Cost Club Case Study

Scenario One: Cost Club

Background

Cost Club is a growing retailer, similar to Super Wal-Mart or Target. It provides discount merchandise and supermarket products in large stores located in many areas of the United States. Cost Club is administratively organized into regions, and each region is permitted to develop its own operational policies, as long as the bottom line of low cost and reasonable service to customers is maintained. There are many strong competitors to Cost Club, with some regions experiencing more competition than others.

Your Role in Cost Club

You recently have joined the Atlanta regional office of Cost Club as the Assistant Manager of Human Resources (HR) for the region. If you do well in this assignment, you may advance to the HR manager spot when your boss, Pat, moves on to another executive role in Cost Club. For memo purposes, Pat's last name is the same as the last name of your facilitator.

Pat has explained that while the Manager's role is to focus on long-range and integration issues involving the entire region, your role as assistant manager is to deal with HR issues that arise routinely in the workplace. Pat has forwarded you a number of e-mails that present situations referred to HR; you must look at the situations and respond to Pat in an e-mail that addresses all the forwarded e-mails. Pat apologizes for not giving you time to settle in to your new position, but says that these are significant and time-sensitive issues that have to be dealt with quickly. You immediately begin examining the forwarded messages.

Dealing with the Problems

Message 1: Discharges at the Anderson Cost Club store.

The first e-mail, with attachments, provided background on the discharges that had recently occurred at the Anderson Cost Club store, which is located in a right-to-work state. The general manager (GM) had fired two employees without giving them any reason for the discharges. When questioned, the GM at Anderson said that he wanted to downsize his workforce in his store, and because Cost Club was nonunion, there is no restriction on discharging anyone for any reason. He claimed that he did have to give a reason. Pat forwarded the information with a note saying, "The GM believes there is no restriction on the right to fire people, but we are concerned that the employees in question will file wrongful discharge lawsuits against us. If they do, we may lose the case, because we didn't give a reason for the discharge."

Message 2: Regional CEO's question about reducing employee costs.

The second e-mail was sent to Pat from the Region's Chief Executive Officer (CEO), who is looking for ways to reduce employee costs. The key comments in the memo included:

"Nearly 40% of our region's costs are employment related. Right now, nearly 100% of our workforce are full-time or part-time employees. We have few employees who are provided by temp agencies, and we have even fewer independent contractors doing the things that have to be done for us to serve our customers. I'd like you to consider the use of temps and contractors as a way to reduce our employment costs. Will the law allow us to do that? I don't want the lawyers involved yet--just an initial explanation. You don't need to worry about the cost issues of the various types of workers--I just want to know what the differences are, and if we can use those other types more to do our work."

Pat asks that you briefly explain the differences in the types of workers, discuss the extent to which we can use these types of employees, the implications that arise in employment laws, and what that means to the regional CEO's idea.

Message 3: Safety Manager's concern about injury and damages

The third e-mail included a memo from the safety manager for this region of Cost Club. It raised the concern about events in which Cost Club may be responsible for payment of medical or other obligations. The relevant section of the safety manager's message is as follows:

There are a number of things that have happened--things we have not invited or condoned--that involve people linked to Cost Club. These activities worry me, because Cost Club may be held responsible in some way. Here's the specifics:

1.