Mgmt 4213 Case 3 the Cane Mutiny

Case 3: The Cane Mutiny

1. What was Medignostics’s phased retirement program and why did they phase it out?

Medignostics’s phased retirement program was part of the Part-Time Statute for the Elderly. This was a new aspect of German social legislation. The article states that,

“The statute was a way of easing older workers out the door so that jobs could be made available for the young. Companies that complied were eligible for subsidies. If you worked at a company that participated, then, beginning at age 55, you could reduce your hours to half-time for the rest of your working years but still earn 80% of the wages you had as a full-time employee. Once you reached age 65, the statutory retirement age, you would face only a small penalty in pension benefits for having worked those part-time hours.”

The reason why Medignostic phased out this program was simply because of the costs of it. The longer an employee has been at a company the more money they made, and with this program they had to eat the costs of having longer standing employees making more money than the younger employees. They also had these older employees working less hours but still making a comparable amount if they would work more hours.

Since Medignostic’s upper management were trying to make cut backs to save money this program was one of the first to be phased out of the company.

2. Heberer seemed to be tackling generational diversity from both ends: younger and older worker concerns. What are the short-term costs and long-term benefits of meeting the needs of younger and older generations, respectively?

There are short-term costs and long-term benefits coming from both ends of the spectrum in this case. I'll start with the younger worker concerns. It seems as if Medignostics is having a hard time recruiting the younger workers they need. I found a very interesting article in Forbes titled Hiring Young Workers Who Want Work-Life Balance: What's An Employer to Do? In it they talk about how to get the younger workers more interested in working for you. In one passage they state,

“Remember that some young people want work-life balance, while others want to throw themselves into a job. You can hire both types of people, if you structure the reward system right. Some tech companies, for example, pay a salary based on moderate hours, plus a bonus based on production. The people who sweat and strain—or the programming equivalent—get high rewards. The less-ambitious people know that they have not qualified for the top bonuses, but they also know they had their evenings and weekends free.” (Conerly).

I believe that this “rewards based system” is something that could be extremely beneficial to Medignostics they can hire the young employees they need and give their employees some incentives to work harder and longer hours.

Now, there are some costs to doing this and that is simply the cost of the rewards Medignostics will have to give out, but the long term benefits will be employees who are hard working. This also gives these employees a sense of loyalty, something that will help keep the younger workers with them.

To address the older worker concerns I don’t think that this rewards based system will work. Most people who are closer to the retirement age aren’t as interested in climbing the corporate ladder as they are with just getting their work done. I believe that Dietmer Martina gave some great advice with how to handle the older workforce. He says,

“It might be good to think about transferring aging workers to less demanding roles. In Japan, for instance, employees are routinely taken out of management at a certain age and allowed to glide into retirement. Perhaps Hausmann might be better off in a consulting role at Medignostics. That way, the company could still benefit from his vast experience, but clients wouldn't be affected” (Martina).

I think this would be a great option for Medignostics older workers. By allowing them to take on consulting roles they will feel as if their opinions are needed in our technology filled workforce. They will still be able to offer the company their expert advice but they won’t have to deal with things such as technology seminars and having to learn new programs online.

3. Heberer’s original proposal was shot down as ‘not a priority’. When he proposed on-site daycare, Heberer was asked to leave Weber’s office (senior VP of HR). If you were Heberer, what evidence or arguments would you use to convince Medignostics that they should reconsider their approach to balancing the needs of each generation?

It seems to me that Heberer does not have the respect of his higher management. He needs prove himself and his ideas before he makes any more big proposals. In order to do this he may need to use a few different approaches when he is going to make these big asks. He may also need to come up with a few short term money saving ideas to pitch to his bosses. If Heberer can do this he can also use those money saving ideas in his big proposals.

Heberer can see the long term benefits of an on-site daycare center for their employees. He has a vision in his head for the future of Medignostics but is not relaying that vision to upper management. All that upper management is seeing is the costs of starting an on-site daycare and Heberer needs to convince his bosses that the benefits will outweigh the costs, or he and his ideas will continue to be shot down. He can also use his short term money saving ideas and put the money he saved in other projects