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Table 1. Reduction in Turnover from Year One
Personnel Category Year Two Year Three Year Four
Rate Persons Rnd Rate Persons Rnd Rate Persons Rnd
Executive 127 1.30 1.65 2 3.60 4.57 5 4.50 5.72 6
Physician 367 0.50 1.84 2 0.20 0.73 1 2.50 9.18 9
Other Professional 615 0.50 3.08 3 4.30 27.00 27 7.00 43.05 43
Non-Professional 804 2.70 21.71 22 1.90 15.28 15 4.70 37.79 38
All Categories
Weighted Averages
1913 1.50 28.70 29 2.50 47.83 48 5.00 95.65 96
Rnd = Number of Persons Rounded Of
Table 2. Reduction in Turnover Costs from Year One
Personnel
Category Year Two Year Three Year Four
Total Without
Prod Svngs Total Without
Prod Svngs Total Without
Prod Svngs
Executive 23,675.00 15,675.00 59,187.50 39,187.50 71,025.00 47,025.00
Physician 28,967.00 15,967.00 14,483.50 7,983.50 130,351.50 71,851.50
Other
Professional 19,299.00 8,943.00 173,691.00 80,487.00 276,619.00 128,183.00
Non-Professio
nal 77,627.00 50,886.00 52,927.50 34,695.00 134,083.00 87,894.00
TOTAL $149,568.00 $91,471.00 $300,289.50 $162,353.00 $612,078.50 $334,953.50
Table 3. Total Financial Benefits of Higher Employee Retention Using a Base of Year One
Personnel Category Savings Year Two Savings Year
Three Savings Year Four Total Savings
Execu"ve 23,675.00 59,187.50 71,025.00 153,887.50
Physician 28,967.00 14,483.50 130,351.50 173,802.00
Other Professional 19,299.00 173,691.00 276,619.00 469,609.00
Non-Professional 77,627.00 52,927.50 134,083.00 264,637.50
All Categories $149,568.00 $300,289.50 $612,078.50 $1,061,936.00
1. Total Incremental Savings: $1,061,936.00
2. Total Incremental Costs: 680,000.00
NET SAVINGS $381,936.00
Bene3t/Cost Ra"o (1)/
(2)=
156%
7. INCIDENT: HUMAN RESOURCE INFORMATION SYSTEMS DATA BREACH
I. OVERVIEW
Sweets, Inc., a manufacturer of a line of candy, is 3nalizing the implementa"on of a
comprehensive human resource informa"on data system covering its 400 plus employees. Up un"l
yesterday everything had gone smoothly. Then, a major problem developed that turned everything
upside down. A laptop computer containing sensi"ve data was missing from one of the HR oCces. So,
what ac"on should the firm take?
If one listens to TV news programs or reads the newspapers, one can 3nd reports of sensi"ve
computer data being compromised at many large corpora"ons. This case depicts an all too common
situa"on.
II.OBJECTIVES:
1. To familiarize students with the problems that can occur if human resource data is
compromised.
2. To make students aware of steps firms can take to secure its human resource data.
III. ANSWERS TO QUESTIONS
1. What ac"ons should Sweets, Inc. take now? Explain your
reasoning.
Since the firm is s"ll not totally sure whether the computer has been stolen or whether it is just
missing, the firm needs to conduct a more thorough search for it. This entails looking through drawers
and talking with everyone who might have knowledge regarding it. It is par"cularly important to talk
with the last person who used the machine or, if the machine is assigned to one person, to talk with that
If the laptop can not be found, the firm then needs to try to determine exactly what informa"on
was saved on the machine. Those who use the computer would be in the best posi"on to know. In
addi"on, the Head of Computer Opera"ons and others in that department need to be asked how
In all likelihood the firm will need to communicate to all employees that a laptop is missing that
Most firms are reluctant to admit that a computer breach has occurred but since this deals with
2. What steps can the firm take to prevent this problem from
occurring in the future?
If this was a simple ques"on to answer, we would not be hearing about so many cases of
Undoubtedly, the firm needs to develop policy and procedure guidelines for securing computers
and communica"ng these to employees. The Computer Opera"ons Department would probably be in
the best posi"on to develop these policies, perhaps with the help of outside security professionals. If
3. What addi"onal informa"on needs to be gathered before any
decisions are made or ac"on taken?
As stated above, the firm needs to determine what informa"on is contained on the missing
laptop and how sensi"ve it is? They also need to determine how diCcult it would be for someone to
Diversity Issues
8. CASE: MANAGING DIVERSITY: JOHNSON CHEMICAL INTERNATIONAL
I. OVERVIEW:
This case focuses on the diCcult issue of workplace diversity. The facts in the case include a
derogatory e-mail that was sent throughout the company’s Haverford Plant. The e-mail was ofensive,
rude, and insulted both women and minority employees. Ini"ally, management appears to be stunned
by the incident.
