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HR management for Thompson-Pritchett

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Scenario:
You are the newly hired Human Resources Manager for Thompson-Pritchett, Inc., a customer service and sales organization that has been in operation for two years. You were hired to develop a fully functioning Human Resources department which will provide enhanced HR services for the 150 employees and the leadership team. Over the past two years, the human resources functions have been spread among several individuals within the organization, including an administrative position which processed paperwork and the management team which typically handled their own human resources issues.

The CEO recognized the need to bring in an HR professional who will provide more strategic support for the organization to help them with their aggressive expansion goals. You are aware that there may be initial resistance from the management team; therefore, you plan to schedule one-on-one meetings with each manager, where you will get to know their leadership styles, department functions, as well as their needs and challenges. You also plan to hold communication sessions with employees to introduce yourself and discuss your role in helping them with HR needs they may have. You realize that trust is earned, and it may take some time for the management team and employees to feel comfortable with you. You are prepared for this!

Before you can begin addressing organizational issues, it will be important to engage in an organizational analysis to find out where things currently stand. This process consists of familiarizing yourself with the company background and assessing existing challenges and issues. Part of this process may include what is referred to as SWOT analysis?identifying the strengths, weakness, opportunities, and current threats with regard to human resources areas. This type of analysis provides the foundation from which to begin to formulate recommendations.

The critical areas in which you intend to focus initially include staffing, policy review, training, performance management, pay practices, benefits, career development/recognition, and retention. You are aware that with the HR functions spread among several individuals within the organization, procedures and policies are inconsistent within the organization. Through the centralization of these functions under the "HR umbrella," consistency should be restored.

You are very much aware that any initiatives you recommend must be tied to the corporate goals and designed to support the CEO's vision for the company. If you are to successfully align yourself as a true business partner, you will need to be prepared to provide financial data and other concrete figures to support your recommendations. For example, in your brief time with the company you quickly recognized an issue with employee turnover. You know that in presenting recommendations for addressing turnover, you will need to show the financial benefit to the company and how a reduction in turnover can lead to an increase in productivity and reduced expenditures. Demonstrating the return on investment for your recommendations will be key.

Additionally, with all strategies and policies you recommend, you will keep in mind the culture and ethical values of the company and how you can help to support those values through your recommendations. HR policy can either detract from or enhance company performance. You intend to demonstrate, through your recommendations, that you are a strategic business partner focused on helping the company to achieve its goals and remain competitive.

You realize this will be a challenge and know that effective communication and relationship building will be critical and will help to facilitate the changes to be made. You have considered what will be required, and you are prepared and eager to make a difference

ASSIGNMENT

As the new HR Manager with Thompson-Pritchett, Inc., you have put together some preliminary reports for the CEO. One of the reports you compiled focuses on employee turnover. Thompson-Pritchett, Inc. is an organization with aggressive expansion goals. In the last two years, they have continually hired new employees, yet they have not achieved the staffing levels they desired. They knew that some employees had left the organization, but turnover rates had not been formally tracked.

After your preliminary fact-finding, you were surprised to discover that the turnover rate for the past year was 38%. You know the CEO will not be pleased with this turnover rate, and you have made the decision to prepare yourself more before presenting the report to the CEO. Since turnover presents a significant cost for an organization, you recognize that this will be an opportunity for you to demonstrate how you can partner with the executive team to turn this situation around and help the company be more competitive. Prepare a short presentation for the CEO on the situation and possible reasons employees are leaving at such a high rate.

As you are preparing your presentation, consider the following:

1 - In detail, discuss what are some of the general reasons why employees tend to leave organizations?

2 - You plan to present the financial impact to the CEO. This will help her to get a real sense of the significance of the situation. What factors will you consider in preparing this financial estimate? For this assignment, you are not required to determine the actual dollar figure, but instead, you are to consider what would contribute to the cost of turnover.

3 - Being proactive, what measures can be taken to assess the morale of current employees, and how likely they are to leave/stay?

4 - What process do you recommend for partnering with the management team to reduce turnover in the upcoming years?

5 - As you consider your role, how will you position this to the CEO to demonstrate the value you can bring to addressing this problem?

Please provide reference

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Solution Preview

This is the basic reference material. The Response is in the PPT file attached.

Retention of Human Resources

Movement of individuals into, through, and out of an organization is termed as turnover. Turnover can be statistically defined as the total number (or percentage) of separations that occurs over a given time period. The turnover rate is an important indicator of the morale and health of an organization.

http://www.indiainfoline.com/bisc/jmht.html

Thus a severe problem facing any corporate entity today is the issue of retaining and attracting human resources. These resources that were stable in the past are the most mobile and fickle today. Thus managing employee turnover is critical to any and every organization. According to the fratfiles "Conservative estimates put the cost of replacing a lost employee at 25 percent of the annual compensation amount. For the typical full time employee who earns $38,481 and receives $50,025 in total compensation, the total cost of turnover would amount to $12,506 per employee."

Thus the employee turnover can significantly affect the profits. According to the about.com, Total employee turnover cost = Costs of hiring new employees + Costs of training new employees Bliss & Associates, a human resources consultant firm, breaks these costs into four categories: 1) costs due to the employee leaving; 2) hiring costs; 3) training costs; and 4) lost productivity. Let us discuss the cost in a detailed manner:

Costs of Hiring New Employees

? Advertising

? Bonus signing

? Relocation pay

? Time for interviewing

? Travel expenses

? Pre-employee assessments

Costs of Training New Employees

? Training materials

? Technology

? Employee benefit set up

? Time for trainers

Other costs include:

* Excess staffing levels and overtime payments

* Delay in work

* Higher stress to the existing employees

* Adverse impact on the morale and resulting low productivity and customer service

* Reputation of the organization is hurt.

Implication of changing workforce
The implications of changing workforce demographics are important. If the age of the population is young it means entry positions will be easily filled. If the workforce is highly educated, the quality of work will be high but higher salaries will have to be paid. Usually, by the demographics changing every implication is more complex. However changing demographic realities are given to an organization and the capacity of the organization to adapt to these realities is limited. Even for the most flexible organization it takes time and resources to completely adapt to the changing workforce demographics. Thus, the importance to a changing workforce can be and HRM challenge but can be handled with time and resources. Thus rising employee turnover often becomes a 'vicious circle': low morale causes more workers to leave, increasing the dissatisfaction of those who remain, and so on. (ACAS) Hence Managing turnover is a constant challenge for any organization, and awareness of the issue has heightened in the last decade.

Importance
Employee turnover is important to organizations, individuals, and society. From the organizational perspective, employee turnover can represent a significant cost in terms of recruiting, training, socialization, and ...

Solution Summary

The solution uses the Thompson-Pritchett case study to discuss HR management issues. These include reasons for employees leaving and the financial impact of it.

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