Address the following questions in a well-integrated case assignment: 1. How can The King Company re

Address the following questions in a
well-integrated case assignment:
How can The King Company reduce
labor costs and still save as many jobs as possible?
How might up-to-date job
analysis information aid King in determining how to reduce labor costs?
Discuss the short-term and
long-term implications of downsizing. Be
sure to also discuss possible EEO issues that may occur in downsizing.
Bring in information from at least 4
sources from the Trident library to help strengthen and validate your discussion.
When possible, provide private-sector
employer examples of HRM programs, systems, processes, and/or procedures as you
address the assignment requirements. Provide names of the employers. Use
different employer examples in this course than what has been used previously
in your other papers and courses.
Paper length: 4-5 pages (not counting the
cover and reference pages).

The King Companyexperiencesmanyofthedifficulties commonintoday’sbusiness
to declining sales,the

department. Also presented are e-mailsfromvariousstaffmembers.Thee-mailsidentify
specificproblemsthat need to
beaddressed bythe
department and
provides a look atKing’soverallculture.Youmayfindthetoneofsomee-mailstobeunprofessional. This is a
good lesson for us all–Asmuchasweenjoyinformalityintheworkplace,alldocumentsandcorrespondence—includinge-mails—can
beretainedandarediscoverableinlitigation. Managersmustbecautious

Employees In the Case:
Amera, Argonta—Accounting
Andreas, Gary—employee on
workers’ comp
Call, Jake—Compensation
& Benefits Manager
Dean, Don—C.E.O.
Dugas, Karla—Benefits
Folkner, Meg—Supervisor,
CAD Design
Grant, Alan—Current HR
Honduras, Margo—Previous
HR Director
Jones, Lyle—Production
Madison, Charles—Senior
Petersen, Matt—Production
Supervisor, Team 3
Planky, Burt—fishing buddy
Putt, Tonia—CAD Designer
Rey, Dave—Production
Sanders, Tomas—Design
Scholl, Karmen—HRD Manager
Simms, Bertie—Designer
Smith, Mike—V.P.
Songun, Amy—Accounting
Stone, Guy—Production
Tu, Kevin—Staffing Manager
Varn, Juan—Safety &
Security Manager
Warner, Salty—union
White, Shaun—Employee
Relations Manager

The King Company is
a small manufacturing company located in
a mid-sized city inthe upper Midwest. King manufactures high-quality specialty
components for thecomputerindustry.Thecompany
wasfoundedin1994bycurrentCEO,Don Dean. Dean
wasatalentedyoung engineerinSilicon
outthedoorwithlittlemorethananentrepreneurialspiritandasmallseverance. DeanleftCalifornia,movedbacktohishomestateandusedhisseverancetofinanceThe King Company,startingthecompanyinsmallrentedquarters
inanearly vacantstripmall.HebroughtinCliffMadisonearlyonaschieffinancial
officer. Deanwassmartenoughtoknowthathehadnoheadforfigures,but Madisondid. Madisonwasanoldcollegebuddy,asuperaccounting
aspossibleoutofhisseverancemoney.Itwasagoodmatch. Madisonmanagedthebusiness,and Deanwastheideamananddesignerofthespecialty
components,patentsofwhichwerethebackboneof King’ssuccess.
Today,thelow-rentstripmallisa partofcompanyhistory,and King
employs835full-time workersinitsowncontemporaryfacilitybuiltin2002.
nichecontinues tobehigh-quality,specializedequipment.ThecompanyisproudthatitsproductscontinuetobemadeintheUnitedStatesand also
proudofitsISOqualitycertificationgrantedbytheInternationalOrganizationforStandardization. Deanbelieves
Kingsellsitsownproductsandhasasmallcustomerbasescatteredthroughout theUnitedStatesandAsia,butthisgeneratesonlyasmallpercentageofKing’srevenue.Eighty-threepercentof King’ssalescomefrombuildingoriginal
on onecustomerisasignificant
source ofworry
for King’smanagementteam,especiallybecause
salesof finished
productsaredownforthis customer andcutbacks areexpected. If
the rumorproves

