Directions: Please answer all the questions for the two case studies below. Answers should be thorough and complete for each question.

Directions:

Please answer all the questions for the two case studies below.  Answers should be thorough and complete for each question.  Please write your responses in a word document for submission and use the APA format as a guideline. Double space and use a 12 point font. The combined responses should be at least 200 words in length.  Use the following information to support you in completing this assignment correctly.

• All questions answered and addressed
• Answers indicate that symptoms were recognized
• Actual causes of the problem were uncovered
• Answers indicate that you identified major goals of the organizations, units, and/or individuals in the case
• Answers indicate that longer-term performance problems and those requiring immediate attention have been recognized and considered
• Identified appropriate alternative actions

Case Study 1

An Ethical Dilemma?

Due to growth in your biopharmaceutical company, you have just added two new research scientist positions. After some investigation, you have determined that the least amount you could offer candidates for the job is $135,000. Because most of your employees have been with the company for a long period of time, you are particularly interested in hiring some research scientists who have recently completed their graduate work. In the past, you have had problems hiring employees because your company is not yet well known, and it is located in South Dakota. After the first round of interviews, you identify a candidate who is from the area, who wants to stay in the area, and who has acceptable, though not exceptional, credentials. She is an acceptable candidate who will do a good job but who doesn’t meet your need for “fresh” ideas in the same way as would a recent graduate. You offer her the job, with a salary of $105,000, and she accepts, without negotiating for any increase in the salary. Shortly thereafter, you interview a male candidate who is just completing his degree and who has exactly the credentials you are seeking. During the course of the interview process, you learn that he has two other offers, he has two other interviews scheduled, and his offers are both considerably higher than you are going to pay the person you just hired. You are pretty sure the latter candidate will accept the job if you offer him $135,000. What are you going to do?

1. Identify the issues in this case.
2. Make a decision about what to do.
3. How should you respond to the female employee if you hire the male employee for more money and she finds out that you did so?

Case Study 2

Executive Compensation at AB3D

AB3D Industries is a company with six manufacturing facilities that produces a variety of plastic-based children’s toys.  The company was founded in 1983 by Edward Pistrom, who served as the chief executive officer until 1995. Since then, several CEOs have filled the post quite successfully—continuing to meet the demand for safe and durable children’s toys.

AB3D Industries has approximately 2,400 employees throughout the facilities.  Each facility is run by a general manager and has staff who address the relevant employee and customer needs of those in key positions.  The general managers of each facility report to the corporate staff, which consists of the CEO (chief executive officer), the COO (chief operating officer), and the directors of Human Resources, Legal, Sales, and Marketing.  Since its founding, the company has maintained a healthy rate of growth in sales as well as in financial returns related to return on investments (ROI) and return on assets (ROA).

Despite the prosperous history of AB3D, over the past four years, the company’s performance has declined.  Of the six manufacturing facilities, four have failed to post any gains in productivity or revenue, while two have posted slight gains in productivity despite diminished levels of revenue at the facilities. Put simply, the performance of the facilities and the company as a whole has been poor.  The CEO for the past three years was fired due to this poor performance.

Over the past three months, a consulting company has worked with AB3D top management to identify potential candidates for the CEO position.  After a lengthy search and extensive interviews, AB3D is excited about the prospect of one candidate in particular—Andrew Reason. Andrew essentially grew up in this industry.  Over the past 16 years, he has worked his way up from the manufacturing floor through operations and marketing positions to assume a director of operations position at a competing firm.  Based on numerous discussions, it is clear that Andrew is interested in the prospect of helping turn around the performance of AB3D Industries.  His main concern is that AB3D must be able to provide a compensation package compelling enough for him to take on the CEO role.  The consulting company has suggested that the market average for base compensation for CEOs in this industry should be approximately $1,000,000. In addition to base pay, CEOs in this industry expect lucrative short-term and long-term incentives to reward them for exceptional performance.  What should you offer to this top candidate?

1. What factors are you considering in setting the executive compensation package for this potential hire?
2. What compensation/incentive package would you recommend for the new CEO? Be sure to identify the base pay as well as the forms of short-term and long-term incentives you would recommend. Why would you recommend this package?
3. What implications, if any, would this package have for the workers at AB3D Industries?