Identifying the Right Ones. Personal Qualifications for an ongoing Employee

Seminar Paper, 2009
27 Pages, Grade: 1,7


Table of contents

Executive Summary

Table of contents

List of Abbreviations

List of figures

List of tables

1. Introduction

2. Methodology

3. Restructuring a company
3.1. Introduction to the company
3.2. General assumptions
3.3. Employees of the IT department

4. Measures to success
4.1. Measures in general
4.2. Measures for the IT department

5. Making a clear cut
5.1. Pure rationality
5.2. Put measures first
5.3. Integration the 360-degree feedback
5.4. Trust to gut feeling
5.5. Recommendations

6. Conclusion

I. Bibliography

II. Internet links

Executive Summary

Identify the right ones is for every manager a tough task at any time, especially if the upper management comes up with the idea to lay off a certain amount of employees at an explicit date.

This assignment gives some advice for this task. Prepare a balanced scorecard of the employees with a certain number of measures regularly. Take in account that the results should not contain only subjective marks. This can be achieved by demanding a self-assessment of every employee. This can be part of the 360-degree feedback.

The opportunity of a limited competition for the last employees can help to further minimize the subjectivity inserted into the process. Side effects like the too early recognition of the lay off process as well as the chance to use a consultant as a mediator have to be considered.

List of Abbreviations

Abbildung in dieser Leseprobe nicht enthalten

List of figures

Figure 1: Porters value chain

Figure 2: The company as a black box

List of tables

Table 1: Switching cost grading

Table 2: Switching costs calculations

Table 3: Balanced scorecard for the employees of the it department

Table 4: Salary budget of the team

1. Introduction

In these days in which the financial crisis is everywhere and influences almost everything across the world market, a midsize steel company faces the situation of heavy downturns of their profits. Therefore, the management of the company decided to decrease the labour costs throughout the whole company.

To achieve this goal every department within the company has to lower their salary costs by a certain amount. This process is described based on the example of the IT department of this company. In this department two out of ten employees need to get fired and the management need to evaluate possible measures to identify who to keep and whom to lay off.

This assignment provides a brief introduction into the fundamental aspects of decision making process, measures to success, usefulness of a balanced scorecard and the importance of gut feeling for the final decision are getting evaluated.

It starts with the introduction of the company “First Steel” as a steel producing midsize company. Afterwards, some general assumptions are presented and explained for the better understanding why some aspects are left aside. This is to clarify that these aspects are well known but would bust the framework of this assignment.

In the following chapter all members of the IT department are briefly introduced together with their function within the department and their job tenure.

Thereafter, general measures to success are pointed out and being discussed whether or not their importance in this situation. With these key measures the following paragraph explains the choice of the relevant measures for this assignment.

Furthermore, a matrix with the chosen measures and all team members is presented. With this balanced scorecard each measure is weighted to reflect its importance.

The result from this balanced scorecard will be explained in the following chapter as well as methods to react on those outcomes. Therefore, the decision making process under pure rationality is explained. Subsequently, the conclusion going strictly by measures and the advantages are listed. In addition the relevance of trusting his gut feeling is mentioned and explained.

Finally, recommendations are made and the conclusion is presented.

2. Methodology

In order to clarify the way to achieve the outcome of this assignment, there are many research strategies. The following chapter should serve as a guideline of the used strategies.

First of all, the definition of team production or team work for this assignment is made as a clear defined internal operation task which is to be done by a certain group of employees. Furthermore, this challenge should get finished more or less self dependent with a prior defined team leader who is responsible for the outcome after all.

In addition, the importance of the 360-degree feedback or multisource assessment is evaluated to reach the final measures weighted in the balanced scorecard. This method works in the way that feedback is provided from all around an employee meaning from colleagues, subordinates and supervisors. Additionally, a self assessment feedback is included. The possibility of getting feedback from outside is left aside.

The accuracy of 360-degree feedback is closely linked to the length of time that a reviewer has known the person being rated. Most accurate is the rating from people being between one and three years in the company followed by persons known for less than a year. Thereafter, people known between three to five years are next most accurate in their ratings followed by people known for more than five years.1

Subsequently, self ratings are significantly higher in outcome than ratings of others, according to studies.2

Furthermore, a survey is made to find out what are the most important measures needed in the certain department according to the employees in the department. The intersectional measures which are named most commonly are listed in the balanced scorecard later on.

In order to keep the face and confidence in the measures chosen for the balanced scorecard, above survey was done in order to implement the most common measures. Traditionally, the balance scorecard is a performance management tool for measuring whether the smaller-scale operational activities of a company are aligned with its largerscale objectives in terms of vision and strategy.3

In this assignment the balanced scorecard is used to identify the employees in the department with the lowest overall performance.

3. Restructuring a company

3.1. Introduction to the company

The company regarded in this assignment could be one out of a big number of different industries. The industry itself is not of importance, but for a better understanding, one can assume that the company is called “First Steel” and it is a steel producer.