being explored, and
whilethere is someinterest, there areno solidcontracts. Kingemployeesareunderstandablyjittery.
ThoughKingremainsnon-union,threeyearsagotheorganizationwentthrough adifficultperiod ofemployeeunrest.
There werecomplaints ofpoormanagement,inconsistentlyenforcedpoliciesandunfairpracticesregardingjobchanges
and movement of
employees within
the organization.
Because of the company’s standingasarespected
blackeye whenananonymousemployeewroteascathing
ofthelocalpaper.Thisbroughtinunionorganizers whodistributedleafletsand
circulatedauthorizationcards.Toaddressemployeeconcerns, The King Companyrespondedwithmanagementtrainingandreorganizationoflower-levelsupervisorypositions.Acompanywide “Talk-to-the-Boss”
program was implemented,allowing employees
managementwithoutfear ofreprisal.
It seemed to help.Theauthorization cardsfailed to
interest foran election, andthingssettled
down. Unrest, though,never goes awayentirely. Employees became cynicalabout“Talk-to-the-Boss,”and“theunionbuzzards,”asDeancallsthem,nevercompletelywentaway.
ThingshavecertainlychangedforKingfromtheolddaysofthestore-frontlocationandahandfulofemployees. Dean
months.Decision-makingisprimarilyinthehandsof Madison,whoisnowtheorganization’ssenior
vicepresident,andasecondvicepresident, Mike Smith.Smithcameto Kingeightyearsagowithan MBA/HR
concentration from TUIandasuccessfulmilitarycareer.
Witha historythat has
growth andstrong revenue, itwill be a
majorculturechangeforKingtorespondtotheerodingeconomyandapossibledecline in sales. Inaddition to the hiring freeze,
Madison directed managerstocut wasteandimproveproductivity

The Human Resources Department
Margo Honduraswas HRdirectoratKingforeightyearsbeforeherdeparture in2007.Theofficialwordwasthatshehadtakenearlyretirementtospendmoretimewithherfamily,butwhateveryonereallybelievedwasthatSmithfinallygotfedupandgavehertheboot. Ofcourse,therewastheofficialretirementpartywhereeveryonesaidhowmuchtheywouldmiss her,butreally,
most employeesinthedepartment
raisedatoasttoherdepartureand gaveacollectivesighofrelief. Hermanagementstyle—when
Karla Dugas, King’sbenefitscoordinator,forwhomnoperkswereevertoomany.Consequently,thecompensationandbenefits
WithapprovalfromMadisonandSmith,Hondurasandcompensationmanager, Jake Call,hadestablishedameritbonusplanearlyinHonduras’stenureatKing.Though Hondurascontinued
tochampion thebonus plan asa
objectives and controlling costs, it has
been a bone of contention across theorganization,
particularly in the
HR department.The bonus plan
required everyonetohaveannualperformancegoals. Hondurasallowed
stafftosettheirowngoals,butforeveryoneelseinthedepartment, Hondurasalonesetthegoalswith noinputfromthoseexpected
today.There isgrumblingthat evenwith Honduras’sdeparture,thingsneverchanged.Dugasstill
offloads mostof herwork onothersandis never dependable forproject completion,yetsheandherstaffmembersreceivetop-tierbonuses
yearafteryear.EvenCallseemstolooktheotherway.OtherHRdepartmentemployeesfeeltheirworkisnotsupportedbymanagementandthatthereislittlefeedbackonprogresstoward goals.Forthem,bonuses,if paidatall, arebased on unknownscontrolledarbitrarily byCall.Asaresult,the
departmentisrifewithanimosity andthereislittlecooperationacrossfunctionalareas.Certainlythingscouldn’t

When Hondurasretired, Smithpromoted Alan Grant,managerofsafetyandsecurity,
Granthadreporteddirectlyto Honduras, hisgoodtrackrecordatsafetyandsecuritykepthimbelowtheradarofmany
theproblemsintheHRdepartment. Asmanager
ofhimastheorganization’s“cheerleader.”Bestofall,his managementstylewasthepolaroppositeof Honduras’s.
Whereshemicromanagedandcriticized,Grantbelievedinencouragementandresponsibility. Smiththought
Grant wouldbringa
WhenGrantmovedintoHonduras’soldoffice,hesetabigjarofcandyonthedeskand invitedeveryone
stop by andchat
him whenever they wanted.Ofcourse,Dugaswasfirstinthe door.

