Answer & Explanation:Assignment from nickkynickkyWhen business improves for The King Company, the company plans to build a facility in Portland, OR. Research and explain the demographic characteristics of the Portland labor market. Would the company find the diversity and the skill levels needed to build its technology component? Discuss. If not, where is the closest location to Portland you would recommend and why?References:U.S. Department of Labor (https://www.dol.gov). U.S. Census Bureau (http://censtats.census.gov/pub/Profiles.shtml). Note: These are both national databases. Also check with your the state department of labor and other sources for information.For this SLP assignment bring in at least 2 sources from the Trident library to help strengthen and validate your discussion.
the_king_company_background_7.docx
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THE KING COMPANY BACKGROUND
The King Company experiences many of the difficulties common in today’s business
climate. In response to declining sales, the company must transform itself from a
strategy of expansion and high profit to one of cost containment and staff
reductions.
The case discusses the organization and provides details of the human resource
department. Also presented are e-mails from various staff members. The e-mails
identify specific problems that need to be addressed by the HR department and
provides a look at King’s overall culture. You may find the tone of some e-mails to
be unprofessional. This is a good lesson for us all–As much as we enjoy
informality in the workplace, all documents and correspondence— including emails—can be retained and are discoverable in litigation. Managers must be
cautious in their writing because inappropriate language may be impossible to
defend in court.
Employees In the Case:
Amera, Argonta—Accounting employee
Andreas, Gary—employee on workers’ comp
Call, Jake—Compensation & Benefits Manager
Dean, Don—C.E.O.
Dugas, Karla—Benefits Coordinator
Folkner, Meg—Supervisor, CAD Design
Grant, Alan—Current HR Director
Honduras, Margo—Previous HR Director
Jones, Lyle—Production Employee
Madison, Charles—Senior V.P.
Petersen, Matt—Production Supervisor, Team 3
Planky, Burt—fishing buddy
Putt, Tonia—CAD Designer
Rey, Dave—Production Foreman
Sanders, Tomas—Design Manager
Scholl, Karmen—HRD Manager
Simms, Bertie—Designer
Smith, Mike—V.P.
Songun, Amy—Accounting Supervisor
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Stone, Guy—Production Supervisor
Tu, Kevin—Staffing Manager
Varn, Juan—Safety & Security Manager
Warner, Salty—union promoter
White, Shaun—Employee Relations Manager
COMPANY BACKGROUND:
The King Company is a small manufacturing company
located in a mid-sized city in the upper Midwest. King
manufactures high-quality specialty components for the
computer industry. The company was founded in 1994
by current CEO, Don Dean. Dean was a talented young
engineer in Silicon Valley. When the industry hit the
skids in the early 1990s, he found himself out the door
with little more than an entrepreneurial spirit and a small
severance. Dean left California, moved back to his home
state and used his severance to finance The King
Company, starting the company in small rented quarters
in a nearly vacant strip mall. He brought in Cliff Madison
early on as chief financial officer. Dean was smart
enough to know that he had no head for figures, but
Madison did. Madison was an old college buddy, a super
accounting wiz, and somebody Dean could trust to
squeeze as much mileage as possible out of his severance
money. It was a good match. Madison managed the
business, and Dean was the idea man and designer of the
specialty components, patents of which were the
backbone of King’s success. Today, the low-rent strip mall
is a part of company history, and King employs 835 fulltime workers in its own contemporary facility built in
2002.
So far, King has not been significantly affected by the
latest downturn in the industry. Its market niche
continues to be high-quality, specialized equipment. The
company is proud that its products continue to be made
in the United States and also proud of its ISO quality
certification granted by the International Organization
for Standardization. Dean believes this is what has kept
his company in business while others in the industry
shipped jobs offshore or went by the wayside.
King sells its own products and has a small customer base
scattered throughout the United States and Asia, but this
generates only a small percentage of King’s revenue.
Eighty-three percent of King’s sales come from building
original specialty components for one manufacturer. This
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has been a steady income source for King, but heavy
reliance on one customer is a significant source of worry
for King’s management team, especially because sales of
finished products are down for this customer and cutbacks
are expected. If the rumor proves true, King will not
escape unscathed. Consequently, the push is on for belttightening in the organization.
King instituted a hiring freeze, and marketing and sales
budgets were directed to increasing the company
customer base. Canadian and European markets are
being explored, and while there is some interest, there
are no solid contracts. King employees are
understandably jittery.
Though King remains non-union, three years ago the
organization went through a difficult period of employee
unrest. There were complaints of poor management,
inconsistently enforced policies and unfair practices
regarding job changes and movement of employees
within the organization. Because of the company’s
standing as a respected employer in the community, it
was a significant public relations black eye when an
anonymous employee wrote a scathing letter to the
editor of the local paper. This brought in union
organizers who distributed leaflets and circulated
authorization cards. To address employee concerns, The
King Company responded with management training and
reorganization of lower-level supervisory positions. A
companywide “Talk-to-the-Boss” program was
implemented, allowing employees to bring issues to any
level of management without fear of reprisal. It seemed to
help. The authorization cards failed to generate enough
interest for an election, and things settled down. Unrest,
though, never goes away entirely. Employees became
cynical about “Talk-to-the-Boss,” and “the union
buzzards,” as Dean calls them, never completely went
away.
Things have certainly changed for King from the old days
of the store-front location and a handful of employees.
Dean remains the CEO, but he no longer manages the dayto-day operations, spending time instead at his family’s
summer retreat on the Maine coast or in the Caribbean
during the winter months. Decision-making is primarily
in the hands of Madison, who is now the organization’s
senior vice president, and a second vice president, Mike
Smith. Smith came to King eight years ago with an MBA/
HR concentration from TUI and a successful military career.
