الموضوع: Business Case studies

Case Studies to Accompany
Noe, et al., Human Resource Management, 7^th edition


by Alan J. Fazzari and Joseph B. Mosca,
Monmouth University
West Long Branch, New Jersey








Copyright: 2009




Table of Contents:

Title Page


An Arbitrator’s Dilemma: Bullying or Self-Preservation? 3

Sexual Harassment or Just Being a Friendly Co-Worker? 33

Fire Me Why Don’t You? 62

The Acquisition and the Role of Human Resources 82





















AN ARBITRATOR’S DILEMMA: BULLYING OR SELF-PRESERVATION ?

Objectives

Learn that bullying at work can and often does lead to negative consequences for those involved and other employees.

Describe the process and sequence of events that lead up to an arbitration hearing.

Understand that even with the best of intentions, an employee’s actions can be mis-interpreted by others due, in part, to biases and past experiences.

Identify the importance of gathering all the critical facts and data to management’s position prior to legal proceedings.

Understand the pros and cons of having empowered teams in the workplace.



INTRODUCTORY NOTES

According to Namie (2000), one in every five United States employees was bullied with repeated, deliberately harmful verbal abuse. A recent survey cited that more than half of the working American population has suffered or witnessed workplace bullying including verbal abuse, job sabotage, abuse of authority or destruction of workplace relationships (Cable, 2007). This equates to an estimated 54 million employees – 37 percent of US workers – have been bullied at some point in their work lives, while even more have witnessed acts of workplace bullying.

Workplace bullying is defined as a persistent pattern of negative acts directed at a worker (Baron & Neuman, 1996; Keashly, 1998), any form of harassment whether mental or physical, intentional or not, which is unwanted by the person at which it is aimed (Anonymous, 2006), or a form of interpersonal aggression or hostile, anti-social behavior in the workplace (LaVan & Martin, 2008). It may also involve incivility and aggression with the intention to cause humiliation and distress along with someone’s work being undermined and the individual belittled (Lee & Brotheridge, 2006).

To date, in the United States, there is no single, specific statute that governs workplace bullying (Mack, 2005), although ethically and morally it violates basic human and workplace principles. Specific studies of workplace bullying and ethnicity are rare (Lewis & Gunn, 2007). It was noted, however, in their research study a higher prevalence of bullying amongst non-White groups as compared to White groups with personalized bullying being the most prominent. When colleagues bully other colleagues the focus of the attack is first and foremost personal.

Unfortunately, as indicated by the Dignity at Work study into bullying, Human Resources has been reluctant to get involved in resolving conflict until it is absolutely necessary and that as a result bullying in the workplace is escalating (Fuller, 2006). The changing face of the Human Resource function itself, with many of the HR departments being centralized or moved off site, functions being outsourced, and HR becoming more strategic is contributing to the demise of the “people’s champion.” In addition to this, although there has been a steady decline of Union membership over the years (Dickens and Leonard, 1985), bargaining units by contract are for the most part obligated to defend their members when dismissed for alleged violence or bullying in the workplace.

Workplace bullying links itself with a lack of trust of management, a poor organizational climate, higher absenteeism and turnover rates, reduced productivity, anxiety, depression, and high litigation costs (Anonymous, 2008). Coaching, awareness, and training of workers, including management at all levels, in addition to a good solid no tolerance policy for bullying that is supported by labor and management is usually a good first step in adjusting employee’s attitudes towards other workers and their colleagues. Understanding the complex dynamics of bullying and aggressive behaviors in the workplace by Human Resources and its impact on the well-being of employees is necessary for proactive action regarding these dysfunctional and conflict-escalating behaviors on the job.

PROFILES

Diane Arnold has a high school education and has been at Wonder Life, Inc. for 12 years. Beginning her employment as an assembler, Diane learned the product and process through experience. She is presently the Supervisor (Advisor) of the electronic departments.

Michael Crowe has been with Wonder Life, Inc. for over 30 years having worked in the factory in almost every position on almost every product. Michael is a natural at handling conflict and guiding others to a win/win outcome. He serves as the Chief Union Steward at Wonder Life, Inc’s. contractual bargaining unit.

Juan Cruz is a very hard working Hispanic employee who supports the educational programs and teambuilding at Wonder Life, Inc. Juan serves as the team leader and liaison between management and employees who work in the electronics departments. Juan is married to Lisa Cruz, an employee (associate) in People Services.

Albert Donnely joined Wonder Life, Inc. 10 years ago as their Human Resource Manager. As the organization grew so did Albert’s responsibilities. Presently the Vice President of People Services, Albert and his team have been recognized on numerous occasions by the national, state, and local professional Human Resource associations for everything from innovation and creativity, workplace education, and best practices to economic development, best employer to work for, and Human Capital Business Leader.
Mark Howell is a manufacturing engineer and one of the creative geniuses behind the development of the new centralized packing process. Mark has been with Wonder Life for five years and is well respected by the rank and file.

Sam Jones is an African-American employee who works alongside of Juan Cruz in the electronics department. Sam is also a member of the contractual bargaining unit and began his employment approximately three years ago. Sam’s brother Gene Jones is the union steward for the paint shop areas.

Mary Kilmore is the shop steward of the electronics areas. Mary is a long-term employee and has been in many positions prior to her present one as lead person on one of the assembly lines.

Mr. Lee is a retired Vice President of Human Resources from Lexicon Oil. Mr. Lee now spends his time consulting and also as a mediator and arbitrator for those organizations needing his services. He is registered with the State Department of Labor and the State Mediation and Arbitration Association/Board. Mr. Lee has only served in the capacity of an arbitrator for two years now which equates to three cases.

John Martin is Wonder Life, Inc.’s Vice President of Operations. John is a 30 year veteran of the organization and has facilitated many new processes and innovative ideas from Quality Circles to Just-In-Time Inventory. John has watched the company grow from a small $3 million in sales organization to its present revenue of $120 million.

Vincent O’Connolly is another lead person in the electronics department. Vincent’s people skills are much to be desired. His temper is volatile and his sarcasm is so prevalent while he is talking that many employees try to avoid any contact with him.

Victor Pastore is the plant director. No stranger to bargaining units, Victor has appeared during a few arbitration hearings in other organizations. Victor always wants to learn something new, and then try it on one of the assembly lines while looking for continuous improvements in process control. Victor has a no tolerance policy for almost all non-business like behaviors: excessive absenteeism, bullying, lateness, pilferage, etc.

Pedro, Lewis, Jose are three Hispanic employees who work in the shipping and receiving department of Wonder Life, Inc. Each one is a member of the bargaining unit and on average has been with the company for three years. Their performance has been stellar and their records indicate no incidents of reprimand.

Joan Rossi is a People Services employee serving mostly in an administrative assistant capacity.

Susan Wolfe, the People Services Manager of Wonder Life, Inc. joined the organization approximately two months before Albert Donnoly arrived. Together Susan and Albert created the department from the ground up. Susan is extremely competent in screening and recommending the right candidate for consideration at Wonder Life, Inc. This, plus her skills in employee relations continue to make the company an “Employer of Choice.



THE DAY BEGINS

At 6:45 AM the production lines of Wonder Life, Inc. were being set up by lead people. The normal routine had begun for the 7:00 AM start time. Department Supervisors, known as Advisors, were accessing the data base for their daily work schedules and production loading. The Vice President of People Services and Quality, Albert Donnelly, and the Vice President of Operations John Martin, walked the factory floor. They assisted wherever needed and greeted employees, referred to as associates, working on the ten productions lines, in the warehouse, paint shop, test engineering, quality assurance, shipping, receiving, and a myriad of other factory departments. Some small talk took place and went a long way in lifting everyone’s spirits. The first shift of Wonder Life, Inc.’s multi-shift manufacturing operation consisted of 225 direct labor associates represented by the International Brotherhood of Electronic Assemblers Union. The second shift had 80 additional direct labor associates. The relationship between management and labor was a good one. Years of working collaboratively to achieve harmony resulted in a motivated, dedicated, and loyal workforce. Efficiency, quality, and productivity were exceeding projections which translated into a healthy bottom line for Wonder Life, Inc.

WORKER INVOLEMENT TEAMS
For years Albert and his department led a journey to create worker involvement teams throughout the company. The model was most successful in manufacturing which resulted in upwards of 18 moderately self-directed work groups. These teams made most of the decisions for their departments. They would hold bi-weekly meetings to discuss production, product, quality, and other projects that were part of their goals and objectives. Some stellar members of each team would also become participants on broader based cross-functional teams. These cross-functional project teams created lists of cost saving, continuous improvement ideas through brainstorming sessions when their groups came together. They also met on a consistent basis in an effort to find solid solutions to challenges facing departments throughout Wonder Life, Inc. and its customers.
One such meeting had begun immediately following the start-up of the assembly lines. The topic was a summary discussion of a project that emanated from the strategic business plan; centralized packaging. Presently, each assembly line had it’s own “packers.” These packers were positioned at the end of each line. They would receive the assembled product, package it in an inner carton and place it on a nearby pallet. The pallet, when full, would be moved to another location in the plant. Product was then unloaded and additionally re-packed into an outer carton usually specified by the customer. This process was considered labor intensive and thus costly. (See Figure # 1).
As Wonder Life, Inc. sales continued to grow, additional resources were required; assembly lines, employees, equipment, and overall space. Unfortunately, space had become a rare commodity. A new addition to the building was being considered in the five year plan but that did not solve the present problems being faced. In spite of the overall lack of room, efficiency on the production floor was consistently improving except for on-time shipments. They held steady at a level of 96%. Customers were not expressing any concern at the moment but John knew it was only a matter of time before demand exceeded supply at Wonder Life, Inc. They needed to stay ahead of the curve and maintain high levels of customer satisfaction.
The new central packing system should help solve the problem with late shipments and space. It would relieve each assembly line of their “personal packers.” No longer would packers be solely dedicated to any of the ten lines. Several assembly lines employed two packers so the new plans should free up close to 12 associates. They would be placed elsewhere in the factory. Some might actually become associates of the new Central Packing Team.
With central packing when the assembled product reached the final work station, the assembler would place the product in an inner carton and then on a conveyor system connected directly to his/her work station. This conveyor would take the inner carton to a central location in another part of the plant closer to the shipping dock. Pallets would be arranged to receive each line’s merchandise. The product would then be separated according to customer order, placed in it's proper outer carton, and set on a dedicated pallet for shipping. The project took the cross-functional team several months to complete. Initial savings of labor, including overhead, fixed, and other variable costs, were projected to be in excess of $1million in less than two years. (See Figure 2). A great deal of effort also went into creating the universal outer packaging materials that were an integral part of this process. It was not an easy task to develop one outer carton that would be aesthetic and yet practical enough to fit all sizes and shapes of products. The team did so, however, through a great deal of hard work and research. Customer focus groups gave the packages a “thumbs up” so Wonder Life, Inc. felt comfortable they were on the right path. In addition there would need to be changes to existing conveyor systems, loading capacity, scheduling of similar products during similar times, and training programs. The cross functional team that took hold of this new approach was excited to see it finally had all come together. See Figure # 2.
THE COMPANY
Wonder Life, Inc., a 75 year old privately owned manufacturing company is a leader in it’s market niche of developing life-safety systems for buildings. Wonder Life, Inc. has tough competitors with deep pockets. These companies had a majority of the market but Wonder Life’s 40% share was more than enough to keep them busy at their one factory on the east coast. Wonder Life enjoyed a steady long-term approach to pleasing its customers. It had built a very loyal customer base that continued to return because of Wonder Life’s attention to detail and quality assurance.
At the forefront of this success were the associates that worked there. People Services (Human Resources) has successfully led a charge to create a team based culture mostly throughout manufacturing. There were inroads being made throughout the remainder of the company but the focal point had been rank and file associates. The facility was multi-cultural and diverse. Associates attended on average 40 hours of various types of training and education each year. Teams participated in their department’s goal setting, did their own hiring, scheduling of production, became experts in total quality management techniques, and assisted research and development in the creation of new products. These tasks were just a few of the many processes undertaken by the teams in the factory. Value added opportunities were sought willingly by associates. These resulted in productivity and process savings of nearly three million dollars in the three years preceding the centralized packing system. The team philosophy was working very well by all measures of profit, job satisfaction, productivity, and customer delight. The teams also benefited by these savings through a variety of employee relations programs including profit sharing.
The cross-functional or departmental team meetings were commonplace. These were working meetings where either data was reviewed regarding goal attainment or new projects were discussed. After each meeting associates that represented their teams made an effort to pass along the information they gained to others who worked with them. It was common for associates to suggest and then create new and innovative ways to satisfy better the customer. It was common to witness one of these meetings taking place during any hour of the day.
THE CENTRAL PACKING TEAM MEETING
At the cross-functional meeting of the centralized packaging team, in attendance was Juan Cruz, the lead packer from one of the assembly lines, Mary Kilmore, a union steward, Vincent O’Connelly, the lead set-up, Diane Arnold, the supervisor (advisor), Victor Pastore, the director of manufacturing (coach), Mark Howell, manufacturing engineering representative, and John Martin, the Vice President of Operations.
During the meeting a summary of the new system proceeded without hitch. The team’s hard work over the last few months truly paid off. Everyone was pleased. Questions were easily responded to in an effort to work out any last minute details prior to communicating with others in the plant and office. There were no longer any concerns or bitterness that had been commonplace in the beginning of the project. Originally, the Union had expressed doubt about the new system mainly due to a feeling that layoffs might occur because of this new technique. Management assured the Union no one would loose their position due to the new packing method. In fact the organization was planning to hire over 20 additional production associates within the next few months to keep up with forecasted product demand. People Services adjusted the overall manpower plan in manufacturing recently because sales had been on a steady increase for three months now thus creating the need for additional labor. Everyone at the team meeting was satisfied. They agreed that within the week they would formally meet with their teams and explain the new system. A projected date of full implementation was approximately eight weeks in the future. Actions would now need to move quickly in the event anyone else outside the core team had input that resulted in changes. The various conveyor systems would now be ordered and sub-assembled off site. When ready they would be moved to the company and installed. The meeting ended with a brief celebration of donuts and coffee. Following the jubilation everyone went back to their work stations.
HORSING AROUND TURNS UGLY
Each day at 8:00 AM, one hour after the manufacturing lines were up and running, a daily production meeting also took place in another part of the building. The meetings were facilitated by the Production Scheduling Department. Advisors, Plant Management, Quality, Manufacturing Engineering, Procurement, Engineering, People Services, Customer Service, and Test Engineering were always in attendance. Several Vice Presidents also participated in this daily gathering where each function reported out updates in a round robin fashion. The purpose of the gathering was to enhance communication and information across the organization. Each day everyone would know what was taking place elsewhere in the company. This way meeting attendees could relay information to their respective teams and departments in an effort to plan accordingly. These operation meetings usually lasted for approximately 45 minutes unless something needed additional attention. If so, more time would be taken so a plan of action would be set into place.
During the production meeting, which began soon after the central packing meeting ended, a voice came over the intercom. Normally, it would not raise any eyebrows, however, the page required the immediate response of Albert and Diane Arnold. Both were at the production meeting. By the tone of the message it appeared as if something was in need of urgent attention. Diane phoned the extension number being requested. A lead person on the floor requested that both Albert and Diane immediately come to the area in question.
Albert and Diane excused themselves, left the meeting and rushed to the area. Upon their arrival they witnessed associates huddling together, talking loudly, and crying. They also noticed several male associates making an attempt to walk Sam Jones, an African American packer from the assembly line, to Diane’s office. On the opposite side of the line, other associates appeared to be escorting Juan Cruz, a Hispanic associate up toward Albert’s office. Albert and Diane thought it best to immediately split up. Albert began to walk toward his office trying to catch up with Juan and the men walking with him. Diane went toward her office to meet Sam and his group.
Other pages were coming across the intercom asking for Victor Pastore, the Plant Director, and Chief Union Steward Michael Crowe. Soon they too had reached the area. All the parties received a quick briefing as to what took place by an associate who had been in the area. Victor and Michael walked toward the larger group assembled and attempted to calm them down. After about 10 minutes most associates began to return to their work stations. Others asked to take a short break. Their request was granted.
Diane made it to her office, immediately phoned Joan Rossi from People Services and asked her if she could come down to her office for a few moments. Joan obliged and walked down to join the meeting not really cognizant about what had occurred. They were soon joined by Michael Crowe, the chief union steward. Diane and Michael began to question Sam as to what occurred. Joan listened at first before she also asked a few questions. Sam was a mediocre employee who had been with Wonder Life for about 3 years. His brother Gene Jones, who had been with the company for close to 10 years, was a union steward for the paint department. At the same time in another part of the building, Albert and Susan Wolfe, the Manager of People Services, began to interview Juan. Juan had been with the organization for five years and was an excellent performer. Presently, he was a lead person on one of the assembly lines and filled in as a packer when needed. His wife Lisa Cruz was the Administrative Assistant for People Services. Juan had been the representative in attendance at the central packing team meeting earlier. Albert wanted to make sure that all their actions from here forward were in line with good business practices, contractual guidelines, company policy, and procedure so another union representative was asked to join.
In his meeting with Albert and Susan, Juan reported that after his central packing meeting, he went back to his work station.
Juan: “I explained briefly to the team what we talked about at the meeting this morning. I told them a more formal meeting would take place in a few days so that I could explain in more detail the entire process. I went over to my station and began to work. While I was there Sam began calling me names and teasing me. I asked Sam to stop, but he just kept calling me names. Some of them were pretty nasty. After a while I called him a few names back but I kept asking Sam to quit it. He just continued and laughed about it. I don’t know why this happened. Sam and I are friends and have been for years. We shoot hoops together on the school playground go to lunch together at work, and also at times drove together to work.”
Susan: “Then what happened?”
Juan: Well, Sam continued to call me out. He called me some body parts and the ladies on the line were getting pretty embarrassed. I continued to ask Sam to stop or else? Then I’m not sure why I did it but when Sam bent down to pick up a box in order to pack more product, I hit him in the head. I saw some blood coming from his forehead after that. Then we started slapping, punching, and shoving each other around.”

