978-0078112768 Chapter 13 Solution Manual Part 3

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Chapter 13 – Employee Benefits

1.1.1 Exercising Strategy:

Smokers Face Another Risk from Their Habit: It Could Cost Them A Shot at a Job

More hospitals and medical businesses in many states are adopting strict policies that make

smoking a reason to turn away job applicants.

Questions

1. Should companies be allowed to require its employees not to smoke? Why or why not?

Student responses will likely vary. Some may feel that it is appropriate to allow

2. Do you feel that companies should be able to restrict other employee activities?

As the case with the answer to question one, this question could appropriately result in

an array of student responses. If an activity interferes with job performance, or if the

3. Do you believe it is discrimination to not hire people who smoke? Define

discrimination. Explain your view on whether employees are engaging in

discrimination in this case.

Once again, student responses can and likely will vary. Discrimination refers to unfair

1.1.2

1.1.3

1.1.4 Managing People:

The Affordable Care Act—How Will Small Employers Respond?

This vignette discusses the ramifications of the Affordable Care Act on small companies that

are near the 50 employee threshold specified by the law. One such company, Automation

Systems, LLC is contemplating avoiding expansion due to the increases in cost it would endure

as a result of the law. The owner is presently looking for solutions to avoid these increases in

cost, as are many other employers. Such solutions include dividing the business (i.e. creating a

spin-off), reducing worker hours below the definition of full-time, relocation, or even laying

off staff.

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Questions

1. How do you feel about companies looking for ways to avoid coverage under the

Affordable Care Act?

2. Do you feel that it is more understandable that small companies like these would look

to avoid coverage, compared to larger companies (e.g., the Darden corporation

discussed earlier in the Integrity in Action box)?

3. What are the consequences for companies, workers, and society of companies avoiding

coverage by the law?

HR In Small Business

Babies Welcomed at T3

T3 is a marketing agency that has a primary value for innovation. One innovation that Gay

Warren Gaddis, the agency’s owner, implemented was a “bring your baby to work” benefit for

new mothers to avoid the lost time she anticipated would result from four of her employees all

being pregnant at one time. The program seems to be successful with over 55 babies coming to

work since the program’s inception. The company also offer benefits such as medical, dental,

and vision insurance; various life insurance policies; disability insurance; a 401(k) plan; paid

time for vacations, holidays, and sick leave; and discounts on gym memberships and cell phone

plans. There are also some other unusual benefits: breakfast on Mondays, candy on Fridays, a

book club, and a “bring your dog to work” policy.

Questions

1. Of the employee benefits mentioned in this case, which of them do you think are

important for keeping a creative workforce engaged at T3?

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3. What are some of the advantages of the agency’s T3 and Under policy? What are some of

the risks? How can the company address those risks?

Again, this will be a varied conversation but some of the advantages are spelled out in

4. At what other kinds of companies, if any, do you think a “bring your baby to work” policy

might be effective as an employee benefit? Why?

Students will likely come up with a wide variety of types of firms here. It seems

Additional Activities

Twitter Focus

Babies Welcomed at T3

T3 is an independent advertising agency started by Gay Warren Gaddis, a woman who

encouraged employees to bring their babies to work. She counted on the employees to work

flexibly in the presence of their children. Once babies reach nine months or start to crawl,

parents are expected to make arrangements for day care. Bringing babies to work is not the

only employee benefit at T3. The company also offers medical, dental, and vision insurance;

various life insurance policies; disability insurance; a 401k plan; paid time for vacations,

holidays, and sick leave; and discounts on gym memberships and cell phone plans.

Question

1. How would you feel about working in an environment where babies are brought into

the office? What are the advantages of this policy? Any disadvantages?

Manager’s Hot Seat Exercise: Listening Skills: Yeah, Whatever-Please refer to the Asset

Gallery on the OLC for Hot Seat videos and notes.

