Human Resource Issues at Valley Bank

Human Resource Issues at Valley Bank

Chapter 1 Case

A human resource issue that HRM professionals and general managers must deal with if they are to assist the organization in becoming competitive and meeting its goals. This exercise enables you to further develop your analytical skills as you assess the human resource issues affecting competitiveness at Valley National Bank.

Objectives:

1. 1.     Identify human resource issues that may affect organizational effectiveness and competitiveness.
2. 2.     Develop strategies for dealing with human resource concerns.

Procedure:

Step 1: Read Chapter 1, paying particular attention to the discussion of human resource domains as they relate to competitive advantage.

Step 2: Read the background information on Valley National Bank provided in exhibits 1.3.1 and 1.3.2 identify the Human Resource issues facing the Vice President’s department and under which of the HR domains (Organizational Design, Staffing, Performance Management and Appraisal) each issue belongs.

1. 1.     Outline some strategies for dealing with these issues.
2. 2.     Develop a rank in order chronological priority list of the first three issues that require your attention.
3. 3.     Provide written justification for you recommendations.
4. 4.     Enter your rank orderings and justification in the space provided on Form 1.3.1.
5. 5.     Answer the questions on pages 611 and 612.

Background Information for Valley National Bank (VNB)

Exhibit 1.3.1

Recent Bank History: Valley National Bank is a relatively young financial institution with close to $10 billion in assets, although it will shortly acquire another bank bringing its size up to about $12 billion in assets. As a whole, there is a wealth of technical talent in the company, yet most of the experience has been developed within the confines of $1 to $2 billion dollar institutions. The managers and employees have not had much collective experience managing a $12 billion company. Senior managers currently recognize they must make some critical strategic decisions regarding the future of the bank if they are to remain competitive in the next decade.

Accounting Department: The vice president of accounting reports directly to the senior vice president of management accounting, who in turn reports to the controller of the company.

The Vice President Suzanne Roberts, was promoted into her current position to manage a department whose previous manager let get out of control. Her job is to provide managerial accounting software to line and staff management throughout the organization so that managers may be able to make better decisions in daily operations in their respective departments. The software, difficult to implement, has proven to be very useful in institutions with postures of high growth. The information provided by the programs is financial in nature and  for the most part, is the type of information that VNB bankers are not used to receiving.

Therefore, two key goals are:

1. 1.     To educate the company in the use of the new software so the bank ultimately benefits in terms of bottom-line results.
2. 2.     To use the software to identify those sectors of the business in which the bank does exceptionally well so that better and more focused strategic decisions can be made.

As challenging as her stated primary job responsibilities are, Ms. Roberts believes that another issue she currently faces is to get the right people in the right places in her department so to complete the department’s goals. When she came into the department, she quickly concluded that some of the best contributors in the department were also the lowest paid.

Bob Phillips: Was the former manager of the department. Through the merger, he came to Valley National Bank to manage the department, having had experience managing two people at his previous position. In his role as vice president of accounting, he was asked to supervise about 10 people. Over two years things got so out of hand that his employees complained that they did not know what they were supposed to do, except in emergency situations, which seemed to be happening every day. Performance reviews for employees were late up to 6 months. Naturally, employee morale was very low and opinions of the company had hardened. Good people quit the bank or transferred to other departments. Finding replacements for these people was done poorly; often the first person who walked through the door was hired. Today, there are several people working for the department that should not have been hired. Unfortunately, their options are such that it probably pays for them to stay rather than voluntarily leave.

            Bob lacked the organizational and planning skills needed to effectively manage his people. In addition, his weak interpersonal skills have created some hard feeling amongst people in his department. He can usually arrive at a good accounting/financial solution to a problem and has an extensive knowledge of all major software programs related to bank operations. However, he has a difficult time working with other people to implement his solutions. Needless to say, some employees recent that Bob is still paid a good salary and given a good title to go with his reduced responsibilities.

