Key Business Issues
OBHR 4480-01
9/23/2014
Case Study 4 – pg. 327
1. Jan is facing a number of key business issues. The first is the lack of support from the board of directors about her proposal due to a poor return on investment. The second is the employee expense growth. CalleetaCO is incurring a 12% cost increase annually compared to an industry average rate of just 4%. Another key business issue Jan is facing is the growing concerns over working conditions in their foreign facilities in Mexico and Vietnam which are being targeted by activists on behalf of inhumane working conditions.
2.CalleetasCO’s HR operations are contributing to the company’s success by putting value on its human capital talent acquisition and retention plan. CalleetaCO was able obtained the most highly skilled individuals in their industry giving the organization a competitive advantage. These contributions support the company’s strategic goals because it will help the CalleetaCO avoid high turnover rates along with inconsistency in the quality of their RFID technology. The changes that John can make to in his HR operations to meet the boards demands is to focus on cutting employee cost in the area of employee benefits.
3.John’s proposed change to cutting employee costs in the area of employee benefits will not hinder CalleetaCO achieve sustainable competitive advantage. Right now the HR departmental costs is 20% higher than competitors firms. If I were in John’s position I would cut employee cost by getting rid of luxury services such as onsite pet boarding. These types of services should not be at the cost of the company if they do not have the revenue to support it. I would also consider cutting the cost of health care. Instead of CalleetaCO having to pay for all of the health, dental, and life insurance