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Viewpoint: Mr.

Edgar Lim
Time Context: July 10, 2014

I. Problem Statement
This Case Study will focus on the problem:
 How Permex will address and resolve the scarcity of workforce they are experiencing after a three-
month fish ban?

II. Statement of the Objectives

This case analysis aims:
 To ensure that there is a sufficient number of workers available for the labor needs of Permex in
Zamboanga for the succeeding years in order to safeguard the sustainability of production and
supply of the canned goods in the market.

III. Areas of Consideration

The following are the lists of the strength and weaknesses and the potential opportunities and threats
of Permex Producer and Exporter Corporation that can help the business in achieving their goals to find out
what are those internal and external factors that can affect the company in making a decision.

 Permex’s location was central to its access to  Permex lacks of strong marketing
the fresh fish used in many of its products. capabilities and extensive
 Permex’s facilities include its own landing pier for distribution networks as compared
the docking of local and foreign fishing boats. to its competitors.
 Permex has its own complete canning machines
for the canned tuna and sardines.
 Permex owned six separate warehouse
buildings, an ice plant and cold storage facility.
 Permex’s modern facilities and resources
equipped the company to engage in deep sea
 Permex gives employment to 2,000 workers
during its production.
 Permex satisfies higher demands to its retailer
and distributors.
 Permex enjoys a price advantage over its
 Permex’s “Double Triple A” award allowed  Permex faced a strong competition
them to enjoy preferential status of its products from large sardine industry
in Canada. companies such as Mega Fishing
 Permex is the first fish cannery recipient of the Corporation, Columbus Seafood
Golden Shell Award for export. Corporation, Universal Canning Inc.,
 Permex has a greater customer satisfaction Ayala Seafood Corporation, Atlantic
due to the quality of their products. Foods Corporation, Century Pacific
Foods Inc., Seacoast Top Choice
Food Corporation, Aquatic Seafoods
Corporation and Southeast Asian
Canning Corporation.
 No production can occur during the
three month fish ban.

IV. Assumption
The assumption in this case study is we believed that the Permex Producers and Exporters
Corporation does not provide alternative jobs and compensation benefits to their workers.

V. Alternative Course of Action

With thorough analysis and consideration, the following are the possible solutions to the problem
being faced by Permex:
 Propose a complementary product related to the industry that will substitute the original products
during the three-month fish ban period to continue the production operations of the company.
 Retention of old workers or employees by giving compensation benefits or incentives especially to
those who work hard and exert extraordinary efforts for the company to ensure that they will not
withdraw from the firm and transfer to another business entity,
 Recruitment of possible employees, workers or laborers to find suitable labor workforce and get them
to join in a company.
 Set-up a fish farm which helps to grow and develop the fish species needed in the production before
the start of the three-month fish ban.

VI. Analysis
The following are the advantages and disadvantages of each alternative course of action:


1. There will be an alternative source of income for Permex Company during the closed fishing season.
2. It will keep the workers engaged and motivated.
3. It can generate better products that stimulate economic growth.
4. It will increase the demand for principal products since complementary product will be introduced.

1. Permex will have to incur additional expenses for Research and Development to produce the new
2. Additional expenses for seminars and trainings for workers who are not familiar with the manufacturing
process of the new product.
3. These products will only be temporary which might not result in a not so good profitability.
4. Division of workers on producing both products.


1. Benefit plans motivate workers for higher efficiency and productivity.
2. It can improve the work-flow and work methods.
3. Benefit plans make employees hardworking and innovative.
4. When employees are dedicated, supervision costs can be reduced.
5. Offering benefit plans may become a competitive advantage of the company against the others in the
same industry.
6. Incentive plans help establish positive response within an organization.
7. The employees may work in a longer period of time in the company.

1. Incentive plans can lead to disputes among workers since some earn more than others.
2. Hunger for money among the workers forces them to overwork, which may affect their health.
3. Significant costs will be incurred by the company.
4. For enhanced incentives, they may sacrifice quality.


