CASE ANALYSIS DRAFT

KEY ISSUES

• The company is experiencing conflict between its management and union sectors because of their changing industry and financial obstacles. 
• Recession caused the company to become close to bankruptcy and in order to keep their company in Canada they had to cut wages and convert retirement plans to RRSP’s
• Employees hired after 2010 are stuck paying for older employees retirement funds 
• Women in the workplace had their wages cut for eight years

Precision Alloy Management clearly has many financial obstacles that they are struggling with currently. The automation industry has unfortunately moved primarily to countries abroad for cheaper labour costs and higher profit. PAM was able to keep their company in Canada, but that resulted in financial difficulties. The company almost went bankrupt a few times, and in order to stay running they had to make cuts to employees benefits such as their RSP’s and insurance benefits. 

Employees hired after 2010 receive less benefits than employees who had been hired previously, causing the newer employees to be forced into paying for the older employees retirement plans. They claim that it is unfair to them. Also, one woman claimed that it is an industry originally dominated by men, and these women would have their wages cut for eight years. 

It is difficult to determine a solution to this problem as the company is still experiencing financial troubles due to the competition in countries such as Mexico where they are able to offer better prices. It is important for the company to come to some sort of resolution and agreement between their union and management sectors. 

I believe that it would be beneficial to abolish the idea of a pay scale for employees hired after 2010. It would be a more attractive strategy for the employees to have the opportunity to receive pay increases based on the efficiency of their work. If this is implemented then newer employees will be inspired to work harder and more efficiently and productively in hopes of receiving their pay increases sooner and thus causing less tension. 

It is also important to give HR a strong voice because they are the ones who communicate with the employees more often and have an inside voice as well. If employees feel like they have more of a voice and their concerns are being heard they will also feel less disgruntled. 

Staying in a union is important as well, because employees need the feeling of security within their jobs since it is an industry that can quickly move overseas. There needs to be better agreement between the different parts of the union and they need to come to one solid agreement throughout the whole company. 

There are still many obstacles this business will need to overcome to thrive in the changing industry. The pay scale idea needs to be changed and further based on merit. Also, HR will need a stronger voice in the matter so employees can be heard, and the union needs to come to one solid agreement from all sectors.