Problems faced by management group & recommendation going forward

CASE STUDY: SpiderWeb Inc.
SpiderWeb, a telecommunications company founded in 2008, has posted rapid growth in recent months following the launch of a new smartphone based on leading-edge interactive technology.
SpiderWeb has a total workforce of 150 people, most of whom belong to Generation Y. The organization’s head office in Montreal is staffed by 50 employees, while a new plant in the Vancouver suburbs employs 100 people in production and distribution. The company is financially sound and plans to double its workforce over the next two years through developing the American and world markets.
SpiderWeb is strongly influenced by the entrepreneurial management style of its two founders. Still active in the organization, they are responsible in particular for the HR function. To support the firm’s anticipated growth, they have decided to employ an HR consulting team to identify the HRM needs and lay out an action plan prior to them hiring a VP of HR to be in charge of HR at SpiderWeb’s two locations.
You are the HR consulting team that has been hired.
At your first meetings with the executive committee, composed of the founders and four key managers from Montreal and Vancouver (the finance director, R&D director, operations director and CEO of the Vancouver plant), you realize that they are fairly apprehensive and uninformed about their proposed new HR function and its strategic dimension.
Findings
A few days after being hired by the company, you hold a number of meetings with managers and employees from both sites. Your initial findings are striking:
• at first glance, the employees generally seem to be motivated and happy to work for SpiderWeb, particularly since the launch of the new smartphone, which everyone is proud of;
• the company has no HR management policies;
• its senior managers are assigned their duties and the management of major projects on an arbitrary basis;
• this is the first management experience for most of the company’s managers;
• up to now, supply and demand have served as a guideline for compensation, which is inconsistent and inequitable. This practice is not unanimously approved of and is a source of discontent among employees and executives alike.
The Issues
Many managers confided that they would like to see the company move forward and institute a new and equitable compensation policy. The executive committee also informed you that recruitment is the main HR issue. The scarcity of talent in cutting-edge technology and the low level of awareness of the employer brand, given that the company was established only a few years ago, add to the challenges faced by the new VP of HR.
You also note several issues that are specific to the Vancouver plant. Its CEO, whose responsibilities include HR management, is the brother of one of the founders. However, he lacks the relevant training and experience to fulfill this function. Many of the plant’s employees have spoken to you about his lack of organization and management skills. Nonetheless, the two founders would like to see him continue these duties and you want you to include recommendations in your proposal that will assist him in his professional development.
After a brief analysis of the key HR indicators, your team realizes that there are some serious problems at the Vancouver plant:
• turnover is far too high when compared to the industry average;
• there are numerous disability cases;
• absenteeism is high.
As well, you heard employees at the plant’s distribution centre discussing a proposal to apply for union certification. Your team talked this over with the plant manager, who doesn’t seem to be worried or interested in the matter. In his view, the workers in question are mainly isolated cases, troublemakers that he plans to take care of. He believes that engagement levels among most of the plant’s employees are high.
When you return to Montreal, you hear a rumour about the strategic R&D team. Apparently its members fail to comply with the guidelines respecting the protection of intellectual property and lack the sense of professional ethics their role requires. You also hear that some of them have met with competitors outside the workplace.
Lastly, despite the considerable respect the employees have for the founders, several more experienced executives shared their concern about the founders’ lack of medium- and long-term vision and planning. Moreover, the founders themselves are the first to admit that they’ve never really taken the time to think about the priorities and strategic directions that would ensure the company’s survival. They realize that this situation should be remedied as soon as possible and admit that they have focused exclusively on the company’s growth from the start.