There was a long pause and Juan looked down at the floor.

Albert: “Go on Juan.”
Juan: “I then saw Pedro, Lewis, and Jose, run over to break it all up. Jose leaped over the conveyor belt and fell. He must have hurt his leg because he was limping when he got to us”.
Albert found out later that Jose had gone to the emergency room of the local hospital, received seven stitches, and was released.

Juan: “The three of them split us apart. They held us and tried to calm Sam down. He was all wound up. I saw Jose take Sam to the men's room. I think he was going to clean out the cut over his eye. Hey, I’m real sorry. I didn’t mean to hit him that hard.”
Susan: “Okay Juan, what happened next?”
Juan: “I think while they took Sam to the bathroom, Pedro took me to Diane’s office. There were quite a few people who saw this all happen. They must have heard Sam calling me names.”
Albert: I think we’ll probably call them up here later, Juan. Let me write down the names of those that were out there on the lines.”

Albert and Susan put together a list of names who Juan said were working in the area. When the list was completed, they felt they had more than enough information. However, Juan said there was more.

Juan: “Wait there’s more. As I was waiting with Pedro by Diane’s office, we saw Sam and Jose coming from the bathroom. It looked like Jose was walking him toward your office, Albert. Suddenly, he must have noticed me. He picked up something from the shelves where we are going to put the new conveyor belt and started to run toward me saying, “you snuck me, I’m going to get you.” Then Jose and Lewis came over again and tried to hold him back. He swung that pipe real good and it broke on one of the shelves. Thank goodness he didn’t hit anyone with it. He just kept yelling and coming at me swinging. Finally, Pedro, Lewis, and Jose held him tight. That’s when I moved away and I think you were paged”

At that point, Juan said that was all he remembered until Albert and Diane showed up on the floor. With the agreement of the Union, Susan escorted Juan to the door. They thought it best that he go home for the day and pending further investigation they would contact him as to the next step. Juan willingly left the building. He would be paid for the full day.

Before they contacted anyone that saw the incident on the floor, they telephoned Diane. Albert asked how Sam was and told her he’d be down there in a few minutes. Albert and Susan joined Sam in Diane’s office with a Union representative.

Albert: “Sam tell us what happened out here today.”
Sam: Juan and me were joking around. I called Juan a name. We was joking. Then when I went to pick up a box to pack some product, I felt something hit my forehead. When I looked up, Juan was taking jabs at me so I defended myself. We got into a little match on the floor. Then I saw Pedro, Lewis and Jose running toward me. After that I don’t remember much except being in the bathroom with someone wiping some blood from the cut over my eye where he snuck me.
Albert: “That’s all that happened?”
Sam: “That’s what I remember. Oh yea, when Jose was taking me out of the bathroom to the first aid room, I saw Juan at Diane’s office. I wanted to go over to him to shake hand and let things go. All of a sudden I saw Pedro and Lewis come running over again and grabbing me. Before they did I picked up something from the shelf to defend myself. I thought they were going to knock me down. All I wanted to do was shake Juan’s hand and get back to work.”

After a few more questions, Albert figured the stories were different enough to move ahead with the questioning of others who may have witnessed the event. Susan asked Sam if he felt good enough to drive home.

Sam: “There’s nothing wrong with me. My cut stopped bleeding and I want to go back to work.”
Albert: “Sam, it’s best if you go home for the day. I’m going to talk with some others who were in the area. Tomorrow we might want to talk with you more.” For now though you’ll be paid for the rest of the day. It’s best you leave.”
Sam: “So where’s Juan? Did he get ditched too? Hey, he snuck me. I didn’t do anything, no matter what anyone says around here. I’m telling my brother about this.”
Reluctantly, Sam got up and walked briskly to the door mumbling. He kicked the door opened and left the building while Susan was watching.
THE INVESTIGATION CONTINUES
Associates were called to Albert’s office one at a time. Susan did the same in her office in an effort to speed up the process. Union representation was present in both meetings. They both got bits and pieces of information from everyone who was working on the same assembly line as Sam and Juan. They were also able to obtain some additional information from coaches who had been in the area and other associates who happened to be in the men’s room at the time Sam was brought there.

Albert and Susan put their notes together from the meetings they held with over 20 witnesses to the event. Their summary noted that Sam called Juan quite a few vulgar names after Juan returned from his meeting. Sam would not let up no matter how many times Juan asked him to stop. Sam just continued and continued. Then he laughed about it. When Sam bent down to pick up a box witnesses did note that Juan smacked him above the eyes and immediately Sam began to bleed. Associates also said that Pedro, Lewis, and Jose ran over and broke up the fight that resulted from the punch. They did so and then took Sam to the men’s room and Jose to Diane’s office. While in the men's room, other employees came to help. One was also a union steward, Mary Kilmore who had been with the company for close to 20 years. Mary and the others said that while in the men’s room Sam was bleeding from the cut over his eye and he kept saying things like: "he snuck me" and “I'm going to get him." Mary said that Jose tried hard to calm him down and told Sam “it’s not worth it.”

Susan and Albert also noticed there was consistency in what happened after Sam left the men’s room. Witnesses reported that after Sam was calm he wanted to go back to work. Others told him to go to the First Aid room while they contact Diane and Albert. The First Aid room was in close proximity to the rest rooms but you would have to go around Diane’s office to get there. Sam reluctantly agreed. He was escorted by Jose. As they walked out of the rest room and toward the first aid office Sam, instead of turning toward the first aid room, he immediately turned in the direction of the Diane’s office. He saw Juan waiting there with Pedro. Everyone interviewed said they heard Sam yell something to the effect of “you snuck me.”

Then Sam picked up his pace while Lewis and Jose tried to calm him down once again. Witnesses saw Sam rush overt toward Juan and as he did Sam picked up a piece of PVC piping. Then he started to swing it as he was walking fast. They said the force behind the swing would have seriously hurt someone had he connected. He broke the pipe on one of the shelves. Again Lewis, and Jose came in and held Sam back. Pedro took Juan away from the area. All of this reportedly occurred within less than 12 minutes.

With this consistent information from so many witnesses Albert and Susan spoke with John, Victor, Diane, and Michael. They said they had more than enough information and the best decision to make at this moment was to dismiss both associates based upon Article VII, Section 5A of the contractual agreement between Wonder Life and the International Brotherhood of Electronic Workers.
“ if any employee represented by this bargaining unit is caught in a fight regardless of who is at fault, they will be dismissed immediately pending additional investigation if deemed warranted. This dismissal will take place without compensation. A thorough and complete investigation will take place by management, with union representation present, as soon as practical. A final report and decision will be provided to the Chief Steward upon completion.”
The preponderance of information gathered pointed to the fact that Sam continually edged Juan on by calling him inappropriate names while in the employ and on the site of Wonder Life. Juan repeatedly asked Sam to stop but Sam did not. Juan reportedly threw a punch at Sam when he bent down to pick up a box. A fight resulted and even after a calming period Sam willfully and purposefully went to attack Juan again.
The following day when Sam and Juan arrived Diane and Michael sat with each separately and informed them they were no longer employed at Wonder Life for the reasons stated in the contract under Employee Behavior; Fighting on the premises. They were escorted separately out of the building.
As Juan was being walked out he apologized and left the building. Sam, on the other hand immediately consulted with his brother, Gene and filed a grievance, stating he was unjustly terminated. As a member of the bargaining unit Sam had the right to take this action. Sam’s position was, “he thought Pedro, Lewis, and Jose, the three Hispanic employees who reportedly attempted to help on two occasions, were not trying to assist him but rather going to harm him.” That is why he picked up the pipe and swung it. Sam posited that he did not yell anything at Juan. He did not say “he’s going to get him,” and he did not swing the pipe at Juan, but rather at Pedro, Lewis and Jose because Sam felt they were going to harm him.

THE GRIEVANCE
The grievance was accepted by the union which was surprising to management since they had been at every meeting with each witness. The process took its normal course of the contractually agreed upon three step process where management and labor attempt to defend their positions in a series of meetings. The evidence from the witnesses was shared and discussed. During each meeting though Sam denied, refuted, or defended the accusations and eye witness accounts. After several weeks and numerous meetings neither the union nor management was able to reach an accord. Wonder Life, Inc. stood steadfast on the dismissal of both associates. The Union was being pressured by Sam to get him reinstates to his original job. Union representatives made a recommendation to seek arbitration.
Arbitration was the end result of a failure to reach an accord during the three step grievance process. The contractual agreement requires binding arbitration. It was well within Sam’s rights as a dues paying member of the union to recommend this step in the process. Michael and the union leadership would now need to file the necessary paperwork which would begin the process of arbitration. Initially both labor and management had to agree upon an arbitrator from a list that would be provided by the State Department of Labor. It would take a few weeks for the process to unfold, papers to be filed, and agreements reached. In the meantime Sam would remain dismissed without compensation. He was not allowed on company property. Any discussion with the union had to take place off-site or at their headquarters.
Juan did not pursue a grievance. He contacted People Services a few days after the incident and again apologized for his behavior. Juan informed the company he would be looking for another job elsewhere. He inquired how this incident might affect a recommendation, if requested by companies showing interest in Juan. Susan assured Juan that policy at the time was not to provide anything more than a confirmation of dates of employment, position title, and salary. In less than two weeks People Services was informed by his spouse, Lisa, that Juan was gainfully employed at a local warehouse for upscale dinnerware.
During the next two months the arbitration process unfolded as expected. The same five names and backgrounds of arbitrators were separately provided by the State Department of Labor to Michael and Albert. If neither one accepted any of those suggested another five would be sent along a few weeks later. As it turned out, it took three attempts (15 names) before one individual was agreed upon by both parties. An arbitrator, Mr. Lee, was selected to hear the case. Mr. Lee had a background with manufacturing and diversity issues. His final decision after hearing the case would be binding. The arbitration process is similar to listening or having a trial in a courtroom. Both sides have the opportunity, through counsel if they choose, to present their case. The grievance is given to the arbitrator for review. During the actual case, witnesses are called and cross examined and any evidence is reviewed. The arbitrator then renders a decision. In this case will Sam be re-instated to his position as he is requesting or will he be dismissed?
At the time when both labor and management were preparing their cases for arbitration the news media was covering the S.L. Samson trial live from a courtroom on the West Coast. The break rooms and cafeteria at Wonder Life, Inc. had television capabilities for associates. They were all tuned into one of the most amazing courtroom dramas of the legal system. A football legend, S.L. Samson, was being tried for the murder of his wife and her alleged boyfriend. Flashbacks during commercials of a blue Ford Bronco on a Los Angeles highway being pursued by police continued to pop up on the screens during down time of the trial itself. Associates all had their opinions whether the football legend was guilty or not and the conversations during lunch breaks showed how truly divided and confused employees were about what some claimed should have been a cut and dry case. Associates debated the merits of the legal system and watched in awe on how attorneys worked hard to defend and/or prosecute the most famous legend of the college gridiron. It was a time when Americans were sitting at the edge of their chairs waiting for the verdict from the jury. The courtroom had made it into America’s living room.

ARBITRATION
A date for the arbitration hearing was agreed upon by all parties. The arbitrator, Mr. Lee, showed up at the building of Wonder Life at 7:00 AM to meet and talk with Albert and Michael. The tenor of the union membership was surprised the union even accepted to move this case along. At times some members expressed their concern that their dues were being spent on what they considered a “losing cause.” The grapevine in the factory worked quickly and without any recourse to anyone’s feelings. Quite a few associates witnessed what occurred and felt that Sam got what he was asking for. Of course his brother, Gene, also a union steward, continued to defend Sam’s behavior. Soon it became apparent a dividing line was being drawn. The union leadership was concerned that their members at Wonder Life, Inc. might become angry with the manner in which they were handling this case. None-the-less, they felt everyone deserves a fair hearing and is innocent until proven guilty. “That’s what my dues pay for” said Sam, one afternoon before the hearing.

The arbitration hearing began in the training center at 8:00 AM and lasted until 5:00 PM. Eighteen witnesses from those interviewed were called to testify from the company. They were the same associates who watched it happen first hand. All were cross examined by the union. Some witnesses became emotional once again and cried during the hearing similar to what occurred on the day the fight took place. Mr. Lee requested to be taken on a tour of where the incident took place so that he could see where the first aid room was and where the pipe was swung and where the office of the supervisor was and where the actual fight occurred. Mr. Lee looked around the plant for approximately 45 minutes while on his tour.

In general when associates took the stand they expressed their surprise that the case has come this far. They testified the contract is clear; “ANYONE” caught in a fight with another employee is dismissed. Zero tolerance for this behavior. It is like in High School, said one associate, “it is tough to prove who threw the first punch, or who called the first name, you both go to the principal’s office and most likely you both get suspended.” As the day unfolded, witnesses pointed to both employees being equally at fault. Sam swung a pipe. Sam taunted Juan. Juan threw a punch. Sam was rushing over to Diane’s office where Juan was waiting. One associate noted when asked what he felt about the whole event that took place, “Sam was just loosing it, he didn’t know when to stop.”
During lunch no one was allowed out of the room. Food was brought in. When the case resumed no matter who was called upon a similar report was given. “the name calling started by Sam and the pipe was swung by Sam.” After it ended Mr. Lee promised both attorneys a ruling in approximately six weeks. All parties left without any further discussion. Once back out on the floor the rumors and grapevine took over quickly. Stories ranged from “Sam was fired on the spot” to “Sam is being reinstated.” Production was at risk of being negatively affected by the chit chat for the day.

Albert and Michael waited each week for a decision by Mr. Lee. After eight weeks both sides agreed to call and ask when it would be completed. Sam wanted to know what to do and Susan and Diane were curious whether they needed to hire someone permanently for the position. Mr. Lee apologized and promised it would be in the mail in a few days.

