Critical Analyses 3 CA 3: ManagING Human ResourceS  Social Contract The Right Way with Employees? As a senior manager for a global player in automobile production and sales, Jane Ellis had joined thousands of fellow employees in the excitement surrounding production of the company’s new hybrid vehicles. But barely two years into production, embarrassing component shortages, delivery delays, and a recall of the first models had a ripple effect, presenting the company with mounting concerns. In the confusion, many customers canceled orders and turned to competitors for purchase of the eco-friendly vehicles. Ellis’s company was facing a financial downturn.  With three decades of service to the company, Jane led a contingent of managers intent upon keeping together as much of the company and as many employees as possible. “We know there will be some necessary cuts,” Jane admitted. “But this company has a long history of sticking by its people. Our first priority should be internal streamlining of how we do things and making sure we have the right people on board.”  Many managers liked what they heard from Jane. She was well-respected and had a unequaled reputation for her leadership and collaborative skills and her ability to work with managers, as well as line workers on the factory floors. People marveled at the number of individuals she knew on a personal level throughout the company. Drew Cunningham influenced a second contingent within the management group. A brash go-getter with a reputation for fixing companies in crisis, he proposed across-the-board cuts in employees in order to implement a solution as quickly as possible. He proposed the immediate creation of a forced ranking system in order to identify and get rid of lower-ranking employees. Jane raised her hand and rose to her feet in objection. “So we’re going to create a system to fire …” “I didn’t say fire …” “OK, cut our own hard-working people? It sounds like some lame government commission,” Jane said. “We’ve got bright people. This thing simply got worse faster than we thought. We can work with the people we have in setting up more efficient workflow, establishing reasonable deadlines to increase output and …” “Jane, these are not the days of knowing everyone in the plant,” Drew said. “You’re not throwing out your uncle Harry. We’re taking a serious look at what we do, how we do it, and streamlining everything by keeping the right people in the organization and cutting the rest.”  Apply Your Skills: Case for Critical Analysis The Right Way with Employees? 1. What kind of employee social contract is assumed by Jane Ellis and Drew Cunningham? Explain fully – what is the traditional social contract and what is the “new” social contract. 2. If you were an HR manager at the company, which view would you support? Why? 3. HR departments hire and develop human capital to serve the organization’s strategy and drive performance. Which approach—Jane Ellis’s or .

1. Critical Analyses 3
CA 3:
ManagING Human ResourceS
Social Contract
The Right Way with Employees?
As a senior manager for a global player in automobile
production and sales, Jane Ellis had joined thousands of fellow
employees in the excitement surrounding production of the
company’s new hybrid vehicles.
But barely two years into production, embarrassing component
shortages, delivery delays, and a recall of the first models had a
ripple effect, presenting the company with mounting concerns.
In the confusion, many customers canceled orders and turned to
competitors for purchase of the eco-friendly vehicles. Ellis’s
company was facing a financial downturn.
With three decades of service to the company, Jane led a
contingent of managers intent upon keeping together as much of
the company and as many employees as possible.
“We know there will be some necessary cuts,” Jane admitted.
“But this company has a long history of sticking by its people.
Our first priority should be internal streamlining of how we do
things and making sure we have the right people on board.”
Many managers liked what they heard from Jane. She was well-
respected and had a unequaled reputation for her leadership and
collaborative skills and her ability to work with managers, as
well as line workers on the factory floors. People marveled at

2. the number of individuals she knew on a personal level
throughout the company.
Drew Cunningham influenced a second contingent within the
management group. A brash go-getter with a reputation for
fixing companies in crisis, he proposed across-the-board cuts in
employees in order to implement a solution as quickly as
possible. He proposed the immediate creation of a forced
ranking system in order to identify and get rid of lower-ranking
employees.
Jane raised her hand and rose to her feet in objection. “So we’re
going to create a system to
fire
…”
“I didn’t say
fire
…”
“OK,
cut
our own hard-working people? It sounds like some lame
government commission,” Jane said. “We’ve got bright people.
This thing simply got worse faster than we thought. We can
work with the people we have in setting up more efficient
workflow, establishing reasonable deadlines to increase output
and …”
“Jane, these are not the days of knowing everyone in the plant,”
Drew said. “You’re not throwing out your uncle Harry. We’re
taking a serious look at what we do, how we do it, and
streamlining everything by keeping the right people in the
organization and cutting the rest.”

3. Apply Your Skills: Case for Critical Analysis
The Right Way with Employees?
1.
What kind of employee social contract is assumed by Jane Ellis
and Drew Cunningham? Explain fully – what is the traditional
social contract and what is the “new” social contract.
2.
If you were an HR manager at the company, which view would
you support? Why?
3.
HR departments hire and develop human capital to serve the
organization’s strategy and drive performance. Which
approach—Jane Ellis’s or Drew Cunningham’s — is more likely
to have a greater positive impact on performance? Discuss.