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Strategic HRM And Emerging Issues
During the HR Manager’s audit at the India plant, The HR manager also discovered that the plant has not traditionally utilized any form of progressive discipline. Managers keep track of issues in their own way without any formalized process. Now that the plant is part of a global, publicly traded company, the lack of processes puts the entire organization at risk for several areas of compliance. How can HR add value in this context?
HR stands in position to hold operational managers accountable for their jobs. In this case, appropriate discipline needs to be given to these managers for not abiding by any standard process.
HR has to evaluate situations in unison with the Legal and Quality departments. All share accountabilities for operational risk and all need to get together for a cross-functional response to the situation.
The exit process for employment can be lengthy and present too much risk to a business if not handled well. HR is able to assess risk, make recommendations for process improvement, and execute strategic plans.
HR has a commitment to creating the best employee experience, which stops employees exiting from a business. When processes are not well thought out, the most detrimental impact is first felt by employees.
Bookmark question for laterIn smaller businesses, when departments are not as well defined and have fewer people, business leaders from any discipline will frequently perform terminations. This is not ideal. As companies grow, why should they place ultimate accountability on HR to manage the termination process?
Some state laws require HR to manage the process, so most companies have to adopt an overarching policy for HR to run and manage the process.
HR prevents former employees from filing any type of lawsuit by ensuring a zero litigation policy.
HR isn’t always the best department to run an effective termination. If a relationship between manager and subordinate is really personal, managers in these situations tend to run much more effective separation discussions.
The termination process, while difficult for management, is even worse for the individual. HR possesses the necessary skills in handling these delicate procedures and knows how to mitigate risk.
Bookmark question for laterDuring times of global financial crises such as in 2008 and 2020, many companies were faced with loss of revenue and subsequently had to take a closer look at operating expenses and the potential of reducing headcount as one means to stay above water. For publicly traded companies, decisions in this realm draw the attention of many outsiders such as the press, customers, and shareholders. How can HR provide strategic value in situations like this?
As HR has ultimate ownership of recruitment efforts, it stands in the best position to know how many people will need to be rehired again once the economic downturn ends.
HR has the knowledge, skills, and ability to manage complex employment situations and advise the business through time of established procedures that ensure fairness.
Because HR knows the voice of employees, it is able to obtain feedback from all employees quickly to understand what decisions can be made.
HR can best assess how social media responses will impact the business’s reputation. HR typically reviews sites such as FaceBook, LinkedIn, and Glassdoor.
Bookmark question for laterE-Tronics will be executing a reduction in force (RIF). Upon the last review, the HR Director notices that 95% of the justification is sound. However, there appears to be a greater impact on a small group of employees over the age of 40. How should the HR Director handle the situation?
The HR Director should put a hold on the process until E-Tronics achieves 100% accuracy in ensuring there is no disparate impact to any legally protected group. The HR Director should also create documentation for legal precedence to ensure there is no disparate impact.
The HR Director should meet with the small group of employees over the age of 40 and seek volunteers from the group that will agree to an early retirement plan.
The HR Director should not pause the situation because doing so will cost the company potentially hundreds of thousands more in lost costs. These issues can be cleaned up for the second round of reductions.
The HR Director should realize that 95% accuracy is actually better than most businesses in the real world. There are no risks to executing a RIF with this high degree of justification.
Bookmark question for laterDuring the COVID-19 Pandemic of 2020, E-Tronics began weighing options for controlling or cutting costs due to lower revenue and profitability. Senior leadership has requested HR to conduct an analysis and come back with the best way to manage their human capital costs. HR leaders know that from the most recent engagement survey, 7% of the workforce indicated they are ready to retire in the next 1–3 years. Given this information, what is the best option to pursue?
Forced ranking; this intense process evaluates employees peer-to-peer and will highlight objectively which employees are ranked at the very bottom and should be let go.
Temporary Workers; the move to temporary workers will decrease overall costs and allow the company to let go of workers immediately without the burden of legal process.
Early Retirement; this provides a convenient and satisfactory way for meeting expectations of a reduction in force (RIF).
Job Sharing; this allows two people to share one role, creates greater efficiencies across the department, and reduces cost.
Bookmark question for laterAt a plant in California, the leadership team is reviewing closure options and has sought external guidance from a national consulting firm that specializes in plant closures for government agencies. As E-Tronics has a few government contracts, one in California, the company thought it prudent to engage with this consulting firm for advice. Why is this a potential problem?
