Spl Company Case Study

INDEX

Executive Summary

This is an individual work based on the case study of the performance management module. In briefly there is a company called as SPL company .SPL Company is a FMCG Company and has been in industry for over 10 years.

[FMCG means Fast -Moving Consumer Goods, are the products that are sold quickly at relatively low cost. Though the absolute profit made on FMCG products is relatively small, they generally sell in large quantities, so the cumulative profit on such products can be large. Examples of FMCG generally include a wide range of frequently purchased consumer products such as toiletries, soap, cosmetics, teeth cleaning products, shaving products and detergents, as well as other non-durables such as glassware, light bulbs, batteries, paper products and plastic goods. FMCG may also include pharmaceuticals, consumer electronics, packaged food products and drinks, although these are often categorized separately.  ]

In this SPL Company they produce some products such as chocolates, soap... etc... The company’s current (in 2010) turnover is Rs.75 million. But there happened some problematic situations in the company’s sales and the profit range. It was, last three years the sales & profits have been considerably declining.

    So the CEO of the company, Mr. Ravi Gomez recently has gone through a workshop on performance management system and then he was impressed with the advantages it could give to any organization. So he asked his newly recruited HR Manager Mr. Prasanna Perera and advised him to design a performance management system for SPL (Pvt).

By based on above described situation I am required to;

• Analyze and identify issues involved in the case.
• Make suggestion to Mr. Ravi as for introducing and implement the PM system at SPL Ltd.

Problem statement

The problem statement which known as “Defining the Issues”, is not easy to write! Now it is time to decide what the issues involved in this case study.

The main issue is the sales and the profits have been considerably declining. The following chart will prove what has happened to the company’s profits and sales during the last three years.

[pic 1]

Let see how much percentage the company gets through this sales and profits above three years.

So we can understand clearly about declining the sales and the profits. There may be some reasons for that like as follows;

• High employee turn over
• Not modernizing the packing plant
• Keeping inefficient assets like as old machinery and vehicles for usage

High employee turnover

• What is employee turnover?

In human resource terms, employee turnover is a yard-stick of how long your employees stay with your company and how often you have to replace them. Any time an employee leaves your company, for any reason, they are called a turnover or separation.

• Calculating Employee Turnover

Measuring employee turnover can be helpful to the employers that want to analyze reasons for turnover or estimate the cost-to-hire for budget purpose. The U. S. Department of labour suggests the following formula for computing the turnover rates;

Employee turnover = Number of separations during the month   ×      100                   

                                   Total number of employees at mid-month

Eg: If there were 25 separations during a month and the total number of employees at mid- month was 500, the turnover rate would be:

                        = 25 × 100= 5 percent. (5%)

                                      100

The current employee turnover percentage is 12%.

• How the employee turnover affects to the organization?

The employee turnover naturally affects performance. Those that employee separations are often experienced staff, and it naturally takes time to replace that expertise. It may be related to the employee satisfaction with the job. Also some other reasons may relate to the high turnover like as follows;

• Low pay
• Poor working conditions
• Long working hours
• Not enough benefits
• Discriminations
• Job stress

It may affect the company’s cost because it needs to spend time and resources filling the position and training the new employees. And also it can lower employee morale. So that they do not work properly. So that the production will decrease to a lower level. The above details may cause for declining sales and profits.