Brief summary of the situation

The Effective Management Solution (EMS) is an undersized consulting firm, which is fast on the rise (Heneman & Judge, 2009). The consultancy firm at present boasts four operations areas each having twenty-five associates. On an annual basis, an average of five associates from every operations field are   promoted to a higher-ranking position inside the same field, while another average of five associates quit the firm after obtaining employment with other such like firms. This to a certain degree lowers the firm’s returns. Effective Management Solution has, as a result, kicked off a plan to augment its annual returns by 20 percent for the coming five years. In addition, owing to the rapid expansion of the firm’s operations, its existing human resource is by now clocking more than forty billable hours on average each week. As an opportunity to augment revenue, the EMS executive team is taking into consideration as priority a strategy for staff promotion. In this regard, it plans to employ a hundred associates annually, for the five years phase. The firm’s present strategy to keep its workforce is an offer that includes a ‘bighearted’ benefit package besides a fixed or set remuneration. This offer is seen to competitive from the firm’s point of view. Nonetheless, candidates who are decidedly qualified typically reject in excess of 48 percent of such offers generally. These candidates choose to take offers from companies that appear to them as more established and offer lower-than-market-rates salaries, but financial prospects through hurried promotions as well as many different pay programs. In view of the aforementioned projections along with about 50 percent negative responses to job offers, the EMS has made a resolution to reorganize its employment offer practice with the endeavor to: raise the job offer taking percentage; diminish turnover rate, as well as concurrently set off a strategy that will be liberated from discontent  with present associates. Considering this, Manuel Rodriguez, the one-man HR department, as asked, has suggested that the firm initiate a Hiring and Variable Pay Plan program. This will set in place to enable the firm boost the job offer taking rates, diminish the loss of associates to other companies, and at the same time avoid creating discontent problems amongst the presently engaged associates.

Assess the attractiveness, of the HVP program for both applicants and those who receive offers, deciding for whom it would be the most attractive.

Any Hiring and Variable pay plans will definitely bring out strong feelings (Abosch, 1998). This particular EMS Hiring and Variable pay plan will elicit different feelings in both applicants and those who receive offers as well as the already employed personnel. The program, hypothetically, will be attractive to many applicants (maybe owing to the fact that applicants will almost be attracted to any job they apply). Many of them will reason that a reasonable day's work output is not usually realizable without some percentage of pay being put "at risk,” owing to the fact that personnel generate just approximately 50-60 percent of the productivity of variable pay personnel. This of course, if it is the case, is beneficial to the employer though it seems on the surface as if it means that since one is being paid depending on the outcome, the pay will automatically be higher if their output was higher as compared to fixed salary and benefits. However, it has been showed that this efficiency of variable pay is not consistently positive (Lawler III, 2000). Some of those receive the offer are too likely to be attracted to the program considering that a fraction of those who turned away the present plan (the highest –quality applicants) preferred firms that provide fairly below-market salaries but high benefit financial potential through a variety of interim variable-pay programs, in addition to fast promotions.

Predict And Justify If The HVP Program Will Likely Increase The Job Offer Acceptance Rates.

The Hiring and Variable Pay Plan will not necessarily increase the job acceptance rates at EMS. This is because the rough number quoted to prefer this plan is “most of those who reject the offer” (a fraction of 50%) i.e. the highest-quality candidates. This means that what one can bet on is an increase in the number of high quality applicants accepting the offer, but the increase of the total number is not guaranteed. In fact, it is highly likely it will remain the same. This is because some of the 50% who would have accepted the “old” offer will reject the new offer under HVP project. However, the firm will reap the benefit since now it will attract more high-quality candidates.

Predict And Justify If The HVP Program Will Likely Reduce Turnover.

The Hiring and Variable Pay Plan may not necessarily reduce turnover and it is highly likely it will not. The truth of the mater is that the best employees always can and will walk out the door to employers who are paying them better with whatever programs those employers are using. Worse, still, if the best employees get employers who are willing to give them a high an up-front salary they will still move on. This will be made especially worse if the employees are offered fixed salaries and benefits that are higher than the highest earning the employee has achieved over a period under the HVP program. In addition, if the variable pay component from EMS fails to satisfactorily compensate the associates for the risk, they will definitely jump ship. A single bad year of less payout or a payout that fails to compensate the associates for the risk they took on, and the firm will witness an employee’s exodus and their finding of new employers.

Give Your Opinion About How Current Associates Will React To The HVP Program.

For the already employed associate, they will have a choice between choosing to be in the plan or to remain under the old plan. The question of the program’s attractiveness to them though still arises. However, for them the plan may not be so attractive after all. They may start thinking that the performance of a firm’s personnel is a function of the firm, of the job itself, and the executive practices, as opposed to personnel sole effort; as such, they will hold that enticements are not workable and they will be the basis for additional problems than solutions. They, too, might not be generally attracted to the plan for the same reason with the people who have been offered the job.

Suggest What Issues And Problems The HVP Plan Will Create For Human Resources And For The Hiring Manager

The Hiring and Variable Pay Plan will certainly create a number of issues and problems for Human Resources and for the hiring manager as well as the executive team. The HR manager and the executive team will find it hard to convince associates down the proverbial ‘food chain’ on how their involvement brings about enough value to achieve the goal of the firm. The plan could set the firm’s executive team up for discord if it is supposed that bad decision making at the executive level is the reason for the failure to realize whatever goal. The Human Resources and the hiring manager will have to come up with a way of appraising each individual independent of others or the firm’s management shortcomings. Further, no matter what the HR manager does, the associates will now, more than ever, require having freely available details on their previous and present position as well as their immediate and future direction. They will require to be kept in the know about what is supposed to happen to realize their aims and how to work as a team to realize joint goals. This will mean complex and extra communication than was before the program. The HR manager will also have to deal with the problem of benefits processing every now and then. This is due to the reason that employees largely do not have as a large amount of private resources to balance for a lesser salary as they await to be paid their "bonus.” They will need to be paid the benefits perhaps each month and this will be a herculean task for the HR manager. According to Ducharme and Podolsky, (2006), employers want to follow this track must at least try to increase creditability with the personnel by delivering on lesser percentages of variable payments throughout the year.

Propose and Justify Changes in The HVP Program

This Hiring and Variable Pay Plan designed for EMS can benefit from a number of changes. To start with, it should temper its monetary reward system with little focus on nonfinancial rewards. A good variable pay plans should not solely focus on money as the ultimate incentive (Kinne, 2000). Time for instance could be a major reward to several employees. This variable pay plan could offer paid time off the job alongside extra pay. For a lot of individuals in today’s world, defining what is required to be completed in what time and then allowing the individual to execute the task in whatever time is contented gives not just free time but also a sense of independence too (Kinne, 2000). The firm could also tie educational programs as well as mentorship programs to performance as a reward system. To booster team spirit, the HVP program should have incorporated gain sharing as another reward system. This system rewards results that are a direct measure of the achievement of the whole organization as opposed to the achievement of the single employee. Gain sharing is to attach the personnel to the performance measures, which appraise the executive team and by which the general society defines a flourishing firm (Mericle & Kim, 2004).