Reference no: EM132985385

Don Frederickson, Human Resource Manager at Binder Books, was facing a serious problem. Their 600-person plant operation was one of the oldest in the company and there were rumours they would be closed. Their technology was ancient and would be hugely expensive to upgrade. Still he persevered to do his part to control costs and keep the plant viable.

One major challenge he faced was wages, specifically for the IT Support Team. The Firm was an average payer in a very competitive IT wage market. He knew it would be hard to replace IT staff who left. He was aware of concerns they had. Some were long-service staff, but other, younger employees who socialized more in the industry and were aware of more lucrative external opportunities.

It came to a head when he had a meeting with Andrea Fife, a senior Team Leader who said, "Look, this is a bigger problem than you realize. It's not just that we are behind the market in pay. We are just patching up this old system to keep it going. No one else is using this technology any more. If we stay much longer, our skills will be so out of date that we won't even be able to get jobs!"

She was right! If they left, the plant would shut down and they would be unlikely be able to hire new employees to work on this old system. In the short term, steps had to be taken. The Corporate Office IT Department was aware of the issues as well. He collaborated with them to try and address them.

Corporate HR had also been aware of the issues, but repeated delays now laid it at their doorstep. He was able, to enlist support and a plan was developed to:

-Provide an upgrade of wages to 75% of the local market, to help somewhat in being competitive for the time being, and also,

-Top up the annual wage with annual lump sum payments ranging between $1,000 and $2,000, depending on the level of the staff member's position.

While the raise in the base wage was permanent, the lump sum payments were not and would be revisited annually to determine if they were still required. In this way, while the employees received the money, but the firm was not locked into a permanent dismantlement of their existing wage structure.

This would help, but he still had to address the fact that they were falling behind in knowledge and skills.

Binder Books had a tuition refund program that was supportive of employees taking business related courses. In collaboration with Andrea and her Manager, Bruce, Don developed a technical training plan to upgrade and maintain the knowledge and skills of each of the six employees involved.

He hoped these interim measures would be helpful to at least dodge this particular bullet for the time being. He was also heartened that even though the plant was old, it had a dependable reputation. There was currently a high-profile cost improvement initiative they were embarking on and he hoped it was successful.

The IT Staff were very pleased with the wage adjustments and felt they were at least on par with most of their colleagues. There are some high paying firms around, but they felt they were in the same ballpark as their colleagues. Possibly more important was the supported education. They knew they were not being left behind and felt the Company was stepping up to the plate for them.

Address the three questions below (base your answers on course material AND on your personal experiences and sensibilities about workplaces):

-What longer term issues might Don face if the wage top-up has to continue?

-What non-compensation aspect was a problem and how did that help? What other steps do you feel Don could have taken to address this issue?

-What competitive issues do employers face with specialized functions such as IT? How would you address such issues?