The King Company,Inc.


VicePres. Mike Smith

Sr.VicePres.Cliff Madison


HumanResources Alan Grant






Safety andSecurity


HRDirector: Alan Grant
Manager:Jake Call
BenefitsCoordinator: Karla Dugas
StaffingManager:Kevin Tu
EmployeeRelationsManager:Shaun White

Current Situation
Threemonthsago, Alan Grant,directorofHR,resignedunexpectedlybecause
aquick butthorough selection
andwithseveralyearsofexperience asanHRgeneralistinalargeorganization. This isanoutstandingcareer opportunityforyou.Youwillbeamemberof themanagement team,andthisisachanceforyoutomakearealdifference intheorganization.CongratulationsonyournewpositionandwelcometoThe
King Company.
on your desk and settle into
Grant’s old
chair. You notice hisin-basket isoverflowing.Youreachforthetop file,openthebulgingfolderandstarttoread thestack
of e-mailsGrantprinted
You notice that the emails are numbered, with the oldest one first.

Email 1:
To: Mike Smith, Vice President
Alan Grant, Director, HR
From: Charles Madison, Senior V. P.
It has come to
my attention that our sales numbers were misrepresented for the last two
quarters. A number of unconfirmed sales
anticipated for January were pre-booked into our accounting system between
September and December of last year.
These sales were entered without signed purchase orders or confirmed
contracts. Most of them did not come to
fruition, and this significantly inflated our sales totals for the last fiscal
year. As you know, pre-booking of sales
without confirmation is a violation of company policy.
First, I want
an immediate accounting of all bonuses paid to the sales staff. Any bonuses paid on fictitious orders must be
returned to the company, and disciplinary action will follow for those
because our staffing forecast is based on sales numbers, this indicates that
The King Company has a surplus of labor.
The hiring freeze may not be sufficient.

Email 2:
To: Alan Grant, Director, HR
From: Charles Madison, Senior V.P.
I know you
have already put in place a hiring freeze, but considering the news that has
come out of sales, we believe that it will not be enough. You are directed to design a comprehensive
plan to reduce labor costs across the board.
You should plan for a 10% reduction in labor force by the end of this
fiscal year. We have scheduled a meeting
with you in two weeks to go over your plan and finalize decisions.
Email 3:
To: All staff
From: CharlesMadison,SeniorV.P.
Likeallofyou,Ihavewatchedthe ups and downsinournationaleconomy,andIworryaboutreportsofdecliningsalesinourindustry.Thebusinessnewsisgreetedwithincreasingconcerneachtimewehearofyetanothercompanythatmovesjobsoff-shoreandshutsdownitsU.S.facilities.Throughoutitall,Kingremainssteadfast inourpolicyofAmerican-madeproducts,anditisthequalityofourworkforcethathasgarneredoursuccess. Eachofyouistobecommendedforthegoodworkthatyoudo.
However,wemustrecognizethatbusinesscannotbesustainedtodaywithpoliciesofthepast.Wemustbeproactiveandanticipatechange.Thoughthecompanyremainshealthy,ourrevenuehasbeenflatforthelast twoquarters,andsalesprojectionsindicateadownturngoingintonextyear.Thisnecessitatescost-savingmeasuresthroughoutourorganization. Mike
Smith (V.P.) andIwillbemeetingwith alldepartmentmanagerstodeterminespecificgoalsandplansforthefuture.Alldepartmentswill
be involved.
Withfallingsales,therewillbesignificantcutsinstaffingexpensesbecause our
hiring freeze did not sufficiently reduce labor costs. We cannot continue to build and stockpile
inventory without sales. Effective
immediately, all areas of the organization must plan for a 10% reduction in
costs. I know this will be a difficult time
for all of you, but know that this is for the health of the organization and
not a reflection of the quality of your work.
As in the past, we will work together, and the good work that you do
will sustain us during these difficult times.