With a history that has known only growth and strong
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revenue, it will be a major culture change for King to
respond to the eroding economy and a possible decline in
sales. In addition to the hiring freeze, Madison directed
managers to cut waste and improve productivity across
the board. Employees were reminded that every
department would be affected and that nothing was
sacred.
The Human Resources Department
Margo Honduras was HR director at King for eight years
before her departure in 2007. The official word was that
she had taken early retirement to spend more time with her
family, but what everyone really believed was that Smith
finally got fed up and gave her the boot. Of course, there
was the official retirement party where everyone said how
much they would miss her, but really, most employees in the
department raised a toast to her departure and gave a
collective sigh of relief. Her management style—when she
managed at all—was divisive. She had her favorites,
especially Karla Dugas, King’s benefits coordinator, for
whom no perks were ever too many. Consequently, the
compensation and benefits staff fared well under Honduras
because it was Dugas’s area. Other employees in the HR
department found Honduras to be unfair and abrasive
even on the best of days.
With approval from Madison and Smith, Honduras and
compensation manager, Jake Call, had established a merit
bonus plan early in Honduras’s tenure at King. Though
Honduras continued to champion the bonus plan as a
success in accomplishing objectives and controlling costs, it
has been a bone of contention across the organization,
particularly in the HR department. The bonus plan
required everyone to have annual performance goals.
Honduras allowed Call’s compensation and benefits staff
to set their own goals, but for everyone else in the
department, Honduras alone set the goals with no input
from those expected to carry out the activities.
The result was hard feelings and perceived inequity that
continues today. There is grumbling that even with Honduras’s
departure, things never changed. Dugas still offloads most of her
work on others and is never dependable for project completion,
yet she and her staff members receive top-tier bonuses year after
year. Even Call seems to look the other way. Other HR
department employees feel their work is not supported by
management and that there is little feedback on progress
toward goals. For them, bonuses, if paid at all, are based on
unknowns controlled arbitrarily by Call. As a result, the HR
department is rife with animosity and there is little cooperation
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across functional areas. Certainly things couldn’t get worse.
When Honduras retired, Smith promoted Alan Grant, manager
of safety and security, into the director’s position, even though
he had only been with King for a year before his promotion.
Though Grant had reported directly to Honduras, his good
track record at safety and security kept him below the radar of
many of the problems in the HR department. As manager of
safety and security, he focused primarily on increasing wellness
activities. Establishing an active wellness team across the
organization, he became the most visible member of the HR
department, and with his positive upbeat attitude, many
employees thought of him as the organization’s “cheerleader.”
Best of all, his management style was the polar opposite of
Honduras’s. Where she micromanaged and criticized, Grant
believed in encouragement and responsibility. Smith thought
Grant would bring a breath of fresh air to the HR department,
and he gave Grant free reign to make the changes necessary to
turn the department around.
When Grant moved into Honduras’s old office, he set a big jar of
candy on the desk and invited everyone to stop by and chat with
him whenever they wanted. Of course, Dugas was first in the door.
The King Company, Inc.
CEO
Don Dean
Vice Pres.
Sr. Vice Pres.
Mike Smith
Operations
Cliff Madison
Human Resources
Finance
Sales and
Marketing
Safety and
Security
Employee
Relations
Alan Grant
Human Resource
Development
Compensation
and Benefits
Staffing
HR Director: Alan Grant
HRD Manager: Karmen Scholl
Compensation and Benefits Manager:
Jake Call
Benefits Coordinator: Karla Dugas
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Staffing Manager: Kevin Tu
Safety and Security
Manager: Juan Varn
Employee Relations
Manager: Shaun White
Current Situation
Three months ago, Alan Grant, director of HR, resigned
unexpectedly because of a family emergency. Despite the
hiring freeze, a quick but thorough selection process was
conducted, and you were hired as the new director of
human resources. You’ve come to King with an HR degree
from a respected university and with several years of
experience as an HR generalist in a large organization. This
is an outstanding career opportunity for you. You will be a
member of the management team, and this is a chance for
you to make a real difference in the organization.
Congratulations on your new position and welcome to The
King Company.
It’s your first day on the job. You hang your diploma on the
wall, arrange a few personal mementos on your desk and
settle into Grant’s old chair. You notice his in-basket is
overflowing. You reach for the top file, open the bulging
folder and start to read the stack of e-mails Grant printed
out before he left. 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
involved.
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Second, 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.
Alan,
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:
Charles Madison, Senior V.P.
Like all of you, I have watched the ups and downs in our national economy, and I worry about reports of
declining sales in our industry. The business news is greeted with increasing concern each time we hear of
yet another company that moves jobs off-shore and shuts down its U.S. facilities. Throughout it all, King
remains steadfast in our policy of American-made products, and it is the quality of our workforce that has
garnered our success. Each of you is to be commended for the good work that you do.
However, we must recognize that business cannot be sustained today with policies of the past. We must
be proactive and anticipate change. Though the company remains healthy, our revenue has been flat for
the last two quarters, and sales projections indicate a downturn going into next year. This necessitates
cost-saving measures throughout our organization. Mike Smith (V.P.) and I will be meeting with all
department managers to determine specific goals and plans for the future. All departments will be
involved.
With falling sales, there will be significant cuts in staffing expenses because 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
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From: Jake Call, Compensation & Benefits Manager
Alan—
I am sending this on to you because I don’t know what to tell her. Do we have a policy on this?
Jake
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 downsize!
Email 6:
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To: Karmen Scholl, HRD Manager
From: Alan Grant, Director, HR
Karmen,
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 Foreman
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 Foreman
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
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From: Karla Dugas, Benefits Coordinator
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 Coordinator
From: Meg Folkner, Supervisor, CAD Design
Karla-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, …
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