Optima
October 2013
JVA Corporation Simulation
A proposal to the CEO is: performance, as well as revenue, is reviewed every 6 months. This way it allows, JVA Corp to cut or increase pay every 6 months and review its bottom line. Employees can also benefit by having the opportunity to earn pay raises potentially twice a year, rather than the typical annual reviews.
In order to prevent more loss, I proposed the following ideas to help the revenue to decline; and not to be considered as a permanent solution.. Since JVA Corporation has been in good financial standing & employees were well taken care of prior to economic downturn, any changes to be imposed would be considered drastic. And this does not only affect the employees across the board, both domestic & international; but it will also affect the community. Since the company suffered a net loss of $53B (175) in the fiscal year, which means the company was worth at $259B before the economic downturn – a huge dent on JVA Corporation. The proposal is effective the next fiscal year. This will give ample time of preparation, feel the employees’ atmosphere and implement an effective communication to employees on these changes.
a) The 500 employees earning more than $150,000 annually will have a 7% salary cut . A savings of $112.5 annually.
b) The 3000 employees earning $100,000 - $149,999 annually will have a 5% reduction of salary. This means a savings of $18.5M annually.
c) A 3% salary cut to employees earning less than $100,000. There are 1500 employees. Savings of $4.5M annually
d) All gym membership will totally be cut. Savings of $6.0M annually.
e) Travel will be minimized.to $5M. Utilization of skype or on-line meetings are encouraged. Savings o f $10M annually.
f) Advertisement will be concentrated more to be on-line, less from magazines and other type of advertisements. Will be reduced from $10M.