been employed as a design engineer with your company for the last seven years. Benson,who is now 35 years old, is a reliable employee as well as a skillful and inventive engineer. Seeking to earn additional money, he decided to start his own business, at which he would on evenings and weekends. The products to be made and sold as part of this business are similar to those made and sold by your company. Bensons immediate supervisor found out about Bensons business but took no action for several months, believing that the business probably would not amount to much and that eventually Benson would lose interest in the project and drop it on his own.
However , one afternoon the supervisor found Benson on company time using a company telephone to order materials for his business. The supervisor reprimanded Benson on the spot and warned him that such practices would not be tolerated. He further stated that the incident would be reported to you, the chief engineer. A few days later, Benson received written notice from you that he must divest himself of his business within a month or resign from your company.
A month later, Bensons supervisor asked him directly for his decision. Benson indicated that he had though it over a and talked with friends as well as officials of the engineers union of which he was a member. He stated that he would not give up the business nor would he resign. Bensons arguments were that he was a good employee and that his outside company did not interfere with his work for your firm. The small amount of business that he did could not hurt your company, and he was neither using the companys resources nor soliciting its accounts. Therefore, what he did with his own time was of no concern to your firm. Benson's supervisor then reported the conversation to you.
AS CHIEF ENGINEER, WHAT ACTION SHOULD YOU TAKE? Background Facts :
Charles Benson has been a superior engineer and was a reliable employee prior to the problem. Benson has been with the company for seven years. The products that Benson firm makes are similar to the products made by your company. Bensons supervisor knew about the outside but took no action for several months. Benson states that he will neither give up the business nor resign form the company. Benson was ordered by you as chief engineer, in writing to drop the business or resign form the company. Benson was caught by his supervisor doing business for his own firm on company time and using a company telephone. Assumptions:
1. Benson has stated that he has contacted union officials and that they support his position. This is presumed to be true. 2. Benson states that he is not soliciting company accounts. This is presumed to be true. 3. Bensons current level of business will probably not hurt your company in the sense of his being a competitor. Nor will hiss present product line compete with your companys product line. 5. Current company policies do not specifically forbid an outside business, although conflict-of-interest laws as well as secrecy clauses and the companys ownership of ides resulting from company work impact on the legal aspects of the problem. 4. It is assumed that Bensons business activities are no longer done on company time and his outside work does not currently interfere with his work that is done at your firm. The Charles Benson Problem-Solution
CENTRAL PROBLEM 1.) Should Charles Benson be retained as an employee or fired? (Limits the solution to two courses of action retaining or firing.)
2.) What should be done about Charles Benson? Lacks specifics about the problem that are important if the analysis is to be presented to someone else.) (this may be a problem that needs to be worked on, but its solution disregards specific of Bensons case, including the earlier warning.) 3.) What policy should your company establish regarding employees forming outside business? 4.) What should be done about Charles Bensons outside business considering the fact that he was warned, that the union may take action, and that he has been a good employee and is a superior engineer? (tries to incorporate the relevant factors into the central problem, resulting in an unwieldy and awkward statement of the central problem.) ( An alternative course of action is assumed as the solution before the analysis.) 5.) How can Charles Benson be kept with your company? ALTERNATIVE SOLUTIONS
1. Discharge Benson
Advantages: Will enforce discipline, since Benson warned that he must give up the business or resign. Will discourage employees in the future from starting outside businesses. Will solve any problem of conflict of interest due to the nature of Bensons business. Disadvantages: May lead to union problems due to the unions current support of Bensons position May lead to a morale problem if it is believed by other employees that the company has acted unfairly. Will result in the loss of a superior engineer and an otherwise reliable employee. Advantages: Will avoid any problem with the union. Will result in the companys keeping a superior engineer and an otherwise reliable employee. Will avoid any feeling among other employees that Benson is being treated unfairly. 2. Retain Benson Disadvantages: May result in a discipline problem, since Benson was ordered to give up the business or resign. May eventually result in a direct conflict of interest due to the nature of the products and the customers. Will effectively establish a company policy on this matter that may not be desired. May encourage other employees to start outside businesses. Advantages: May avoid any problem with the union. Will reward Benson for past performance as a superior engineer and an otherwise reliable employee. Will maintain discipline, since Benson was warned that he must give up the business or resign. 3. Discharge* Benson as an employee but retain him as a consultant. *The mechanism of this discharge should be Bensons resignation. Will avoid setting policy or precedent regarding employee businesses. Will solve any problem of conflict of interest due to the nature of Bensons business Disadvantages: May encourage other employees to become consultants rather than employees with the company. May set policy of a different kind: that employees who start their own businesses will be retained as consultant DISCUSSION - ANALYSIS 1. Several important issues bear on this problem: A. The disciplinary issue and the fact that Benson was sold told to resign or to divest himself of his business. B. The importance of fair treatment and its potential effect on other employees. Benson has been a superior engineer and an other wise reliable employees. There is currently no conflict of interest, and may encourage other employees to similarly start businesses on their own. D. Potential union involvement and a legal suit. C. The policy issue. If Benson is retained, this will tend to set policy and may encourage other employees to similarly start businesses on their own. 2. All of these issues are important and must be considered in the decision. Therefore: A. Discharging Benson should be avoided, since it has considerable potential for affecting the morale of other employees (being unfair the first mistake of a superior and otherwise reliable employee) and could lead to problems with the union and a legal suit. B. Retaining Benson should also be avoided because of its potential effect on discipline and on setting policy and encouraging other employees to start their own businesses. C. Discharging Benson as an employee but retaining him as a consultant is the only solution that is not negatively affected by the main issues. 3. If Benson fails to accept the solution of resigning to become a consultant, then he should be discharged. Under these circumstances there is less chance of his treatments being perceived as unfair, and while the company still risks union problems and a lawsuit, discipline will be maintained, no policy on outside businesses will be set, and other employees will not be encourage to follow in Bensons footsteps. CONCLUSION 1. Discharging Benson as an employee but retaining him as a consultant is the best solution considering the major issues involved. 2. If Benson fails to resign to accept a consultancy, he should be discharge. 4. A policy on outside employee business should be established and publicized as soon as possible. 3. The consultancy approach must be presented to Benson as the only all-around fair solution, and not as punishment, in order to maximize the chances of his accepting it; however, it must be presented in such a fashion that other employees recognize the resigning or discharged employees will not automatically be hired as consultants. RECOMMENDATIONS OR DECISIONS 1. Discharge Benson as an employee and hire him s a consultant. 3. Establish and publicize a policy on outside employee businesses soon as possible. 2. If Benson fails to accept this solution, discharge him immediately.
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