Reference no: EM132241573

Making Human Resource Decisions

Scenario:

You are the Director of Human Resources for your company. The CEO has just informed you that the financial state of the company is dire, and as a result, he is approaching the managers of each department and asking them to reduce personnel costs. The company makes its profits primarily on services such as business consulting, cloud-based storage for large companies, and other small miscellaneous business products. The industry has become highly competitive and sales are down. There is not enough revenue at this point to pay all of the salespeople.

You are charged with devising a plan to determine how personnel costs will be reduced. After much deliberation, you decide on three options. Because this is a management dilemma, none of these options are optimal. Further, cost/ benefit analysis has a role in the decision making process, but as you are dealing with people, this type of analysis is complicated and subjective.

Options:

1. Lay off employees and use them only as needed on a project or change employment structure (i.e. move some employees to independent contractors)

2. Reduce salaries across the board

3. Reduce hours and/or benefits for lower-level staff

Instructions:

Choose one of the above options and defend this decision. Use concepts from the chapter to defend your decision.