MGMT250 - First quarter decisions have been made.
Unfortunately, it appears that this entry never made it into the system, so I must write it again.
Our team met on Tuesday evening once again to discuss our strategy and decisions for the first quarter. The criteria to discuss largely entailed deciding which programs to enact and wage setting strategies.
We decided in the outset that promotions would be made whenever possible, and whenever an employee is promoted from levels 2 through 4, an employee from the lower level will be promoted to replace him or her. This results in greatly reduced cost, since hiring a new worker is much more expensive. We made zero hires at levels 2-5, and 63 hires at level 1.
We determined that our long-term strategy with respect to wages and fringe benefits would be a complex one with some amount of risk. Since fringe benefits only affect the HR department's budget during the first quarter of implementation, we decided that the most effective strategy for dealing with fringe benefits would be to raise them in one lump sum during the first quarter and hold them constant for the remainder of the year. Since fringe benefits are priced as a percentage of wages, we also concluded that it would be most cost-efficient to do this before raising wages at all. Therefore, we decided that in order to bring fringe benefits up to an acceptable level for the year we would incur a budget overrun of approximately $100,000, with no allocation to wage raises.
We are confident that our strategy will be a successful one and look forward to receiving the results of the first quarter.
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