THE OUTCOME:
Another two weeks passed and the decision arrived via registered receipt mail. Albert called Diane, Susan, and John into his office. He opened up the envelope and began to read the decision out loud to the team. In his decision Mr. Lee ruled in favor of the plaintiff. An excerpt of the decision stated that;
“Overall it is the feeling of this arbitrator that Sam” an employee of Wonder Life, Inc. undoubtedly felt his life was in jeopardy at the time of this incident. The three Hispanic gentlemen supposedly coming to “quell” the fight and “help out” were most likely in the mind of the plaintiff, trying to do him additional harm since they were all of one race other than his own. It is therefore in the opinion of this Arbitrator, Mr. Lee, that the plaintiff, Sam, is to be re-instated to his former position or one of equal compensation and level immediately with “no” retroactive back pay or benefits.”

This was not at all what was expected. Those assembled in Albert’s office thought it was an open and shut case. John needed to read it himself.
“Could this be true?” said John. “The testimony was clear enough from the witnesses. Those three guys; Pedro, Lewis and Jose came to help and assist, not to harm. At least that’s what I heard everyone say. What about the swinging of the pipe. That happened after the punches were thrown by Sam and Juan; quite some time to be exact. Along with that fact, the punches that were actually thrown were thrown before these three guys came to assist. They actually had to restrain him twice. Jose went to the hospital and received stitches in his knee as a result of jumping over the conveyor belt and slipping while doing so. Is this guy, Mr. Lee crazy or what?”

A phone call was made to Michael. He said he had not opened his mail as of yet. When he got off the phone Michael did so quickly. He called his team to his office. The decision astounded even the union, and union counsel. Since this was contractually “binding arbitration” there could be no appeal. Wonder Life, Inc. had to live with it.

As the decision was communicated to the various sectional stewards the membership were also amazed. One member asked, “so if someone fights or does not listen to management, like in this instance to go to get first aid or if someone attacks someone or others with a pipe, it’s apparently okay?”
Sam was reinstated as per the court’s decision. He was not an ideal employee following the incident. He would not participate during team meetings, snapped at fellow workers and began to disregard requests from his advisor. Sam’s arrogance increased with each passing week. His co-workers did not want to get close to him for fear of reprisal.

Two months after being reinstated, Sam found himself in trouble with the law again. This time it took place outside the workplace. He was arrested allegedly selling illegal drugs in a school zone. He was incarcerated prior to standing trial. He did not call out from work and no word came from his brother. The contractual agreement cites;
“if any employee or a representative of the employee does not call the company after three consecutive days of absence without notification, it will be determined that they have abandoned their position at Wonder Life, Inc. Therefore they will be dismissed without recourse.”

Sam was released from the company. Two months later a local newspaper reported that Sam was found guilty of selling drugs in a school zone and sentenced to prison.








ADDITIONAL RESOURCES

Anonymous (2006, April - May). Bullying in the workplace. The British journal of Administrative Management, 29.
Anonymous (2008). Workplace violence update: What you should know now. HR Focus, 85(6), 7-11.
Baron, R.A., & Neuman, J.H. (1996). Workplace violence and workplace aggression: Evidence on their relative frequency and potential causes. Aggressive Behavior, 22, 161-178.
Cable, J. (2007). Survey: Half of Americans have experienced workplace bullying. Occuptational Hazards, 22. Retrieved February 21, 2009, from Research Library database. (Document ID: 138243571).
Dickens, W.T. & Leonard, J.S. (1985). Accounting for the decline in union membership. Industrial and Labor Relations Review, 38(3), 323-333.
Fuller, G. (2006, October). Staff pay the price for HR’s ambitions. Personnel Today, 10.
Keashly, L. (1998). Emotional abuse in the workplace: Conceptual and empirical issues. Journal of Emotional Abuse, 1, 85-117.
LaVan, H. & Martin, W.M. (2008). Bullying in the U.S. workplace: Normative and process oriented ethical approaches. Journal of Business Ethics, 83, 147-165.
Lee, R.T., & Brotheridge, C.M. (2006). When prey turns predatory: Workplace bullying as a predictor of counteragression/bullying, coping, and well-being. European Journal of Work And Organizational Psychology, 15(3), 352-377.
Lewis, D. & Gunn, R. (2007). Workplace bullying in the public sector: Understanding the racial dimension. Public Administration, 85(3), 641-665.
Mack, J.A. (2005). The law of bullying off the playground and into the workplace. Bench & Bar of Minnesota, 62(8). 20-24S.
Namie, G. (2000). US Hostile Workplace Survey: Survey Results. Retrieved from the campaign Against Workplace Bullying Web site: www.bullybusters.org.



DISCUSSION QUESTIONS

1. Define any issues or problem(s) as you see them leading up to the arbitration hearing?
2. Outline the steps you would have followed had you been leading the investigation?
3. What parts of this case would you say are most critical in the decision making process (list 4 only)?
4. How would you set up your case before the arbitrator if you represented the company? The union?
5. What are some questions you might you ask of management’s witnesses? Union’s witnesses?
6. Why do you think the arbitrator ruled as he did? Do you also feel Sam may have feared for his life?
7. By not upholding the termination of the Sam what would be the overall effect on other employees?
8. Juan never returned. He never grieved the case of his dismissal. Why do you think that happened?
9. How might an incident like this affect management’s interpretation of the union contract? Do you think the wording now needs to be changed?

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Inner Carton

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Assembly Operation

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Shipping

Outer Carton

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	Figure 1: Old Method of Packaging

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Carton Placed on Conveyor Belt To Central Packing

Assembly Operation & Packaging into Inner Cartons

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Central Packing Sorts Product to be Shipped

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	Product Loaded on Trucks and Shipped

	Figure 2. New Centralized Packing Method – Eliminating Process Steps

SEXUAL HARASSMENT OR JUST BEING A FRIENDLY CO-WORKER

Objectives

Learn that sexual harassment can have a devastating effect on employees

Identify the various steps in an employee disciplinary process

Understand the importance of learning various cultural customs which may result in workplace behaviors unfamiliar to human resource departments

Learn that trust in human resources is a key component in whether employees
report alleged incidents of sexual harassment

Understand that constant workplace education, updated policies and procedures, and reinforcement by human resource departments are necessary in order to maintain a safe harassment free work environment.


INTRODUCTORY NOTES

Sexual harassment is so widespread that up to half of working women have reported experiencing some form of it at some point in their careers (Loy, P.H. & Stewart, L.P., 1984; Schneider, B.E., 1982). Sexual harassment negatively impacts employees in many ways, including on the personal level (Merkin, R.S., 2008). Workplace sexual harassment has been shown to increase psychological distress and increase physical illness (Huerta, Cortina, Pang, Torges, & Magley, 2006), increase disordered eating (Cleary & Schmieler, 1994), and result in symptoms of nervousness, anger, depression, weight loss and sleeplessness (Vijayasiri, 2008). Unfortunately few victims of sexual harassment at work file complaints.

Although research definitions of sexual harassment vary (Rospenda, Richman, Ehmke, & Zlatoper, 2005), from a legal perspective it is a form of sex discrimination characterized by “unwelcome sexual advances, requests for sexual favors and other verbal or physical conduct of a sexual nature” that affects the terms, conditions, or employment decisions related to an individual’s job (“quid pro quo” harassment) or creates an “intimidating hostile, or offensive working environment” (hostile environment” harassment) (Gross, 2008).

Employer’s have a duty of care to provide a safe working environment (Gillen, 2008). Productivity and morale will improve by making employees comfortable in their work environments. What if, however, an alleged harasser claims he/she is from an environment and culture (Jamaica) where warm and friendly, fun-loving, easy going and embracing are all part and parcel of the essence of one’s daily life style? Although Jamaican upbringing is one that instills a sense of caution and constant insecurity (Patterson, 1995), the overwhelming majority of Jamaican children are well adjusted (Smith & Green, 2007). These value orientations (Gaines, 1997), noted above, are defined as organized sets of beliefs that are communicated by societal agents, e.g. schoolteachers, families, the media, religious leaders. In turn, we all differ in the extent to which we internalize these cultural values (Gaines, Ramkinssoon & Matthies, 2003). As employees we bring these beliefs into our jobs. They can and do affect others, sometimes positively, other times in a negative manner.

Our workplaces have become multi-cultural and diverse more so now than ever before. The challenges Human Resource professionals presently face due to the many varied customs and beliefs brought into organizations is overwhelming. Cookie cutter decisions usually do not work for the long run when faced with the many varied backgrounds, values, and attitudes inhabiting our businesses. It becomes even more critical that Human Resource professionals and Management take the time to learn about the multiplicity of traditions and customs employees bring to their jobs. Without this knowledge a recipe for disaster is eminent.

PROFILES
Anne Brady is the Manager of Employment and Organizational Development at Wheels, Inc. Anne has been with the company for seven years and has served in various Human Resource positions during her tenure. Anne is a straight shooter and believes in following policy and procedure to the letter.

Alex Pascale, the Vice President of Human Resources, joined Wheels, Inc. close to 15 years ago. He has an MBA from Cornell University in Human Resource Management and a MA in Psychology from New York University. Alex and Jane Keegan brought the Human Resource department from being an Administrative function to a dynamic, nationally recognized leader in employee relations.

Jane Keegan is the Human Resource Manager of Wheels Inc. Jane was hired approximately two months before Alex. They shared an office for the initial seven months Alex was on the job learning the culture, creating policies, procedures and programs for employees. Jane’s strengths lie in employee selection and retention.

Darrell Howard, Wheel’s Inc. Vice President of Operations is a quiet, laid back leader who is well respected by employees throughout the company. Darrell comes from a strong background in manufacturing having been employed by several Fortune 50 companies when he graduated college.

Nancy Nader is one of the nine Plant Supervisors at Wheel’s Inc. Nancy always has a positive attitude and continually goes out of her way to help employees both at work and in their personal lives. Nancy came up through the ranks learning each and every product over the years while an assembler, lead person, and quality technician. Nancy is one of the strongest proponents of teams and collaboration at the company. Her consistent upbeat attitude and constant reinforcement of employees has resulted in significant increases in productivity and quality.




Robert Mason, the Production Control Manager of Wheels, Inc., has been in his position for close to 25 years. During that time Robert has gain the reputation of being able to schedule any product request by a customer within 24 hours of its acceptance. Robert’s ability to “load’ the factory without stretching resources is second to none in the field especially since he rarely uses any of the computer models on the market.

Yvonne Stevens is a recent addition to the Production Scheduling department having been an assembler for two years and then working in shipping and receiving for a year. Yvonne is constantly on the move throughout the plant and works closely with each team in scheduling product for maximum production.

John Ritter has been the Chief Union Steward at Wheels, Inc. for close to 20 years. John is a straight shooter and in meetings with employees “tells it like it is.” John has negotiated seven contracts between Wheels, Inc. and the bargaining unit.

Jerrick Tulley is an Employee of Jamaican Ancestry who works in the factory on one of the assembly teams. Jerrick has been with Wheels, Inc. for a little less than a year now and enjoys telling stories to employees about his homeland. Always smiling and chatting, Jerrick had to be told on several occasions to focus his energies on his work and the product.

Bill Nessor the Shipping Supervisor is another long-term employee of Wheels, Inc. having joined the company right out of high school 25 years ago. Bill has been in a variety of positions at the company while learning the flow of product from design to production but found his niche in shipping. On-time deliveries are presently at 96%.

Jeff and Sam are two production employees on the same team as Jerrick.

Wheels, Inc.
Wheels, Inc. (Wheels) is a multi-shift manufacturing company. Its first eight hour shift begins promptly at 6:00 AM. The second shift starts at 3:00 PM. Wheels, Inc. has been in business for approximately 50 years and is located in a low to moderate income neighborhood of residential and industrial real estate. Wheels, Inc. employs 600 individuals from a variety of diverse demographics. Approximately 410 employees work in the factory on assembly lines, in the warehouse, shipping, receiving, tooling, component insertion, packaging, quality, and test. The remaining 190 employees are spread throughout the office and in the field as salespeople and technical support.

Wheels produces an assortment of products for the automobile industry. Business has grown each year along with market share. With the onslaught of electronic and computerized components making up most of the modern automobile, Wheels holds a tight rein on the market of component circuitry that are critical to the braking system. Wheel’s ability to claim repeat business is its reputation for quality. Never in its history has it had a recall or has a part failed to perform. Other companies produced similar products but could not boast about the excellence in reliability Wheels possesses. The giant automakers, both American and Foreign, are loyal customers.

Wheels factory employees are unionized. The relationship is positive and productive. This is shown by the lack of grievances, the collaboration in attaining training grants for education of workers, and the willingness of both parties to form a proactive union-management committee. The committee meets every two weeks to discuss any concerns prior to them growing into unmanageable work challenges. The average tenure of the Wheels employee is around 15 years. It was not uncommon during the yearly employee recognition dinner to award longevity gifts to dozens of 15, 20 and 25 year veterans.

Wheels is proud of its employee relations programs. These range from numerous technical training opportunities offered during work hours, its management development and diversity curriculum, team centered work models, and plenty of incentives for continuous improvements in quality, productivity, delivery, self-development, and sales. Every employee is required to attend a minimum of 50 hours of education each year on company time. A full curriculum of courses is offered from Wheels University, a separate building on the ten acres of land Wheels owns. There are courses which are mandatory like The Elements of Diversity, Hazardous Materials Training, Teambuilding, and Harassment. Within the initial month of employment each employee is required to attend these four classes. Mastery of the material is evaluated by a self-paced test and case study analysis. Any language barriers are alleviated through interpreters the company hires or has on sight. Wheels is dedicated to maintaining a safe, secure, and happy workplace. A large portion of its training budget comes from State Department of Labor grants. The remainder is an allocation within the Human Resource budget itself.

Behind the training and employee relations success is a very proactive Human Resource function and a team of managers who consistently stay abreast of new benchmarks and innovative models used by other companies. At times Human Resources consults with local universities in areas they need some assistance; generational differences, life-style benefits, compensation programs and diversity challenges. Management feels strongly that they need to be up-to-date on how to work together as a team for the satisfaction of the customer.

OPERATIONS
Productivity and efficiency is on a continuous up tick at Wheels. Attendance is excellent, and the teams are in a constant mode of finding new ways to improve upon anything and everything within their department. Vice Presidents and other top management are very visible and maintain an open door policy. They tour the factory and the office often greeting associates and asking for feedback on almost anything related to the business. By so doing a better pulse on the organization as a whole is gained. Employees are grateful about this approach and it proves beneficial. Communication throughout Wheels appears to be well grounded and up-to-date.

Every day there is a regularly scheduled production update meeting facilitated by Robert Mason, the Production Control Manager. These meetings provide everyone with an opportunity to gain updates on activities, customers, order input, quality, or events that took place the day before. The meetings, held at 2:30 every day, provide critical key employees from both shifts the opportunity to share information.

At about 3:30 on April 6^th, the Vice President of Human Resources, Alex Pascale, received a phone call from Nancy Nader, a supervisor from the first shift. Both Alex and Nancy had recently left the production update meeting and returned to their offices. Nancy asked Alex if he would come to her office and speak with Yvonne Stevens, a Production Control employee. Nancy was very vague, most likely, he thought, because the assembly lines were just getting up and running and she was rushed. He found out though, that Yvonne was upset about an employee who inappropriately touched her about 45 minutes ago. Alex dropped what he was doing, left his office, and began to walk into the plant. While in transit several employees stopped him and asked, “Alex, do you know what happened to Yvonne?”
Alex: “No, not yet.”
Alex soon reached his destination. While in Nancy’s office, Yvonne, was sitting in a chair, visibly troubled and in tears.
Nancy: “Hi Alex,. I was just told that Yvonne informed several other supervisors that she was sexually harassed by Jerrick Tully in the Tool and Dye department right after the second shift started.”

As Yvonne continued to cry. Alex sat in an adjacent chair, waited a moment, looked at Nancy, then back at Yvonne.

