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Human Resource Issues

CarLis Inc.

You are sitting at your desk in your new office, head in hands, pondering your next move. As a recent graduate from a large midwestern university, you had been schooled in Human Resource Management. Upon graduation, you accepted an offer with CarLis Inc. to be the HR Manager, a new position in this growing company. Paul Hewitt, the owner, had hired you and had been very clear about his expectations. "Get HR under control!" he had said. Then he left town for two weeks to visit suppliers and customers before continuing on to a trade show. Through literature and questions, you have been able to find out the following information.
CarLis is located outside a midwestern city of 60,000 people. Paul Hewitt, then 28, upon graduation from high school had joined the Army. Paul was released from the Army in 1987 and secured a job with an auto factory. In 1990, he still held the same operative level job that he held when he was hired - that of an injection molding machine operator. His wife's relatives believed that he was a lazy person with little ambition who would never amount to much. Actually, Paul was and is a quite intelligent person but his basic satisfaction in life stems from the challenge of building equity by investing. He had studied on his own and had gained an understanding of markets and their influences.
But he was happy in his job. He liked his co-workers and his take-home pay was sufficient to take care of the necessities of life and to support his hobbies. Even though he was not challenged by his job in the factory, he felt that he got all the challenge he needed from his financial interests.
Oops! In early 1990 the country began to slide into an economic recession, which had a very adverse effect upon the auto industry. Several employees, including Paul were laid off because of excessive inventory buildup. Paul applied and received full unemployment benefits from the state - approximately $96 a week - plus Paul received SUB (Supplemental Unemployment Benefits) payments from the company because of the union contract. Paul decided to try and use his financial skills to make a new life for himself.
He realized that the injection molding business was very competitive, but he knew the ins and outs of the machines and felt that with a few other key people, he could be competitive in price and quality. In this process, plastic pellets are melted and forced under pressure into large hydraulically operated steel molds to form the required shapes. Essentially, if you can afford the machines and know mold design techniques, you can be in the business.
Paul expended a lot of time and effort in the design of his new company. He recruited an engineer, Rod Michaels, from the old company who knew mold design and also offered a part of the company to a marketing person, Al Gary, from the old firm. Together, these three developed a business plan and with their pooled monies, applied for the required financing necessary to start up the business. They decided to name their new company CarLis, A combination of Paul's two children.
They rented a 4000 square foot building and installed two injection-molding machines that they bought used from a machine manufacturer. They contracted with ADIA, a "temporary" employment service, for temporary help and initiated training with their ten new temporary employees. Training consisted of instruction in working the machines and learning the new company's processes and procedures. Paul and Al conducted the training. They planned that each employee would need to be able to do any and all jobs. They made an agreement with ADIA that they would not hire the temporary workers to full time positions with CarLis until at least after 90 days of satisfactory service.
They targeted a cassette company and made them a proposal for business. They won the bid and were in business! Things went about as planned for a new company, with unexpected glitches and snags occurring and being solved. Paul and Rod handled the manufacturing end, while Al was responsible for customer relations. The company showed profits in the second year and the partners began to think about expanding into a larger facility so they could handle more business. In 1993, they bought a 2000-foot facility and two more injection machines. When they won a bid with an auto manufacturer to make interior car door panels, they added twenty employees and a second shift. At this time, Paul was the manager, Al was in charge of sales and marketing and Rod was production manager. Rod served as day shift supervisor as well. They promoted a deserving long term employee, Beth, to night shift supervisor. She had been one of the first temps hired to a full time position with CarLis and was extremely deserving of the promotion. They continued to utilize ADIA for temporary workers and if they turned out to be good, they continued to hire them on a permanent basis.
Business continued to be great and by the end of 1994, the facility proved to be too small. They built on to it and added two more machines. They also had added two more auto manufacturers to their client list. Not even in their wildest dreams had they expected business to be this good. Following the principles of span of control, Paul added new employees for production whenever the demand for moldings dictated. As they grew, more supervisors were promoted. CarLis now employed 120 workers in three eight-hour shifts.
The company now has five supervisors working under Rod, who now serves as the plant manager. They have all been promoted from the hourly ranks, largely because of their enthusiasm and competence. Their responsibilities include training new hires in their production duties, monitoring workplace safety, and ensuring that the work gets done and done well. To a person, they are very proud of the job that they are doing. When promoted to supervisor, a $1/hr raise is given and the individual is switched to exempt status, though they are paid overtime.
The operative jobs require people with good mechanical skills, but heavy lifting is not required. Turnover averages 10-12% a year and average pay is $9.00 an hour, a little below average for the area. Benefits are the legally required ones. At present, CarLis is non-union and Paul wants it to stay this way. Recently though, labor organizers have been active in this geographic area, though they have not so far been concentrating on CarLis.
But safety continues to be an important concern of Paul. The production process requires that molding machine operators inspect each item and trim excess plastic from the edges with a utility knife. These knives feature replaceable razor blades and are very sharp. The problem occurs when the knife slips and the operator cuts him/herself. The accident incident rate is 25 per month, well above the industry average of 16 per month. Most incidents do not result in lost time but occasionally require a trip to the hospital for a couple of stitches. The temporary agency has also been having problems supplying CarLis with the quality of worker that Paul feels is necessary to enable CarLis to continue growing at the current rate. But the owner of the agency says that there are simply not enough people in the area to fill all the requirements and some of the ones that do request that they not be sent to CarLis; something to do with danger. Local area unemployment is only two percent. The government regulations concerning personnel decisions were taking too much of the manager's time.
The company has enjoyed steady growth and all indicators point to continued steady growth. CarLis recently won a bid with a local trailer-manufacturing firm for plastic data storage bins. Paul is planning to expand the business about 50% and will have to hire about 60 additional workers to meet this new demand.
At this point, you were hired. You spent your first week getting to know people and learning the information that you know. Paul will be back in about ten days. You would really like to have something to show Paul - at least a plan of action.

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Problems:
Shortage of personnel to fill up the positions CarLis. There is a lack of personnel to fill up the positions at CarLis. There is a shortage of employable persons in the area. Those who are employable are apprehensive that joining CarLis may lead to injuries from blade accidents.
Causes/Issues:

1. The cause of shortage is that the Midwestern city has a small population.
2. There is a specific quality of workers that CarLis needs and it is not easy to get these workers.
3. The average pay of $9.00 an hour is lower than the average.
4. There is a feeling that CarLis has a higher accident rate than industry.

Alternatives:
1. To accept only the most profitable orders to match the current capacity of CarLis.
2. To recruit workers from ...

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