A Fortune 500 company recently announced that it would outsource its payroll ope

Question

A Fortune 500 company recently announced that it would outsource its payroll operations on October 30, 2016 to a third party payroll service provider. The outsourced plan will include working with the service provider to build a ‘Retention Plan’, where key current employees in payroll operations would be identified. The plan will include two tiers: key employees will be retained for 8 months, and the remainder of the staff retained for only 4 months.

A bonus structure is to be built into the ‘Retention Plan’, enabling employees at the end of their transition period to earn a bonus if the service provider determines the employee was helpful in making the transition successful. This bonus will be based on performance goals that were established in the ‘Retention Plan’ process.

Using today’s date – provide recommendations and comments for the following questions:   

1.What advise would you give to management regarding ongoing communications and updating the organization on this event?

2.Who will take responsibility for handling any negative feedback regarding a backlog of travel check requests, tuition reimbursement payments, special payment for bonuses, car allowances and other payments to relieve some of the pressure?

3.What type of plan will need to be put in place for this transaction?

4.Who will be responsible for reviewing the ‘Retention Plan’ to determine if the employees performance are meeting the goals established for success outcome of outsourcing by the end of the year?

5.What process would management put in place to measure success or failure of the retained employee’s performance goals?

Explanation / Answer

1. Individual mails has been sent to all the employees working in the organization regarding the outsourcing of the payroll activity. To have all the employees in the organization to be kept well informed about the activity, banners had been placed in the cafeteria and the common places where all the employees flock during the leisure time. The employees were also insisted to have their database corrected if there are any corrections, before the transition process and last date for such corrections is set as August 30th, 2016.

2. The permanent employees in the organization, in the payroll department will take responsibility on clearing the backlog that is arising during the transition phase.

3. Plans are readily available with the service providers who is going to take the outsourcing process. Already they have successfully implemented their plans in taking over from the other companies. One such plan could be chosen from the service provider for the transition process. It would be just sufficient for us to over see the transition process.

4. One of the top management executives responsible for the HR function will oversee all the performance of the employees involved in the retention plan.

5. After the employee is successfully retained, a specific appraisal will be conducted to such employees after six months of their retention, to check their performance after their retention.

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