During times of plant closures, the last thing the company needs is to pay exorbitantly high consulting fees. Most expenses should be geared towards employee outplacement efforts.
California’s laws governing plant closure and notification require additional cost saving measures as outlined in the states collective bargaining agreement.
The internal HR leadership team would advise local leadership that relevant acts such as WARN do not apply to state, local and federal governments. Working with this consulting firm may not produce the accurate, relevant facts needed.
The company cannot notify any third party about the company’s plans to shut down one of the facilities until it is more than 60 days out.
Bookmark question for laterDuring national economic crises, the private sector occasionally looks to the government for specific answers and legislation regarding layoffs and other economic incentives. However, the information doesn’t come as fast as they need it to. Small companies in particular are put in a position where they must act quickly to stay above water. Business leaders panic because they need answers quickly but have no reliable information. Why is the HR profession so necessary in times like this?
HR professionals are frequently involved in litigation and can therefore connect with law offices and understand the legal landscape and risk of any employment related decision.
HR is able to connect with state legislators quickly because they are typically involved in employment related legislation decisions.
HR professionals have the ability to act in an agile manner and interpret legal processes or apply functional knowledge to make decisions that benefit both the business and the employees, while adhering to all relevant legislation.
Bookmark question for laterUnfortunately, some managers within organizations purposefully make an employee’s situation miserable with direct intent to force the employee out. This is due to many circumstances such as collective bargaining agreements where a union is represented, specific contract language, or tenure policies. Because of these elements, many managers aren’t able to terminate under regular conditions and will sometimes commit themselves to unethical practices. How can HR minimize unhealthy and potentially illegal situations like this?
HR is the sole representative during any legal proceeding and bears the burden of proving guilt for the company.
HR plays a dual role in advocating on behalf of employees and also acting as a representative of the company. A good HR professional must leverage company resources while watching out for the individual.
HR is able to conduct frequent investigations ensuring they enforce appropriate conduct within the business.
HR is able to review comments from engagement surveys and identify which managers have been acting unethically. They are able to then act on appropriate disciplinary actions.
Bookmark question for laterDuring the same timeframe as the COVID-19 pandemic, Advanced Hero was also reviewing its profitability as a company. While the company was fortunate enough not to be facing as severe a financial decline, it was engaged in looking at alternative options for cost-saving. Which of the following should the HR department recommend?
Rescinding offers for non-essential positions, thereby enabling the most important work to still be completed
Freezing compensation in a hybrid format, such as freezing salaries as these wages are higher but allowing hourly rates to continue on unencumbered
Outsourcing certain work where labor costs and fees are not as high externally, where much of the outsourced work can be non-essential
Requiring temporary furloughs to all employees and staggering the weeks of leave, where all employees including the CEO are in scope and the work impact is minimized
Bookmark question for laterDuring difficult termination processes, companies utilize certain documents and legal processes to make the situation better for all parties involved. Why is a release of claims document frequently used by HR in the termination process?
It allows the company to recoup costs associated with sign on bonuses, relocation packages, etc.
It allows all tangible assets to be retained by the company for industries that make tangible products such as manufacturing and textiles.
It allows the individual to receive additional severance pay while voiding any potential claim of litigation.
It allows all proprietary information to still be legally bound to the company and not to the employee or former employee.
Bookmark question for laterMike is a senior executive at Advanced Hero and has been in his current role for 12 years. The Board of Directors has been closely monitoring his input and interactions with others for the last year because of the friction between him and the other executives regarding business direction and strategy. The Board of Directors concluded that it needs to make a decision, so it seeks the advice of the Chief Human Resource Officer (CHRO) for guidance. Which of the following details should the CHRO consider?
Certain bona fide executives and policymakers that meet specific criteria are able to be forced into retirement. Even though Mike is 65, Advanced Hero can legally force him into retirement.
Executive compensation provides certain protections from employment-related decisions. The CHRO will have to conduct a compensation analysis to see if Mike’s pay is above or below the thresholds for these protections.
Even when job deficiencies exist, a company cannot terminate an employee over the age of 40 because job performance is not an exception to the ADEA rules. The board must find a legal, alternative path to separation.
