What is Fair at Exactitude Manufacturing?

This is a case study of an HR Vice President at Exactitude Manufacturing Shannon Keller. The firm is known for the manufacture of engine parts for aircraft and power generation types of equipment. The HR Vice President spent most of his time at the organization developing a new system that will align HR strategy with the organizational emphasis on high-quality manufacturing. The new system created realigns wages for production employees, inspectors, machinists and trainers into five tire categories eliminating previous payment system that had six pay grades. Intrinsic motivation makes a person to strive towards a goal of personal satisfaction or accomplishment since it is an inner form of motivation while extrinsic motivation is an external form of motivation tied to something or someone. Exactitude utilizes this form of motivation to improve employee satisfaction and performance by ensuring that every employee receives his or her salary depending on the qualification and also it gives an opportunity for training hence the employees are motivated to train s as they can move to the next tire level.

There are different external factors that the organization would consider during the establishment of wages in the different manufacturing locations such as geographic differences, competition, cost of living, and communicating with the employees. Geographical differences are considered because it depends on how far people are willing to travel to go to work and this will determine what they will be paid. Also, labor supply determines wages because when the rate of unemployment is low, the employers provide higher wages for the employees to work because of the shortage. However, when the labor supply rate is high, the employers would not need to search for employees, and therefore it might cause them to pay little wages. Furthermore, competition is an essential factor to be considered because an organization needs to determine and know how the competitors are paying their employees to avoid their employees to seek a job at the competitor’s organization because of higher wages.

Quality and productivity are the basis and vision of the company, and therefore the company has to envision a compensation plan that aligns all the organization strategic frameworks. The system demands that the employee must have the training to increase skills and ability. Also, the system has developed a job bid system for the employees so as they can bid on existing open jobs or other new jobs created to increase the productivity of the organization. Positions are awarded only to the employees who are qualified based on training, skill level, and also education.

For HR to address each of the employee concerns for the new system he has to take into considerations the feelings of the employees and also their point of view so as they can come to an agreement that will satisfy both sides. For the first concern, the HR should explain to them that the new system is not being implemented to diminish workers with less seniority but to motivate them to move to a higher tire with the training being offered. Concerning the concerning number two, the senior employees should remember that the system is created to improve the productivity of the organization and not to influence their loyalty and experience for the organization. More so, the concerning number three, the HR should consider the external factor competition to identify the wages of the competitor’s organization and adjust the salaries to fit every employee. In concern number four the HR should explain to the senior employees that the process will be as first as possible and in case of any delay there will be compensation. The best job evaluation method that can describe the organization is job ranking. The method used ranks the employees from highest to lowest depending on the quality the value to the organization. The Tire system at Exactitude ranks all employees depending on their level in the organization.

One of the external factors that may influence wages in my area is the qualification. The salary difference can be regulated by job description or the analysis that will justify salary modification (Galuscak et al., 2012). The employees will analyze according to the business needs that needs qualification and improved skills. Also, the organization may need to hire staffs with new skills and qualification that were not available in the past.

In conclusion, Exactitude Manufacturing has developed a new Tire system and implemented in the organization. The system aim is to ensure the organization increases its productivity while the employee develops more skills due to the provided training. However, there are issues of concerned that arise and the HR should handle them before implementing the system so as all the stakeholders involved are happy.

Reference

Galuscak, K., Keeney, M., Nicolitsas, D., Smets, F., Strzelecki, P., & Vodopivec, M. (2012). The determination of wages of newly hired employees: Survey evidence on internal versus external factors. Labour Economics , 19 (5), 802-812.