(Human Resource Management Functions, Applications, Skill Development, 3e Robert N. Lussier, John Hendo
(Solution Manual, For Complete File, Download link at the end of this File)
Case 1-1
Summary
At Zynga, a very strict and rigid control system was utilized that focused on the bottom line over
employee health, welfare, and satisfaction. Zynga, known for FarmVille and CityVille, employed a CEO,
Mark Pincus, who thrived under authoritarian watch over his employees, utilizing top-down management
strategies to increase employee productivity.
Former employees began expressing concerns regarding the culture and how a negative culture may
prohibit growth and employee retention, specifically from higher level software engineers and computer
programmers. The external perception of Zynga was much different than the internal perception, which
focused on data-driven decision-making and metrics to make decisions regarding employee performance.
Despite the culture struggles, Zynga was regarded as a highly successful company. However, other
companies were looking to attract some of Zynga’s talent who may not fit with the employee culture,
after the initial public offering, as many of the employees who had stock or company options would more
than likely wait until the IPO to pursue other lines of employment.
Analysis
This case introduces many of the HR concepts that are discussed throughout this text including employee
motivation, organizational culture, ethics, employee retention, compensation, and employee management.
Because this is the case for the first chapter of the text, the instructor may wish to refer to Exhibit 1–3
The Practitioner’s Model for HRM to reference all of the topics which could be discussed in this case
study.
For students who have not taken introductory business courses, it may be necessary for the instructor to
discuss start-up companies and how IPOs are executed and the purpose of stock and employee options.
Questions
1. Imagine you are the new HR director at Zynga. What do you think you might do in this situation to
limit the potential loss of a large number of very talented employees?
First, try to talk with Pincus about the cost of driving away talent. Your job as the HRM is to “advise”
him concerning people matters. Talk to him about the costs of low productivity, low satisfaction, and high
absenteeism and turnover. Since he is numbers-driven, use the numbers to show how much he is harming
the company.
Second, discuss grievances with employees and try to resolve at least some problems immediately. See if
they have suggestions on how to make the workplace more adaptable to various talent levels that could be
carried out. Bring the best suggestions to Pincus for discussion. If he is intelligent (and chances are high
that he is!), you should be able to find a way to make him listen.
,Longer term, the culture needs to be modified. Respect is a necessary part of any high-performance
culture, and there isn’t much respect being shown right now.
2. Are there any benefits or incentives that you can think of that might make more people want to stay
on at Zynga after the IPO is complete and they can “get their money”?
The best incentive in this case would be to change the work environment. It is unlikely that anything else
will work to get people to stay, unless they feel that their concerns about management are going to be
taken into account.
Traditional benefits might include flexible work schedules, telecommuting which can also lower stress.
Stress management benefits of various types might help. These can go all the way from providing yoga
classes at lunch to providing laundry and dry-cleaning services, dog sitting, and elder care. The level of
stress here appears to be bordering on “distress.”
Any incentives should be tiered so that you don’t have to be the absolute top performer in order to meet a
goal and receive some reward.
3. HR managers frequently have to teach other senior managers how to deal with their employees better.
What do you think you can do about Mr. Pincus? Is there anything you can do? Can you coach him
concerning his management style? Do you think this will be effective?
First, remember that he is the CEO!
However, Mr. Pincus needs some executive coaching on leadership and motivation. He is highly talented,
but he has never been taught to manage others. Management is NOT intuitive! So your job would be to
get him to understand that such coaching would actually likely save the company money in the longer
term.
The first thing you can do is show him how much he loses when he drives a talented employee away.
Second, you can show him that competition is not always going to bring out the best in people. Sabotage
and cutthroat coworkers easily occur in this environment.
Third you may be able to show him the value of praise for performance.
He needs to see the evidence that threats and coercion DO NOT work well in getting people motivated to
do more than the minimum.
Make him understand that the company’s reputation heavily affects the ability to recruit the best
employees.
Longer term, it may be necessary or desirable to build a buffer between Mr. Pincus and his employees.
Many entrepreneurs are very good at getting a business going, but not very good at all at running it on a
daily basis. Make him the “creative director” who works only with senior managers who are able to stand
their ground and interact with him, and then translate his ideas into action with the rest of the company. In
other words--keep him out of everyone’s hair.
4. Do you think that big cash and stock rewards for top performers and “the boot” for poor performers
are the appropriate ways to manage talent in this type of high-tech business? Why or why not?
,This is not the best thing to do, simply from a turnover cost standpoint. With this type of high-tech,
knowledge-based company, it would not be unusual to spend $100,000 or more to recruit and select a new
employee. To then lose them almost immediately is an unnecessary expense. And many of the absolute
best people would leave quickly once they found out that the CEO would be constantly looking over their
shoulder, micromanaging their every move, and waiting for them to mess up.
A better option may be to provide the opportunity for training to make good employees even better. This
shows loyalty to the employee which will be returned to the organization over time.
A “stick-only” approach to managing and leading does not work. Similarly, a “carrot-only” approach
doesn’t work either. You need both positive and negative potential measures to shape behavior in people.
Mr. Pincus has been using only the stick and does not understand the negative consequences of that
approach.
Later, we will talk about the coaching, counseling, and disciplinary process. This is probably the model
we need to follow here--at least to some extent.
, Case 2-1
Summary
Catalya Hats is a large hat company with a global presence that spends time handcrafting hats using a
specialized material, toquilla straw fiber, which must be woven by hand. Catalya earned notoriety from
being a popular clothing apparel for both its uniqueness and celebrity appeal.
It is noted that the top managers in the company worked their way up to positions and participated in job
rotation. Because they participated in job rotation, it was believed that the managers have an appreciation
and understanding to every job performed by Catalya and for the people performing those jobs. This
approach directly tied into the mission and vision of the company, focusing on cross-functional corporate
structure.
Catalya Hats was put in a unique position when their production capacity maxed out. This caused the
owners to sell Catalya to a private investor (Ralph Dweck), who agreed to retain the employees for 2
years and remain with the vision and mission of Catalya. This included moving toward a corporate
approach to for Catalya.
In order to enter international markets, this included Catalya outsourcing through finding international
business partners. This would include outsourcing production, something that Catalya had not done
before in their history. Other managers were concerned about the outsourcing; however, Dweck
reinforced the notion of meeting consumer demand without committing a huge amount of resources and
looking at short-term production options.
Analysis
This case introduces the concept of mission and vision and discusses how that applies to company
expansion and creating/managing positive organizational culture. Instructors should consider discussing
the family-based organizational culture compared to a corporate model and mind-set and how this impacts
the vision and mission of the organization.
Other approaches can be taken such as the impact of celebrity endorsements on products--if the celebrities
supported the hats because of their uniqueness and would be less likely to support them if they are mass
produced. Also, instructors could discuss employee “retention” during a business sale, and if keeping the
employees in their positions was a strategic move by the new ownership.
Questions
1. What is Catalya Hats’s vision/mission and how might it explain why the Catalya family sold their firm
to a private investor, Ralph Dweck? (2nd Ed., pp. 48–49)
A vision is what we expect to become as an organization in the future at a particular point in time, while a
mission lays out our expectations of what we are going to do in order to become the organization that we
have envisioned. Catalya’s vision (although they call it their mission) is to make every hat a unique
experience for the customer and their mission was to carry out this vision through international growth
and expansion. The firm finally maxed out its production capacity at the turn of the 21st century, stalling
the family’s plans for international growth and expansion. Although profitable, the family did not have
the financial wherewithal to support a sizable plant investment and reluctantly sold to a private investor,