Email 4:
To: Alan
Grant, Director, HR
From: Jake
Call, Compensation & Benefits Manager
I am sending this on to you because I don’t know
what to tell her. Do we have a policy on

Forwarded message:

To: Jake
Call, Compensation & Benefits Manager
From: Karla
Dugas, Benefits Coordinator
Hey Jake—
I just got back from vacation today, and I wish I
could say I had a great time and was well-rested and ready to hit the ground
running. But, unfortunately, I was sick
for 10 days of my two-week vacation.
What a bummer and a lousy way to burn up all my vacation time! Since I have unused sick time available, can
I change the 10 days of vacation to 10 days of sick leave so I can take a
vacation when I’m not sick? Thanks in
advance for doing the paperwork for me!

Email 5:

To: Alan
Grant, Director, HR
From: Shaun
White, Employee Relations Manager
Hi Alan,
Hey, sorry to bring all these problems to you when
I know you have your hands full with the pending staff reduction, but we had
another issue with Guy Stone (Production Supervisor) on the production floor
this week. You know he’s hot under the
collar most of the time. He gets
production out of his staff, but he certainly has issues as a supervisor. I don’t think he’s learned even one thing
from all the management training Karmen’s HRD group has provided. He had a run-in with Lyle Jones (production
employee) yesterday. I guess he and Lyle really got into it—a real
shouting match. In front of the whole
shop. Guy fired Lyle, marched him right
over to his locker, dragged out all his personal stuff and hauled it out the
front door. Granted, Lyle’s kind of a
bad apple and having him gone might be for the best, but I had a call this
morning from some junior lawyer at Ness, Terry and Smith saying he was
representing Lyle in his employment lawsuit.
I thought you’d want a heads up.
Hey, look at the bright side—one less person to

Email 6:
To: Karmen Scholl, HRD Manager
From: Alan Grant, Director, HR
As you know, upper management is looking for areas to cut costs. In light of Shaun’s memo regarding the
termination of Lyle Jones, it looks like the supervisors aren’t getting much
benefit from your management training program.
I hate to be the bearer of bad news, but Charles Madison (Senior V.P.)
has management training on the chopping block.
If you want to save your training programs, you need to get a report to
Charles that demonstrates a clear ROI for training expenditures. Better get to it ASAP before your whole
department disappears.

Email 7:
To: Shaun White, Employee
Relations Manager
From: Dave Rey, Production
Hey Shaun, I don’t know what’s
the matter with people these days. The
rumor mill is crazy, and I know everybody’s nervous about possible layoffs, but
we’ve got some real problem employees down here on the production floor. Salty Warner and his gang are stirring things
up with the unions again. He’s getting
quite a following, and there’s a group that meets in the cafeteria at lunch and
the talk is they are calling the union to get out here again with the
authorization cards. Attitudes are
terrible, production damage is up, and production’s hitting the skids. I’m trying to put a stop to it. I changed everybody’s lunch schedule to break
up the group, and I transferred Salty to a different shift. Frankly, I’m looking forward to some good
layoffs. You’d think they’d listen up
and think about what’s good for them.

Email 8:
To: Shaun White, Employee
Relations Manager
From: Dave Rey, Production
Hey Shaun.
Some guy in a suit was here today, said he’s legal counsel for the
union. Gave me a bunch of lip service
about switching around employee lunches.
Said it was an unfair labor practice.
I told him to get his fanny outta here.
I’m the boss; I can make lunch schedules any way I want, and besides, we
aren’t even a union shop. Can you
believe the nerve of those guys? He also
said something about your employee involvement teams, but I don’t know what he
was talking about. He said he’ll be
around to see you later. I just thought
I’d give you a heads up. When do we
start the layoffs?

