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. If extra resources are required for additional effort, what advice would you give to management to take for attracting, compensating and rewarding additional temporary resources?

2. What type of bonus structure will be built into the retention plan for the key employees identified to remain in the function during the transition?

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

4. 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?

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

6. 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?

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