II. OBJECTIVES:
1. To introduce students to the complex issues surrounding the management of
diversity in a large organiza"on.
2. To help students understand the diferent experiences of women and minori"es in
the workplace.
3. To assist students in understanding the diference between equal employment
opportunity and managing diversity.
III. DISCUSSION:
The e-mail appears to have caught Johnson management of guard. They seem to feel that
Johnson had made signiticant progress in recrui"ng women and minori"es in the last few years. It also
seems they are prepared to get at the root causes of the issues. Further inves"ga"on by the Vice
President of Human Resources reveals serious concerns among all employees. Focus group sessions
with diferent employee groups indicate a number of issues centered on gender, race, and ethnicity.
Addi"onally, there appear to be problems with levels of sa"sfac"on among the diferent employee
groups. The major problem facing top management is how to proceed to manage the growing diversity
within the company. Each iden"ty group has very diferent percep"ons about the Johnson workplace
and its environment for employees. In the short-term, they are also faced with mi"ga"ng the las"ng
efects of the e-mail. The instructor should point out to students that it is not unusual for employee
groups to have vastly diferent percep"ons of their treatment and status in a company.
One of the causes of Johnson’s current situa"on may be that while the company has focused on
advancing equal employment opportunity in the company, they failed to realize that just adding
numbers of women and minority is not suCcient to crea"ng a workplace that values all employees. In
fact, the e-mail may be symptoma"c of backlash against the aJen"on being paid to equal employment
opportunity and aCrma"ve ac"on in the company. There is good theory to suggest an increasing
percentage of women and minori"es in a tradi"onally White male organiza"onal environment can lead
to nega"ve feelings towards those groups. Proponents of managing diversity go into great detail to
explain the diference between equal employment opportunity and managing diversity. Basically,
aCrma"ve/ac"on is a special legally mandated program focusing on increasing the numbers of women
in minori"es. Managing diversity is a more inclusive, organiza"on wide strategy to respond to and take
advantage of the value of a diverse group of employees (see the following ar"cles for a discussion of
HRM strategies and diversity paradigms: Thomas, D.A., & Ely, R.D. (1996). ‘Making diferences maJer: A
new paradigm for managing diversity’, Harvard Business Review, Sept-Oct., 79-90; Kossek, E;, Lobel, S. A.
& Brown, J. (2006). Human resource strategies to manage workforce diversity. In Konrad, A., Prasad, P.,
Pringle, J. Eds (2006). Handbook of Workforce Diversity. Thousand Oaks: Sage Publica"ons.)
The solu"on for the case should focus on the steps to be taken to managing diversity versus
equal employment opportunity. In many ways, Johnson Chemical has already undertaken a major step.
They have held focus groups to get at the essen"al diversity issues in the company. Top management
must realize that managing diversity is not a program nor is it an isolated training program. It will involve
an organiza"on wide change efort. The essen"al steps of such an approach involve: (1) Top
management commitment to valuing diversity; (2) Crea"on of a commiJee or team to spearhead the
efort. The commiJee should report directly to the President; (3) Systema"c diversity awareness training
for all employees especially managerial level employees; (4) Changing human resource policies and
prac"ces so that they are inclusive of the company’s diverse workforce; (5) Holding managers
accountable for diversity management in the company; and (6) Con"nuous aJen"on to the crea"ng an
organiza"on culture that values diversity.
IV. ANSWERS TO CASE QUESTIONS:
1. Evaluate Johnson’s ac"ons in dealing with the e-mail.
Management appears to have moved quickly to mi"gate the damages done by the e-mail. The
CEO has made it clear that the perpetrator will be disciplined. His leJer to all employees is very efec"ve
and quite direct. It should send a clear message to all employees that the company will not tolerate
2. Examine the data contained in Exhibits 1.10 and 1.12-1.17. What seem to be the
most signiticant diversity issues at Johnson?
