FINAL EXAMINATION

Adm 223/MPM 206/Mgmt 208: Human Resource Management/Personnel Management

School of Accountancy and Business Management
Saint Louis University
Instructions:
1. Answer comprehensively the questions after each mini case study.
2. Use concepts, principles, practices or HRDM models to support your answers.
3. Use the official SLU bluebook for your answers. Do not write on the back
portion of the pages.

Case 1: Downsizing

As the largest employer in Baguio City, Aye Tee, Inc. (ATI) is an important part of the local economy.
Baguio City is a small area and Aye Tee employs 2,500 more or less of technical and non-technical
people from the area and surrounding provinces. These people have a few alternative job opportunities
available in the area.

Des Encarnacion, the human resource director of ATI, tells of a difficult decision he once had to make.
According to Des, everything was going along pretty well despite the economic recession, but he knew
that sooner or later the company will be affected. “I got the word at a private meeting with the president,
Ding De Leon, that we would have to cut the workforce by 30 percent on a crash basis. I was to get back
to him within a week with a suggested plan. I knew that my plan would not be the final one, since the
move was so major, but I knew that Mr. De Leon was depending on me to provide at least a workable
approach.”, Encarnacion said.

“First, I thought about how the employees would react. Certainly, workers would have to be let go in
order of seniority. The managers of the different departments would try to protect as many jobs as
possible. I also knew that all of management’s actions during this period would be intensely scrutinized.
We had to make sure that we had our act together.”, he continued.

“We really had no choice but to make the cuts, I believed. First of all, I had no choice because Mr. De
Leon said we were going to do it. Also, I had recently read a news account that one of our competitors,
Entel Dynamics in Cavite and Laguna had laid off several hundred workers in a cost-cutting move. To
keep our sales from being depressed, we had to ensure that our costs were just as low as those of our
competitors. The semiconductor is very competitive and a cost advantage of even 2 or 3 percent would
allow competitors to take many of our customers.” Encarnacion explained further.

“Finally,” Des added, “a major reason for the cutbacks was to protect the interests of our shareholders. A
few years ago as a shareholder group disrupted our meeting to insist that ATI make certain
environmental issues are addressed by the company. In general though, the shareholders seem to be
more concerned with the return on their investments that with social responsibility. At our meeting, the
president reminded me that, just like every other manager in the company, I should place the
shareholder’s interests above all else. I really was quite overwhelmed as I began to work up a human
resource plan that would balance all of these conflicts.”

Questions:
1. How might each HR function (Staffing, Learning & Development, Total Compensation
Management and Employee/Labor Relations) be affected by the reduction in force? Remember
that all employees at ATI are not members of the union.
2. List the elements in the company’s environment (internal and external) that will affect
Encarnacion’s suggested plan. How legitimate or critical are these environmental factors?
3. Is it true that Encarnacion should be concerned first and foremost with protecting the interests of
the shareholders? Discuss.
4. Corporate culture is major internal factor affecting an organization. How might the downsizing
of ATI affect the corporate culture of the company?

Case 2: The Controversial Job

Rene Lachica, compensation manager for a UpNorth Business and Research Consultancy, was generally
relaxed and good-natured. Although he was a n0-nonsense, competent executive, Rene was one of the
most popular managers in the company. This Friday morning however, Rene was not his usual self. As
chairperson of the company’s job evaluation committee, he had called a late-morning meeting at which
several jobs were to be considered for re-evaluation. The jobs had already been rated and assigned to
pay grade 3. But the office manager, Shaun Leano, was upset that one job was not rated higher. To press
the issue, Shaun had taken the case to two executives who were also members of the evaluation
committee. The two executives (training manager JP Villa and general marketing manager Honey Guia)
then requested that the job ratings be reviewed. JP and Honey supported Shaun’s side of the issue, and
Rene was not looking forward to the confrontation that was almost certain to occur during the meeting.

The controversial job was that of the receptionist. Only one receptionist position existed in the firm, and
Marianne Sales held it. Marianne had been with the firm 12 years, longer than any of the committee
members. She was extremely efficient, and virtually all the executives in the company, including the
president, had noticed and commented on her outstanding work. JP Villa and Honey Guia were
particularly pleased with Marianne because of the cordial manner in which she greeted and
accommodated UpNorth’s customers and suppliers who frequently visited the office. They felt that
Marianne projected a positive image of the company.

When the meeting began, Rene said, “Good morning. I know that you’re busy, so let’s get on with the
meeting. We have several jobs to evaluate this morning and I suggest we begin...” Before he could finish
his sentence, JP interrupted, “I suggest we start with Marianne.” Honey nodded in agreement. When
Rene regained his composure, he quietly but firmly asserted, “JP, we are not here today to evaluate
Marianne. Her supervisor does that at performance appraisal time. We are meeting to evaluate jobs
based on job content. In order to do this fairly and objectively, with regard to other jobs in the company,
we must leave personalities out of our evaluation.” Rene then proceeded to pass copies of the
receptionist job description to JP and Honey, who were obviously irritated.
Questions:
1. Do you feel that Rene was justified in insisting that the job, not the person, be evaluated?
Discuss.
2. Do you believe that there is a maximum rate of pay for every job in an organization, regardless
of how well the job is being performed? Justify your position.
3. Assume that Marianne is earning the maximum of the range for her pay grade. In what ways
could she obtain a salary increase? Discuss your answer.

Case 3: Expat on Board (will be answered during the examination day)

Note: Please bring extra sheets of examination paper (blue book) during the exam date.

Prof. Rey L. Orille, MBA

wreigh79@yahoo.com
09166330522 / 09088802008