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Assignment 2: Case study—Paid Time Off (PTO) Policies
PTO policies have become good tools for HR staff to use in terms of organizational incentives. Use the Argosy University online library and your textbooks to read about PTO policies. Now, let us go back to Company A and Company B from Module 1.
While reviewing the information from the two merged companies, the HR Director has found out that each company has two different PTO policies.
Company A has a PTO system in which employees are given 30 days of paid time off each year, which accumulates at the rate of 2.5 days a month. Under this policy, vacation and sick leave are all rolled into one paid leave and any absence whether scheduled, such as vacation, or unscheduled, such as sick leave, are taken from the accumulated leave the employee has earned.
Company B has a more traditional leave system in which employees are given 12 days of vacation, 10 days of sick leave and 10 holidays. The company is closed on those holidays. Vacation is accumulated at a day per month. Sick leave has an unlimited accumulation, but unlike vacation would not be paid out upon termination of employment.
Since the employees of the merged company will be working side by side, the HR Director has asked you to review the situation and make recommendations for a solution.
Instructions:
As the HR Director, respond to the following issues:
- Identify any additional information you would need to recommend a solution, and explain where you would likely find that information.
- Discuss any issues you would likely encounter if you were to merge the PTO system to a traditional leave system. Explain which issues would be difficult to solve and why.
- Explain any problems you see with leaving the two systems in place, and identify which system would be assigned for new employees.
- Make a recommendation for one common PTO system. Explain your system and why you think this system is the best system for the company.
Include two to three scholarly references in your response.
Write a five-to-seven-page memo to the company’s Chief Executive Officer (CEO). Apply APA standards to citation of sources.
Use the following file naming convention: LastnameFirstInitial_M2_A2 . ByWednesday, September 11, 2013, deliver your assignment to the M2: Assignment 2 Dropbox.
| Assignment 2 Grading Criteria | Maximum Points |
|
Identified information that is relevant and logical for recommending a PTO solution, and provided clear and rational ideas for where the information would likely be found. |
|
|
Discussed relevant issues that could likely be encountered upon merging the PTO system with the traditional leave system. Supported the explanation of difficult issues by sound reasoning and evidence from scholarly resources. |
|
|
Assessed various challenges that would logically emerge from having two separate PTO systems in one company; provided a thorough analysis of which system would be assigned for new employees. |
|
|
Recommendation for the system that would be most beneficial to the newly merged organization is clear, specific, and based on scholarly research and industry best practices. |
|
|
Wrote in a clear, concise, and organized manner; demonstrated ethical scholarship in accurate representation and attribution of sources; and displayed accurate spelling, grammar, and punctuation. |
|
| Total: |
Unit 2: Module 2 ()
· From Managing human resources: Productivity, quality of work life, profits (9th ed.), read the following chapters:
·
Pay and incentive systems
·
Indirect compensation: Employee benefit plans
Module 2 Overview
In this module, you will learn about the strategic, operational, and tactical compensation and benefits tools HR managers use in talent management. HR managers use a mix of compensation and benefits as incentives and motivators. A key role for HR managers is to devise an incentive system that rewards and motivates human behavior, which includes monetary and nonmonetary incentives that assist HR managers to acquire and develop talent.
HR strategy and HR managers utilize a carrot-and-stick approach to motivate employees. The carrot symbolizes incentives whereas the stick symbolizes policies and procedures. Incentives are seen as positive motivators in terms of acquiring and keeping talent in organizations whereas rules help in keeping control over employees.
Professional organizations such as the Society for Human Resource Management (SHRM) and the American Society for Training and Development (ASTD) provide best practices and benchmarks in employee motivation and development. HR professionals may refer to these resources for talent management.
In the first assignment of this module, you will discuss and evaluate the compensation and benefits that motivate employees. In the second assignment, you will analyze the impact of acquisition and mergers on paid time off (PTO) policies of an organization. You will also recommend a common PTO system, keeping in mind the policies of two merged companies.
Using the navigation on the left, please proceed to the next page.