The Board first has to obtain a majority vote by shareholders in order to prematurely terminate a senior executive. Once shareholders are notified of an emergency vote, they have 21 days to validate the termination proposal.
Bookmark question for laterSamantha and a few other employees with over 30 years tenure at E-Tronics were presented an early retirement release. During the review period, Samantha noticed that some of her peers within the same group impacted began pressuring her to sign the release. Some even left disrespectful messages in her inbox and on her and desk. She claims that because relevant information was shared to those impacted, her peers are pressuring her to sign the release so some of them don’t have to lose their jobs. What should the HR Director consider in reviewing this complaint?
The OWBPA dictates that employees who agree to and sign an early retirement release have between 21 and 45 days to file any incident of harassment if it is to be legally recognized by the EEOC before retirement.
The OWBPA dictates that employees who agree to and sign an early retirement release waive any and all legal claims after 45 days of retirement. Claims made before this period are reviewed by the company’s legal counsel under the terms of ADEA.
The OWBPA dictates that employees who agree to and sign an early retirement release waive potential claims under the ADEA. However, employees cannot be expected to waive all rights under the EEOC for other claims such as harassment.
The OWBPA dictates that employees who agree to and sign an early retirement release waive any and all legal claims pertaining to unlawful acts committed by the company or persons of the company.
Bookmark question for laterAfter looking at the layoff and separation plans, the Finance Manager suggested that the easiest way to protect company profitability is to cut those with the highest pay. How should the HR Manager respond to this perspective?
Finance does not have any actual involvement in the decision-making process for who will be let go. The accountability rests on Human Resources to decide and then to inform other stakeholders of the actions.
Those that are highly compensated are also the decision-makers. Laying off all or most of the decision-makers will put the company at risk of complete failure.
In partnership with Finance, a re-distribution of wages may relieve the pressure of layoffs by structuring labor costs differently. The ADEA allows exceptions for bona fide executives’ wages to be reduced as a cost-cutting measure.
Those that are highly compensated and even possibly overqualified are usually more experienced workers over the age of 40. This criteria typically puts companies at risk of breaking ADEA laws.
Bookmark question for laterDuring the most recent annual performance management training at E-Tronics, managers admitted struggling during termination discussions because it is uncomfortable to conduct terminations. What is the best advice HR can provide to managers?
Because most terminations are not anticipated and employees are caught off guard, managers should into detail about past performance evaluations so that employees can understand the complete rationale for the termination.
Recent research shows that emailing the termination decision is acceptable due to the highly accepted and universal usage of electronic communication in today’s culture. If managers really don’t want to speak in person, this is a viable option.
As termination discussions are difficult, managers should keep the meeting brief and highlight the main performance issues that led up to the termination decision. Active listening can also help diffuse potential frustrations exhibited by employees.
Managers should provide the rationale for the termination but be open and willing to hear the employees’ perspective in case the decision needs to be changed. Employees’ input at this stage is critical to avoid potential EEOC claims.
Bookmark question for laterCompanies face both legislative and social pressure to take care of employees in many areas of life. In relation to the separation process, regardless of reasons for separation, why should HR departments pay special attention to COBRA?
Providing terminated employees certain rights under COBRA is critical so that the company can avoid potential EEOC claims.
Providing terminated employees certain rights under COBRA safeguards the company from potential ADEA claims for those over the age of 40.
Providing terminated employees certain rights under COBRA ensures that withdrawals from ERISA backed accounts occur without tax penalties.
Providing terminated employees certain rights under COBRA allows continued coverage under group health plans.
Bookmark question for laterAn E-Tronics Operations Manager recently transferred from a non-union plant and is now faced with the task of collaborating with HR to identify impacted groups for layoffs. This manager has not worked in a union environment where a collective bargaining agreement (CBA) is in place. His recommendation for layoffs is to follow the same method used at his previous plant, which is to base the decision on performance. Why is this approach not possible in the present situation?
The layoff provisions of the CBA first call for a review of the 9-box grid to understand how many union members are in the lower quartiles and how many are not.
The layoff provisions of the CBA require 60 day notice to be given to union employees before they can be impacted by layoffs.
The layoff provisions of the CBA outline that separations need to be based on seniority, not variables such as performance.
The layoff provisions of the CBA require union employees to complete the 90 day probationary period before they can be impacted by layoffs.
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