Alex: “Nancy, can you go get Yvonne a glass of water please?” While Nancy was out of the office Alex sat as a tearful Yvonne patted her eyes with several tissues from Nancy’s desk. Nancy returned quickly with water in hand and gave it to Yvonne.
Alex: “Yvonne, are you doing okay? Do you want to talk about it?”
Yvonne: “Sure, as long as that pervert stays away from me.” With tears continuing to roll down her cheeks, “My husband is going to kill me.”
Alex: “Would you like to tell us what happened?”

Since Nancy’s office is in the middle of the production floor, Alex and Nancy both noticed that other employees on the assembly lines within the area were looking at them. At that point, Alex decided that trying to have some privacy out there would soon become compromised.

Alex: “Yvonne, let’s go up to my office and talk about this.”
Yvonne: “Whatever”

Alex left Nancy’s office and escorted Yvonne back to his office where they could have more privacy and confidentiality. As they were walking Alex was met by Jane Keegan, the Manager of Human Resources. Jane walked alongside both of them. Jane has just returned from a meeting off site. Alex briefed Jane quickly on the little that he knew up to that point.

Alex: “Jane, call Nancy and have her ask Jerrick to go to her office and wait there until I come out to see him. Also call John Ritter, the shop steward, to sit and wait with Jerrick. Nancy can fill John in on the little that we have at the moment. When you are finished meet me in my office. I need to ask Yvonne a few questions about the incident she reported.” Jane obliged and went into her office while Alex walked with Yvonne into his.

After a few minutes Jane returned to Alex’s office. While there, Alex asked Yvonne to explain more about what happened.

Alex: “Yvonne, tell us what happened. Jane will take notes about what you say. You mentioned in Nancy’s office that you were harassed?”
Yvonne: “I am so upset now, I don’t want to talk about it. I would rather leave the building now and talk about this tomorrow.”
This came as somewhat of a surprise to Alex and Jane since previously Nancy told him that Yvonne reported the incident to several supervisors in the plant.

Alex: “Yvonne, Nancy said you told some supervisors already that Jerrick sexually harassed you. What exactly does that mean?”
Yvonne; starring blankly at Alex, “I want to go home now, I’ll talk about it tomorrow. I just want to go home. I am way too peeved to get into this now.”

Silence prevailed for a few more moments.

Yvonne: “Jerrick, that jerk, put his hand on my butt while we were talking in the tool and dye department right after the second shift began. He hugged me and thanked me for something the team and I did and then he squeezed my butt. Will you please let me go home now? I want to get out of this place. When my husband hears about this he’s going to really be upset. I’m not sure what he’s going to do.”
Alex: “ Hang in there Yvonne. While the incident is fresh in your mind let’s talk more about it.”
Yvonne: “No, not now, maybe tomorrow.” “Let me outa here.”
Alex: “Okay Yvonne. Jane, please read back what we heard Yvonne say. Yvonne you can make any changes if you would like. Yvonne, if after you agree, I would like you to sign the notes and Jane will co-sign them.”
Yvonne: “Sure, whatever. I just want to get out of here.”
Jane obliged. She read back the little information that Yvonne provided. Yvonne chose not to change anything. Yvonne signed her name on the bottom of the notes. Jane did the same. Jane left the office to get copies of the notes. Upon her return she provided Yvonne with a copy and Alex with another copy. Then she created a manila file folder and placed a third copy in it, labeled it Yvonne - Investigation – 04/06/08.

Yvonne: “Can I go now?”
Alex: “Sure, is there anything else we can do for you now though?”
Yvonne: “Sure, just keep that creep away from me.”
Alex: “Yvonne, when you return tomorrow for work, I want you to call me immediately. We’ll sit down and continue talking about what happened. We’ll make sure you and Jerrick are not in the same area. I will be going with Jane soon to talk with him.”
Yvonne: “Why do you have to talk with him? He’s just going to lie about everything. Just ask some of the other women here, they’ll tell you.”
Alex: “Yvonne, please be assured we will do a full and complete investigation of this incident. I am not sure what you mean about other women. What’s that all about?”
Yvonne: “Noting, just let me outa here.”
Alex: “Yvonne, you’ll be paid for the remainder of the day. But there is one last item I need to impress upon you. Do not talk to any other employee about this, please. We’ll walk you to your car. Go home and we’ll see you tomorrow as soon as you come into work.”
Yvonne: “I don’t want you to walk me to my car. That’ll look pretty obvious that something happened. I can walk by myself. What’s wrong you don’t trust me?”
Alex: “It has nothing to do with trust, Yvonne. We just want to be certain you are able to get home safely.”
Yvonne: “I can get home safely. It’s when I get home what my husband is going to say and do that worries me. He’s not going to like this you know. Like, he’s going get real angry.”
Alex: “I am sure he will, Yvonne. Just tell him we’ll investigate this fully and when it is all over what has to be will be. Ask him not to do anything that he will regret later himself if that is what you are leading up to.”
Yvonne: “Sure, whatever. Let me get out of here.”
Alex: “Okay Yvonne, please again talk to no one. Go to your car and drive home. If you would like we can call you later. Talk to no one about this please. Are you sure you don’t need a ride?”
Yvonne: “Sure, whatever. I can drive by myself. I don’t need any help.”

Yvonne got up, Jane followed and they both walked to the exit. Jane watched Yvonne as she entered her automobile, started it, and pulled away. Jane returned to Alex’s office.

Alex: “Jane is this the same Jerrick employee that was warned a few months ago with what Anne Brady complained about?”
Jane: “I think so.”
Alex: “Pull his file and review it, please. I’m going to talk with him. Meet me in Nancy’s office as soon as possible.”

Alex left the office, Jane went to the employee files and pulled Jerrick’s file. She opened it and in the section marked discipline she noticed a written warning. Jane read the notes and the warning that followed. The last paragraph stated:

“Upon completion of a thorough investigation by Human Resources it was found that Jerrick Tulley did not fully comprehend the harassment policy and procedures here at Wheels, Inc. despite attending the training classes provided. Jerrick continually reported during the investigation that in his home country of Jamaica “they are friendly, warm and fun-loving. It is not uncommon to ask someone to come over his house and have dinner and celebrate.” Although we do not condone what occurred, Human Resources recommends that it is in the best interest of all those involved that Jerrick return to work and:
1. No longer ask any female employee to join him at his residence for celebration and dinner after they have initially refused.
2. Jerrick will attend the upcoming Diversity class for the second time and continue to attend until he has mastered this area of work relationships as proven by the assessment given at the end of the class.
3. Jerrick will read and become familiar with Wheel’s Harassment policy. If an interpreter is needed, one will be provided.
4. Jerrick will no longer make physical contact, e.g., placing his arm around another female employee, hold their hand, brush up against, etc. while talking with them on company property.
5. Jerrick’s primary responsibility here at Wheels, Inc is to work according to the guidelines set forth in the contractual agreement between Local 1234 of the ABC Brotherhood and the Wheel’s, Inc, Employee handbook.
6. Should Jerrick again physically infringe upon another employee’s rights or space or should Jerrick be found in violation of company policy or procedure he will immediately be dismissed without recourse. Should Jerrick consistently ask employees to join him at his house after refusal, dismissal from employment here at Wheels, Inc is in order. We will not tolerate or accept any events that infringe upon the rights and safety and well-being of another employee. This is especially critical in the area of workplace harassment.
While turning the page, Jane also noticed a letter from Anne, Wheels, Inc. Manager of Employment and Organizational Development. It stated.
“Although I do not agree with this decision to retain an employee who blatantly disregarded numerous requests of this person to stay away and not ask me any longer to join him at his residence, I have no choice but to accept the investigation’s findings. It is just a matter of time before this employee commits this act again with someone else”

Anne
1/03/2008

Jane stood there speechless. She remembered the case and the subsequent decision a little more than three months ago. She also remembered how upset Anne was at the decision and the constant verbalization of Anne following the closing of the investigation; “it’s only a matter of time before he (Jerrick) does it again.”

Returning To The Company
A few minutes had passed since Yvonne had left the building and Alex was walking toward Nancy’s office. A page for him came over the intercom. Alex stopped at the nearest phone, dialed, and heard Nancy pick up on the other end.

Nancy: “Alex, I thought you were talking with Yvonne. Are you finished?”
Alex: “Sure am, she didn’t want to talk any longer. To make a long story short she left the building to go home. Jane walked her to the door. She got in her car and drove off from what I understand. She’ll be back tomorrow and we’ll talk then. At least that is what she promised. I’m on my way now to talk with Jerrick. He’s still in your office right?”
Nancy: “Sure is, but you got bigger problems now. Yvonne is out on the loading dock talking to the team in Shipping and Receiving. She’s telling everyone what happened. Obviously she did not go home.”
Alex: “Geez, I cannot believe this. Jane and I told her to go straight home. That is what she continued to say she wanted to do. Jane walked her to the door and saw her pull out of the parking lot. She must have come back through one of the other entrances.”
Nancy: “Well she’s here now and by the looks of it she’s causing a real problem out there.”
Alex: “Nancy do me a favor, stay with Jerrick. I’ll be there in a few moments. Call Jane and ask her to meet me in Shipping by the loading dock.”
Nancy: “Sure thing.”

In a matter of minutes both Alex and Jane were out on the loading dock much to the amazement of Yvonne. Practically the entire department was listening to her talk about what occurred. As they approached, Bill Nesser, the Shipping Supervisor, also was returning from Wheel’s nearby warehouse. Bill also noticed the crowd.
Alex and Jane approached the crowd. They noticed and dispersed quickly. Yvonne looked startled.

Alex: “Yvonne, you had told us you wanted to go straight home and did not want to talk about this today. What are you doing back here in the plant when I specifically asked you not to tell anyone about what occurred?”
Yvonne: “Whatever, like I can’t talk to people now?” “I’m out of here.”

With that Alex and Jane watched Yvonne walked down the steps to the parking lot past Bill and into her automobile. She pulled away quickly. Bill came up the stairs and asked, “Alex what’s gong on?”
Alex: shaking his head, “Bill, I’ll tell you later. Jane, can you make a note of this and place it in the investigation file.”

Celebrating or Getting Too Close?
Alex and Jane walked over to Nancy’s office where Jerrick was sitting looking at a magazine with John. Nancy was nearby working with employees on one of the production lines. Alex entered her office, introduced himself and Jane. They then waved Nancy to join them. The five of them were in Nancy’s office. Alex closed the door, but again that did not keep employees from looking over through the large glass partitions that afforded little privacy. Jane sat prepared to take notes and Nancy stood by the door in case anyone attempted to enter or knock.
Alex: “Hi Jerrick, how are you doing?”
Jerrick: “Fine sir, great day today. The team broke another record yesterday. I was happy when I came to work today. I shook my team’s hands and thanked them for the great jobs we are doing. Why am I here sir? Did we do good again?”
Alex: “I am sure you and the team did well, Jerrick. I do not know at this moment if you broke another record though and I am glad you are happy. Jerrick, when you were shaking your team’s hands today was Yvonne in the area?”
Jerrick: “Oh yes sir, so was Jeff and Sam and a whole bunch of other people were passing along. We were all happy. Were we too loud, sir?”
Alex: “I am sure you were not too loud Jerrick. Celebrating is good. Tell us how did you congratulate Yvonne?”
Jerrick: “Oh sir I shook her hand and gave her a big hug. She is the best. She schedules our work fantastic and if it weren’t for her our team would not be in the lead for the monthly award. I hugged her sir.”
Alex: Did you do anything else while hugging Yvonne Jerrick?”
Jerrick: “What do you mean sir? I do not understand. We are a friendly people. I hugged her. Maybe I lifted her off the ground a little because we was so happy. Did I hurt her sir? I did not mean to hurt her sir if I did.”
Alex: “I am not sure if you hurt her Jerrick. Yvonne claims you squeezed her butt while you were hugging her. She then had to push you away and also says she asked you to stop but you would not.”
Jerrick: “Oh no sir, I did not squeeze her butt, sir. I did hug her and I shook her hand and others also sir. I did not squeeze her butt sir. Yvonne kept getting close to me and was brushing up against me with her body sir. Would you like me to show you what she did sir? You can ask Jeff or Sam or anyone from the team sir.”
Jane: “Jerrick, remember in January when you were told to not hug people at work or get close to them because of what Anne said and the classes you had to attend again?”
Jerrick: “Oh yes Miss Jane, but we were just celebrating our good work. Here Miss Jane let me show you what I did. I am sorry if I hurt anyone. Here, Miss Jane let me show you.”

Jane looked at Alex and Nancy and saw their nods. Jerrick got up and so did Jane. Jerrick shook her hand and then hugged Jane from around the shoulders for about three seconds. He released. Then he shook Alex’s hand, John’s, and also Nancy’s. Then he hugged Nancy in the same manner. He released and sat once again.

Jerrick: “See Miss Jane. Did I do good? I did not touch your bottom Miss Jane or Miss Nancy.”
Alex: “So you are telling us you did not inappropriately touch Yvonne in any manner? Did you invite her over to your house?”
Jerrick: “Oh no sir, again she was the one brushing and rubbing up against me sir. We are a friendly people sir, so I think nothing of it. I invite everyone over to my house sir to celebrate.”
Alex: “Okay Jerrick, here is what I want you to do. You go back to work now, don’t tell anyone about what we talked about today if they ask. You just tell them we were talking to you about the work you are doing. If they continue to ask you call Miss Nancy here. Is that okay with you Jerrick?”
Jerrick: “Yes sir, I will go back to work now sir. Thank you sir, Miss Jane, Mr. John, and Miss Nancy.”

With that Jerrick rose from his chair, and left the office. Jane, Nancy, John and Alex stood there trying to sort things out. They agreed that the two stories are in conflict. Tomorrow when Yvonne comes to work talking with her is even more critical.



The Next Day
The following morning at 7:00, Alex’s phone rang. He picked it up. It was Darrell Howard, the Vice President of Operations.
Darrell: “Hey Alex, I’m here with Yvonne. She says that yesterday she was harassed by Jarreck and nothing is being done about it. Do you have a few minutes?”
Alex: “Sure Darrell, I’ve been waiting for her to call me. That is not accurate though, let’s you and I meet alone first. I suggest Yvonne waits in the conference room until we are finished.”
Darrell: “Okay, I guess so. I’ll be down in a few minutes.”

Alex took the file containing notes from yesterday’s investigation, opened it up and placed it on the conference table he had in his office. He waited for Darrell. After approximately 10 minutes Darrell entered Alex’s office. They both sat at the table.

Alex: “Hey Darrell, I am not sure what is going on with Yvonne but if what you said over the phone is accurate we have a problem here with this employee. Yesterday during the start of the second shift Yvonne reported to some supervisors on the floor that Jerrick grabbed her butt. She ended up in Nancy’s office. Jane and I though it best to talk with her here in my office for privacy. When we tried to get something from her she kept saying she wanted to get out of here and would talk with us today. Hey, we tried. It’s all in our notes. Here take a look. She even signed them.”
Doug peered down at the notes and glanced back at Alex.
Alex: “When she finally left the building yesterday, Jane watched her get into her car and drive off site. Then minutes later we get paged by Nancy again who tells us that Yvonne is back in the building on the loading dock telling everyone about what happened. This was after Jane and I repeatedly told her not to discuss this with anyone. When we went back there and asked her what she was doing, she copped an attitude, walked away, got into her car and drove away. She caused quite a stir out there, Darrell and quite frankly I did not appreciate it that she disregarded my request to not talk to anyone.”
Darrell: “Yea, she can be a bit of a hard head. Just like her mother who works in the circuit board department. She’s been here for 20 years now and sometimes it’s like talking to a wall. Okay, so you got this under control?”
Alex: “I am not sure Darrell. We’ll continue to investigate this claim by Yvonne but now that she says we are not doing anything about it concerns me more”
Darrell. “Oh don’t let that bother you. She’s probably just reaching out again to get someone’s ear”

With that Darrell stood up. Alex looked a little perplexed at this last statement. Darrell walked and said, “hey keep me up to date on what happens. We have a ton of product to ship today so I need everyone. I’ll send Yvonne over to you. You ready for her? ”

Alex: “Yea sure, let me get Jane.”
Alex called Jane into his office. He briefed her as to what has just occurred. Jane then went to the conference room and asked Yvonne to join them in Alex’s office. They entered Alex’s office sat at the conference table.