· Incorporate strategic human resource management principles in the development of programs that meet organizational needs and enable the organization to maintain a competitive advantage.
· Recommend talent management strategies that support the HR strategic plan and the competitive strategy of the organization.
Unit 2: Module 2 – Compensation and Benefits
Compensation and Benefits
·
· http://www.entrepreneur.com/article/223516
·
Compensation means salary. HR managers use research, studies, and surveys to determine a competitive salary in order to design a talent management strategy.
Benefits such as PTO and medical insurance, etc., are also researched and planned. Benefit packages supplement employees’ compensation, and, thus, form an important element of a talent management strategy. A benefit plan typically addresses the specific needs of employees. However, HR managers must balance the needs of the organization and the needs of the employees while designing the compensation and benefits (C&B) mix because market forces often drive resources. In a good economy, or when an organization is flourishing, it is relatively easy to acquire talent. When economic or organizational performance is bad, attracting resources becomes tougher.
The role of C&B on employee motivation, morale, productivity, and retention can be profound and is the subject of ongoing research to determine not only the effect of compensation and benefit packages on productivity, but also the specific tipping point. For example, will a 25% bonus on base salary result in a 25% increase in productivity? Would a 20% bonus have the same results? Can any increase in productivity be accurately linked to bonus incentives or are there other factors at work? Your assigned readings provide some references to such studies, but you can conduct your own research in the Argosy University online libraries using keywords like “pay for performance,” “compensation rewards,” “financial rewards,” “organizational performance,” “human resource management,” or “profit-sharing.”
Executive Compensation
Executive compensation is about talent acquisition and development. It is strategic in nature and incentive based. Executive compensation is about getting and retaining the best talent available. Many executive compensation plans are based on market value and is often about pay for performance.
http://www.inc.com/guides/hr/20678.html
Benefits
HR strategies employ various benefits including the following:
· Medical benefits: Medical benefits are usually provided for all employees and include comprehensive and/or major medical insurance. Employees may be given choices between service providers and insurance riders where possible.
· Insurance: There are various types of insurances, and employees may have a say in the type of insurance they want to avail.
· Pensions: This includes retirement benefits, with a choice of options when possible.
· 401Ks: This includes retirement benefits, with a choice of options when possible.
· Time off: Employees may receive various options for time off work such as sick leave, personal leave, vacations, holidays, and sabbaticals.
· Lifestyle benefits: This includes incentives such as restaurant vouchers, movie tickets, membership to social clubs, and so on.
· Wellness/childcare: This includes memberships to gyms, health clubs, child care facilities, and so on.
· Flex benefits: This includes options such as telecommuting, and flexible working hours depending on the employee’s convenience.
http://www.entrepreneur.com/article/80158
·
Using the navigation on the left, please proceed to the next page.
Unit 2: Module 2 – Job Analysis
Job Analysis
Job analysis in an important tool in talent management. This process serves to identify the activities involved in a job and the skills required to perform it. It helps HR managers select the right personnel for the right job. Job analysis should be performed on a need basis, and the process should be continually improved.
There are three parts to the job analysis process:
1. Needs analysis: A needs analysis entails gathering data and developing goals and objectives. It helps understand the needs of the job. O’Connor (2006) summarized a simplified three-step approach to needs assessment:
a. Identify the problems, issues, challenges, goals, and priorities of the business.
b. Uncover gaps in performance areas.
c. After determining causes of the problems, recommend solutions. (O’Connor, 2006, pp. 14–17)
2. Job description: A job description is a document that describes the role, duties, and responsibilities of the job and explains the skills and activities required to perform the job. The job description provides all the information related to the job such as designation, location, nature of the job, and qualifications required for the job. It also explains the authority-responsibility relationship with internal and external people.
3. Evaluation and Assessment: This is the last stage of the job analysis process. Evaluation and assessment make sure that the job description is reviewed periodically to maintain its effectiveness. This process, when implemented correctly, leads to better workforce management.
The job analysis process assists HR in developing accurate job descriptions. It also helps them conduct employee recruitment and evaluation. However, HR personnel should be cautious to evaluate only the job and not the employees while performing the job analysis.
