STAR, a small startup organization with headquarters in Chicago, Illinois founde
ID: 453779 • Letter: S
Question
STAR, a small startup organization with headquarters in Chicago, Illinois founded in 2000, has tripled its workforce and earnings over the last 12 years. Due to the growth of the company; many of the traditional infrastructure functions such as Information Technology, Finance, Marketing, Sales, Human Resources and Administration Services has been filled with consultants.
The major areas of Sales, Marketing, Strategy, and Administration are staffed with consultants; the consultants are not loyal to STAR and have moved in and out of the company to pursue other career opportunities.
In a recent review of the companies growth and expenses the President has requested that a task force be assembled to spend some time with the senior management team to discuss the issues that they are facing regarding the fast pace that the company has grown over the last 12 years.
The following information details some of the President’s concerns:
---Each employee was hired and compensated based on what the employee requested or what each hiring manager agreed to pay.
---Salary review by the task force revealed that current pay levels are higher than the market.
---Each employee has a different employment agreement / offer letter written by the hiring manager. Elements of the offer letters include the following for employees that have worked for 12 months or longer at STAR:
1.If the employee is terminated they would receive “golden parachute” clauses that can payout in excess of $150,000.
2.If the employee is terminated they would receive company paid benefits for 12 months.
3.Laptop and mobile phone can be transferred to the employee after termination.
4.Each employee receives 5 weeks paid vacation.
---Administration pay levels exceed $100,000 with about 40% of the administrators working “virtual” and not available during normal business hours due to special arrangements that they have made with their manager.
---Every employee is covered by the Company Benefit plan that is 100% employer paid. Medical (prescription) and dental claims are paid at 100% by employer (self insured).
Please provide your recommendations with your comments for each of the following questions. Your responses should be comprehensive and reflective from text book readings or other research on this topic.
1.For the current workforce what are the issues that need to be resolved so that the company can continue to grow and be profitable? Please elaborate on all the issues and all the possible resolutions.
2.Will the company be able to sustain this approach to salaries and benefits long term? Why or why not – provide a comprehensive explanation of your research and findings that support your approach.
3.Of the following major areas of Sales, Marketing, Strategy, and Administration which should be converted to employees and which should be kept as consultants? Please provide an in-depth explanation of your position.
Explanation / Answer
1)
For the current workforce, the issues that needs to be resolved are as follows:
The resolutions for the above problems are as follows:
2) Yes, the company will be able to sustain this approach to salaries and benefits for long term because strategic planning always works for an organization.
3) Out of the given major areas, I think Marketing and sales should be converted to employees and Administration and strategy should be kept as consultants
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