Alex: “Yvonne let’s talk about what happened yesterday. You mentioned that Jerrick grabbed your butt. Tell us about that please.
Yvonne: “ A bunch of us were standing around the Tool and Dye department. We had just found out that we were on top in productivity and quality and had a great chance of winning this month’s award. I guess we were making a lot of noise. We were happy at the results. Suddenly, Jerrick came over to me placed his arm around me, and gave me a hug. I tried to move away. Then he grabbed my butt and tried to hug me again. He asked me if I would like to come over his house and have dinner and meet the family. I pushed his hands away and said no, don’t you ever touch me again. Then I got out of that department and walked over to Jimmy, the Paint Shop Supervisor to tell him what just happened. Like, I need this crap. He’s a creep. He’s asked about eight other girls to come over his house already to have dinner and meet the family. Just ask them they’ll tell you.”
Alex: “Thanks Yvonne. We’ll get to those eight other women in a moment. Do you remember some of the others that were in the same area when you were talking about your productivity?”
Yvonne: “I think Jeff and Sam were there. There were others also, Monty, Mary, maybe Lucy. Why?”
Alex: “Well, to be honest you are saying he grabbed your butt. When we spoke with Jerrick he told us that you brushed up against him and kept rubbing against him. He did admit to hugging you and wondered if he hurt you. Otherwise we have two different stories now.”
Yvonne: “I never brushed up against him. That jerk, who does he think he is? Just ask anyone that was there where his hands went. Also, go ahead ask the other ladies about being invited over to his house. They’ll tell you. He’s a little too friendly in my opinion.”
Alex: “Hey, let’s go over this one more time now. Besides that, can you give Jane a list of those names of the other ladies you are saying were asked by Jerrick to join him at his house?”

Yvonne repeated the same story. Jane took notes. Then Yvonne wrote for Jane a list of eight ladies all of whom Yvonne claims were asked by Jerrick to join him at his house on numerous occasions.

Alex: “Yvonne, now tell us what happened yesterday after we asked you and you agreed to leave the building and go home. That’s what you wanted to do. Then you show up on the loading dock. You caused quite a mess out there. You know I have to write this up and place it in your file. Do you want to explain why?”
Yvonne: “Whatever, do what you gotta do. I will not work with him again though. He better not be in my department when I am there. My husband told me he’s going to take care of things no matter what you do.”
Jane: “Now Yvonne, that’s not the way to help out. Two wrongs don’t make a right. If your husband does anything then it will only cause more problems for you and your family. Is that what you want?”
Yvonne: “Whatever, just keep Jerrick away from me. I do not want him fired, I only want him to stop doing this to us. Is there anything more that you want? I told you everything.”

Once again Jane took a copy of the notes from the meeting to the copy machine. When she returned, she asked Yvonne to read it and then sign them after she makes any changes. Jane signed and dated the copies also. Yvonne went to her desk. Jane and Alex closed the door and went over the notes from the two meetings. They knew at this point they had to call at least Jeff and Sam up to talk with them. They also agreed that this was not turning out as expected. The eight woman employees also needed to be talked with over the next few hours. Why would they not report something like this to human resources. Jane and Alex developed a plan of splitting the interviews so that neither one of them would have to do it all themselves. They also needed to ask someone to be a witness to what was being said in either case.

They also had to deal with the fact that in Jerrick’s file was a prior violation notice and the note that stated dismissal would be in order should Jerrick violate any of the requirements set forth in the notice.

It was quite a surprise to find out about the other women. No other record of any incident with any of these women has ever been recorded. It was confusing to hear that there were others he has allegedly invited over to his house, made physical contact with by placing his arm around them and hugging them all after the Anne incident. There were eight (8) to be exact. Wheels, Inc. prided itself on the enormous amount of training in diversity and harassment it continually offered and required employees to attend. There was follow-up also by Supervisors and Management to make certain everyone understood the consequences of not abiding by policy. Why then did no one come forward from these eight mysterious women?

Then there were the words of Anne echoing that “it is only a matter of time.” More embarrassing is the fact that she worked in the Human Resource Department. Jane and Alex outlined their plan for the next few days. It included calling Jeff and Sam to discuss what they saw. Also they knew they had to call up others from the department who may have been there at the time of the incident. The plan also included sitting with each of the eight women and discussing what they heard from Yvonne about Jerrick. In the end the both of them knew that they would have to make some possibly unpopular decisions once again.

Additional Interviews
Over the next few days the eight alleged other victims were interviewed. In each of the cases similar things occurred. Jerrick would be in a jovial mood because of some success or achievement that had taken place with the team. He would then thank a female that was in the area and who had helped in some manner to achieve the success. Jerrick would hug the woman, place his arm around her, and ask her to join him at his house and meet the family. None of those involved had made a formal complaint about Jerrick. None of the ladies had even let Human Resources know what was going on.. “He was harmless” were the words consistently echoed by each woman employee involved. The touching, hugging, and inviting were part of his approach and they all said “no” to the invite. Each one noted he was a “touchy, feeling sort of guy.” He would try several more times and their responses were always, “No thanks. Go back to work.” Each woman was asked if she knew about the harassment policy and what to do if they felt they were compromised? Individually again they all responded they are familiar with it but felt nothing was wrong with him. “He is harmless.” Each lady gave a report of a “touchy feely” person who is “harmless” Never once did Jerrick ask anyone to bring their spouses or significant others with them. Also noted was the fact that Jerrick never asked any male co-workers to join him and his family.

Jeff and Sam were called also and interviewed. Each one told a slightly different story. Jeff reported he saw his hands brush against her buttocks. Sam said he saw Yvonne walk past Jerrick just a little too closely and brushed against him. Maybe it was because of the crowd gathered and there wasn’t much room to pass. Sam really didn’t pay much attention to this. However, they both did say suddenly Yvonne became upset, muttered something and darted out of the department.

Alex and Jane needed to list the priorities and the problems within this investigation. It was apparent there was more than one. Also since this occurred in the past there must be a “root cause” as to why this area of behavior has not been quelled as of yet. What was more disconcerting was the fact that the group of female employees felt they could handle it themselves because Jerrick was harmless.

Yvonne initially only wanted an apology from Jerrick along with him never to approach her or come close to her again. She did not want Jerrick dismissed. Jane and Alex reviewed and re-reviewed their notes. Wheels, Inc. had a progressive discipline policy, but was this incident so severe that they should skip the steps and let him go as requested originally by Ann when the initial challenge took place and was documented?
It was 7:00 PM. Alex and Jane decided to call it a day. They had a lot to think about. They planned to meet with Darrell, Nancy and the shop steward early the following morning with a decision.









Additional Resources

Cleary, J.S., & Schmieler, C.R. (1994). Sexual harassment of college students: Implications for campus health promotion. Journal of American College Health, 43(1), 3-10.

Gaines, S. O., Jr. (1997). Culture, ethnicity, and personal relationship processes. New York: Routledge.

Gaines, S.O., Jr., Ramkissoon, M, & Matthies, B.K. (2003). Cultural value orientation and accommodation among heterosexual relationships in Jamaica. Journal of Black Psychology, 29(2), 165-186.

Gillen, S. (2008, May). Unwelcome attention. Community Care, (1724), 16-17. Retrieved
February 19, 2009, from ProQuest Central database. (Document ID: 1496915581).

Gross, B. (2008). Sexual harassment: Dressing for a hostile environment. Annals of the American Psychotherapy Association, 11(3), 38-41.

Huerta, M., Cortina, L. M., Pang, J. S., Torges, C.M., & Magley, V.J. (2006). Sex and power in the academy: Modeling sexual harassment in the lives of college women. Personality and Social Psychology Bulletin, 32(5), 616-628.

Loy, P.H., & Stewart, L.P. (1984). The extent and effects of the sexual harassment of
working women. Sociological Focus, 17(1), 31-43.

Merkin, R.S. (2008). The impact of sexual harassment on turnover intentions,
absenteeism, and job satisfaction: Findings from Argentina, Brazil and Chile. Journal of International Women’s Studies, 10(2), 73-91.

Patterson, O. (1995). The culture of caution. New Republic, 213(22), 22-26.

Rospenda, K.M., Richman, J.A., Ehmke, J.L.Z. & Zlatoper, K.W. (2005). Is workplace harassment hazardous to your health? Journal of Business and Psychology, 20(1), 95-110.

Schneider, B.E. (1982). Consciousness about sexual harassment among heterosexual and
lesbian women workers. Journal of Social Issues, 38(4), 75-98.

Smith, D.E., & Green, K.E., (2007). Violence among youth in Jamaica: A growing public health risk and challenge. Pan American Journal of Public Health, 22(6), 417- 424.

Vijayasiri, G. (2008). Reporting sexual harassment: The importance of organizational
culture and trust. Gender Issues, 25, 43-61.

Discussion Questions:

1. Define the problem(s) here as you see them?
2. Is there any additional information you would have attempted to obtain? Why or Why not?
3. What, if anything, would you report to Anne as she has asked about the case? When would you report anything to Anne?
4. How might you handle the separate stories of Jeff and Sam?
5. Given the file of Jerrick which reported a similar incident, what process would you now follow as you made your decision?
6. Do you feel there is a need to further improve upon the overall diverse culture at Wheels, Inc.? Defend your position.
7. What would you do about Yvonne coming back into the building?
8. What about the other 8 employees who had training in harassment and never came forward?
9. What would your decision be and why?

FIRE ME WHY DON’T YOU?

Objectives

Learn that providing feedback to employees on a consistent basis is critical and necessary for performance improvement.

Understand that even in a culture of coaching, some employees tend to blame others for poor performance.

Learn that the best defense against having to dismiss an employee is hiring the right employee in the first place.

Describe the process of a productive performance evaluation meeting.

Identify the various signs to an unmotivated employee.

Understand that constant documentation of employee performance and behavior is critical for decision making.



INTRODUCTARY NOTES

Firing an employee is incredibly difficult, however, there are times when it has to be done and as a manger you mat be the one chosen to do so (King, 2008). What is even more difficult to digest as a manager is when an employee asks “you” to “fire them” especially since they feel that no matter what they do it will not be good enough. On the one hand some companies feel that the employee should assume full responsibility for his or her own career, for keeping their qualifications up to date, for moving to the next position level and most daunting of all for achieving job satisfaction (Patch, Rice & Dreilinger, 1992). Other organizations, however, create a climate and culture of coaching whereby they are interested in improving the ability of their managers so they can improve their performance and prepare them for future roles (Lindbom, 2007). This culture is one which a regular review of performance and just-in-time feedback benefits everyone involved.

Feedback on performance is a necessary evil, giving it as a manager, and receiving it from others. (Craig, 2008). If done properly it can assist an organization with motivation and morale and increased performance. If done poorly, it can cause long-term performance and behavioral problems. Employees are satisfied and benefit mostly from performance appraisal systems when supervisors are supportive and there is trust between the individuals involved in the process (Whiting, Kline & Sulsky, 2008). The performance appraisal and providing knowledge of results is often considered one of the most important human resource practices (Boswell & Boudreau, 2002), and has increasingly become part of a strategic approach to integrating Human Resource activities and business policies while assessing and developing employees and distributing rewards (Kuvaas, 2007).

There are three opportunities according to McKay, 2008) when as managers and leaders we can do something about our employee’s performance: at the time of hiring (hire correctly in the first place); through training and coaching; show poor performers the door. If a manager feels they have hired an individual who does not have the right personality, mental ability and attitude to do the job, no amount of training or coaching will matter.

A good leader must be able to both deliver rewards for good performance and punishments for poor performance along with being able to rally the staff in an effort to achieve an organization’s goals and objectives (transactional leadership and transformational leadership) (Vigota-Gadot (2007). Balancing a relationship with fairness and equity for employees is a key element of success and motivation. If management finds itself in a position where there is a good chance that dismissing someone is inevitable, make certain everything was done in an effort to have supported the employee’s potential success; training, coaching, sharing of specific results, communication and a series of performance appraisals listing actions needed for improvement (Creveling, 2008).

At times, however, no matter what management or Human Resources does, some employees are just not a match for the organization and they do not “own up to their deficiencies or lack of performance.” Rare as it is, some employees also have their own agendas and may want an organization to “fire them.” No matter what the cause, even with “at-will employees” if a manager finds themselves in the untenable task of having to let someone go, do so with respect and in a manner that keeps the employee’s dignity intact (Koeppel, 2007).


PROFILES

Paul Apel is the Second Shift Supervisor at Generations. He has been at the company for four years now and was promoted from the rank and file after two years. Paul has minimal experience as a supervisor and thus was afforded the opportunity to attend numerous training and development programs. Paul’s mom, Grace Cotter also works at Generations.

Grace Cotter, Paul’s Mom has been with Generations for 25 years. She is a Union Shop Steward. Grace has always been a very dedicated employee and is competent in all of the various operations that go into the production of the clothing lines Generations is famous for.

Jim Bausch, the Production Manager of Generations, was formerly an Industrial Engineer before he was promoted. Jim believes in mentoring and developing his employees and is supportive of the many educational programs available for those who want to move ahead in the company. Jim has a high level of trust in his supervisory staff.

Judy Donato is the Human Resource Manager of Generations. Judy began her career at the company as an administrative assistant for Dennis Howell. As the company grew, however, there became a need for a Human Resource department. The respect that the employees have for Judy was proof enough she was the best candidate for the position.

Joe Frazier is the other second Shift Supervisor at Generations. Joe keeps to himself and rarely collaborates with Paul on any production or quality matters. Joe’s performance is excellent and customers rarely have any complaints about product that comes from his departments.

Dennis Howell is the Chief Operating Officer of Generations. Having come from the garment district in New York, Dennis is more than technically competent to do the job necessary for the customer Dennis rarely holds departmental meetings and usually lets Jim handle the “people” end of the business.

Chang and Rosalina are employees on the Second Shift. They are very verbal in letting management know that something is wrong with the manner Paul treats their co-workers.

Cindy Lampson is the attorney who Paul has hired to represent him.


GENERATION’S NEWEST SUPERVISOR

Paul Apel, a Supervisor at Generations, has been with the organization for approximately four years. He was promoted from the rank and file after his second year with the company. Generations is a clothing factory with one location in the Northeastern portion of the United States. Being newly promoted, Paul was afforded a significant amount of training, development and mentoring. The Human Resource department created with Paul and his manager, James Bausch (Jim), a developmental plan. The plan outlined the competencies needed to be successful on the job and the focus of training and education in order to achieve mastery in these necessary skills and abilities. Paul was one of two supervisors on the recently enhanced second shift. Due to an average 15% growth in business in the past three years, management decided to increase the size of the workforce. Adding a larger second shift made sense since machinery and equipment were readily available. Generations has a first shift also but it was at maximum capacity. Manpower could not be added.

Paul held past positions of responsibility elsewhere as a prison and security guard. His mom, Grace Cotter, has been with Generations for twenty-five years. During the last ten years, Grace has been a union steward. Grace is a very dedicated, focused employee. She thought about retiring a few times so she could spend her days with her grandchild, Paul’s son, but she decided at 60 years old she’d rather keep active and work. Besides, Grace was a valued employee and Generations appreciated this by rewarding Grace with out-of-contract bonuses and some extra time off when needed. Recently, Grace underwent hip surgery. Generations accommodated her due to the follow-up physical therapy which took place during work hours. Her physician told her there would always be some residual pain but Grace forgets this while at work. Her pleasant demeanor and knowledge of the product line is one of the many reasons why so many employees of Generations want to work with and respect Grace. The admiration management has for Grace surely played a part in the decision to promote Paul over other qualified non-Generations candidates.

After two years as a supervisor of the 2^nd shift, rumors about Paul began to make their way to Jim. One such story noted that Paul is rarely seen, if at all, during the second shift. He opens the shift up, sets up the various departments under his supervision, makes certain the work is distributed appropriately according to the production schedule, and then either disappears into his office or leaves the building. If an employee asks him a question he either ignores the employee or tells him/her to “do it the way they think they should do it.” There was additional hearsay that Paul had a temper. He would yell at his employees for no apparent reason. Most of the 2^nd shift was Asian and Mexican.