Email 9:
To: Jake Call, Compensation &
Benefits Manager
Alan Grant, Director, HR
From: Karla Dugas, Benefits
Hi Jake and Alan,
I’m forwarding this on to you. I
don’t know how this happened, but it looks like we’ll have to do something
about it. It must have happened while I
was on vacation. Thanks a bunch.
Karla Dugas

Forwarded message:
To: Karla Dugas, Benefits
From: Meg Folkner, Supervisor,
CAD Design
As you must be aware, Tonia Putt in CAD design went on approved family
medical leave on the first of last month.
Somebody in your department messed up the paperwork and put it through
as a termination instead of FMLA leave. She should have continued to get her regular
salary because King policy allows her to use sick leave and vacation pay under
FMLA. Because it was a termination,
though, her salary was cut off. She has
direct deposit and didn’t even know it was cut off until her checks started
bouncing. Now she has overdraft fees,
she says her credit’s ruined, and her mortgage company is threatening
foreclosure. She is hopping mad, and I
don’t blame her. She wants the mix-up
fixed right now. She wants all the fees
reimbursed, and you need to do something about her credit score and her
mortgage company. She says she’ll get an
attorney if need be. It’s crazy. Why would anybody think she was
terminated? She’s my best CAD designer!

Email 10:
To: Juan Varn, Manager, Safety
and Security
Cc: Alan Grant, Director, HR
From: Matt Petersen, Production
Supervisor, Team 3
Hey Juan—
You know we’ve got Gary Andreas out on workers’ comp for a back injury,
but the scuttlebutt is that it’s not a King Company work injury. Burt Planky
went fishing with Gary last
weekend, and after a few beers, Gary tells Burt he hurt his back moving his
sister’s refrigerator. The guys on the
floor think it is a big joke. Seems
everybody but management knows that old ankle injury that kept Gary off work a
few years back was a motorcycle accident and not a pallet that fell in the
warehouse. I suggest you cut off his
workers’ comp and put him at the top of the reduction list.

Email 11:
To: All Employees
From: Charles Madison, Senior
Mike Smith, V.P.
In light of the economic difficulties we are experiencing, the following
actions will become effective immediately.
In addition to the hiring freeze already in place, compensation paid to
all hourly and salaried employees will remain at the current level until
further notice. Accrual to the merit
bonus system will end at the close of this quarter, and the bonus system will
be eliminated at the end of this fiscal year.
All travel expenditures will be strictly scrutinized and must be
approved by Charles Madison (Senior V.P.).
All equipment purchase orders will be delayed by 90 days and must then
be approved by the Senior V.P.’s office.
Tuition reimbursement is discontinued, effective today.
In light of the importance of health care and retirement savings to the
well-being of employees, The King Company will, for the present time, continue
its current level of employee health insurance coverage and King’s
contributions to employee retirement accounts.
We are hoping these efficiencies will get us through these difficult
times and sincerely appreciate your understanding and cooperation.

Email 12:
To: Karla Dugas, Benefits
From: Amy Songun, Accounting
Hi Karla,
You know Argonta Amera in accounting has been taking MBA classes at the
university using tuition reimbursement.
She’s already enrolled in a class for this term on a program we approved
last fall. We’ve paid her tuition
reimbursement in the past and she told me yesterday she would be turning in
another reimbursement form at the completion of this term, and she expects to
be paid because she was enrolled before the cancellation of the policy. Her reimbursement is $1395. I’m assuming it’s ok.

Email 13:
To: Amy Songun, Accounting
From: Karla Dugas, Benefits
Re: Tuition reimbursement for
Argota Amera
Sorry Amy. No can do! I checked with Charles Madison (Senior V.P.)
and he said “No Way”! The reimbursement
benefit has been cancelled effective immediately.

Email 14:
To: Karla Dugas, Benefits
From: Amy Songun, Accounting
I passed your message on to Argonta and she was pretty huffy about
it! She said Charles had approved Tomas
Sanders’ reimbursement, and he’s in the same MBA class as she. You know Tomas, he’s the manager over in
Design. Argonta said you couldn’t
discriminate in benefits if one gets it, it has to be available equally to
all. I don’t know where that comes from,
but she acts like she knows everything since she’s been taking those classes.

Email 15:
To: Amy Songun, Accounting
From: Karla Dugas, Benefits
Re: Tuition reimbursement for
Argonta Amera
Wow! Now Charles is hopping
mad! He said he didn’t have to reimburse
anybody after the policy had been cancelled.
He said he’d pay her $500 and that’s all she’s going to get. She can take it or leave it. Besides, he said The King Company doesn’t
need an MBA at her level in the company.