Unfortunately, out of various reasons, the company had a tremendous downfall of its revenues and is facing losses instead of profits. Therefore, the management decides to make a clear cut, and decided to decrease the budget for personnel costs by at least 15% for each department. There are many different departments, in many of them the decision to choose the right people to lay off is rather easy. Like in the local production plant, there are many employees with a low profile on specificity. To decide for the right ones there is a tough, but manageable process. Identifying those people who should stay in the company can be done by measures around standards. For example in Germany, the law sets up clear rules for who should stay in a company and who should not. This is called a social plan or a social compensation plan. This plan is based on how long an employee was employed in the company. Additionally, the family situation of each individually employee is looked at and gets evaluated. Last but not least the employee’s age is taken into account.

Back to First Steel, the company has three plants in different countries in Europe, mainly producing steel from raw materials around the world and selling it to different car companies in Germany. The company is mostly organised according to Porter’s value chain.

Supporting activities are centralized in the headquarters, having specialists for procurement and technology development separated into their own departments as well as the human resource management mainly organised from the headquarters, with local managers for the production plants.

Abbildung in dieser Leseprobe nicht enthalten

Figure 1: Porters value chain

In the headquarters, reporting straight to the board of directors, the head of IT has the duty to select two from his ten employees within the IT Department of First Steel. Identifying the right ones, who should stay in the company to continue its success, should be the toughest task for the near future.

3.2. General assumptions

In this situation a lot of things can be considered important for a decision, but not all aspects are on the same level. Furthermore, some aspects will not be considered within this assignment. The family situation of each employee will be left aside to keep the focus on the individual asset specificity of the department members plus the cooperation experience between the department and every single employee. Also the decision is made by the manager of the department without informing the department members up front to avoid negative motivation and unintentional side effects.

One could argue, let the market decide and tell everybody the situation. After some time of competition the best will continue working for the company. There are considerable side effects to this decision, which are clear in forehand. For example a long running competition of the individuals could lead into a squeeze out of the key players. A second pitfall could be found in the situation afterwards, where everybody should go back to teamwork. Will everybody really be able to do so? This is to be answered by everybody itself. This question itself could be a topic to a separate assignment.

Another unwanted side effect could be for example that the best people of the department have the impression of an unsecure work environment and are looking for a new job and leave the company on their own.

3.3. Employees of the IT department

Taking a closer look at each team member, they will be named after the alphabet from A as Armin to J for John. To reduce any sexual influence, all employees will be given the same gender.

Armin is specialist for IT systems of inbound and outbound logistics. He works for First Steel for three years now. Together with his big network inside and outside the company, he is working a lot with the suppliers and buyers. He has to deal with a lot of interfaces from the outside IT world, satisfying each partner with the needed information.

The support for the HR department is Bob who specialist in this area of IT, as well as he has the power of fast comprehension and qualified as one part of the individual programming team. He is fully integrated with its large network and an assignment of over ten years to the company.

Chris is specialist for the CRM system, the central system of the marketing and sales department and is the company advanced specialist for the standard programming language within the individual programming team. After two years in the company, his growing work and his knowledge of the company processes has reached a very high level.

Database administration is the profession of Detlef. He works for the IT department for eight years and he knows a lot about the internals of the department but has a low to no network at all. His social skills will not help him to increase his network but he is a genius in getting the optimum from the database.

Three plants, not all of them located at the headquarters, to support, Erik travels a lot to maintain operations systems at the different locations. He started working last year for First Steel, and fitted into the system from the very first moment. He also brought new ideas to the table from his studies, as this is his first job after graduating.

The after sales and compliance department need the support of Fred on an hourly basis. The IT system supporting this, should be replaced soon, to give Fred at least a little bit of freedom and a chance of a two weeks holiday.

Coming from the research and development team, George joint the team twelve years ago and became specialist for computing intensive servers for its former department as well as the support specialist for the procurement department.

Heinz is specialist for the “management information system” of the company and because of his long history in the company, the guy who knows everything about it. He probably knows more colleagues on a personal level than his boss.

A long list of tasks from the three plants and always somebody at the telephone, Ian is the second supporter for the operations department. He is also a specialist in the programming and completes the team of the three individual programmers. Working for First Steel over fifteen years he has seen already some downs and ups of the company and the steel market and all its facets.

Last but not least there is John from the IT department. He is the project leader, always assigned to special tasks like now selecting the new IT systems together with Fred.


1 Eichinger (2004), p. 23ff

2 Yammarino, F. J., & Atwater, L. E. (1993), p. 231-235


Excerpt out of 27 pages


Identifying the Right Ones. Personal Qualifications for an ongoing Employee
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Employer, Management, Company, Employee
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Uwe Sülter (Author)Andreas Roer (Author), 2009, Identifying the Right Ones. Personal Qualifications for an ongoing Employee, Munich, GRIN Verlag,


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