During his first six months as a supervisor, Paul’s overall performance was rated as being Outstanding. This is the highest rating an employee can attain. Following the next six months his performance appraisal rating had dropped to a C+ (Competent Plus) which translates to functioning above average. During his second year, however, Paul’s execution and the productivity of his department during the 2^nd shift began to deteriorate. Quality slipped and more often than not when the first shift arrived the morning after, they needed to clean up and also re-do some of the production orders because of errors made in sewing, cutting, and final pressing. This caused a backlog in shipping to world-wide designers, distributors, and major department stores that were waiting for the new seasonal clothing lines. Top Management trusted Middle Management and the Supervisors. This trust resulted in an unwritten “hands-off” position toward the second shift. “If it ain’t broke don’t fix it” was the mantra of Jim and his first shift team. Unfortunately, recent events had begun to show that things were not as rosy as once thought.
Several key areas were in need of immediate focus for Paul; external customer attention, change mastery, leadership, work ethics, integrity, communication, internal customer focus, and development of self and others. Human Resources consistently works with Paul on updating his developmental plan. The recommendation was to provide another formal evaluation in three then six months later to be certain improvement was noted in these critical competencies. Paul expressed his dissatisfaction with this outcome but accepted the assessment none-the-less.

THE REPORTS CONTINUE
Jim and the Human Resource Manager of Generations, Judy Donato, continued to hear the reports from employees that Paul was not a pleasant person to work with. One tale said that Paul would not let employees go on their break unless they asked permission of him directly. Jim also noticed the error rate was significantly higher than previous on the 2^nd shift. A plan to visit the 2^nd shift unannounced was discussed between Jim and Judy. Each one did just this within the next week. Jim and Judy noticed the same thing. Paul, when visited unannounced, was either in his office reading the newspaper, on the telephone, or talking to the female coach of one of the physically challenged employees. Generations had an agreement with the local Association of Disabled Citizens (ADC). Generations hired individuals who were somewhat physically challenged into jobs that were not too demanding. Accommodations were always made. This was a part of their community relations goals and objectives. ADC provided assistance in the form of a coach to help the employee(s) and also the company.
The visits did not appear to cause any concern for Paul. He always explained who he was talking with and also why he might have been on the phone. The coach would immediately leave Paul’s office when Jim or Judy arrived. Paul then would make his way into the plant and spend time on the floor with his employees as if to ignore the visitors.

Several days passed and there was little positive change in the reports from other employees. The scrap rate, productivity, and the quality coming from the 2^nd shift were unchanged. Additional information surfaced that reported Paul would now leave the building for long periods of time with the ADC coach or another non-employee female who visited him. He waited until he certain Jim or Judy were not showing up and then he would change his personality, start his tyrants and leave. Nothing of this, however, was mentioned from the other 2^nd shift supervisor, Joe Frazier. Joe’s employee’s never complained and their production results were well on target if not exceeding standards. Jim and Judy chose not to discuss any of this with Joe at this moment.

Judy and Jim began to investigate further what the grapevine was saying. Aside from increasing the amount of times they visited or stayed long past the primary shift, they would ask employees as they walked through the aisles during their visits, “how’s it going?” Usually they got nothing but silence especially when Paul was walking around. There were at least six occasions, during different times of the shift, within a three week period when they had arrived and Paul was no where to be found. They waited for about an hour each time. Upon Paul’s return he’d usually have a pizza box or a sandwich with him. His explanation was he went to get dinner and there was a crowd which caused the delay. Paul would always walk in with the coach from ADC.

THE VISITS WITH THE TEAMS
Judy decided one evening to join one of the team meetings from the shift. These took place on a bi-weekly basis. The teams would discuss projects, workloads, resources, processes, etc. During the course of one of these meetings, Judy decided to ask bluntly how they felt they were being treated by management. At first there was a deafening silence. Judy waited and asked again if management was pleasant and helping them get their work done.

“Quite frankly,” Judy noted, “the quality and productivity of your team on the second shift is not up to standards. Our customers are getting concerned about late shipments and shabby workmanship. Some of them are considering leaving us and going elsewhere for their clothing. That means layoffs if they do.”

Soon the silence was broken and Chang, an expert seamstress, interjected.

Chang: “He, Mr. Paul, yell at us. He no respect us, he tell us to take a hike when we ask him for help. Mr. Paul say go back to work and do what you are hired to do and stop complaining. Then he closes his door with that woman inside his office. We no see him for long time. Every night this happens.”
Rosalina, another senior seamstress also broke into the conversation. “All I know is Mr. Paul sometimes leaves his office, walks out the building with the coach lady, and doesn’t come back for about two hours or more. It’s not our fault we are not doing good. He never helps us. Our needles are dull, our machines need adjustments and cleaning, and the cutting machine is not as sharp as it should be so our seams are off the line.”

Judy: “Why didn’t anyone ever say anything before today?”

Chang: “We afraid of Mr. Paul. He yell at us and tell us to find another job if we no like it here. Mr. Paul tells us there other people who he can get to do our jobs.”

Judy took notes as more information came from the team for the next thirty minutes or so all with the same theme; Paul may not have been living up to the expectations set forth during the performance evaluation. Judy decided that it was time to work with Jim on yet another plan to get to the bottom of the second shift challenges. Customers were not happy, employees were fearful, and with the increase of potential business coming to the company through some excellent new designs, marketing, sales, and styles, Generations needed to put its house in order.

Judy and Jim put together what they hoped would be one last plan to get this part of the shift back on track. The first action they took was to talk with Joe the other Supervisor. Joe stated he was unaware of any of the problems employees claimed. Joe never heard any yelling or threatening coming from Paul. He also never saw Paul leave the building except to smoke periodically during employee’s break time or their lunch. Joe did admit Paul’s door was often closed but he figured he was working on production related issues. Joe’s area of the factory was located quite a distance from Paul’s section of the plant. The machines did make quite a bit of noise also. A huge wall divided them and there were separate entrances that employees could use if they so chose. Joe’s section and teams were extremely busy and he did admit he has had little to no contact with Paul for months except to say hello in the beginning of the shift and at debriefing meetings with Jim.

Another week had passed since the team meeting and more data came in from Operation’s Information System. It all pointed toward additional errors, shabby quality inspections, late shipments, elevated machine breakdowns, and increased customer returns. Productivity dropped to less than 84% based upon standard. Overall it did not look good. Judy and Jim agreed to meet with Paul formally and lay the facts out on the table in the form of another formal performance review with yet one last follow-up plan to improve.

THE FINAL PLAN TO GET BACK ON TARGET
Two days after they received the operations data, Judy and Jim asked Paul if he would join them as soon as he got his shift up and running. A little hesitant, Paul agreed. The three of them met in the conference room on the production floor so they would be able to monitor the factory just in case someone needed them. Jim began;

Jim: “Paul, we need to look at some of the recent numbers. They are not good and quite frankly I am worried. We are all worried. Well-Mart, one of our largest customers is about ready to pull the plug on our spring fashion line because of quality issues and late shipments. Paul, help me understand what’s going on? During your last performance review we put together a plan and you agreed to make some serious improvements. From what these numbers say we seem to be going in the wrong direction.”

Paul: “Oh not this again, Come on people, you’re just picking on me again and honestly I’m getting tired of this. In fact, to be honest with you, I think you’re harassing me. It’s not my fault you gave me a bunch of incompetents out there. These people can’t sew for nothing. Judy, where did you get them from? No matter what I do it’s not good enough anyway. My best is just not good enough for this place. It’s the same thing over and over again.”

Judy: “Paul, listen. I sat in on one of your team meetings from your shift last week. Your employees told me about you yelling at them constantly, threatening to fire them, and replacing them. Then they said you leave the building for long periods of time with the coach from ADC, or you close your door with the coach from ADC and are no where to be seen for the better part of the shift. We’re not sure what’s going on here Paul but as Jim said the numbers are not good and if what the employees are saying about your behavior, it may be inappropriate while here at work.”

Paul: “Oh yea you’re going to believe them over me now. Just like you both. I told my mother to get out of here a long time ago. You don’t appreciate anything I do. And my personal life is my personal life. If I want to go to lunch with a woman, that’s none of your business.”

Jim: You’re right to a point Paul. We’re not making this personal. What you do on your time is your business. What you do on company time and property is all of our business. It appears you are taking a lot of company time to work or talk with this lady. We heard that from more than just a few employees. She is supposed to be here to help coach her employee. Let’s get back to these numbers Paul. What’s your take on why they are still decreasing?”

Paul: “Hey Jim, no matter what I say it doesn’t matter. You’ve already made your mind up. Give me the review will you? No better yet, why don’t you just fire me. That’s what you want to do anyway. Fire me why don’t you?”

Jim: Looking very shocked at what he just heard. “Paul we have no intention of letting you go at this moment. We want to talk with you about your performance as we have been doing for months now. We want to share with you again some areas that need improvement. You need to take some ownership of the problem. We want you to focus on this and not blame everyone else. Judy’s staff will work with you on hopefully a last development plan so you get back on track. I want to put someone on the shift with you to lend a hand so he can help with the areas customers are concerned about.”
Paul: Becoming angrier, “I don’t need anyone to help me. Hey, this is ridiculous. You’re just out to get me no matter what I do or say. Fire me why don’t you? I’m tired of this already. I’ll just collect unemployment until I find another job. I can’t seem to please you guys anyway. It’s my entire fault, right?”

With that Paul rose from his seat, went to the door, opened it, and left. As Jim and Judy watched in utter amazement Paul walked out the exit door, got into his automobile and drove off the premises.

Judy and Jim sat speechless. They had not expected this sort of reaction. They looked at each other. Judy looking at Jim said, “okay now what? One might consider this job abandonment.”

DISMISS PAUL OR NOT?
Jim: “Well, if he wants us to fire him why not. Let’s do it.”

Judy: “What! We do that and we’ll end up with a lawsuit on our hands. This was a performance review meeting and not a very good one at that. We did not come here to dismiss Paul. Since when does an employee ask to be fired? Something’s up with this guy and I don’t like it. ”

Jim: “I know Judy but I thought we can just let anyone go with or without cause. Didn’t you say once we were an employer at will?”
Judy: “Sure try it some time. He used the big “H” word on us Jim. He’s looking for something. I would not fire him, not just yet. I’d get him back in here and finish the evaluation first then we can decide what to do.”

Jim: “Doubt that will ever happen. He left the building Judy remember? He abandoned his job. You tell me we can’t let him go for that? Now who am I going to get to cover the shift?”

Some more discussion took place. Judy and Jim waited a bit hoping Paul would return. Instead, after about 30 minutes the phone rang. It was Dennis Howell, the Chief Operating Officer.

Dennis: “Jim, it’s Dennis. I just spoke with Paul. He called me from his car. He said you and Judy were pushing him around and harassing him about 30 minutes ago, telling him he’s no good, that he curses at employees at night and said he is running around with some lady from the ADC? What’s going on? We got a lot of product to get out of here. Can I see you? Paul says he wants to meet with me and Judy also. I also got a call from Grace, Paul’s mom. She’s also on her way up to my office. She says her son also called her a few moments ago also and was really upset about the way he was being treated. Grace said that she doesn’t know the whole story but has heard some rumors that the 2^nd shift doesn’t like Paul and wants a new supervisor because he’s too tough. I think we better talk before we have a real problem on our hands.”
Jim, Judy and Dennis met. Jim explained what happened at the recent meeting they had with Paul. He told Dennis they were just following the performance appraisal recommendations they wrote a few months ago. Dennis was aware of the production numbers, the quality decrement, and shipments being delayed from Paul’s teams. Dennis had been working with Jim on this for quite some time. When Dennis heard that Paul wanted to be fired he was also quite surprised. He agreed with Judy that something must be wrong. He planned to meet with Grace in a few moments and had to get back to Paul about the meeting he asked for. Jim and Judy left Dennis’s office.

AN ALTERNATIVE FOR PAUL
Paul did not show up for work the next two days although he had made a call and left a message that he would be out ill. He also followed up with a phone call during the day to meet with Dennis. Judy decided after the two days of call outs from Paul, to meet with General Counsel and asked that a release agreement be drawn up providing Paul with a severance package of 4 weeks pay if he signs and releases the company from any action. General Counsel had no idea why Generations should do this. If the Supervisor was ineffective and if he has not shown up for work the past few days then why not just let him go? Unless we have some doubts that the stories are true from the employees? After a two hour meeting, Counsel decided to agree. An agreement was created. Paul was contacted by Judy who left a message to meet with Jim and her the following day. They wanted to discuss his request.

Paul showed up Wednesday. This time, however, he went directly to Dennis and wanted to talk only with him and Judy. Dennis let Paul speak his mind and vent. He did not call Jim immediately. Judy joined them and was surprised Jim was not present. When Judy raised the concern about not having Jim in the meeting, Dennis ignored it and continued to ask Paul questions. Paul reported to them both that he feels there is no hope and no future for him at Generations, and that Jim is setting him up to fail. He again asked to be dismissed after a 30 minute discussion. When it appeared as if there was little hope to convince Paul to remain and finish working through the performance evaluation, Judy shared with Paul Release Agreement. She asked if he would considered something like that. Paul asked to see it first. Paul read it, signed it, and was handed a check for four weeks severance. A copy of the agreement was given to Paul. He left the building.

Judy informed Jim later about the meeting and its result. He was not pleased that Dennis held the meeting without him. He told Judy that undermines his authority and all the work he has done with Paul. None-the-less Jim had no choice but to accept what happened and now needed to make arrangements for a new Supervisor on the 2^nd shift. Judy and Jim spoke to the teams on the shift to inform them that Paul would no longer be coming to work and they would soon have a new leader. For the time being though Jim would stay on the shift for a few hours and then Joe would take over from the other end of the plant. Everything would work out just fine so have patience. Jim gave some of the senior employees a bit more responsibility in the transition and told them their compensation would be adjusted accordingly.

PAUL’S ATTORNEY
Two days following that meeting, Human Resources was contacted by an attorney, Cindy Lampson who reported she was representing Paul. This made little sense to Judy but she took the call regardless. Since Jim happened to be with her she placed the telephone on conference so he could listen and comment if need be. The conversation was a cordial one. Notes were exchanged verbally. Paul’s attorney, Cindy Lampson, noted that Generations had no grounds to dismiss Paul and they must reinstate him with full back pay. Paul was planning to pursue a lawsuit for unlawful discharge and harassment against Generations. To say the least Jim and Judy were again confused. Judy pointed out to Cindy that they were in possession of a release of all claims that Paul signed in acceptance of fours weeks of severance pay.

Judy: “Paul chose to resign. We accepted his resignation. The company was very generous and provided him with a release and four weeks severance pay. I’m really not sure why Paul is saying we dismissed him. The letter we have on file from Paul states, “I am resigning my position as Supervisor of the 2^nd shift of Generations effective immediately.”

At that point, Cindy excused herself. She told Jim and Judy she needed a bit of time to discuss this action of which she was unaware with Paul. She asked Judy to kindly fax a copy of the release and Paul’s signed letter. Judy obliged. Cindy was never heard from again.
Later that same day Generations received a “Notice of Hearing” from the State Department of Unemployment to be held on the behalf of Paul Apel. Apparently Paul had also filed for unemployment benefits. Jim asked Judy “how can he collect if he chose to resign from his position?” Judy was just as perplexed.

Because of their schedules, neither Jim nor Judy could appear in person. They made a phone call and sent a follow-up letter stating their position with back up documentation. The Unemployment Office phoned regardless on the date listed originally in their first correspondence. As Jim and Judy were walking out the door to go to an off-site meeting the receptionist stopped them. She told them there was an unemployment investigator waiting on the phone to talk with them both.

