Requirements of Case Study Report on GlobaTech's Employee Retention

Case Study Scenario

Answer each of the questions below as you would in a typical exercise. But please write out your answers using sentences as you would in a report. At the end of each question, I give some guidance about how long I think that each answer should be. Please aim for clear and concise answers that address all parts of the questions. In your submission, I recommend removing the question text and just including the question numbers. Each question is worth 2.5 points.

Suppose you are a consultant for GlobaTech, a relatively large technology company with $800 million a year in revenue and 1,233 employees. Recently many of their employees have left the company. Job attrition is costly for the company. The hiring, training, and integration of each new person costs money, not to mention the work lost during the search process. You are asked to help GlobaTech in identifying important areas for improvement with respect to employee retention.

1. GlobaTech is planning to build a new coffee lounge in their headquarters to promote interaction between employees. The company is trying to decide between building a small, medium, or large lounge. The payoffs received for each size of lounge will depend the market demand for labor in the area, which could be low, medium, or high. The payoff matrix for this decision problem is:

Labor Demand

Size of Lounge Low Medium High

Small 400 400 400

Medium 200 500 500

Large -400 300 800

(payoffs in $1000s)

The owner of the company estimates a 18.25% chance that labor demand will be low, a 39.55% chance that it will be medium, and a 42.20% chance that it will be high. What decision should the company make in order to maximize profits? What is the expected monetary value of this decision? Show your work. (Recommended answer: 1-2 sentences and calculations.)

2. GlobaTech had to lay off hundreds of employees last summer and they think that this past event is influencing employees’ judgements about their current job security. You test this theory by surveying their employees and asking them to report their perceived likelihood of being laid off this year. The average response is 40%. GlobaTech reports to you that the actual likelihood of layoffs this year is 10% based on current revenues.

What is the availability heuristic, and how can it explain the biased judgements of the employees? Include at least two citations to the assigned readings. What do you think the company can do to help employees make more accurate judgments about their job security? Describe one idea. (Recommended answer: 2 paragraphs)

3. GlobaTech wishes to invest a total of $1,000,000 in employee retention programs next year. They have identified five different strategies that will yield a return on each dollar that is spent. They wish to maximize their expected return by investing in a mix of these strategies. Assume that the return on investment remains fixed and once their investment plan is selected they do not change their mind. The retention plans offered are:

Celebrating employee accomplishments 9.1% return per year

Increasing time off to employees 16.1% return per year

Team-building events 7.3% return per year

Company retreats 5.6% return per year

Professional development classes 12.3% return per year

GlobaTech believes that offering more time off and offering classes will take time away

from work and therefore should be done in moderation, so they want a limit of 30% of

their total investment placed in these two programs. Adding company retreats and

celebrating employee accomplishments were recommended by their board of directors,

so they want at least 40% of their investment total placed in these programs. How much

should the company invest in each program? Show your LP model including all of the

constraints. Upload your spreadsheet representation with your assignment.

(Recommended answer: 1-2 sentences and LP model with constraints)

4. GlobaTech wants to know which employee characteristics are associated with staying at

the company. If they can figure this out, they believe they will develop better programs

to help keep employees within the company. They provide you with their employee

database (EmployeeAttrition.csv) for statistical analysis. Which five employee

characteristics do you think might be associated with the number of years that an

employee has worked at the company? Briefly explain your hypotheses. Which

characteristics ended up being statistically significant predictors of tenure at the

company? Show regression results. Paste your R code into the document. (The

outcome variable in your model should be ‘YearsAtCompany’. This is a continuous

variable; you should fit a regression model.)