Conflict Case

You are employed by a Fortune 500 company, based in Austin,working in their HR department. The company makes toys. Yourspecific role is to aid managers who are having difficulties. TheCEO of the company has told one of the supervisors to come see you,because there is an issue with his department.

James comes to you because many of his employees havetransferred out of the division or quit. When you ask James ifanything has changed in his division to cause this, James tells youthat he is not sure of the cause. If anything, he thinks hisemployees should be even more satisfied than before. James tellsyou that last month he decided to implement a new pay system forall his teams and also the team leaders. He decided that theworkers in the teams would get 80% of their base pay from the yearbefore, but would get a bonus for every 1000 toys they made beyondwhat they produced last year. By his calculations, if his divisionproduces the same number of toys as last year, the bonuses will putthe teams at 100% of their pay. If they produce fewer toys, theywill make less money--but if they produce more, they will makemore. In order to keep teams from competing against each other, thebonuses will be paid out according to how well the entire divisiondoes, not on how each individual team does. James decided to dothis on a Monday and had it implemented on that Tuesday, with amemo sent out explaining the change.

So far as the team leaders are concerned, James decided to givethem 80% of their pay but, instead of more money, the team leaderbonuses would consist of company-paid trips to Europe. Jamesthought that this was a great idea, as everyone likes to go ontrips. Furthermore, the trips are actually worth more than the teamleaders would be able to make if they were just being paid cash,even if the division suddenly became the top producer in thecompany. So they are worth more than the money they would get, butthe system still saves the company money because the company owns atravel agency, meaning that they are able to get the trips at ahuge discount. This new policy is the only change that James canthink of that might have affected the teams in his division.

Both James and the CEO are looking to you for answers. And onceagain, the CEO wants a memo about the situation, and what you aregoing to do about it in the next two hours.*

*Note: As the CEO wants the information in 2 hours (although,obviously, you have until the assignment is due to turn in yourmemo), you are not expected to do any sort of advanced research. Nocitations are needed. Furthermore, as you are given no furtherinformation about the situation, your “plan” will be viewed in sucha light.

You are to write a 1+ page, formal memo (the text needs to goonto the second page, even if it is a single word) addressing thissituation. The memo should be single spaced, with a full spacebetween paragraphs (like this document).

**There is no additional reading for this case.