The investigator would not take no for an answer, nor was she going to re-schedule the hearing. She forcefully asked Judy for an explanation of the events that led up to the dismissal of Paul. Judy continued to note that Paul was given numerous performance evaluations, had a number of developmental plans and finally had voluntarily resigned. The company was in possession of a signature on a resignation letter to that effect. The investigator noted she was also in possession of the document. She then “demanded” that Judy fax over or deliver in person immediately all appraisals and notes in Paul’s personnel file. Judy asked for identification and informed the investigator of this inconvenience. If they wanted the file they could send along a courier with a subpoena. Following 30 minutes of working up the chain of command Judy finally gave up and faxed 39 pages of information detailing Paul’s work history including performance appraisals, warnings, development plans etc. they were all received by the local Office of Unemployment.

Three work days later Generations received notice Paul was being awarded full unemployment benefits with no penalty. The investigator noted in her report that Generations forced Paul to resign against his will. It was not contestable.

Additional Resources
Craig, T. (2008, April). How to give feedback. Personnel Today, 31,

Creveling, J.P. (2008). When it becomes necessary to fire an employee. Chemical Engineering, 115(2), 51-54.

King, R. (2009). Firing employees is sometimes necessary. Snips, 78(1), 83

Koeppel, D. (2007, July 5). One key to a problem-free firing is dignity. New York Times (Late edition East Coast), p. C.5. Retrieved April 18, 2009 from Banking Information Source database. (Document ID: 1299540811).

Kuvaas, B. (2007). Different relationships between perceptions of developmental performance appraisal and work performance. Personnel Review, 36(3), 378-397

Lindbom, D. (2007). A Culture of coaching: The challenge of managing performance for long-term results. Organizational Development Journal, 25(2), 101-106 .

McKay, R. (2008). Zero tolerance for poor performance. NZ Business, 22(3), 22-23.

Patch, F., Rice, D., & Dreilinger, C. (1992). A contract for commitment. Training & Development, 46(11), 47-51.

Vigoda-Gadot, E. (2007). Leadership style, organizational politics, and employees’ performance: An empirical examination of two competing models. Personnel Review, 36(5), 661-683.

Whiting, H.J., Kline, T.J.B., & Sulsky, L.M. (2008). The performance appraisal congruency scale: An assessment of person-environment fit. International Journal of Productivity and Performance Management, 57(3), 223-236.

DISCUSSION QUESTIONS

1. Would you have let him go as he is requested?
2. Would you have continued with the performance appraisal?
3. If you were the Chief Operating Officer and/or Judy, would you meet with him? If so with or without Jim?
4. How might this have been avoided in the first place?
5. What are some of the areas of the performance appraisal process that might have broken down?
6. If you were to meet with Paul that last time prior to signing the agreement of release of all claims, what might you have said and done?

7. Why do you think Judy was reluctant to let Paul go as he so requested?
8. Was the four weeks severance package a good idea?
9. Do you agree with Office of Unemployment’s decision? Why or Why Not?









THE ACQUISITION AND THE ROLE OF HUMAN RESOURCES

Objectives
Learn that Human Resources plays a critical role in the process of due diligence while considering an acquisition.

Understand the sequence of actions and reactions that typically take place from employees before, during and after an acquisition.

Describe the do’s and don’ts for Human Resources if they are not involved in the merger or acquisition of another organization.

Learn how Human Resources can also assist in evaluating then assisting with the strategic fit between the combining organizations.

Understand that there will be times when Human Resources must assert itself as a business partner when adding value to the process of acquiring or merging with another organization.



INTRODUCTION

A strategic imperative underlying a merger or acquisition is to create “synergy;” a strategic and operational advantage that neither firm can achieve on its own (Schweiger & Weber, 1989). During the 1980s acquisitions and mergers became a major part of American business as evidenced by the 12,000 companies that changed hands during that decade (Lubatkin, 1988). “Merger mania” (Geber, 1987), a term used often by business researchers described the landscape of sheer volume of activity that permeated all parts of the economy, from defense, to food services, to automotive, to insurance (Ulrich, Cody, LaFasto & Rucci, 1989). As daunting as it may be, mergers and acquisitions continued at a frenzied pace with the first half of 1998 ringing up more than $1.3 trillion in merger activity worldwide ( Solomon, 1998). Unfortunately, statistics have shown that, overall, acquirers have less than a 50-50 chance of being successful in a merger or acquisition (Pappanastos, 1987), and although estimates vary up to one-third fail within five years and as many as 75% are financial failures long-term (Marks, 1988).

Experts cite many reasons for the high rate of failure ranging from the wrong partner chosen, to the wrong price, to bad timing. A merger or an acquisition is a corporate event that also has the potential to create severe personal trauma and stress which can result in employees feeling psychological, behavioral, health, and survival problems leading ultimately to performance issues (Ivancevich, Schweiger & Power, 1987). An increasing number of newly merged organizations experience dysfunctional changes in employee behavior, lost productivity, leadership struggles, and various other human (employee) problems (Manzini & Gridley, 1986). One of the key reasons for these problems and also the loss of value a new acquisition experiences is the fact that senior executives tend to underestimate the difficulties involved in integrating the organizations (Solomon, 1998). Top Management usually do not bring Human Resources into the process until it is too late.

By so doing the due diligence process may fail to identify any additional problems not evident to those untrained in Human Resources and its many tentacles. A skilled team, a well defined process, and a focused integration plan can help ensure the overall success of an acquisition (Douglas, 1999). Successful mergers or acquisition have shown that (1) there was a pre-merger evaluation of the potential association from the human resource perspective, (2) a specific human resources strategy for the merged or acquired company was an element in the integration process, and (3) effective and accurate employee communications programs were conducted both during and after the deal (Schuster & Zingheim, 1990. A positive management style, good solid leadership, work rules and processes, training, constant communications, consistent compensation, benefits and incentive programs all lend themselves to a more mature blending of talents and continued successful growth. Human Resources can help employees move past any stress and resistance to change resulting from an acquisition or merger in addition to minimizing any post-deal damage if they are involved in pre-deal due diligence. As Marks (1988) reports from a senior executive recently having gone through an acquisition;
“what will make or break this acquisition’s financial success will be how people are treated, not the business decisions. Business losses can be recouped, but if you treat someone poorly early in the game you can never change the feelings that result.”

PROFILES

Peter Wolfe has been the CEO and major stockholder of Scorecard, Inc., a privately owned company for 35 years. Having taken the reins over from his father, Peter has kept the legacy alive for the family. Peter is a conservative and risk adverse leader but has also been able to realize nearly 5% growth each year since he came aboard. Peter has created a “family” culture for employees and is a “shirt sleeve” CEO constantly looking for new ideas and products from staff.


Doug Franks is the VP of Operations for Scorecard, Inc. Doug is a quiet, unassuming man in his mid-fifties. He has been at Scorecard for 25 years and has watched the company grow from a small sports shop to the multi-building operation it is presently. Doug worked at two other manufacturing organizations before coming to Scorecard, Inc. Both were Fortune 100 companies.
Joe Heyer is the Chief Financial Officer of Scorecard. Joe joined Scorecard a year after his former company went bankrupt. Joe is a neighbor of Doug Franks, living several houses away. Joe is an excellent financial analyst and is able to “crunch” the numbers quickly and with unsurpassed accuracy. Joe, being the newest member of the executive team tries very hard to be accepted by them by sharing information prior to it being first reviewed by Peter.


Rudy Rothberger is one of the newest associates of the Board of Directors having replaced a family member who passed away after serving 20 years. Rudy is the Senior Partner of Rothberger, Stein, Simple, and Scheer, the largest public accounting and investment firm on the east cost.


Alan Flynn was hired at Scorecard, Inc. about a decade ago as the Human Resource Manager. At that time, the former Vice President of Administration and Finance, Jim Meyers, was preparing to retire. That would leave a large hole in the top of the organization representing Human Resources “at the table.” Alan is a quick learner and Jim was an excellent mentor. The passing of the torch was seamless and when Jim retired three years ago the Board approved the promotion of Alan to VP of Human Resources and Quality.


Dave Willow is a Management Consultant and has known Peter for over 15 years. Dave worked on a few projects with Peter as Scorecard, Inc. grew and took market share from other competitors. Since a leader was needed upon completion of the acquisition of Partners, Inc., Peter asked Dave if he would take on the responsibility. Dave agreed, and became the General Manager when the deal was complete. .

Richard Pierce is the General Counsel of Scorecard, Inc. Richard is a Harvard Graduate and worked at a major Insurance company as Assistant Counsel prior to joining the team. For the most part, Richard keeps to himself and with Alan continues to keep Scorecard, Inc. out of court or litigation.


The Company
Scorecard, Inc., an organization located in the Midwest was founded 60 years ago. Americans, enthralled with the opportunity of being able to attend a professional sporting event on a Sunday afternoon also enjoyed being able to purchase the equipment and memorabilia generic to the games themselves. As the years passed and radio and television brought sports into a family’s living room, Scorecard, Inc. was right there developing and manufacturing equipment for the team and the consumer who wanted to imitate their idol. Today, Scorecard, Inc. produces a full range of game and practice equipment for baseball, football, basketball, soccer, tennis, and hockey. The company continues to remain privately owned and it has seen financial growth of nearly 5% each year for the past 35 years.

It was also 35 years ago when the owner’s son, Peter Wolfe, took over the position of CEO. Grandchildren, nieces, nephews, cousins, aunts and uncles chose not to become involved in the workings of the business. They did enjoy, however, the steady flow of dividends that came their way each quarter since their initial purchase of shares in the business. Scorecard is a three building operation located in York, Pennsylvania where the seasons allow for a variety of sports to be played all year round. One building is dedicated to the production and distribution of the wide variety of equipment and memorabilia for the sports themselves. Another much smaller building houses the research and development teams and the third site is dedicated to the administrative services of Sales, Marketing, Finance, Information Technology, Quality, Human Resources, Procurement and a myriad of other support functions.

Scorecard, Inc. is non-union and has remained so due to a Human Resource department that continues to stay well ahead of the curve regarding benefits, employee relations programs, and compensation for its employees. Scorecard, Inc. employs approximately 500 hourly workers on three shifts. During the height of each sport season additional temporary seasonal labor is needed so the number of employees can jump to 600 at any given time. The other parts of the business employ an additional 150 professional employees. Although not a major player on the Fortune 500 list, Scorecard, Inc. has not had any challenges locating employees to work for them. Reaching Employer of Choice Status has not been easy but the constant attention paid to Human Relations activities and programs pays off. Members of the same family are not uncommon on the payroll.

A Code Driven Business
Business in part is driven by a set of very specific codes depending upon the level of the equipment; professional, collegiate, high school, junior, municipal or pee wee. These codes demand perfection from the company due to the fact that a game or event can be called off and a team forced to forfeit if any piece of equipment is not 100% within specifications. The codes themselves are not difficult to follow. The challenge is some coaches always try to get the edge on their competition by pushing the limits with equipment specifications sent along to production. Scorecard, Inc. will not compromise. A compliance officer, hired by management, makes certain that these specifications sent in by customers are within the code limits. Every so often unfortunately, one slips by.

Due to constant changes in sports themselves and the codes placed upon the teams, along with injuries and lawsuits, Scorecard, Inc. cannot amass any significant amount of inventory of parts or sub-components. If something happens to change within the sport due to one of those unfortunate injuries, money hungry attorneys or township politicians grandstanding, all the remaining equipment for that sport becomes shrink for Scorecard, Inc. which is very costly. Close to 85% of its sales is “made-to-order. Productivity, therefore, always must be at its optimum and quality must continuously improve on a consistent basis. If a shipment is late or a product is damaged or out of specification, customers will almost instantly go elsewhere. This places a strain on almost every department. Any significant turnover or absenteeism would be devastating. Fortunately, Scorecard, Inc. has one of the most progressive Human Resource functions in the country. The Society of Human Resource Management recently awarded them the coveted Innovative and Creative Practices Award at their National Convention. This award is in addition to six others that have been bestowed upon Scorecard Inc.’s Human Resource team in as many years from the state, county and local Human Resource Associations. Alan has also recently been informed by the Society that he is in the running for the Human Capital Business Leader of the Year Award. This is the highest coveted honor bestowed on a HR professional.

Top Management Support, Yet Concern
Scorecard, Inc. prides itself on those Human Resource programs it has facilitated over the years. The foundation for such progress comes right from the top. The CEO, Peter, has attained advanced degrees in both Organizational Behavior and Business Management. Peter is a frequent keynote speaker at Management conferences throughout the country. Business owners and leaders in Human Resources travel from a distance to listen to Peter talk about the programs which have benchmarked Scorecard, Inc. as one of the Best Places To Work by the State Chamber of Commerce.

Last year Scorecard, Inc. closed their books with sales of $100 million. This was a huge achievement for this mid-sized organization given the market which contains two giants in the industry; Ruth Industries and Playoffs International. Both these organizations together have approximately 75% of the total market for sporting equipment. Each has inquired on numerous occasions as to purchasing Scorecard, Inc. The response has always been an emphatic “no.”

Peter though does realize that the market continues to change thus creating a need to diversify and expand. At any given time an organization from across the ocean can rise up with a less expensive product and drive the market into a tailspin. The critical item that Scorecard, Inc. has in its favor is its unending attention to detail and quality. Peter and his predecessors have built a loyal following over the 60 years in business and have never let shabby workmanship ruin a customer relationship. Unfortunately, given the economic climate lately, price appears to be gaining on quality since a fair amount of funding has been cut at the school, collegiate, and also municipality levels for their sports programs. Donations are also down significantly from long-term patrons who enjoy watching their nieces and nephews play.

Over the past seven years a growth strategy has been consistently discussed among the executives. They have noted and requested that their conversations be placed in the minutes during strategic planning meetings. “It is now time to set Scorecard, Inc. on the path of diversification and aggressive growth” noted Doug Franks, the Vice President of operations. The Top Management team of Scorecard, Inc. has strongly suggested to Peter that the purchase or merger of another organization similar or smaller in size with excellent market potential is critical to survival. Ruth Industries and Playoff International have slowly been acquiring the smaller and midsize sports equipment organizations over the past few years along with some retail outlets. This has raised a red flag every year at the planning meetings, but nothing has been done as of yet on the part of Peter.

A Conservative CEO
Scorecard, Inc., up to this point, has been very successful at chipping away at market share in its product lines due mostly to quality and service as mentioned earlier. Peter, however, has continued to remain extremely conservative and has stayed away from any significant growth by means of an acquisition or merger. Although the concept continues to be raised by his executive team and has been turned into a goal several times, nothing substantive has developed. Whenever Peter or Joe Heyer, the Chief Financial Officer, would look at a company that was for sale, Peter would analyze the numbers, data, pros and cons to a point of “no sale.” It became a case of paralysis by analysis. In effect if Peter was going to move ahead with an acquisition or a merger he wanted a perfect place and plan to put his family’s money. He would consistently bellow at meetings, “show me another Scorecard, Inc. and I’ll buy it on the spot.”

The executive team of Scorecard, Inc. knows that risk taking is not within Peter’s vocabulary. Why should it be when growth has been around 5% per year, the family has been kept extremely well off financially, and the company has never had to downsize in its history like the competition has. Scorecard makes money. Maybe not the amount that its competition does but it has kept generations of families employed and satisfied for years. During its recent strategic planning retreat the executive team once again had a sense that the market will begin to soften and will change sooner rather than later. The formal market analysis completed by Sales and Marketing pointed to the same conclusion. Except for professional and Olympian teams, approximately 85% of all other customers report they must begin to purchase on price soon due to finances and funding becoming soft and even drying up from schools and benefactors. Rudy Rothberger , a long term member of the Board of Directors informed Peter he would be attending the strategic planning retreat. It was at this meeting that Rudy announced, “a purchase or merger must be made within the upcoming fiscal year. I speak for all the Board when I say this”

An Acquisition Must Take Place
Rudy and the Board apparently recognized that over the years several officers have left the company due to the lack of willingness on the part of Peter to diversify and grow. There was no doubt that growth would increase the opportunities for employees to have upward mobility. It could also bring into the company newer technologies that would help push back the competition. As the Vice President of Human Resources, Alan Flynn, echoed at every strategic planning meeting and beyond at the monthly updates, employees who apply here at Scorecard, Inc do so for many reasons. One is they want growth. Rarely do we any longer find a professional employee who is content with his/her original position.

