Running head: FINAL REPORT

Simulation Final Report Sheila K Keller; kellshe MGMT 420 Professor Mimi Kelly August 26, 2012

FINAL REPORT

Executive Summary BECA Corporation is a medium-size firm of approximately 660 employees. Through rapid expansion, the organization has developed a significant need for a strong Human Resource Department. The current strategic plan has addressed BECAs need to improve the organization and planning of their workforce. The plan aligned with the mission statement and spanned the course of three fiscal years. The overall strategy to use savings gained by the implementation of the strategic plan has been successful. BECA's HR Department is now operating at a higher quality level, lower grievances/accidents, lower turnover, and lower absenteeism. BECA's percentage differences in these areas are comparable to industry averages or better. The firm has reached the goals set for the past three years within the constraints of feasibility. Although, the firm should continue improvements in all areas, BECA is in a much better position than three years past. The areas of absenteeism and accidents are much lower than the industry averages. Quality and productivity are above industry averages. Turnover, morale, and grievances are all comparable to industry averages, which are significantly improved from the beginning of this strategic plan. In addition, the firm has made significant strides toward increasing female and minority staffing, but this goal will continue to be a long-term goal, since competing with industry-wide affirmative action efforts has limited growth in this area. The overall strategy continues to be strong and sound. BECA should continue to increase wages alongside industry wages. However, the results of this strategic plan have proven that the highest wages do not determine the highest performance indicators. In this respect, other areas drive performance quality among employees. The firm should continue to fund special programs and increase the training budget. Areas such as quality, productivity, training, and morale are all interrelated and require careful consideration to affect positive changes/outcomes. Special programs that target training, performance, and safety were much more effective in creating a quality workplace. It is advisable to continue with this strategy. Overall, the expense of each objective will need to be considered and adjusted to perform within budget restrictions. New benchmarks are needed to continue improving quality, morale, and productivity. The affirmative action program has been successful, but may not be needed after one to two more years. The results of the past three years have shown how invaluable the addition of training and special programs has been for BECA. It is highly advised that these programs receive ongoing funding and support. The decrease in wages experienced from improvements helped fund each of this plans goals/objectives. Improved morale, turnover, and productivity are clearly visible. As funding becomes less flexible, it is suggested to begin a program for motivation and decreasing costs.

FINAL REPORT

Table of Contents
Executive Summary....................................................................................................................................... 2 Quarter 1 ....................................................................................................................................................... 4 Quarter 2 ....................................................................................................................................................... 5 Quarter 3 ....................................................................................................................................................... 5 Quarter 4 ....................................................................................................................................................... 6 Quarter 5 ....................................................................................................................................................... 7 Quarter 6 ....................................................................................................................................................... 7 Quarter 7 ....................................................................................................................................................... 8 Quarter 8 ....................................................................................................................................................... 8 Quarter 9 ....................................................................................................................................................... 9 Quarter 10 ..................................................................................................................................................... 9 Quarter 11 ................................................................................................................................................... 10 Outcomes and Recommendations for Goals & Objectives......................................................................... 12 References .................................................................................................................................................. 15

FINAL REPORT

Quarter 1 A conservative approach was taken this quarter, with promotions as the sole source of hiring above wage level one. This was a choice based on cost as well as the strategy to improve moral, productivity, and retention. Considering the large number of employees in wage level one and the concentration of resignations in this wage level, an initial raise of fifty dollars was given to level one to encourage retention. Health insurance was changed to a more attractive plan for employees with lower deductibles. In alignment with program goals and objectives, the following programs were established: Employee Participation Program Grievance Procedure Orientation Program HR Information System Performance Appraisal System Affirmative Action Program

In addition, the following was invested in several training initiatives: Training for External Hires and Promotions, $7,500 Training for Managers and Supervisors, $7,500 Safety and Accident Prevention Program, $12,000 Quality Program, $5,000

Performance indicators were favorable at the end of this quarter. The company accident rate fell over seven percent. Employee morale had the most significant improvement with an increase of thirty-two percent. It was difficult at this early stage to determine a defining agent

FINAL REPORT

for driving these improvements, as several changes were made at the same time. Very small increases in female and minority employees were evident and most likely a result of industrywide efforts to increase diversity in the workforce. In addition, a job analysis was performed on all jobs in the organization, including managerial staff for $20,000. This decision was based on the goal to create a strong foundation for Human Resources core competencies. Performing a job analysis is an excellent first step in this process (Denisi & Griffin, 2011, pp. 108-116) Quarter 2 All wage levels were raised twenty-five dollars and all programs were maintained. Training funds were raised significantly based on the success from first quarter results. Industry surveys indicated other firms were investing more heavily in these areas with significant evidence of increased quality, decreased absenteeism, and decreased accident rate. Health benefits were improved with dental care and legal services and term life insurance and eye care, in accordance with the strategic plan. Results from this quarter validated the continued increase in funding training programs. Improvements continue in quality, productivity, accident rate, turnover rate, morale, and grievances. As a result, hiring costs are down over $30,000. Target percentages for affirmative action were lowered to a more reachable goal. In addition, exploratory studies were initiated for a Job Design program, to strengthen Human Resources core competencies. Quarter 3 Although the initiative to promote from within is being maintained, one position was filled with an external hire to bring in a new perspective. Wage increases were given in keeping with the objective to raise wages closer to average area wages. The company now offers an employee funded 401k pension plan. In addition, tuition reimbursement was instituted to