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1.1.5

I. Introduction

Organizational Behavior and Management instructors will find this scenario useful in depicting

behaviors associated with active listening (and not listening). An analysis of the interaction

will reinforce communication concepts including: the communication process, the components

of active listening, and information processing. Communication networks may also be

reinforced by this scenario.

II. Learning Objectives

1. To assess students’ understanding of the communication process.

2. To analyze and evaluate the components of active listening in a novel scenario.

III. Scenario Description:

Overview: Pilar Grimault has scheduled a meeting with her department’s young

Creative Director, Miguel Valentino. He has recently completed a campaign for a

longstanding client, Jezebel. Although the campaign was a huge success, the client has

complained to Pilar about Miguel’s project management skills.

Profile:

Pilar Grimault is the Senior Account Manager at Midnight Visions, a worldwide

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advertising agency, after having been a Creative Director for Midnight in

London. She manages teams ranging from 25 to 150 people, working on

accounts for record labels, fashion houses and entertainment conglomerates.

Miguel Valentino is a Creative Designer, overseeing some of the most high

profile accounts for record labels and design houses, and managing global

teams of five people.

References: The references included in the DVD are:

The Communication Process (PPT 13-3)

Components of Active Listening (PPT 13-5)

Information Processing (PPT 13-6)

Communication Networks (PPT 13-10)

Back History: At Midnight, Account managers oversee four to six accounts at any

given time. Some of Miguel’s current accounts are Jezebel, Antonioni, and HotSpot.

This is the first time Miguel has had three high profile accounts at the same time – a

result of shifting schedules and production slow downs.

Pilar has a lot of confidence in Miguel, but because he’s had less experience than most,

watches over him more closely. In addition to reviewing the Account reports, she has

casually/subtly checked in with some of the team members and some of the clients

about Miguel’s performance – most of the news is great with a few things that could

and should have been handled better. This is really a positive review and the trouble

spots at this stage of the game are minor. But they still need to be addressed. The

trouble spots she is most concerned with involve The Jezebel Account – Miguel went

over budget [$11,000!] and then charged the client for overages without checking

with/warning them in advance. They were thrilled with the end media and were okay

about the overages – but not the process. Today is the review.

Scene Set-up: Pilar and Miguel meet to discuss the Jezebel account.

Scene Location: Pilar’s Office

The Meeting – Summary: Miguel enters Pilar’s office on cloud nine because of the

great work he did for Jezebel. Pilar congratulates him but has to bring up the fact the

client was not happy with the management of the project. Miguel is completely

distracted (reads magazine, checks voicemail) and does not listen to Pilar. He becomes

defensive when she offers the solution of having his assistant provide budget reports.

He half-heartedly agrees with her suggestion and then leaves in a huff.

Three weeks later – Miguel is shocked that Jezebel has asked him to be removed as

project manager from the campaign. Pilar notes that if he had listened to her three

weeks ago, this situation could have been avoided. Miguel becomes very responsive

and actively listens to her suggestions for improvement.

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Afterthoughts – Summary: Pilar feels the first meeting was a failure because Miguel’s

body language indicated that he was distracted and not listening to her. She felt this

was very unprofessional behavior. After the second meeting Pilar acknowledges that

losing the account got Miguel’s attention and will now take her suggestion more

seriously.

Dossier: The specific artifacts included in the DVD are:

1. Memo from Jezebel to Grimault

2. Emails between Sampson and Grimault

3. Voicemail from Susan to Miguel

IV. Discussion Questions:

The References and related Discussion Questions may be found in PowerPoint slides 13-1 to

13-10 on the instructor’s side of the text’s Website.

Learning Objective #1: To assess students’ understanding of the communication process.

1. During their initial meeting, what “noise” was present that hindered Miguel and Pilar’s

ability to communicate successfully? Refer to PPT 13-3.

