologically attractive conditions. Important too is perception of workplace justice ("distributive justice") and a supportive environment (Martocchio, 2010 41-44). This emotional support can go a long way in persuading employees to stay.

2. Management can focus on providing discretionary benefits (Martocchio, 2010 12) such as extended vacation time (paid time-off), exercise programs, training, therapy or other perks that need not cost the workplace that much but that are appealing to employees.

3. Management can offer to raise wages when the economy improves and if and when workers prove themselves.

4. Managing can also offer a selection of modular plans that may not cost the company that much and that 'take away the sting' from the reduced wage that ACME will be forced, just then, to offer employee (Martocchio, 2010 285). The modular plan also allows the employer to decide upon the fixed amount of money that he is willing o pay whilst employee covers the rest out of pocket. The employer can offer employee the choice between a higher salary and raise in money in modular plan.