O’Connor, J. (2006). Shifting mindsets. E.Learning Age, 14–17. Retrieved fromhttp://search.proquest.com.libproxy.edmc.edu/docview/200863208/
abstract?source=fedsrch&accountid=34899
Using the navigation on the left, please proceed to the next page.
Unit 2: Module 2 – Performance Appraisal
Performance Appraisal
Performance appraisals are snapshots of performance over a period of time. They are conducted at periodic intervals or by triggering planned or situational events.
Performance appraisals are conducted during a given period to gauge progress and/or at the end of a period to review the employees’ performances. The appraisals can be carrot and stick (reward and/or punishment) or purposive (that is, ranking for advancement).
The process of performance appraisal seeks to evaluate the performance of employees and understand their needs and abilities for further growth and development. Performance appraisal serves the following objectives:
· To revise employees’ compensation and work profile as per industry standards
· To provide feedback to employees about their performance with respect to the organization’s expectations
· To assess the strengths and weaknesses of employees for further growth and development
· To measure the potential in employees to take up the next challenging role or assignment
Performance appraisals offer several advantages to the organization:
· Compensation: Performance appraisals allow HR to outline compensation packages for employees based on their performance. The compensation package includes bonus, high salary rates, extra benefits, allowances, and pre-requisites, all of which are dependent on the performance appraisal.
· Employee Development: Performance appraisals help supervisors recognize the training needs of employees based on their strengths and weaknesses and identify the required training programs for their development.
· Promotion: Performance appraisals help supervisors identify efficient employees and design a promotion plan for them. It also helps them recognize inefficient employees and chalk out an appropriate plan for their development.
· Motivation: Performance appraisals help measure the efficiency of employees if targets assigned to them are met. This helps motivate employees to improve their performance in the future.
Using the navigation on the left, please proceed to the next page.
Running Head: PAID TIME OFFS 1
PAID TIME OFFS 9
Paid Time off (PTO) Policies
Jesse Heineken
Human Resource Management & Talent Development
September 4, 2013
Jesse, take the a moment and review the comments and markups and instructions for this assignment. Your work is below with a breakdown of your points.
Dr. Dale
As the HR Director, respond to the following issues:
· Identify any additional information you would need to recommend a solution, and explain where you would likely find that information.
· Discuss any issues you would likely encounter if you were to merge the PTO system to a traditional leave system. Explain which issues would be difficult to solve and why.
· Explain any problems you see with leaving the two systems in place, and identify which system would be assigned for new employees.
· Make a recommendation for one common PTO system. Explain your system and why you think this system is the best system for the company.
Assignment 2: Case study—Paid Time Off (PTO) Policies
PTO policies have become good tools for HR staff to use in terms of organizational incentives. Use the Argosy University online library and your textbooks to read about PTO policies. Now, let us go back to Company A and Company B from Module 1.
While reviewing the information from the two merged companies, the HR Director has found out that each company has two different PTO policies.
Company A has a PTO system in which employees are given 30 days of paid time off each year, which accumulates at the rate of 2.5 days a month. Under this policy, vacation and sick leave are all rolled into one paid leave and any absence whether scheduled, such as vacation, or unscheduled, such as sick leave, are taken from the accumulated leave the employee has earned.
Company B has a more traditional leave system in which employees are given 12 days of vacation, 10 days of sick leave and 10 holidays. The company is closed on those holidays. Vacation is accumulated at a day per month. Sick leave has an unlimited accumulation, but unlike vacation would not be paid out upon termination of employment.
Since the employees of the merged company will be working side by side, the HR Director has asked you to review the situation and make recommendations for a solution.
Instructions:
As the HR Director, respond to the following issues:
· Identify any additional information you would need to recommend a solution, and explain where you would likely find that information.
· Discuss any issues you would likely encounter if you were to merge the PTO system to a traditional leave system. Explain which issues would be difficult to solve and why.
· Explain any problems you see with leaving the two systems in place, and identify which system would be assigned for new employees.