            Mr. Sterrett, the VP of HR, believe the company should severed its ties with Bob, but other external factors make this choice difficult. For example, Bob has faced some severe personal and health problems since transferring to Valley National Bank.

Carla Goodman: previously worked for Bob for about 15 years. When the accounting department a Valley was established, she was placed in charge of several people and given promotions of two pay-grade levels. This decision was proved to be disastrous because she could not (or would not) of supervising and reviewing people. She was quickly relieved of these duties, but her salary grade remained intact so today she is overpaid for her few responsibilities. Her title indicates she is at a lower pay level, but it fools no one. She is average as a technical worker and understands the flow of transactions well. Currently, Ms. Roberts has Carla working alone on assignments because she doesn’t make very good impression with other people. Carla tends to openly criticize the company, which draws concerns from other people in the department. In fact, on occasions, she and Bob have resulted in shouting matches to get their individual points across. Ms. Roberts also received an anonymous note reporting possible sexual harassment between Carla and another employee.

Greg Williams has been with the company for about eight years and has worked for Ms. Roberts for 2.5 years in various capacities. He has progressed in a very normal fashion in the bank. However, he has seen younger people such as Ms. Roberts move ahead of him on the organizational ladder. He expresses concern that his career at the bank may be leveling off unless something dramatic happens, he is not the quickest person to catch onto things in a technical sense, and he has had a difficult time interacting effectively with people. This reduces his chances for promotion. In general, he is a conscientious, mild-mannered employee who doesn’t normally complain about things. He is good at taking orders but not good at handing them out.

Kathy Lewis: is the most promising employee in the department today in terms of future potential within the company. She is technically sharp, with considerable knowledge of the new information system, and has shown some promise in effective management of people. Kathy has been an employee of the bank for a number of years and worked for Bob before the bank merger. She understood his odd nature. Her skills allow her to get more done than most people, and she is willing to put in extra hours to get things done. She did announce her resignation from the company at one time because of mounting problems within the department, but a Senior Vice President by offering changes would be made at some time.  Kathy is probably worth more to the bank than her salary indicates, especially in light of Carla and Bob’s current salary ranges. The normal salary increase should allow her to catch up in the next year or two. Kathy probably could gain some experience if she transferred to other departments, but Ms. Roberts recognizes that she could not afford to let Kathy go because of the current lack of depth in the department.

            Overall, things are not as bad as they appear to be. Ms. Roberts, however does get concerned from time to time about the general lack of depth in the department as Mr. Ritcher, Valley Bank president, looks to the department to help the bank to become more competitive. Ms. Roberts has met with Mr. Strerret of the HR department, who has recommended that Bob be terminated immediately but Carla should be retained because she could file a sexual discrimination lawsuit. Sterret also recommends that Carla’s salary should be cut immediately.

Priority List of HRM Issues: Form 1.3.1

First Issue in need of attention:

Justification why this is the first and most important issues:

Action to Be taken:

What is the HR domain: ( Organizational Design, staffing etc.) for this issue.

The second issue in need of attention:

Justification why this is the second and most important issues:

Action to be taken:

What is the HR domain: ( Organizational Design, staffing etc.) for this issue.

The third issue in need of attention:

Justification why this is the third and last most important issues:

Action to be taken:

What is the HR domain: ( Organizational Design, staffing etc.) for this issue.

List the potential internal strengths at Valley National Bank.

List the potential internal weaknesses at Valley National Bank.

List the potential external opportunities at Valley National Bank.

List the potential external threats at Valley National Bank.

Assessment Questions:

Do you agree or disagree with the recommendations of Mr. Sterret? Explain your position. Is it lawful to cut someone’s pay as Mr. Sterret recommends and are there any concerns regarding his suggestion to terminate Bob?

What other information would be helpful in preparation for recommending action to be taken?

What steps would you take to determine the legality of your action?

Among the domains of HRM, what domain usually drive other HR domains when significant organizational change is necessary?