GM 565 Week 11 Discussion

GM 565 Week 11 Discussion | Franklin Pierce University | Assignment Help 

11.1 Discussion - Team 3

DISCUSSION TOPIC: Managing Compensation & Benefit Programs

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1) Review the content in the Introduction item for unit 11.

            Remember The “3C’s”  Cost, Change, & Communication 


2)  Read the Case: "Managing Compensation Costs, Headcount, and Participation/Communication Issues" -Chapter 18 of Miklovich, Newman and Gerhart.

               The case outlines how some companies, like Cisco Systems, Hewlett-Packard, American Airlines, and  General Motors, have cut employment or cut wages and/or benefits to reduce labor costs in hopes of  becoming more competitive and more profitable.

               In contrast, some companies, like Southwest Airlines, Nucor, and Lincoln Electric, have a no layoff    practice and do not appear to have cut wages or benefits even in years when sales have declined  significantly (and have not gone through bankruptcy).

    3) Post your answer AND rationale for the following questions:

a.      What is the difference between these two sets of companies?

          For example, is it simply that one set of companies care more about its employees than the other set of companies? Or, is it also the case that Southwest, Nucor, and Lincoln Electric have set up their compensation strategies in a way that makes them more able (than Cisco, HP, American, and GM) to cut labor costs when times are tough? 

        For more background, here are some articles for you to review:   
           a. http://www.jsonline.com/business/93960929.html (Links to an external site.)- Nucor
          b. (Links to an external site.) http://www.businessweek.com/news/2012-10-18/southwest-airlines-profit-slips-on-fuel-costs-stagnant-traffic (Links to an external site.) - Southwest    


         b. What can we do to make labor costs flexible so that we can position our organizations to “weather the storm” during times of declining revenue?  (Refer to flexibility -labor cost model in Exhibit 18.1)

         c. If you were leading the change and subsequent communication in a compensation system at your organization, who at the company would you have participate in the review/redesign and why?