FINAL REPORT

encourage employees to expand their knowledge base. Training programs were raised again and all company programs were maintained. Similar improvements were seen in this quarter, further validating conclusions drawn in the first two quarters. An incident involving sexual harassment and honesty on job application required attention this quarter and signifies the need for improvement. The decision was made to terminate employment for the sexual harassment, since it was witnessed and violated company policy. The honesty issue required termination as well, since the individual did not meet the education requirements for the position. This leaves the company vulnerable to legal fees/lawsuits. BECA needs a stronger sexual harassment policy, additional training for managers, and a more stringent verification of employee qualifications during the hiring process. Quarter 4 Remaining funds for this fiscal year were used to increase wages and continue increasing training programs. All special programs continue to receive funding and no further changes have been made in fringe benefits. Affirmative action efforts are working, even though it is a slow movement. It is doubtful that this goal will be reached in three years and will be a longer-term goal. As would be anticipated with improvements in morale, productivity, and quality, labor cost has decreased over four dollars this year. The company accident rate has decreased over forty percent this year and morale has increased by twenty-two points. These results indicate that the existing strategy is effective and is not in need of any changes at this time. A special request was made for Human Resources to provide a suggestion to meet temporary staff requirements. The recommendation was to forge community relationships by utilizing a homeless placement organization. Management was challenged, but the results were favorable. BECA was awarded the Responsible Employer Award.

FINAL REPORT

Quarter 5 All special programs continue to be maintained, as well as continued increases in training funds. An incentive plan was initiated as part of the objective to increase fringe benefits and improve employee morale, increase quality, and improve productivity. Improvements continue to be evident in the same areas as previous quarters, although the momentum has slowed somewhat. This indicates that the company may have reached a point of diminishing returns, although the investments are still financially advisable. A difficult decision was made this quarter regarding a promotion/hiring opportunity. There were three candidates and selection was made based on experience. The CEO was disappointed that a candidate more in line with the companys affirmative action policy was not chosen. Although affirmative action is an important objective of the company, Human Resources could not overlook the job requirements and chose the best candidate for the job. Candidates who met the affirmative action objective were lacking either supervisory experience or technical experience. Both of these were important requirements for the position, supporting this decision (Denisi & Griffin, 2011, p. 149). Therefore, Human Resources chose to promote our efforts to hire from within the company. Quarter 6 Production requirements are down, so this quarter was a sensible one to increase wages with little expense required for hiring. Continued increases were made in training funds and special programs remain in force. Improvements continue to diminish, although they are still significant. In an effort to see more improvement in the absenteeism rate, an additional vacation/personal/sick day was added to fringe benefits. Results showed significant improvement from a value of 284 to 269, including an increase in morale.

FINAL REPORT An opportunity to develop a Zero Tolerance policy and contract with a training consultant was initiated for $10,000. Especially considering recent issues with sexual harassment, this decision was a sound investment. Current training and clear policies will prevent BECA being placed in such a tenuous position in the future. Quarter 7 Wage increases were given with the availability of funds from a decline in production requirements. Based on the favorable results from the last quarter, another vacation/personal/sick day was added to the fringe benefits package. Similar results were once

again experienced. Efforts to increase training programs continue, as well as ongoing funding of special programs. The diminishing return is evident, although still significant. Although a decrease in production requirements continues to decrease the companys number of employees needed, natural attrition has prevented the need for any layoffs. However, when production requirements increase, then hiring and training expenses increase as well. Human Resources initiated a study for a compensation plan for profit sharing/gain sharing this quarter. The plan will include all employees and encourage employee retention. This decision aligns with the strategic plan to decrease turnover. Quarter 8 Wage increases have continued using the available funds from the decrease in hiring expenses. Diminishing returns from increasing training programs has reached a point where a large amount of continued investment is not financially advisable. Therefore, no increases were made this quarter. Special programs continue to receive funds and they are performing well. Affirmative action continues with a low, but steady, increase. Morale has risen this year to a

FINAL REPORT

value of eighty-eight. Similarly, quality has increased to a value of eighty-two, accident rate is now at 166, and grievances have held steady at sixteen. In an effort to increase core competencies for Human Resources, a new appraisal system was implemented. This system included the input of supervisors, subordinates, self-appraisal, and BARS. Although this effort aligns with the company strategic plan to increase productivity and efficiency, some supervisors were upset with subordinates evaluating their performance and morale was affected. Human Resources requires the input of all team members to make informed decisions and supervisors will most likely adjust and recognize the value of input from their subordinates. Quarter 9 Wage increases continue in an effort to remain competitive with industry averages. Small increases were made in training for external hires and quality funds due to increased staffing needs in level one. Although funding is limited this year, $8,000 was allotted for a comprehensive Employee Assistance Program. This initiative will support employees by reducing stress (Denisi & Griffin, 2011, p. 264) and thereby increasing productivity and morale, which align with the company strategic plan. These types of programs also decrease costs (Denisi & Griffin, 2011, p. 209). It also serves to strengthen the core competencies of Human Resources. BECA was awarded the Employer of the Quarter Award by the Health Institute. Quarter 10 Budget constraints prevent further increases in wages at this time, as the expected increase in production requirements has required an increase in hiring costs. Small increases in training funds continue, as does funding for special programs. The accident rate experienced a significant decrease by approximately twenty-five percent this quarter.

