Tuesday, May 27, 2014

HCM- Case Study: Planning for Employee Resources and Profits By: Elizabeth Dehn

Planning for Employee Resources and Profits
Elizabeth Dehn
Minnesota School of Business
Professor Craig Morris

The human resources of an organization are the strongest asset that most firms possess. The balance necessary to compensate these employees appropriately while maintaining a profit-focus is one of the most difficult tightropes in business. Therefore, you must develop a Human Capital Management Plan that builds upon the newest financial goals and utilizes modest yet modern values and structure to ensure that the strengths of the business increase along with the loyalty of its strongest asset, the employees and stakeholders. The people. This paradox can be easily navigated by combining a cocktail of the organizational goals with a conservative yet engaging employee management plan. As per this case study regarding XYZ Company, I will describe in detail my suggestions for Mary James’ plan to be a team player yet preserve and engage the loyalty and legacy created by her and her kin.

Table of Contents

Planning for Employee Resources and Profits


In this case study I think that the HR manager and stake holders of the firm need to create an opportunity for a win-win situation. (Thenor-Martin, 2013) The HR manager Mary James can create a Human Capital Management (HCM)[1] Plan that will reduce costs yet foster sustainable growth by strategically nurturing existing loyalty and legacy of XYZ Company yet still reducing HCM overhead. In analyzing the ethical issues at hand for what makes an employee happy yet showing the financial benefits of creating conservative and modern objectives, I conclude that these goals are complimentary and should be considered necessary in creating exponential profits. The goal is to fulfill the needs for more profits and cash flows, yet support employee engagement and investment so that strong growth is fostered and sustainable.

Profits versus Overhead

Treating employees well and increasing engagement investment in turn increases employee loyalty and therefore reduces costs in HR. This is because it takes quite a bit of money these days to scout, interview, hire, train, and onboard an employee. Not everyone agrees with this opinion yet there are increasing studies in this area. I understand the stake holder’s position in this scenario of wanting to increase cash flow and meet expansion goals (Thenor-Martin, 2013). I think that XYZ Company should foster the loyalty it has by narrowing in on top talent and analyzing the big picture regarding organizational goals.  Top talent would include some that are already in leadership but would also include an analysis of the highest producers and new talent with vision. This can still accomplish the goal of increasing profits.
Some of the biggest mistakes that American industries have made per our text on page 536 include, “too much emphasis on short-term profits and too little on long-term planning. [..and] too little emphasis on quality and continuous improvement.” (Goree, Manias, & Till, 2011)  Increasing profits cannot just be about decreasing costs. When there is a direct correlation between the ‘happiness’ and productivity of a firm, there then needs to be the proper investment in fostering that growth.

Engagement for Profits

An ‘awesome’ work environment has college graduates falling over themselves to work for companies that are fun. Insight Global has 1,255 reviews on Glassdoor.com with an average rating of 4.4 out of 5 stars from employees. A startling 90% of employees would recommend this company to a friend. By reading further into the reviews I see that the senior management, career opportunities, and employee satisfaction receive great marks from most. (glassdoor.com, 2014)
Per Human Resources Magazine, “higher levels of employee engagement lead to higher sales revenues and profits.” (Minchington, 2011) This article goes on to describe an effort on behalf of Sears to increase this engagement and measure any increase or decrease in profits per that investment. “Sears found that a five percent increase in employee satisfaction drives a 1.3 percent increase in customer satisfaction, which results in a 0.5 increase in revenue growth.” (Minchington, 2011) Companies need to balance desired outcome between modest and conservatively-designed overhead objectives while increasing opportunities to engage and sustain happy employees.

Minchington makes a compelling call-to-action: “Shift your talent attraction strategy, […] allocate sufficient resources to develop and implement an employer brand strategy […] communicate and seek feedback from new hires, […] consider the full life cycle stages of an employee’s tenure and develop engagement strategies which are most appropriate for the stage.” (Minchington, 2011) These objectives can have exponentially larger benefits than the investment. Designing a life cycle of the position and tailoring to create mentorships and other engagement opportunities can greatly strengthen a team and have compounding benefits.

Summary Analysis of Case Study

            The main issue at hand here is that Mary James is the HR Director of a firm that has been overtaken by new owners who want to drastically change compensation procedures and employee percentages to reduce overhead and therefore increase profits and cash flow of the XYZ Company. While Mrs. James has many relatives who previously worked for the business, she is expected to be a ‘team-player’ and create a plan that will satisfy the stakeholders. (Thenor-Martin, 2013) She is ethically conflicted because she knows although it is legal for them to implement the changes, it could drastically change the work environment, employee satisfaction rate, and engagement level of the company she has worked at for 30 years.
            Per the research and situations outlined in my analysis, I conclude that employee engagement/satisfaction should be appropriately fostered regardless of the size of your budget or interest in profits. When employee engagement is fostered and employees are happy, they work harder and are more loyal, which in-turn sustains exponential increases in profits! The following section is an outline and plan for Mary to enact in efforts to create a win-win scenario for this new ownership situation.

