A Fortune 500 company recently announced that it would outsource its payroll ope

Question

A Fortune 500 company recently announced that it would outsource its payroll operations on October 30, 2016 to a third party payroll service provider. The outsourced plan will include working with the service provider to build a ‘Retention Plan’, where key current employees in payroll operations would be identified. The plan will include two tiers: key employees will be retained for 8 months, and the remainder of the staff retained for only 4 months.

A bonus structure is to be built into the ‘Retention Plan’, enabling employees at the end of their transition period to earn a bonus if the service provider determines the employee was helpful in making the transition successful. This bonus will be based on performance goals that were established in the ‘Retention Plan’ process.

Using today’s date – provide recommendations and comments for the following questions:   

1. If extra resources are required for additional effort, what advice would you give to management to take for attracting, compensating and rewarding additional temporary resources?

2.What type of bonus structure will be built into the retention plan for the key employees identified to remain in the function during the transition?

3.What advise would you give to management regarding ongoing communications and updating the organization on this event?

4.Who will take responsibility for handling any negative feedback regarding a backlog of travel check requests, tuition reimbursement payments, special payment for bonuses, car allowances and other payments to relieve some of the pressure?

5.What type of plan will need to be put in place for this transaction?

6.Who will be responsible for reviewing the ‘Retention Plan’ to determine if the employees performance are meeting the goals established for success outcome of outsourcing by the end of the year?

7.What process would management put in place to measure success or failure of the retained employee’s performance goals?

Explanation / Answer

1. The following measures I can advice the management for attracting, compensating and rewarding additional temporary resources:

(i) Compensate every individual resource on a per hour basis i.e. the more time every individual temporary resource put, the higher they will be paid

(ii) Also arrange some extra bonus for those resources on working at a stretch for some particular time cut-off.

e.g: Arrange some extra bonus for any temporary resource whoever among them works for 3months at a stretch

2. The following steps can be provided to key employees after 8 months as a part of their bonus structure:

(i) Provide them a salary hike

(ii) Provide them a bulk amount of bonus at one go as soon as they complete next 8 months

(iii) Provide them scope of learning and trainings which suit their new career aspirations.

3. (i) Arrange a mandatory session or an online presentation for every employee whoever is being considered in this retention plan. This session or online presentation must include:

         a.   Definition, Procedures, Terms and conditions, Timelines of this retention plan

         b.   Bonus structure at the end of every single phase of retention plan

    (ii) After every eployee gets a fair understanding of trhe whole process through the above mentioned sessions, send written communication to each of them informing them which employee has been identified in which category.

     (iii) Also make a mandate for each employee to return individual sign-off in written format on the above mentioned communication.

4. Make a deal with the 'Third Party Service Provider' so that they open a 24*7 helpline number and also an email-id to which any employee can lodge any complaint at any point of time and get almost instant response on their issues.

6. The reporting manager of every employee within the organization will be responsible for reviewing the ‘Retention Plan’ to determine if the employees performance are meeting the goals established for success outcome of outsourcing by the end of the year.

7. Cut-off marking system (on multiple criterias which are based on individual basis) should be fixed from the Top-Management of the organization and that should be followed by every reporting manager while measuring success or failure of his/her reportee employee’s performance goals

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