Email 16:
To: Karla Dugas, Benefits
From: Amy Songun, Accounting
Re: Tuition reimbursement for
Argonta Amera

Charles is not the only one that’s mad.
You should have seen Argonta! She
said if her choice was to take it or leave it, she’d leave it. But, I don’t think we’ve heard the end of

Email 17:
To: Alan Grant, Director, HR
Juan Varn, Manager Safety
and Security
From: Mike Smith, Vice President
Re: Wellness Activities
I’ve gotten word from Charles Madison (Senior V.P.) that the budget
committee is about to ax our wellness program.
I know you both feel strongly about wellness, but it doesn’t seem
appropriate in this climate to pay people for fitness activities or to stop
smoking. You know Charles’ attitude has
always been that wellness is just a lot of expensive fluff anyway and not the
company’s responsibility. If you want to
save the wellness program, you’ve got a hard sell. You need to convince the budget committee
that there is a real return on investment for wellness activities.
Charles is also looking at health insurance coverage for nonsmokers
only. Seems the company could save on
premiums if our entire workforce was nonsmokers. He is considering giving our smokers 90 days
to quit or lose their health insurance.
Can we do that here in Michigan?

Email 18:
To: Alan Grant, Director, Human
From: Shaun White, Employee
Relations Manager
Re: Pending Lawsuit
Hi, Alan. It looks like we’ve got
a bad one here. I received a letter from
the law firm representing Bertie Simms.
You remember Bertie; she’s that girl who used to work in Design. I thought she left The King Company to go
back to school, but I guess not. Looks
like she’s got a chip on her shoulder.
Her attorney claims she reported sexual harassment twice, and nothing
was done about it. In fact, he says that
somebody in HR told her to stop complaining.
I can’t imagine who would say such a thing, but looks like we’ve got to
answer for it. He also claims when our
HR people ignored her, she called our HR Answers hotline, and all she got was
somebody with a strong accent she couldn’t understand and who didn’t help her
at all.
I don’t expect this to amount to anything, but the attorney wants to
meet with us. I suspect they’re trying
to strong-arm us for a settlement. When
are you available? We should keep this
off V.P. Mike Smith’s desk if possible.

In the HR’s Office:
Youfrownasyouclosethefileandsetitbackontopofthein-basket.Thereisalotofworktobedonehere.TheremaybemoretoThe King Companythanyouthought.
Asdirector,you must helpresolvetheorganizationalissues
confronting The King Companyanddevelopsolutionsfortheissuesfacing

Good Luck!

Source: The King Case is adapted
from SHRM 2014 education documents.

Staffing at The King Company
Kevin Tu has managed staffing at King since
the early years when the company had less than 100 employees. Tu runs a tight
ship and manages the department with only one other recruiter and an administrative
assistant, who maintains all job postings, including a telephone employment
hotline and the company’s job line web site. Tu is well-respected across the
organization for his strict adherence to ensuring equity in hiring and job
placement that goes well beyond equal opportunity requirements.
Tu recently completed an aggressive hiring
drive at major universities, hiring several new engineers and CAD specialists.
These new hires barely squeaked in before the hiring freeze, but with the
downturn in sales, the atmosphere has changed dramatically. The staffing
department has known only hiring; they never had to plan for a layoff. Tu worries that a layoff of newly hired
employees will seriously harm the company’s reputation in the community and
make recruiting difficult when the economy gets better.
Tu received a confidential memo from Smith
and Grant requiring a 10 percent reduction in labor costs by the end of the
fiscal year. He wonders if there is some way to cut labor expenses while saving
as many jobs as possible. He also worries about the loss of talent and
retaining the knowledge of long-time employees. He’s got some cost-saving
ideas, but it certainly won’t add up to 10 percent. Tu feels certain there will
be a reduction in force. A few managers will be delighted; they all have some
bad apples they want to get rid of. Tu
wonders how he is going to ensure that the layoffs are equitable and
nondiscriminatory. This is not going to be good for morale, and he dreads the
backlash when word gets out.

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