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mount_ridge_engineering_systems.docx1st Individual Case, MHR523, W14: Mount Ridge Engineering Systems
Mount Ridge Engineering Systems designs, builds, and operates standardized, coal-fired utility plants in Atlantic Canada. Mount Ridge sells the steam to the industrial plant and electricity to the local utility. When the firm was formed four years ago, Joyce Newcombe was hired a Director of Human Resources. Newcombe had a number of years of experience as a manager of human resources, had recently graduated with a Masters in Human Resources from a large Canadian university. At the time of its establishment, the company had a total of four employees in addition to Newcombe: The President and founder, a Senior Vice President of Operations, a Vice President of Administration, and a Vice President of Cost and Estimation.
From the start, Mount Ridge had both the financing and plans to build seven plants over the next five- to eight-year period. Joyce Newcombe was hired to develop all of the necessary human resource programs, plans, and policies needed to staff the plants once they became operational. She explained, "When I was hired, all we had was a dream and a plan. I had an office with a desk, chair, and telephone. I literally had to develop an entire human resource system." During the first year, Newcombe developed a benefit packages for both corporate and plant personnel, an employee handbook, job descriptions, a compensation program, a supervisor's manual, and human resources policies on issues such as absenteeism, pay increases, promotions and termination.
In less than three years, the company had built five plants. The work force grew from 5 to 39 people at corporate headquarters, and from 0 to 183 employees in the plants. The company had been remarkably successful in a short period of time and Newcombe was promoted to Vice President of Human Resources. An important goal or the company was to remain non-union by offering employees a good quality of work life and attractive benefits however low cost production was critical to Mount Ridge’s competitive position. The importance of these goals is reflected in the words of Levinson: “Mount Ridge places great value on its relationship with our industrial and utility clients. Our internal employee relationship has an equally important role in order to maintain an enjoyable and productive workforce for the future. Management believes that companies that are good to their employees reap the benefits in terms of increased productivity and loyalty.”
Most of Mount Ridge's plants are scattered throughout the region. Each plant employs approximately 45 workers. Each plant is run by a plant superintendent who reports directly to the manager of plant operations and maintenance. Human resources operations are centralized at corporate headquarters and the plant superintendents are largely responsible for the day-to-day administration of human resources policies. The VP of Human Resources complained that she does not have any line authority over the plant superintendents, nor does she have any human resources staff located within the plants. Newcombe stated, "One of our biggest problems has been getting management—especially plant superintendents—to understand the legal and governmental regulations affecting human resource procedures." Although Newcombe had developed a detailed employee handbook and supervisor's manual, over the years there had been situations where planat superintendents had not followed company policy. Newcombe recounted one such incident (the termination) that occurred in one of the older plants during her third year with the company.
The Termination
One of the first plants built was the Edison plant. It is located in a medium-sized rural community in eastern Nova Scotia and employs 45 workers. Bud Johnson had worked as an auxiliary operator for the plant for two years and had worked his way to that position after starting as a labourer. An auxiliary operator was responsible for assisting the control room operator and the equipment operator in the basic operations and maintenance of the plant's generating system. Over the years, Johnson had learned quickly and knew a good deal about the equipment operator's job. On many occasions, Johnson was asked to fill in when the equipment operator was absent or when there was a problem that no one else could handle. One day Johnson approached his boss, the plant superintendent, Larry Braxton, about a promotion to equipment operator:
Bud Johnson (auxiliary equipment operator): Larry, you know I can handle the equipment operator position, and I'd like to be considered for a promotion.
Larry Braxton (plant superintendent): That's not the point. We all know you are capable, but we just don't have any openings right now. Besides, the job qualifications require that you spend sufficient time as an auxiliary operator before moving up to an equipment operator. Just sit tight.
Bud Johnson: Well, I hope some openings will come up soon. I really would like to make more money, and I know that I am qualified. You know I can learn quickly. Look at how fast I moved up from being a labourer.
After this conversation, Bud Johnson was again called on several times to help out with the equipment operator's job and to explain the readings and gauges to Wilma Barker, one of the equipment room operators. When Johnson did not receive a pay increase or promotion after his annual evaluation, he met with Braxton and told him that he was dissatisfied with his pay and felt that, since he often performed the equipment operator's job, he ought to be paid at that rate instead of his present rate as an auxiliary operator. Braxton told him he would have to remain at the pay of an auxiliary operator and that he should be satisfied with that for the time being. Johnson became quite upset and stormed out of Braxton's office. The next day, Johnson did not report to work and did not call in to report his absence.
The human resources policy on absenteeism stated that when an employee is absent and fails to notify his or her supervisor, the employee may be terminated. When Johnson returned to work the following day, he told Braxton that he had decided to quit his job because he was very dissatisfied with his pay. Johnson was asked to sign a termination notice form, which was required by the company policy. He was told by Braxton that he would receive a copy of the form in the mail.
A week later, the VP of Human Resources, Joyce Newcombe received a phone call from Johnson. Johnson told her that the reason given on the copy of the termination form he had just received in the mail was incorrect. He had not left to take another job but had left because he was dissatisfied with his pay and lack of promotion at the plant, and he had spoken with Larry Braxton, the plant superintendent about this several times. Johnson also told her that he wanted his personnel records to be corrected and that he had been asked by Braxton to sign a blank form. Johnson alleged that Braxton had added the incorrect reason after he (Johnson) had signed the form. Johnson also stated that he thought the Human Rights Commission would have something to say about this whole incident.
Questions (Marked out of 10, divide by 2)
1. Based on the facts presented, classify and explain the current roles of the Plant Superintendent Larry Braxton, and the Vice President of Human Resources, Joyce Newcombe, in relation to the absenteeism and termination policies and incident, using the concepts of staff, line and functional authority (6 marks)
2. What changes in authority need to be made at Mount Ridge to prevent incidents like the one involving Bud Johnson from happening in the future (4 marks)
2
