Question

Refer to the following scenario for the questions.

The shared service centers of a multinational technology company are concentrated in one country. They provide back-office operational support for the finance and accounting, procurement, and HR functions of the company.
The local talent market for the back-office operations skills is very competitive. To date, the company has been successful in recruiting experienced professionals from its competitors. The main draw has been the generous compensation and benefits package and the general perception of an amiable and cooperative management team. While competitors' workforces have unionized in this country, this company's workforce has remained union-free.
The annual planning process has kicked off. The process requires the global HR and finance teams to recommend the payroll increase budget for each country based on key economic indicators, company performance, affordability, and compensation market survey data. The teams recommend a salary increase budget of 18% for the country with the shared service centers. The country HR director is concerned that the recommended budget is too low and believes that, in order to remain competitive and compensate for inflation, the increase should be 30%. The country director brings her concerns and recommendations to the global VP of HR.
In a discussion with the global VP of finance and the global functional leaders, the global VP of HR learns that the 18% increase budget is a stretch and that going any higher will have a negative bottom-line impact.
Which is the best first step the VP of HR should take to address the opinions and concerns on the salary increase budget?
Answers
A. Meeting with the global functional leaders and the country leaders to discuss each side's point of view until a consensus is reached
B. Recommending that, as a fair compromise for all stakeholders, the budget should be 24%, which is midway between 18% and 30%
C. Contacting the corporate attorney for an opinion on the unionization risk in this country if the budget is significantly lower than the rate of inflation
D. Conducting a quantitative analysis that would model risks, costs, and benefits in order to develop scenarios and a recommendation on the optimal solution

Answer 1

The best first step the VP of HR should take to address the opinions and concerns on the salary increase budget is to conduct a quantitative analysis that would model risks, costs, and benefits in order to develop scenarios and a recommendation on the optimal solution.

Step-by-step explanation:

The best first step the VP of HR should take to address the opinions and concerns on the salary increase budget is to choose option D: Conducting a quantitative analysis that would model risks, costs, and benefits in order to develop scenarios and a recommendation on the optimal solution.

By conducting a quantitative analysis, the VP of HR can evaluate the potential risks, the associated costs, and the benefits of different salary increase budget scenarios. This analysis will provide objective data and insights that can be used to inform decision-making and find the optimal solution that balances the concerns of the country HR director, the global VP of finance, and the global functional leaders.