Foundry AB Company


The current paper addresses human resources issues related to the introduction of incentive schemes on the Foundry AB Company. The paper specifically focuses on the analysis of the strengths and weaknesses of the company in the realm of the SWOT analysis, discusses human resources management issues that are at table currently and that might arise in the future. The last part of the paper compares the incentive schemes that are considered by the managerial staff and provides recommendations based on the results made in the course of the analysis.


SWOT Analysis

The SWOT analysis aims to identify the strengths, weaknesses, opportunities and threats for the existing company. The key strength of the company refers to the qualification of its workers and their abilities to produce goods that are still demanded on the market regardless of different crises. Additionally, the company obviously has established reputation in its sector so that there is no need to waste money on the companys promotion and its products. More than that, the managerial staff of the company has nurtured business relations over the time the company has existed on the market.

The weaknesses of the company refer to the inability to deal with human resources issues that will be discussed more in details later in the paper. In any case, the company uses the false naming, and the managers assert on the merging occurring between both companies whereas, in fact, there has been a takeover of one company by another. The issues with the personnel and the managerial positions have not been resolved yet. Another weakness refers to the spoilt relations with the union that might present the threat for the company and cause certain temporary problems on the production lines.

The opportunities in the SWOT analysis relate to the benefits that are stemming from the sources that are not directly affected by the company. One of them refers to the rising of the demand for the products that are manufactured by the company. The latter will lead to the increased profit rates of the company and will bring in new opportunities. Another benefit might be derived from the weakening of the labor union influence due to the overall decrease in their popularity among the workforce in the area of individualism. In such a case, the company will no longer be tied with the opinion of labor unions.

The threats, on the contrary, refer to the disadvantages that might be experienced by the company due to the emerging of certain external factors. The Foundry AB might suffer from the introduction of new tax laws by the government or by the governmental support of labor unions at the national level. Additionally, the company might be negatively affected by possible lawsuits that might arise as a result of newly initiated bonus schemes or due to the termination of employment agreements with employees who do not have the appropriate level of expertise to be capable of creating newly fabricated products.

The Main Crucial HRM Issues

Many human resources issues should be addressed by the company. Yet, the main one refers to the differences the company makes in treatment of the employees from the A and B Company. There is no doubt that these employees are different in terms of the business and organizational culture and their approaches towards their profession and job overall. However, as it could be inferred from the case attached, the employees from the A Company have more chances in getting promotion than their peers from the B Company due to the simple fact of belonging to the dominating company. This practice is unacceptable under the conditions of the market economy and strong competition. The employees from the B Company might feel oppressed and discriminated, and these feelings might then result in the conflicts, protests, and strikes. Probably, it is the main reason why the employees of the B Company are more attached to the labor unions that the employees from the A Company. More than that, they will definitely be in favor of incentive schemes that provide for the work in groups, regardless of their overall effectiveness and significance, since such a scheme will allow them to remain the strong relations and to work in-group which is, in fact, important when any conflict appears (Yuh-Shy n.d.). Thus, they will be in strong opposition to individualized schemes that will destroy the relations and connections that are present now and make them weaker and not possible of the further fight.

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Furthermore, the company actually has not contacted the employees before the introduction and elaboration of the schemes. However, it should have as the researches show that participation of the employees in the drafting of new policies significantly decreases the resistance and makes the process of the implementation of new reforms more smoothly and easy to perform (Poutsma, Hendrickx & Huijgen 2003).

Comparison of Incentive Schemes

The comparison of bonus schemes allows one to make the following conclusions. First of all, the reward in both schemes is different. In the first column, it is higher. Yet, it should be stressed that it provides for the group work where the leader of the group is rewarded regardless of his/her involvement in the work process and his/her actual performance. The latter means that the employees in the first column might work as much as the employees in the second column and get the same rewards as their peers in the second schemes since the reward will also be assigned to the leader of the group that will be busy with the performance of certain administrative duties. The second scheme is less rewarding in terms of money. However, it provides for the individualized approach where the final reward depends solely on the performance of the concrete person.

In fact, the employees that will choose the first scheme will have to work more than the employees from the second scheme do. The main reason here applies to the manner of the work. In the first case, they will work on a small group basis. Yet, some of the individuals might work harder than others and still earn the same share. In the second scheme, each worker will get the share that he will earn, and its size will specifically depend on his performance.


In my opinion, while introducing new schemes for the consideration of the employees, the human resources managers and the labor unions, the company has not first asked the staff regarding their wishes as to bonuses. Obviously, the company has decided that the monetary bonus will serve the employees as the best reward for their initiatives in the workplace. Furthermore, the company has divided the staff into several categories and set the appropriate tariffs for their labor regardless of the previous experience, the behavior in the workplace, the loyalty for the company, etc. More than that, the managers at Foundry AB have not communicated the changes clearly to all levels of its organization. Most probably, the conflict might arise from the simple misunderstandings as well as the natural fear of changes that is experienced by every employee that is affected by the scheme. Before introducing the scheme, the company should have considered the financial state of its employees, the level of their dependence on the company, and the changes that might be brought as a result of the approval of the new bonus scheme.

Considering this, the company is recommended to initiate the negotiations with both the employees and the labor union. The conversations with the latter as well as the possible reconciliation procedures will let the parties separate from their previous history of the abnormal relations to the future cooperation for the benefit of all sides involved. The parties of the conflict should both announce their positions, identify the terms they agree on, and the ones that they will have to discuss more in detail. It will help to remove all unhealthy rumors that are associated with the two parties and allow them to start a new stage in their relations.

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As to the employees, the companys managers should elaborate on the ways of bringing employees together and removing the possible barriers or stereotypes that have existed before. For years, the company has ignored these issues, and now there is definitely the high time to get over it. Yet, the reconciliation process should stem from the managerial staff to the lower levels. At the same time, it has to be stressed that the employees from the B Company have faced discrimination for years as they have been denied the promotion to the highest posts in the company despite their qualifications and work-related experiences. These practices, therefore, should be equaled, and all the employees should be evaluated on the same merits regardless of their initial belonging to the A or B Company.

Finally, before the introduction of the incentive bonus scheme, the company should find out about the preferences of its employees. For that purpose, it might carry out the little survey or even the negotiations where the employees would pronounce their preferences as to the future schemes. Obviously, there would be those who prefer the group schemes and the ones who will be for individualized schemes. In any case, considering the potential of the employees and the overall impact that they have on the well-being of the company and its financial performance, the company is recommended to introduce the flexible approach to bonus schemes where the employees would be able to choose the one that suits them the best.


Reflecting on the case study that has been analyzed within this paper, the following conclusions could be reached. First, there are many human resources issues that should be addressed by the company immediately. Second, the SWOT analysis of the company has identified the strengths and the weaknesses of the company that are to be addressed in the process of the strategic reorganization of the company. Third, it has to deal with the discrimination practice and make all the employees equal. In addition, bonus schemes that are offered by the company mainly differ in the way the employees will be rewarded, and here they should be explained about the benefits and disadvantages of both approaches for the sake of the better performance rates and the well-being of the company. Finally, it is recommended for the company to negotiate with the union and the employees to discuss the bonus schemes and the overall changes more in details to avoid the possible lawsuits and strikes.

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