One often hears a CEO say, "Our most important asset walks out the door every night." In Savannah Engineering, Inspection, and Insurance Company (SEIIC)'s case this is literally true. The company relies on the knowledge and skills of its employees for its success. Without its human capital, the company has little to offer its customers. As noted in the introduction to the case, SEIIC has been experiencing difficulty in meeting customer service expectations and is experiencing problems with retaining some of its most valuable employees. As a part of your review of the company's HRM systems, you will need to examine the critical areas of training, performance management, and career management.
For each of the areas of training, performance management, and career management:
? Identify at least three approaches or trends that relate to each of the three HRM areas. Provide a brief description and a note on the potential relevance of the approach and trend for each area.
? Choose one of the approaches or trends to discuss in more detail and analyze and discuss the relevance to SEIIC's situation. Justify your answer with appropriate examples and reasoning.
The solution discusses the trends in HR pertaining to SEIIC, Savannah Engineering Inspection and Insurance Company.
Identify specific practices within the areas of compensation and benefits that would aid SEIIC in developing the kind of employees that it needs and for retaining its most valuable human capital.
SEIIC's compensation and benefits programs are based on traditional design principles typical of a company of its age and history. For example, almost all employees receive annual pay increases of two to five percent. This is frustrating to both managers and high performing employees. Managers would like to give better pay raises to high performers. However, budgets are only enough to cover the "required" raises to all employees; this leaves too little for more significant raises to high performers. Naturally, as a result, high performers who feel underpaid often seek other employment. The company's policies have tended to reward seniority rather than performance, and because of the job evaluation system, compensation is tightly compressed. Benefits are thought to be generous in that the company pays for most of the cost. However, the structure of the benefits is rigid and only includes such traditional benefits as health insurance, life insurance, retirement plan (defined benefit) and a 401(k) plan (defined contribution).
The company recognizes that things are changing in its business environment as well as relative to the needs of its people, especially now that so much of its business in world-wide. As part of the ongoing analysis of trends that should influence the redesign of HRM in the company, what are the relevant trends in compensation and benefits that the company should pay the most attention to? To answer this question, address the following:
Identify and explain at least three trends or recent approaches in compensation that SEIIC should consider in its redesign effort.
Identify and explain at least three trends or recent approaches in benefits that SEIIC should consider in its redesign effort.
Discuss the pros and cons to the trends/approaches identified in compensation.
Discuss the pros and cons to the trends/approaches identified in benefits.
Of all the trends/approaches you have discussed, which is the one that has the most merit for compensation and which one has the most merit for benefits? Justify your answer using examples and reasoning.