Human Resource Management Function

 This is a case from the book … below is how it could look as a point paper analysis.

Changes, Changes

Jennifer, the owner and manager of a company with ten employees, has hired you to take over the HRM function so she can focus on other areas of her business. During your first two weeks, you find out that the company has been greatly affected by the up economy and is expected to experience overall revenue growth by 10 percent over the next three years, with some quarters seeing growth as high as 30 percent. However, five of the ten workers are expected to retire within three years. These workers have been with the organization since the beginning and provide a unique historical perspective of the company. The other five workers are of diverse ages.

In addition to these changes, Jennifer believes they may be able to save costs by allowing employees to telecommute one to two days per week. She has some concerns about productivity if she allows employees to work from home. Despite these concerns, Jennifer has even considered closing down the physical office and making her company a virtual organization, but she wonders how such a major change will affect the ability to communicate and worker motivation.

Jennifer shares with you her thoughts about the costs of health care on the organization. She has considered cutting benefits entirely and having her employees work for her on a contract basis, instead of being full-time employees. She isn’t sure if this would be a good choice.

Jennifer schedules a meeting with you to discuss some of her thoughts. To prepare for the meeting, you perform research so you can impress your new boss with recommendations on the challenges presented.

Problem Paper Changes, Changes

Problem Statement:

Jennifer’s company is expected that some employees plan to retire during a busy period and Jennifer wants to make significant changes to the company’s structure, such as becoming a virtual company and having employees work on a contract basis with no healthcare benefits. This could mean turnover and underemployment.

Key Element:

• Expected growth of 10% – 30% expected in next three years
• Diverse age range and retiring employees
• Plans to save cost by allowing employees to telecommute certain days during the week
• Potentially closing down physical office and transforming to virtual company
• Cut back on healthcare benefits for her employees
• Employee possibly working on contract basis

Stakeholders:

Jennifer: owner of the company. Must determine if her company should become a virtual organization or to allow employees to telecommute. She also must decide if she going to have contract employees, so she doesn’t have to provide healthcare insurance.

HR manager: recently hired to the organization. Diverse knowledge in Human Resource Management and notices the growth in revenue for the company. Has to find potential replacement for the employees planning to retire in the three years. Must create and implement policies for a virtual company. Reducing healthcare benefits and having employee work on a contract basis might lead to employee quitting and voluntarily leaving the company.

Contract workers: tend to work on flexible work schedules but do not receive employer-paid benefits, such as health insurance, paid vacation, or 401k program. There is also the lack of job security that prevents worker from wanting to work on a contract basis (Dale, 2017). Therefore, there is a good chance that many employees might quit rather than work on a contract basis for her.

Current workers: Have been with Jennifer since the beginning and have a good understanding of the business. can be affected by the transition to telecommuting or becoming a virtual organization. Will be affected if Jennifer cuts back on healthcare benefits and have them on a contract basis.

Customers: how they will be affected by the company no longer having a physical location and being completely virtual. 

Customers rely on positive emotional interaction with companies to help them in their decision making (Gilliam, 2013). Therefore, Jennifer’s customers might not react positively to her company going completely virtual.

Options to Resolve Problem:

1. Hire new employees to work and learn from the five employees that plan to retire within the three years.

Pro: when the employees do retire, they will be someone to take their place and they won’t have to be trained. They will be more knowledgeable about their jobs and what is expected of them.

Con: Still lose the historical perspective of the company and will be harder to find employees that are willing to work on a contract basis and have no healthcare benefits.

• Create policies about telecommuting and conduct a trail run by selecting certain employees to telecommute from home.

Pro: allows the HRM department to fix and improve any areas of the policies that may be lacking. They can also determine how to measure employee’s performance and communication.

Con: can lead to jealousy within the workplace which can affect the environment. Employees might take advantage of the telecommuting and their work output might decrease, which will affect the expected revenue growth.

• Implement an reimburse premium through QSEHRA program.

Pro: Jennifer can set up a monthly healthcare allowance for her employee. Employees can personalize their individual plan under the program and completely free of income tax. If eligible, Jennifer can deduct the cost of health insurance as a necessary business expense in taxable income (Dykxhoorn &Sinning, 2010).

