Human Resource Management

Case Study 2

Querida Hunt

UNCP

Human Resource Management

November 10, 2013

Case Study 2

Question 1

The key issues in this case study can be segmented in two area; employer benefits and employee benefits. On the first level, the organization is mainly concerned with increasing profits by leasing employees back through a third party. According to the plan offered by Mayfield, who is a professional employer organization (PEO), the areas of savings would occur in taxes and a number of administrative costs which include employee benefits. Through the arrangement, Thompson Technology would terminate the engineering and design staff and benefit from all the savings. In turn, Mayfield would lease the same employees back to Thompson which would allow the organization to keep all its talent and experienced employees without the overhead.

The second level of the problem is the effect on the employees. The employees on the surface are not impacted on an employment level. The employees while now working for the PEO still sit in the old seats, report to the same building and conduct the same work as before the change. On a negative note, the employees have seen changes in their status as employees and a low quality of health coverage and stock options.

Question 2

The Human Resource Department (HR) at Thompson changes in several key ways. The HR department no longer has to worry about hiring or maintain employees in the engineering design departments. Under the agreement with the PEO, they will now maintain all employee records, employment documentation, as well as training. While the employee’s work inside Thompson, they are PEO employees and not Thompson. While Thompson HR will assist with some trainings, employee appraisals, and even employee corrective actions, they will play a secondary role and not primary.

Question 3

There are a few implications for both organizations and their employees. First from a legal standpoint, there is new liability to...