TOP STAR BAKERY (CASE ANALYSIS)

I. SUMMARY OF THE CASE
Top Star bakery was launched on October of the year 1975. Eleven years after, the bakery entered a medium term contract for a local hamburger chain to bake its “sesame seed buns”. The rapid increase in its demand prompted the expansion of the production of Top Star. Since then, the bakery continued its growth.
As the bakery started as a family business, the employees are close to the employers and most of the workers are related to each other. Some were even descendants of the original employees.
On 1982, the then production manager Angel Cruz started a system of compensation that avoided the payment of overtime. When one employee is absent, his work is divided equally among those present and so is his salary. Before it was implemented, the employees could adjust their working time by either slowing or rushing their movements. With the implementation of this scheme, the management could control the direct labor costs without spending too much time supervising the workers.
When Manny Bautista was assigned as production manager, many workers complained that the absentee’s salary should not be shared equally because there are others who don’t share in the extra tasks. The workers suggested that they be paid hourly for their overtimes. Bautista agreed with this but was also concerned about not being able to control direct labor costs. He assessed that even if twenty five percent of the workers were absent, the target output could still be achieved and he realized that the production section was over-staffed.
Then on May 2, 1987, Top Star accepted an order for 20,000 pieces of buns to bake. Bautista became furious when forty percent of the workers didn’t turn up and the remaining employees would not consent to work overtime to finish the production. Because of this incident, Bautista was convinced that the overtime-sharing scheme should be ceased. He decided to enforce a new system. To implement it, he thought of setting targets for each employee and a regular evaluation of their performance. Also, in order to achieve effective control over direct labor costs, Bautista planned to terminate roughly twenty percent of the employees.
II. STATEMENT OF THE PROBLEM
How can Mr. Manny Bautista enforce his new system and what other reformations must he implement for a more effective work force?

III. STATEMENT OF THE OBJECTIVES
1. To successfully enforce the new system and prevent outrage from the terminated and the remaining employees.
2. To ensure the proficiency and efficiency of the remaining work force.
3. To effectively control the direct labor costs without jeopardizing the production output.

IV. ALTERNATIVE COURSE OF ACTION
 One option is to have a discussion with the employees about the new system to be implemented. Explain to them the changes and also of the termination of some of the employees. Give the fired workers sufficient termination pay and talk to them further after the general meeting. Try to soothe them and give them proper appreciation of their loyalty to the bakery but also explain to them about the overstaffing situation. The disadvantage is that you can never please everyone and it is a big possibility that they might join forces and create a union. But, as it is within the manager’s right and authority, Bautista still has the upper hand so long as the remaining workers stay loyal. Also, with the discussion, most of the employees would understand the need for change as it will be beneficial not only to the management and the owners but also to them.
 Another course of action is to set up weekly or monthly work quotas for the employees and of giving incentives to deserving personnel. This could raise the moral and motivation of the workers. Also, this will discourage absences and inactivity or laziness. Again, the disadvantage of this is the laborers own reaction. Some might like having goals while others might want to stick to the traditional ways.
 The management could also opt to perform frequent performance evaluations. This could help in determining the personnel who are efficient and those who are not. One disadvantage is that the employees might feel mistrusted and could harbor ill feelings towards those who perform these evaluations.
 Another alternative is to impose a set of rules in the workplace. For example, late and absences will be deducted from their salary or they could be under probation. With this, the management could control the labor costs as there will be fewer absences and the workers will avoid misdemeanors. The disadvantage is that, like in the other options, the employees might rebel and oppose the rules.

V. RECOMMENDATION AND CONCLUSION
In this situation, most of the options have a lot of disadvantages and many could encourage the workers to protest against the changes. But, when combinations of the different alternatives are employed, the outcome could be for the better. The first alternative is a good start. The discussion with the employees could prepare them for the changes and during the meeting, their voices could be heard. The workers could address their concerns directly to the management and the employees to be dismissed could well prepare for their impending termination. Also, the management could come up with rules and regulation for the bakery, including the weekly or monthly quotas and the performance evaluations. During the assembly, discuss these also with the employees. Hearing the opinions and suggestions of the workers could lessen the friction of the transition. Overall, the way the management approaches and talks with the employees will be the turning point from disaster to obedience from them. If the management makes sure that there are a few conflicts with their employees but with justifiable amount of control over them, then Top Star Bakery will have no more or infrequent problems such as the mass absence of the employees in the future.