Con: Jennifer will still have to provide an contribution caps for her employee and Jennifer cannot offer different allowance amount based on job criteria, which will make hiring new employee difficult (Bronson, 2018).

• Develop a wellness program for employees and encouraging them to seek preventive care when they need it.

Pro: employees are most likely to stay since their healthcare benefits aren’t being reduced. Wellness program can motivate employees to improve their health and reduce hospital and doctor visit. Wellness programs can also increase productively within the workplace (Verasai, 2019).

Con: healthcare program might remain the same cost and there might be an increase in cost due to the wellness programs.

Recommendation: #2 – Create policies about telecommuting and conduct a trail run by selecting certain employees to telecommute from home.

Telecommuting might be beneficial for Jennifer’s company since it will lead to a reduced cost of operation and employees will be more engaged in their work (Telecommuting, 2017). If employees begin to telecommute to work, Jennifer will no need to provide a physical location for her company since it will allow employee to work at home. Telecommuting can increase

However, to telecommuting, Jennifer and the human resource manager must develop policies and procedures that they will implement. These policies and procedures should set clear expectations and guidelines for employees to follow and perform efficiently at home. It should also set a standard for the HR manager to compare and track employees’ work. An example of a policy and expectation would be for employees to be available during a certain time period and when they are working, they are expected to be fully focused on their task in a quiet, undisturbing location (Fallon, 2017). By allowing worker to set their own time schedule, employees will have more control and independence, which will help them manage their work and family obligations better (Martocchio & Ferris, 2003).  Policies should also affirm and explain the consequences if an employee is found to be abusing the opportunity. The HR manager should remind employees that telecommuting is a privilege that can be lost if an employee is not meeting their expectations (Pickett, 2019).  However, the policies and monitoring of employee’s work shouldn’t be too rigidity and formal that employees are unable to be flexibly and enjoy the telecommuting opportunity (Martocchio & Ferris, 2003). 

A trial run of the telecommuting can help the HR manager determine if it will be ideal for Jennifer’s company. This provides the HR manager with the opportunity to observe and improve their telecommuting policies if needed. The trial run should only be available to selected employees that understand their job and the company’s goals and expectation (Continuous. 2017). Ideally, the selected employees will be the five employees that have been with the company since the beginning. These employees will be able to communicate and report any problems that they feel go against the company’s culture and morals. During the trial, it’s important that the HR manager can address and resolve any issues that might occur (Continuous, 2017).

References

Bronson, C (2018). The QSEHRA: Pros and Cons. People Keep.

https://www.peoplekeep.com/blog/the-qsehra-pros-and-cons

Continuous Network, LLC. (2017). Best Practice for Implementing a Telecommuting Program. Business News Daily. https://www.businessnewsdaily.com/7749-create-telecommuting-policy.html

Dale, R (2017). Advantages and Disadvantages of Being a Contract Employee. Biz Fluent.

https://bizfluent.com/info-10074329-advantages-disadvantages-being-contract-

employee.html

Dykxhoorn, H. J. & Sinning, K. E., 2010. “A review and analysis of international accounting research in JIAAT: 2002–2010,” Journal of International Accounting, Auditing and Taxation, 19(2), 137-153.

Fallon, N. (2017). 5 Issues Your Company’s Telecommuting Policy Should Address. Business News Daily. https://www.businessnewsdaily.com/7749-create-telecommuting-policy.html

Gilliam, J. (2013). What Customers Expect in the Telecommunication Industry.T Tec. https://www.ttec.com/blog/what-customers-expect-telecommunications-industry

Martocchio, J., & Ferris, G. (2003). Research in personnel and human resources

management ( 22). Amsterdam: Elsevier/JAI.

Pickett, P. (2019). The Pros and Cons of Telecommuting. The Balance Careers.

https://www.thebalancecareers.com/the-pros-and-cons-of-telecommuting-what-works-for-you-2071999

Telecommuting: The Pros, Cons, and Risk of Working from Home. (2017). Huffington Post.

https://www.huffpost.com/entry/telecommuting-the-pros-cons_b_8454260

Verasai, A. (2019). How Employers can Reduce Healthcare Cost. The HR Digest.

How Employers Can Reduce Healthcare Costs