Plan for Human Capital Management

            Mary James should create a presentation that clearly outlines her plan with a timeline and chart projecting the figures she thinks are realistic and will meet the organizations goals. Below is a proposed outline for her presentation and plan:
v Introduction/Call to Action/Intent Statements: Mary James should create a strong introduction discussing the accolades of the business under past ownership, the current goals as described to her months ago from the new stake holders, and an intent statement making it clear that she feels her plan delivers on all levels yet is flexible per their suggestions.
v Plan: The plan itself must include enacting and creating a timeline for implementation of some of the suggestions from the list of requests she received. Specifically,
Step One – Analyze Talent and Organizational Long-Term Goals. Match the long-term goals and positions for top talent and evaluate current workforce to determine where the superstars and promising employees are and where they should go to optimize organizational effectiveness and strength.
Step Two – Design a HCM budget that allows for reduced compensation in most benefit categories and lower introductory wages yet still provides for optional investment opportunities and employee engagement. For this part of Mary’s presentation, having visual aids to communicate the proposed HCM budget that clearly show the reduction in cost and fostering of assets will be essential.
Step Three – Re-Brand the organization with a new Mission Statement, performance-based bonuses, and an employee engagement program that not only zeroes in on the employee and position, but also allocates for the employee life-cycle, which will foster continued loyalty and growth in the workforce and therefore increase effectiveness and profits.
v Summary/Closing/Offering: In Mary James’ summary, closing, and offering; she must create a synopsis of the research-based plan that she has created to reduce overhead with regards to HCM while fostering new goals to increase engagement, employee loyalty, cash flows, and profits. She should have the goal to create a no-pressure call-to-action for the stakeholders that will help them to genuinely consider her plan to foster current assets to the best abilities of XYZ Company. I think it would be wise for her to mention timeline, implementation, and flexibility so that her plan is realistic, easy to visualize and plausible to enact. Utilizing resources to back up her interest in fostering employee satisfaction will go a long way with stakeholders and combined with a conservative yet creative budget, could easily create the win-win that everyone desires.


Per Mina Brown of Positive Coach LLC, there are seven key leadership objectives that focus on increasing engagement and support retention of super-star and instrumental employees: Cultivate high trust, Model core values, Encourage debate and risk-taking, Listen, really listen, Leverage strengths-Mitigate weaknesses, be savvy about organizational nuances, and lastly Imagining the future.” (Positive Coach LLC Mina Brown)
Fostering these goals and objectives while balancing a conservative yet creative HCM budget will ensure that the organization is on a path towards success. The issue of fostering existing employee loyalty while igniting the fire for future inspiration and innovation from employees lies in creating an engaging atmosphere where employees are satisfied yet also buy-in with the organizations goals for profits and success. This balance might be one of the most difficult to maintain in the business world but mastery of it is magical for a firm.


Brown, M. (2014, Feb). Leadership Strategies - Seven leadership strategies that improve engagement. HR Strategy and Planning Excellence presented by HR.com, pp. 20-21. Retrieved May 15, 2014, from HR.com: http://www.hr.com/en/topleaders/interactive_content/hr-strategy-and-planning-excellence-essentials-feb_hsc7aorn.html
glassdoor.com. (2014, May 27). Reviews for Insights Global. Retrieved May 10, 2014, from glassdoor.com employment website: http://www.glassdoor.com/Reviews/Insight-Global-Reviews-E152783.htm
Goree, K., Manias, N., & Till, J. E. (2011). Ethics Applied (6th Globe Education Network ed.). Pearson Education.
HR.com. (2014). HR Strategy and Planning Excellence Issues List. Retrieved May 05, 2014, from HR.com: http://www.hr.com/en/topleaders/essentials/hr_strategy_planning_excellence/
Kataria, A., Rastogi, R., & Gary, P. (2013). Organizational Effectiveness as a Function of Employee Engagement. South Asian Journal of Management, 20(4), pp. 56-73.
McKinney, R. (2014, Mar). Why Does Succession Planning Go Off the Rails? HR Strategy and Planning Excellesnce presented by HR.com, pp. 16-17. Retrieved May 12, 2014, from http://www.hr.com/en/topleaders/interactive_content/hr-strategy-and-planning-excellence-essentials-mar_hta9ln2p.html
Minchington, B. (2011). The Profits Versus Engagement Paradox. Human Resources Magazine, 15(6), pp. 32-33.
Positive Coach LLC Mina Brown. (n.d.). Engagement and Retention. Retrieved May 17, 2014, from http://www.positivecoach.com/pdf/employee-engagement-and-retention.pdf#sthash.fRmw7mfc.dpuf
Thenor-Martin, A. (2013). Case Study in Ethics: Human Resources. Richfield: Globe Education Network.

[1] HCM refers to Human Capital Management from here on in this document.

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