· Make a recommendation for one common PTO system. Explain your system and why you think this system is the best system for the company.
Include two to three scholarly references in your response.
Write a five-to-seven-page memo to the company’s Chief Executive Officer (CEO). Apply APA standards to citation of sources.
Use the following file naming convention: LastnameFirstInitial_M2_A2 . By Wednesday, September 11, 2013, deliver your assignment to the M2: Assignment 2 Dropbox.
Assignment 2 Grading Criteria
Maximum Points
Identified information that is relevant and logical for recommending a PTO solution, and provided clear and rational ideas for where the information would likely be found.
10/16
Needs further development
Discussed relevant issues that could likely be encountered upon merging the PTO system with the traditional leave system. Supported the explanation of difficult issues by sound reasoning and evidence from scholarly resources.
20/24
Needs further development
Assessed various challenges that would logically emerge from having two separate PTO systems in one company; provided a thorough analysis of which system would be assigned for new employees.
10/16
Needs further development
Recommendation for the system that would be most beneficial to the newly merged organization is clear, specific, and based on scholarly research and industry best practices.
24/32
Needs further development
Wrote in a clear, concise, and organized manner; demonstrated ethical scholarship in accurate representation and attribution of sources; and displayed accurate spelling, grammar, and punctuation.
8/12
Review your work before submitting to avoid errors
Total:
74/100
In an organization, employees may receive compensation benefits as for time offs. They may include sick leave, personal leave, vacations, holidays and even sabbaticals. Employers are aware that their employees need a break. Different organizations have different PTO policies. Paid time off can be defined as any time which is not worked, but is paid. Although these plans are costly to companies, they view these plans as employee friendly. Companies try to offer the best plans, which are very competitive in attracting and retaining the talented workforce (Smith, 2012).
Most of The employers prefer to come up with paid time off plan. This creates a flexible arrangement that allows the employee to use his/her off days at his/her discretion. The amount of days off accumulates through the years of service, and his/her position in the organization. Some companies allow their employees to carry their unused leave days for the next period. Some companies pay cash for their employees leave days while others insist those days to be taken as stipulated.
Organizations are very concerned about the effects of these vacations and areas of customer service, staffing, productivity and operating continuity. Most human resource managers require employees to get clearance from their respective organizations human resource department (Milkovich, 1999).
As the human resources director, this situation will be very tricky. The merger poses a compensation challenge terms of the listed paid time off policies. Company employeesCompany employees might want to keep their policy paid time off plans, whereas company Company B might think their terms were the best. There is the risk of paid time off crisis. Apart from the above provided information about the leave policy of the company, there is also need for information about the number of employees, their levels of work, and their pending off days. Information about their rates of payments is also lacking. These different companies might have had different pay rates for the same job levels (Smith, 2012).
The details about this required information, which has not been provided in the policy plans, can be assessed from their former personnel office and accounting department. Personnel department in this case used to deal with employee compensation data and accounts department used to calculate these benefits and convert them to monetary terms.
Issues
Merging of this two companies means that all departments also need to merge. I will be working to merge the paid time off and the traditional systems existing in both companies. This exercise will not be smooth as most issues are going to arise. These issues will range from when to payment of benefits, the criteria used to calculate these benefits, the time period taken to utilize these offs, the pay rate adjustment from the one which was existing, the limits of these offs, and the overall benefits accrued after employment termination.
When to pay benefits
The two companies had different PTO policies about when to pay these benefits. As the human resource director, I will face the challenge of reaching a deal which will be beneficial to all parties. Employees from company Company A were paid their benefits yearly, whereas their partners in company Company B were paid their off benefits monthly. This issue will be difficult to solve as some parties might want to retain their own way of payment, which they might argue that it will deem best for them.
Criteria to calculate benefits
Employees from the two companies might challenge the adopted merger criteria for calculation of their benefits. Though this might prove to be a challenge, I might call some of their representatives and explain to them the adopted one and why it was adopted. As the human resources director, I will work towards the best agreement for the employees. The company might also work at minimizing the labor costs while maximizing the productivity of the employees.