The data collected from the diferent employee groups point to a number of issues. First,
employees have vastly diferent percep"ons of their treatment based on their gender, race and/or
ethnicity. The women are very concerned about sex role stereotyping. They feel these nega"ve
stereotypes hinder their advancement in the company. The women also believe they are con3ned to
staf posi"ons and hit a glass ceiling. Interes"ngly, the women feel that aCrma"ve ac"on s"gma"zes
them and does not help them. While African-Americans feel they are also stereotyped, they also have
some issues that the women did not express. They feel recruitment has been inadequate and that the
The data in Exhibit 1.10 reveals interes"ng informa"on. The company has been growing in the
last few years. Asian employees have made the greatest gains. Even though there has been an increase
in both women and African-American employees, their representa"on in management/supervisory
The employee survey shows that African-American and women employees are the least sa"s3ed
with a number of aspects of the company. They are par"cularly less sa"s3ed with their opportunity for
3. What is the cost to the organiza"on of these problems? What will happen if they
are not addressed?
There are a number of costs associated with not managing diversity. The data indicate that
turnover is high among women and minority employees. Turnover is expensive and is cos"ng the
Another way to think about the cost to the organiza"on is to look at the loss of the benefit
associated with managing and valuing diversity. In an ar"cle by Dechant and Robinson (1997), they cite
the following as benefit of diversity: (1) Being perceived as an employer of choice. Organiza"ons that
If the issues are not addressed, the tensions among the groups could increase. This in turn can
4. Where and how do these issues need to be dealt with?
b. Formula"on of a steering commiJee to guide organiza"onal eforts (the
c. Diversity awareness training for all employees from the top to the boJom of the
organiza"on. Given the issues raised about supervisors, the company should
also use skills training. This type of training focuses on giving managers the tools
d. Review of current human resource policies and prac"ces to assure they are
inclusive and do not hinder any group. This review may result in new ini"a"ves.
While these are listed, it is important to emphasis the need for a comprehensive change efort.
Students can be asked to discuss in more detail the components of each of the above diversity
5. What support, skills, and training do managers need to deal with these issues?
As stated in the previous ques"on, managers could bene3t from skills training that could include:
6. What human resource management systems or policies need to be examined and
possibly modi3ed?
There are two major systems requiring immediate change. First, the promo"on process needs to
be changed. The company appears to be relying on poten"al ra"ngs given by supervisors. This is quite
subjec"ve and allows for stereotyping and bias. HR should explore the use of more objec"ve systems.
This may include assessment center like models or other processes that provide informa"on beyond the
supervisor’s poten"al ra"ng. Second, aJen"on should be paid to crea"ng career paths with the
9. INCIDENT: TOO MUCH DIVERSITY?
I. OVERVIEW:
This incident presents a situa"on in which Vietnamese assemblers are upset with La"no
supervisors for being mean and rude to them. In addi"on, distrust and fric"on seems to exist between
Vietnamese assemblers and La"no assemblers. The incident seems to suggest that the firm may have
too much diversity. But does it? Or, is it just a case of poor supervision or a lack of communica"on or
some other problem?
II. OBJECTIVES:
One of the objec"ves of this incident is to introduce students to the issue of diversity and both
its advantages and shortcomings. Another is to enhance students’ problem solving skills by requiring
them to determine what the major problems are in this case. Is the problem cultural diversity? Poor
supervision? Lack of communica"on? Other?
III. ANSWERS TO INCIDENT QUESTIONS:
1. If you were Bill Baldwin, what ac"ons would you take in response to Tran’s request?
One of the major roles of a manager is that of problem solving. This involves inves"ga"ng a
situa"on to determine the facts of the case followed by a determina"on of the best way to solve the
problem. So, in this case, Bill or his representa"ve needs to meet with the Vietnamese assemblers either
In this case, Bill asked the Opera"ons Manager, who is in charge of the en"re plant opera"ons
and who overseas all of the assembly supervisors and workers, to meet with the en"re group. During
several heated mee"ngs it was determined that almost all of the Vietnamese employees’ complaints
were directed at the sister half of the bother-sister supervisor team. She apparently was abusive and
Some students may suggest that another problem in this firm is that the Vietnamese and La"no
employees do not seem to trust each other and do not eat and socialize together. They will suggest that
the firm ofer a diversity training program to bring the two groups together. The ques"on that needs to
2. What hiring policy should the firm follow?
In this incident, some students may suggest that the firm needs to change its hiring policy by not
hiring more La"nos or Vietnamese workers. But, whom should they hire and what goal will that
accomplish? The major problem in this case is the behavior of one poor supervisor, not the hiring of
diferent na"onali"es. In addi"on, if the firm hired employees of a single na"onal origin or only na"ve
3. Does the firm have too diverse a workforce?
This ques"on is designed to get students to think cri"cally regarding what cons"tutes a “diverse
workforce” and what are its advantages and disadvantages. Many books and company media releases
proclaim the benefit of diversity and never suggest that diversity can also result in problems. They
contend that employees should “embrace diversity” without even defining “diversity” or sugges"ng what