The strategic planning meeting for executives of Scorecard, Inc. ended after a week of reports, forecasting, manpower planning, resource allocation, competitive analysis, capital spending, and budgeting. Within the top three action items was the goal;

“a serious consideration for an acquisition will be made during the upcoming fiscal year. A team will be put together to evaluate potential diversification efforts in the marketplace. Peter will put together this team within the month of January. The team will work tirelessly to locate the best company within the parameters set forth in an effort diversify and grow Scorecard Incorporated’s product line.”

And so it began. An action plan would be put together by Peter himself after he returned from his two week skiing vacation in Colorado.

The Acquisition Team
Peter returned from his respite and began the process. He sent along an e-mail to his Top Managers noting that Joe, Dave Willow, a consultant who has worked with Scorecard, Inc. on various projects, and Richard Pierce, General Counsel would make up the acquisition team. This was somewhat confusing to the other Vice Presidents. They were curious as to why executives were involved in the first place at the primary stage of due diligence and secondly why only these three. There was no representation from “direct, bottom line departments” and this was a manufacturing company looking to purchase or merge with another manufacturing company. At one of their early Monday morning briefings Doug, asked Peter directly about the makeup of the team. The response was a simple, “this is the way I want to proceed, a small team that is capable of doing the job. It’s not open for discussion.” This was out of character for Peter’s style of leadership although his conservative nature may have been at play here. When the meeting ended the e-mails shot quickly among the executives who were left out of the acquisition loop; “do they really know what they are doing?” “Can Peter really be objective and thorough in a due diligence given our track record?” “Here we go again, another set-up to fail venture” were just a few of the feelings expressed over the intra-net. Quite dejected, the Scorecard, Inc. officers returned to work as usual.

The Search Begins
During the search process that unfolded over the next few months only cryptic notes were provided to the executives. They were unsure of any real progress by the team. Peter stood firm on his original request that he wanted this to be low keyed and the team chosen would take care of everything. Four months into the search during one of April’s Monday morning briefings when Peter was off-site, Joe passed along some information about an organization approximately 100 miles away that looked promising as a purchase. Questions were asked but little solid information was forthcoming. Joe asked the team to keep this confidential and not mention it to the employees.

At the next monthly executive meeting, a few days after Joe had informed the group about the potential company, Alan and Doug felt it time to inquire about this possibility. They had figured that Peter was aware of Joe informing them so they inquired whether a full due diligence on the horizon. If so, why not involve other experts to move this process forward more expeditiously? Their assumption was that the small acquisition team could benefit from additional resources and they themselves could benefit from more knowledge of the potential opportunity.

Alan was curious, for example, as to how many employees hey had, what was the product line, human capital involved, benefits, size of facility, cost of payroll, compensation levels, the culture, how many buildings are there, and on and on. Doug had similar questions relating more to product, equipment, factory layout, technology, product line, etc. They felt maybe it is time to just have a good conversation about this potential growth opportunity.

During the meeting, Alan asked first about the potential company. Peter raised his eyebrows and looked rather surprised that the group even knew and questioned where the information originated from. Joe spoke up and said he had informed them at their Monday meeting so that they might be prepared better should something develop from this search. Peter looked more frustrated and retorted that the information was to be kept confidential and the topic is off the table. Peter pushed any additional questions aside and informed the executive team that everything was being taken care of by himself, Dave, Richard and Joe. Again, this did not sit well with the rest of the executives. They did learn over the years in spite of being very well taken care of, Scorecard, Inc. is a private company and there is little that can be done when the CEO, who is also the majority stockholder, says “no.”

The following week Alan decided to contact Peter directly about what happened at the meeting. He initially had to leave Peter a voice mail message because Peter was in a meeting. He noted that he would follow up via e-mail. In Alan’s e-mail he expressed his concern once again about isolating the rest of the executives and asked Peter to reconsider having a good discussion about others getting involved at this point in the upcoming due diligence. He cited once again the Human Resource and Quality component and provided concrete reasons why it would be most beneficial to increase the scope and breadth of the team. Alan also reiterated the team approach would benefit Engineering, Operations, Marketing and surely Sales. We could begin to assist in data gathering for the decision making process. Soon after Alan sent the e-mail, he happened to pass Peter in the hallway. Alan mentioned the voice mail, the follow-up e-mail, chatted a bit more and the two of them went their ways.

Alan and Peter
Alan and Peter always had a fantastic working relationship. Peter was Alan’s coach in many respects teaching him the business. Once a week they would have lunch together in Peter’s office while they planned and reviewed the various employee relations, quality, and development programs for the organization. Together they laid the foundation for a nationally recognized Human Resource function and company when it came to Training and Employee Education, Economic Development, Human Relations, Health Care programs, continuous improvement, and Family Friendly Benefits. For a mid-sized organization, Scorecard, Inc. was ahead of most of the multi-national companies in these areas. The consistent attention paid to employees and their needs by Peter and Alan continually paid off. Turnover was less than two percent, absenteeism less than one percent and productivity along with quality was 99% based upon Manufacturing Engineering standards. It took a lot of work and a great team to implement the multi-faceted employee-centered programs but the results spoke for themselves.

About an hour after passing each other in the hallway, Alan received his reply from Peter.
“Alan, thanks again for your interest and also being what appears as the liaison between the executive team and myself. I would like to reiterate my position. Joe, Dave, General Counsel and I will be taking care of everything. There is no need to have anyone else meet or discuss or suggest any additional research or get involved in the acquisition process. Hope to see you on Wednesday for our weekly lunch. I have some ideas about pay for performance I would like to pass along to you and discuss”
Sincerely,
Peter

The meetings apparently continued at the location of the potential acquisition since the team was off-site more than usual. The executive team continued to receive bits and pieces of information from Joe at the Monday morning briefings without Peter’s knowledge. Nothing though was really of substance. The executives truly felt left out and any questions they posed to Joe received confusing or no response. Doug noted during one of the meetings that “this process was the best kept secret ever at Scorecard.” On the brighter side, Jack Chambers, the Vice President of Research and Development for Scorecard, Inc. spoke up one morning saying;
“although we’re not included at least I can say after being here for ten years that there might actually be an acquisition on the horizon. I’m not sure what they do but hey, at least we’ll have something.”

With that, the meeting broke up. Soon after the grapevine began to work at Scorecard, Inc. Employees were talking to each other, asking their managers questions and several even approached Doug during their lunch period asking questions about the company Peter was buying.

A Recommendation
After approximately three weeks of due diligence by the team Joe told the executives that a recommendation to the Board of Directors to purchase a company appeared to be reaching more of a reality. The organization was a small 150 employee manufacturing company in New Jersey that made several complimentary retail products in the sporting goods market. Partners Manufacturing, located in Whiting, NJ, produced a clothing line and safety equipment for Tennis, Skiing, and Cycling. Joe described the company as a “very together place with a product line that will knock your eyes out.” Partners had been in business for 20 years now and the only reason for the sale was because the owner became ill and no one on the family tree wanted to succeed him. Joe once again asked them to keep this confidential and to let Peter break the news.

At a special executive meeting the day after Joe let them know, Peter formally announced the recommendation made to the Board. The acquisition of Partners Manufacturing was in its last stage and he wanted everyone to “continue to keep their distance.” “When and if this becomes reality I ask that we all do nothing until I say so. We will meet if the deal goes through and we will plan accordingly. They were not to impose any notions or suggestions into the new organization. Peter reiterated; “it is hands off.”

This was again out of character for Peter. Jack decided to ask a few questions about the product line. Peter responded in a vague manner that they were producers of upscale clothing and equipment for the tennis, skiing and cycling enthusiast. More questions came forth from the executives except for Alan who remained very quiet given the previous letter he received from Peter. He sat there and listened to the responses. They did not at all make the team feel comfortable. Was this the right acquisition for them as a company? What did they know about clothing? Other executives were not quiet at all. They excitedly asked Peter one question after another. Peter, becoming visibly upset, stated that he was assured the due diligence was being thoroughly completed and all signs pointed to an easy, compatible acquisition. He had begun to review the information and at this point was pleased with what he saw. While looking straight at Joe, Peter said, “let’s leave it at that” He rose from his chair and exited the meeting. Joe followed closely behind.



A Visit From the Acquisition
The executives did not feel any better. Jack had little comfort in knowing that he had not had the opportunity to see the facility, talk with anyone or even evaluate their product line. Sales and Marketing felt similar. How are their territories created? What’s the sales force consist of? Do they have a mature product line and marketing effort? Are they a stable company? What do we know about clothing became the major concern.

Again, Alan also had some questions and was not sure if he should wait or research them himself with Joe. He did not get a good feeling if much attention was paid to critical procedural items in any of the Human Resource areas. Also, what about their quality assurance programs and processes? These did not have to be taken care of immediately but it would be nice to see if and what kind of work might need to be done. Then again Alan thought maybe we are all rushing it a little. He got burned once already by stepping forward.

Alan did notice though the mood swing in the other executives. When Peter had left the meeting they became both critical and disgusted with the secrecy and evasive responses. Alan thought it best to tell the group that they should break now and wait a little bit until the dust settles. Then maybe ask Peter for a good sit down to discuss the particulars. Reluctantly agreeing, they dispersed.

About one week later two executives of Partners Manufacturing came to Scorecard. Peter greeted them at the door in the lobby. Doug and Alan happened to be in the same area making a copy of some notes and drawings in the nearby copying center. As they exited the center they noticed Peter shook the visitor’s hands but did not introduce them to either Alan or Doug. He passed right alongside of them. Peter led the visitors to the large conference room. Alan and Doug stood there speechless.

After several hours of meeting with the acquisition team along with a tour of the facility the guests from Partners Manufacturing left. Peter went back to his office. Doug and Alan thought it best to walk over and talk about what took place and the feelings of the executives. Doug, however, received a telephone call and had to attend an emergency meeting with marketing. Doug asked Alan, by default, to approach Peter when they had their weekly lunch together. This was always the toughest part of his job; being the spokesperson for the group. In the past it made the team a much stronger one though at the risk of Alan being on the hot seat.

Alan brought his sandwich and soup and sat with Peter for lunch as they normally did. He began by mentioning to Peter that there was again was a general concern among the executives since they saw the visitors touring the facility. They felt that they were purposefully being left out of the acquisition process and they truly wanted to get involved so they can learn the product line, the market, and the people. Peter became a bit defensive once again and evaded questions consistently. It appeared to Alan that no one should discuss what so many have waited for such a long time. To say the least the meeting was very uncomfortable.

The requests for involvement finally caught up with Alan. Although more times than not he was the messenger, in a three page e-mail Peter basically reiterated,
Alan,
Once again I find myself at a crossroad. We have worked together on so many projects and have been more than successful on so many of them. I would like one last time to remind you that I do not want anyone to “interfere” with the
new company, either during the process of due diligence and after the acquisition should it result in same. I have been informed by the team that the new company has a great operating system, a smooth Human Resource process, good products, development, marketing efforts, sales territories which will be a compliment to our business and stellar employees. Regarding quality, I have been informed their processes are in order. The culture is what it is and it also appears to be a good one for our employee’s growth. I am asking once again, for no interference. I am not sure why you have not headed my requests in the past and quite frankly your continual questioning of my abilities is becoming rather irritating. To say the least you yourself by not heading my former requests are becoming somewhat of an irritant. Please cease bringing anything from the group to me or discussing anything about this process with me until I am ready. Let’s continue our lunch meetings and stay on target with our agenda in Quality and Human Resource programs.
Sincerely,

Peter
Cc: File

Alan sat dismayed at his desk. He knew now that there were going to be major issues ahead but he finally decided to pull back. He wondered though, why was Peter so overly protective of both the process and the result. Also why had the executives themselves not approached Peter. There was not much more than he could do. Alan made some notes, printed out the e-mail, placed it in his briefcase and left for the day sensing that Operations, Engineering, Marketing and Sales would soon be getting a similar letter. At the following Monday morning briefing he found out they did not.

The Acquisition and its Results
Partners Manufacturing was ultimately purchased by Scorecard, Inc. The initial year was a very difficult one. None of the executives from other departments were allowed to intervene into any of the areas of their expertise. Alan stayed away from any of the confusion that occurred unless he was asked by the new General Manager, Dave, the former consultant of Scorecard, Inc. Dave struggled. Although Partners had a small Human Resource function, Dave wanted to be the final say on all the decisions made. His sole goal was to make money.

The decisions he made in the area of Human Resources did not follow best practices and were not at all in line with Scorecard’s. As an example, Dave would provide some employees with time off, others with none, new employees with whatever he felt like giving, and still others that resigned he sometimes would compensate them for unused illness time and sometimes would not. The inconsistencies in his decision making were creating an atmosphere of frustration for many of the employees.

The Sales force of Scorecard, Inc. had no idea on how to absorb the new product line into the existing one. Advertising was left scrambling without any direction on how to get the word out and how to Brand the new and existing products. Engineering could not make heads or tails about what development was taking place for new lines and Operations found it difficult to understand the manufacturing processes. Within the first nine months after the acquisition 50% of the workforce of Partners left voluntarily. As Scorecard went into its second year, they had to lend $3.5 million to the newly acquired company.

Still Peter defended his decision to acquire based upon the due diligence that had occurred. He continued to appropriate money, a little at a time during the second year. He was heard at several executive meetings saying “I will not let it fail. We will do whatever it takes to make it succeed.” The problems continued to mount as the second year unfolded. Sporting equipment manufactured at the new company failed in the field. Customer loyalty was waning overall and many employees at Scorecard sat watching and trying to fix some of the problems that occurred at lest in the manufacturing part of the operation. At the end of the second year, Partners Manufacturing lost over seven million dollars. They needed to borrow again from Corporate. Peter, continuing on his quest to make the company successful loaned the organization another $5 million.

The Human Resource problems continued to worsen. Alan was asked, as the other executives to finally get involved after close to three years of steady decline. Policies and benefits and consistency were still not in concert with corporate. Employees were continually leaving at all levels of the organization. Performance evaluations were not being completed, the benefits were still not in sync with Corporate and many of the once highly though of employee relations programs at Partners Manufacturing had ceased. Dave, in an effort to just get “warm bodies” on the job provided some candidates perks that corporate never even considered. It became more and more difficult to repair. The executives were asked to get involved and as quickly as possible. Each one felt that as long as Dave stayed out of the process there was a little light for success.

During the fourth year after its acquisition Partners Manufacturing had been in such a tailspin that it lost more money than Scorecard could justify. Peter went on record at an executive meeting to report that

“I made a mistake and I need this team to forgive me. As an individual who always believed in the power of teamwork and having proven it in so many ways at Scorecard, I am not sure why I did not involve this team prior to and even during the initial years of this acquisition. We have little choice but now to make every attempt to sell Partners before it drags down our main business with it.”

The executive team of Scorecard became involved and salvaged what was left of a once somewhat reputable organization. The amount of money that had been pumped into Partners Manufacturing would never be made up. It was likely now more than ever, that Peter would not pursue another merger or acquisition in the future given the results of this one. As the executive team left one of its Monday morning briefings Doug turned to Gary and remarked; “so what other mess are you going to get us into now?” Then he turned to Alan as most of the other executives did and said “thanks for trying.” Partners was sold less than a year later at a net loss of millions.

















ADDITIONAL RESOURCES
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Discussion Questions:

1. What do you think went wrong here from a Human Resource point of view?
2. What has occurred behaviorally within the top management team?
3. Would you have done anything different had you been the VP of Human Resources?
4. What sort of strategy do you think the CEO was using in keeping others away?
5. In a due diligence process what usually takes place especially from the HR Department in a company the size of Scorecard?
6. Do you think the dynamics of the executive team will change now given the failure of
this acquisition ?