Fresh Munchables is a mid-sized but steadily growing food-processing company founded in 1967. Since its inception, the company has been committed to providing only premium quality health foods. The company is headquartered in Wichita, Kansas, and it is one of the area’s largest producers of soups and simple meals. In the past 20 years, the company has also begun processing healthy snacks and beverages. Fresh Munchables has traditionally sold its products through large grocery stores, but it is now venturing into online and restaurant businesses, which is all very new territory for management.
The company is split up into three overarching strategic business units—soups and meals, drinks, and snacks. Additionally, the company is divided into several business units at the operational level, consisting of a mix of business operations, manufacturing (production), research and development, finance, and so on. As the company continues to grow, the executive team and other leaders are constantly looking for ways to improve processes.
Because Fresh Munchables has grown from a very small company into a well-established organization, management has decided to broaden the company’s strategic HR functions. The human resources team is currently working to improve recruiting and hiring processes, succession planning, and most importantly, compensation and rewards.
For many years, the company has delegated compensation decisions to managers with little to no training on the subject. This has left the company in a disorganized, confused state when it comes to paying and rewarding employees. These problems have compounded as Fresh Munchables has recently opened up new manufacturing locations with new managers and many new employees.
The chief human resources officer has organized a team of compensation specialists of which you are a part to spearhead total compensation-related problems and help the company to reach its current and future goals. You and your team can achieve this by revising the current total compensation system to reflect the company’s current business strategies and goals as well as attract and retain top talent.
The HR department at Fresh Munchables is working hard to recruit and hire candidates for a systems engineer position. Systems engineers have the knowledge, skills, and abilities (KSAs) that are vital to the success of the organization. Unfortunately, the role of systems engineer is in high demand across the industry, making it more difficult to attract candidates to hire.
What should the HR department do in order to fill this position in a labor-driven market?
· HR should keep the compensation levels the same and hire a less-qualified candidate because it’s often too costly to compete for KSAs.
· HR should make the total compensation for the role relatively high in order to attract the desired candidates.
· HR should use high-pressure tactics to get candidates to commit to employment.
Allison recently graduated from college and was just offered a position as a food scientist at Fresh Munchables. The hiring director offered her a yearly salary of $48,000. However, Allison heard from a friend who graduated with her that he had been offered a yearly salary of $60,000 for a similar position at Tasty Tidbits, a competitor of Fresh Munchables in the snack industry. Allison then proposed a higher salary of $55,000 to the hiring director who refused and said that the typical compensation for an entry-level food scientist was actually $44,000. Allison turned down the job offer. Since then, Fresh Munchables has had a difficult time hiring and retaining food scientists due to higher salaries being offered at other companies.
Which challenge is the company facing in terms of external reward positioning?
· The cost challenge, because the company did not align Allison’s proposed salary with other food scientists within the company
· The bad data challenge, because the company does not have accurate data about the average level of compensation for similar jobs within the industry
· The job matching challenge, because the entry-level food scientist position has not been compared to entry-level positions in other industries
Terri, an employee in the marketing department, comes into the HR office upset because she believes that she is not being paid fairly. Terri is a good employee, and you don’t want her to leave the office feeling upset. As an HR representative, you fear that if you don’t resolve her frustration, she might leave the company. During your conversation, it will be important for you to focus on ________.
· the process that led to the decision regarding her pay, emphasizing procedural justice
· Terri’s compensation in relation to her peers, emphasizing distributive justice
· to what degree Terri is treated with respect in the workplace, emphasizing interactional justice
· to what degree Terri is paid equally to her peers, emphasizing commutative justice
Kit is an employee at Kormel Foods, a local competitor of Fresh Munchables. Kit has worked for his company for roughly 10 years, and, for the most part, has been happy with his pay. Recently, however, Kit had a conversation with an old friend from high school who works in one of Fresh Munchables’ manufacturing facilities but makes $10 more per hour for performing the exact same work. Apparently, Kit isn’t the only Kormel employee being underpaid.
How can management at Fresh Munchables leverage this information?
· They can capitalize on the dissatisfaction of the Kormel employees and attract talented workers from Kormel.
· They can now reduce the wages of their manufacturing employees to match the competition.
· They can inform union officials that Kormel may be a good candidate for union formation.
· They can inform Kormel that Kormel’s employees are unhappy with their pay.