To start out, I will assume (it is not specified) that the performance scaled from 1-4 signifies that 1 is the lowest performance level and 4 is the highest. There are some immediate questions when reviewing the data. I will start out with the question of why the manager with the lowest performance level (2) earns a significantly larger salary than the other three. This manager (#513076) earns $370,834- which is $123,510 more than the second highest paid manager. Why are some of the manufacturing employees getting overtime of $2,700 when others get none? Why is the one employee who scored a 1 on productivity considered an “essential employee”? why are each of the four IT team members receiving overtime? The last immediate question I have is regarding the sales department- why are two of the nine employees receiving a $77k salary rather than $55k like the others? (Moreover, one of those two only has a level 2 productivity rating). Why are four of them receiving overtime? As an HR representative, id want further clarification about these questions prior to proceeding.
It seems as though employees must have pretty high job satisfaction seeing as each one of them has been around for a long time- the earliest employees date back to 1987 and the ‘newest’ 1992. The data also seems to show that employees are above average with productivity- most (59) scored 3’s, only five scored 1, and only six scored 2.
I noticed that each of the employees (not including management) receives a $2,000 bonus each year. I feel like maybe this should be redistributed to reflect productivity and incentivize employees to produce more results.
The employee who has a productivity level of one and is said to have motivational problems and issues with the manager should either be let go or transferred to a different department. In regard to this, layoffs might be a necessary step for this company as a whole- if we cut out the salary from the five employees who scored a 1 on productivity (which would be doable since there is no department that has more than one underproductive employee), this would save us $254,200 in their salaries (and $10,000 in bonuses that we could reallocate).
The company has spent $37,900 on OT. Not all employees are receiving overtime pay- some departments did not pay out any at all, while departments like IT is paying out substantially ($5,000) to each one of the employees. Perhaps this could be further analyzed. The employees could possibly be restructured to reduce some OT costs.
I noticed that the sum of the managers salaries is $1,100,591. This seems excessive, especially in comparison with other employees. For example, the salary of the lowest paid manager, $237,385, is more than the salaries of the entire research team put together. Also, why is the manager who has the lowest performance rating earning more than the rest? This manager earns $370,834 which is $123,510 more than the manager who has the second largest salary.
To conclude, I’d suggest to the company that bonusses be restructured to reflect employee productivity output, that we must cut overtime costs, and that layoffs are a necessary move, particularly the employees who have a low productivity level of one. Also, we should look towards a temporary reduction in pay for managers to reflect the loss of revenue and to help cut budget costs. I feel as though this especially applies to the manager who earns over $100k more than the other managers, who have the same level of seniority.
Cutting 10% of the budget would mean that we must reduce costs by $501,419.10.
501,419.10
-264,200 (layoffs of productivity level 1 employees plus their bonuses)
-37,900 (cut overtime costs)
-34,000 (we could reduce bonuses from $2,000 to $1,500 for the 68 employees, not including management and including the 5 to get laid off, to help cut costs and reflect lower company output)
=165.319.10 (This is the remaining amount, and what we could cut from the salaries of the managers- each would receive a $41,329.75 temporary reduction in pay. I’d suggest, however, the over-paid manager receives a greater pay cut than the other three to reflect the lower productivity rate.)
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