Miguel was so excited about the end result of his project that he could not focus on any

negative information. The fact that the information Pilar was trying to relay was

1. Miguel’s response [to Jezebel’s concern about the budget] is:

a. Appropriate

b. Missing the point

c. Disrespectful

2. The trouble spot is:

i. Miguel’s distracted

ii. Pilar’s too passive

iii. A misunderstanding

Learning Objective #2: To analyze and evaluate the components of active listening in a novel

scenario.

1. What components of active listening did Miguel demonstrate (or fail to)? Refer to PPT

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13-5.

Miguel failed to exhibit any of the components of active listening as indicated by the

following behaviors.

He displays defensive/closed body language.

2. Use the Information Processing slide (PPT 13-6) to explain Miguel’s behavior in the

first meeting.

3. What could Pilar have done to get Miguel’s full attention in the initial meeting?

Student’s should discuss possible alternative approaches. Examples include… Pilar

may have been more successful if she had spent a little more time congratulating

Alternatively she could have shown Miguel the memo from the client directly to get his

3. Miguel is not cooperating. Pilar should:

A. Be forceful

B. Reiterate problem

C. Fire him

4. The [initial] meeting has been:

A. A success

B. A failure

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C. A bit productive

4. How did Miguel’s behavior change in the second meeting? What indicators were there

that he was listening?

Miguel’s body language indicated that he was very concerned about losing the account

5. Why is this [second] meeting different?

A. Pilar’s aggressive

B. Miguel’s afraid

C. Better communication

6. Miguel’s behavior:

A. Remains poor

B. Improved

C. Is motivated

5. What communication network (PPT 13-10) was present in this scenario? Use examples

from the scenario to support your answer.

Students’ answers will vary because it is not entirely clear from the scenario. However,

1.1.6

Teaching Suggestions

This chapter will provide a challenge to most students because of its unfamiliar and complex

content. Having students consider the personal implications of benefits (or not having them)

would be useful. The activities below consist of a combination of interviewing, research, and

case analyses that may further explain to students why benefits are so important to both

organizations and employees.

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1. Have students interview a participant of a 401(k) plan and report to the class the

participant’s perceptions of the plan and how he or she makes decisions relative to

investment. Is it perceived as an important benefit? How would employees decide how

to invest in the plan?

2. Case: Steelcase and Workers’ Compensation Costs. In the late 1970s, Steelcase

experienced an increase in the number of workplace injuries. Most individuals stayed at

home and recovered their former abilities, although it sometimes took months before

they could return to their regular jobs. To reduce the time to return to work, Steelcase

instituted a program in which recovering workers could perform “light-duty” work.

Steelcase also opened a transitional work center at its Grand Rapids, Michigan,

manufacturing site. The center has openings for 30 employees to do various temporary,

light-duty jobs such as washing towels and sorting gloves.

Because the company no longer has to outsource the jobs, it saves $400,000 a year in

addition to savings in workers’ compensation costs. Employees who return to work in

any capacity (even if not in their former positions) still receive the same hourly wages

and full benefits as they recover. In 1986, Steelcase also expanded its medical center in

Grand Rapids to focus more on monitoring the recovery of injured employees through

early treatment and rehabilitation. In spite of incorporating these strategies into daily

operations, workers’ compensation claims have continued to rise steadily. Steelcase

grew rapidly between 1980 and 1990. The number of employees rose from 8,000 to

11,300 in North America, and sales tripled from $600 million to $1.8 billion. The

company now processes more than 2,000 workers’ compensation claims each year

company wide.

1.1.7 Question

What other actions can Steelcase take to reduce workers’ compensation costs? (Note:

the previous example would provide some suggestions.) (Adapted from J. J. Laabs,

PersonnelJournal, February 1993, pp. 72-87.)

