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were closely involved in all the minutiae of production and administration.
There were very low levels of turnover in management, typically around 4 per cent, per
annum, in contrast to the other areas of the company, where turnover was in the region of
20 per cent. Management costs had risen by 6 per cent above inflation for each of the last
6 years, in contrast to the workforce, something that you have taken into consideration in
formulating a new industrial relations policy.
Systems
Burke Engineering had had no major overhaul of its systems in the last 5 years. It had
made little progress towards a centralised information system. There was no established
communication policy within the firm to develop new ideas and keep the company
informed of progress and new developments. It had followed government legislation in
issuing job descriptions to all employees, but these had become increasingly out of date,
as they had not been reviewed for the past 6 years. There was little personnel direction,
which meant that the other components of management control had become increasingly
confused. The company had no formal methods of negotiating with the unions, and had no
laid down policy with respect to either the employment of minority groups or the disabled.
The company paid management well in relation to others in the area, with the base of each
grade being around 20 per cent higher than the average for similar management positions.
There was a fragmentary bonus system in operation for management, even though the
current shareholders had indicated their willingness to issue shares as part of a changed
compensation package. Bonuses were awarded in a fairly erratic fashion as an
examination of the appraisals in Appendix B reveals. There appears to be little logic to the
level of bonus awarded, though length of service has some effect. The benefit package for
managers had been recently extended to include private health insurance and there was
the intention to make company cars available to all managers earning above €30,000
rather than restricting them, as at present, to directors and those with sales and marketing
responsibilities only.
There was no formal recruitment policy. Managers used a local recruitment agency to
handle all the initial work and to present a short list of applicants with a recommendation
which was normally followed. The company carried out very little training. The local
government training office occasionally arranged courses for engineering workers and
these were irregularly attended. Burke Engineering had been a most active supporter of
the Youth Training Scheme. This provided them with around 20 low cost staff each year,
which would be replaced at the end of the training scheme. You estimate that the average
amount of training that each manager had received over the past 4 years was around
three days in total, and most of this had appeared to be wasted. You know that competitive
companies are spending considerably greater resources on training, with the industry
average around 5 days per manager in the UK but nearly 10 in Germany and Japan.
The company had started an appraisal system following the visit of the previous Managing
Director to a business conference. This system provided information about management
shortcomings and successes but was not used in a consistent fashion.
It provided the basic information about all management in Appendix B. The appraisal
system had not been extended to the shop-floor, and managers were individually
responsible for grading staff within their departments. You think that this often bears little
relation to the individual's value to the organisation.
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