When to take this offs←(Paid Time Off (PTO)
The time designated for these paid time offs will also be an issue. For instance, employees for company Company A used to utilize their PTOs on a yearly basis, whereas company Company B employees spent them on a monthly basis. One time might feel their time period was better than the other party. Employees from company Company B might also feel their plan was the best as they did not accumulate these PTOs. This will also be a difficult issue, but we will try to harmonize and encourage most employees to take their PTOs at low work. This will be aimed at minimizing the labor costs when the work levels are low.
Pay rate adjustment Issue
This will be a critical issue. Most employees value their pay more than their working conditions. The two company’s employees will be bargaining for more pay than what they were earning at their previous single companies. Though they might want the company to raise their rates, the management might even be planning to slash them. A committee will have to form to look into this matter as it is not a light matter. The personnel department will work for the best interests of the employees, through negotiating better pay rates.
Conditions attached to PTOs
These offs have conditions. Though some conditions might be existing in both companies, and they do not favor most of the employees, they will try to downplay them. For instance, it was company Company A policy that both vacation and sick leave were rolled out in one paid leave. Absence, whether scheduled or unscheduled were taken from accumulated leave the employee had earned. In Ccompany B, sick leave had unlimited accumulation, but it is not paid upon the end of employment. These conditions will be analyzed and integrated to produce a mix which will aid the employees in achieving optimal benefits attached to these PTOs.
These new systems cannot run parallel in this one company. As a merger, the company will now need a PTO policy which is same for all employees working in the merger. Some problems might arise if the two systems operate. Apart from running a costly human resource benefit system, there will be problems with employees operations. One section of the employees operating under a particular system might feel discriminated. This feeling might fuel un-cooperation in the work processes and create divisions in the workforce. This might lead to low productivity, and in extreme cases it can lead to industrial actions. Employees might term such actions as unfair thus negative merger publicity (Smith, 2012).
All new employees will be direct to the PTO system which was used by Company A. New employees cannot be expected to take leave their first months as they are still trying to catch up with the organization policies and month long offs might cause their learning interruption.
I would recommend the one PTO system which was used by Company A. which involved employees getting 30 days of paid time off, each year. There are so many benefits attached to these PTOs. To employees, they feel that they are entitled use PTO as adults, at their own will, with no restrictions. Employees are also realizing that paid time offs come with certain flexibility. Employees appreciate this flexibility and tend to be more loyal to their organizations as they feel that they are valued.
To employers, paid time offs will be set in a manner to protect the company work load and customer service. This occurs whereby employees are required to request, a two days work notice, prior to being away. This gives the employer some control over unscheduled absenteeism, which is very costly to most of organizations. PTO plans are more advantageous than the traditional off time plans. As employees do not take any time they feel and pretend to be sick. This creates healthy behavior among the employees and minimizes the cost associated with employee absence.
The drawbacks associated with PTO system are that employees can come to work even if they are unwell. They do this to preserve their off PTO days. This is risky for the both parties. An employer can be sued for keeping sick employees at work. For the employee, his/her healthy can deteriorate or might cause an accident if he operates machinery. Another disadvantage of this system is that an employer might limit the PTO days by employee; thus she will be accumulating her PTO slowly than the long term employees. Employees on other hand might try to utilize all their time off, which might not even be existing (Jackson, 2011).
Our merger can actually benefit from this PTO approach if we put into task the cost saving practices adopted by successful organizations. The approach is not one sided as most employees will benefit from the accumulated PTO days (Smith, 2012).
References
Jackson, S. E., Schuler, R. S., & Werner, S. (2011). Managing human resources. CengageBrain. com.
Milkovich, G. T., Newman, J. M., & Milkovich, C. (1999). Compensation. T. Mirror (Ed.). Burr Ridge, Ill.: Irwin/McGraw-Hill.
Smith, W. W. (2012). Paid Time Off Policies: A Review and Analysis (Doctoral dissertation, Minnesota State University Moorhead).