3. Case: Campbell Soup Co. and Health-Care Costs. Health-care costs for Campbell’s

rural operations were exceeding those for its urban areas. John C. Hague, Campbell’s

corporate benefits director, stated, “Although our medical costs weren’t completely out

of sight, they clearly were rising at an alarming rate. What surprised us was that the

costs weren’t high where we expected them to be.” For example, health-care costs in its

Paris, Texas, and Omaha, Nebraska, divisions greatly exceeded the medical costs per

employee in the larger cities, such as Philadelphia. After investigating the situation,

they discovered a phenomenon known as outmigration. People were leaving their own

communities to seek health care in the larger cities for hospital care. With the help of

the consulting firm of Burgett & Dietrich, Inc., Campbell set up a managed care

program.

The program was run by Campbell instead of an insurance company or HMO (HMOs

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are typically not available in small towns). Campbell, which is self-insured, has a direct

say in how its health-care dollars are spent. Campbell provides a monthly forum in

which community employers and health-care providers can discuss such topics as

medical trends, frequency of diagnoses, per-diem costs of hospitals, average lengths of

stay, referral patterns, and costs-per-visit.

Campbell trained local personnel and operations managers about how to manage the

plan. The plan was gradually implemented in five divisions. The program is unique in

that employees agree not to self-refer (i.e., select hospitals and doctors on their own).

They choose a primary-care physician from a participating panel.

Campbell pays 100 percent of the costs (no payment is required by the employee; it is

made directly through the network) for PCN (primary-care network) physicians and

specialist visits. Network physicians agree to casemanage each patient’s care and must

be involved in a monthly board meeting in the community. If a specialist believes

further treatment is necessary after a visit, he or she must obtain the approval of the

primary-care physician. This saves a lot of money in repeated tests.

Campbell has determined that it saves 10 to 20 percent of the healthcare costs for

employees who are in a network. The process creates heightened awareness of medical

costs for all concerned. The focus is on ensuring that the medical system is

appropriately utilized and that it is not abused by the patient or the provider. Employees

are attracted by the lower cost; they now have good reasons to obtain health care

locally. It is a paperless system; the employee does not have to file any claims.

Employees still have choices regarding health care. The system appears to represent a

win-win situation for Campbell and its employees.

1.1.8 Questions

a. Can you see any potential disadvantages of Campbell’s plan?

b. Would this type of plan be an appropriate choice for all organizations?

Source: Adapted from J. J. Laabs, “How Campbell Manages Its Rural Health

Care Dollars,” Personnel Journal, May 1992, pp. 74-81.

4. Research Topic: Long-Term Care (LTC) Insurance. One new benefit that many people

believe will become a standard benefit in the future is long-term care (LTC) insurance.

The demand by aging baby boomers, coupled with Congressional efforts to reduce

federal Medicare and Medicaid expenditures, will encourage employers to include LTC

insurance as a component of employee benefit plans. LTC policies cover nursing-home

care, in-home care, and assisted living services such as meal provision and

transportation. LTC is typically offered to employees and their spouses, retirees and

their spouses, and parents and parents-in-law of employees and retirees. The employee

or retiree is usually responsible for the premiums. Source: “Long-Term Care Insurance

—A Standard Benefit?” Issues in HR, January/February-1996, p. 1.

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HRM Failures

Top

Case 13: Workers Comp: Benefit or Bane?

James Kelly worked as an installer for a satellite TV company. He typically drove 200 miles a

At a medical exam arranged by a third-party workers’ compensation administrator, the examining doctor said

After the exam, the employer offered Kelly his installer job back, but Kelly declined, saying his doctor had not

At trial, the employer claimed the light-duty position had been a temporary assignment and that Kelly was

Although the court determined that the evidence was “not overwhelming” in Kelly’s favor, it did suggest a

2 Question

3 In your opinion, how should employers treat workers’ compensation claims to avoid problems?

Possible answers

Know their organization’s rights and responsibilities regarding workers’ compensation.

5 Case: Kelly v. Ironwood Communications Inc., CV 08-3058-CL, 2009 U.S. Dist. Lexis 36674 (April

30, 2009).

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