FINAL REPORT Safety concerns in our industry provided an opportunity to improve BECAs safety program. A full-time safety specialist was hired to prevent occupational disabilities, and to conduct training on safety practices, OSHA regulations, ergonomic issues, and preventative safety management. This program cost BECA $15,000, but earned the company a superior rating with OSHA and a Safety Award of the Year from our industry. In addition, the companys accident rate reached an all-time low of 123. Maintaining a safe environment and

10

low accident rate saves BECA thousands in potential fines and/or costs associated with employee accidents (Denisi & Griffin, 2011, pp. 264-274). Quarter 11 Production increase has necessitated more budget restraints. Small cuts were made in the training programs, although fringe benefits and special programs were maintained. The expected results of these cuts were evident in a rise in the accident rate, decrease in morale, and increase in grievances. Although, this would be expected with such a large number of new hires in level one. A decision was made to implement self-managed work teams. This will require additional training for members of these teams, but future improvements from this decision will validate the investment. The company should experience an increase in productivity and quality (Denisi & Griffin, 2011, p. 307), but it will take some time to see these results. Overall, BECA has ended this year with a favorable standing in the industry. The following chart provides an overview of the progress made over the past three years:

FINAL REPORT

11

Chart 1

Industry Starting Value Average

Quality Productivity Accident Rate Turnover Morale Grievances Absenteeism Total Minorities Total Females Fringes (%) Wage Level 5 Wage Level 4 Wage Level 3 Wage Level 2 Wage Level 1 50 200 494 9.8 50 31 498 72 225 215 6.9 84 18 317

BECA
79 235 176 7.0% 82 18 270

% Difference
13.9% 4.3% 18.1% 0.1% 2.4% 0.0% 14.8%

51 83 20 19,000 16,000 14,000 11,400 9,000

10.8% 14.7% 31.8% 18815 14765 12630 10619 8551

12.7% 20.1% 31.2% 18825 14780 12640 10585 8460

1.9% 5.4% 0.6% 0.1% 0.1% 0.1% 0.3% 1.1%

*Average Industry Wages are based on Quarter 8 Survey

FINAL REPORT

12

Outcomes and Recommendations for Goals & Objectives A. Hire and maintain an effective workforce that represents the diverse makeup of the current, available labor force to lower turnover and improve morale completed, continue 1. Establish a New Employee Orientation program completed, continue 2. Establish an Affirmative Action Program and assign Affirmative Action Officercompleted, continue with yearly evaluation a. Increase percentage of females in the firm to percentages proportional to the local community labor force over next three years - limited by industry conditions, continue efforts over next year and reevaluate b. Increase percentage of minorities in the firm to percentages proportional to the local community labor force over next three years - limited by industry conditions, continue efforts over next year and reevaluate, refer to following chart: Chart 2

FINAL REPORT

13

3. Establish and maintain an effective Human Resource records and record keeping system using current technology- completed, continue B. Improve quality rating by 30 points over the next three years- completed, recent events decreased quality marginally, but is expected to recover 1. Implement training and career tracking program - completed 2. Establish a Total Quality Management program with a full-time manager, utilizing concurrent controls completed, continue, the relationship between training, quality, and productivity is remarkably evident in the following chart: Chart 3

FINAL REPORT C. Improve productivity rate by 20 units over next three years completed, set new goal at same increase 1. Raise employee morale by 35 points over the next three years completed, although recent events decreased morale marginally, expected to recover a. Create a formal grievance procedure completed, continue

14

b. Implement a Safety Program with a full-time Safety Director to lower the accident rate by at least 35 points over next three years completed, continue c. Establish an Employee Participation Program completed, continue 2. Lower turnover rates to a level comparative to local/similar firms over course of next three years completed, a. Establish performance appraisal program completed, continue b. Raise wages to equal local average rates, or higher completed according to change in strategy to remain competitive within industry, rather than local wages, continue c. Raise benefits to 30% of wages over next three years completed, set new goal based on employee survey

FINAL REPORT

15

References Smith, J. R., Golden, P. A., & Deighan, M. (2012). HRManagement: The Human Resource Management Simulation. Interpretive Simulations. Participated during Summer 2012, Professor Laramie Kelly. Retrieved from schools.interpretive.com /v0912/redir.php Denisi, A. S., & Griffin, R. W. (2011). HR. Mason: South-Western, Cengage Learning.