1. New employees may have developed a wide range of skills and can bring new ideas, perspectives and
talent to the organization.
2. Seek to encourage and motivate employees to achieve more and set higher goals, so next time a job is
open, they will be considered.
3. Hiring an employee allows you to specify the work schedule of the person you hire, which helps ensure
the employee will be available to handle business tasks when you need them performed.
4. Allow to tailor the employee’s training to your specific needs and practices, which can enhance the ability
to carry out business tasks correctly and efficiently.
5. Recruiting new employees can also form a more diverse work force and fulfill equal opportunity

1. When a candidate is selected from an external recruitment process, there is a possibility that the
candidate might have less chance of understanding the environment of the company.
2. There is a possibility that the candidate selected for the post is not worthy of the position offered and
he/she can take advantage of their position in the company.
3. It is time-consuming as most of the companies post an advertisement for their company recruitment and
will result to a higher number of applicants for the post which involves a number of processes for
4. The company needs to provide intense training for the candidates and screening a large number of
candidates consumes more money.
5. The new employee recruited may not adjust to the new environment and to the other employees in the
organization. By this way, the management may lose good employees and need to search for another.


1. Commercial fish farming allows for large supplies of fish which can be an alternative source of supply
for Permex during the three-month period.
2. Fish farms can be easily raise fishes in the tanks or ponds until they are ready for selling or marketing.
3. Commercial fish farming helps in preserving the natural ecosystem.
4. It will continue the production of the canned goods during the three month fish ban.
5. It can contribute significantly to food security, employment and foreign exchange generation.

1. The initial set up costs for fish farming may be expensive due to the installation of fish cages,
hatcheries and provision of processed fish food.
2. It requires costly excavations and channeling river water into and out of the fish ponds or tanks.

VII. Conclusion

5 – Outstanding 4 – Above Average 3 – Average 2 – Below average 1 – Poor

Period of Risk
Cost Flexibility Feasibility Total Ranking
Implementation Level

 Proposal of a New Product 3 2 2 2 3 12 3rd

 Retention of Old Employees 4 3 4 4 5 20 1st
 Recruitment of Possible
4 2 3 3 4 16 2nd
 Fish Farming 2 2 2 2 2 10 4th

Evaluation Criteria:
 Period of Implementation – the ease of the process of implementing the alternative.
 Cost – the amount incurred in the implementation of the alternative action.
 Risk levels – the level of unwanted consequences that the company will suffer when implementing
this alternative.
 Flexibility – the ability of the company to respond to unintended consequences and control the
outcomes once the alternative is implemented.
 Feasibility – the alternatives may be accomplished with the resources currently available or
obtainable by the company.

Since we have the knowledge of which alternative course of actions are evaluated and which factors
that need to be taken into account during the evaluation, it allows us to assess the alternatives in order to
know what we need to implement as a solution. Based on the matrix above, offering employee benefits is
the best course of action in helping to address the labor scarcity experienced by Permex. Since employees
or workers are the backbone of a business entity, they have a great impact in the day to day production or
operations, appropriate compensation benefits will motivate them to stay in the company and ensuring that
they will not withdraw and transfer to another firm.

VIII. Plan of Action

1. Develop a program outline.
 Set an objective for the program.
 Establish target dates for implementation and completion.
 Determine a budget.

2. Designate an individual to oversee designing the employee benefits and incentives program.
 Determine whether this position will be permanent or temporary.
 Determine the cost of going outside versus looking inside.
 Determine the cost of a consultant’s review.

3. Develop an employee benefits and incentives philosophy.

 Form an employee benefits committee (presumably consisting of officers or at least including one
officer of the company).
 Decide what, if any, differences should exist in the benefit or incentive structures for executives,
professional employees, sales employees, and production employees.
 Determine whether the company should set the benefits and incentives at, above, or below the
offer of the competitors.
 Decide the extent to which employee benefits should replace or supplement cash compensation.

4. Determine grades.
 Establish the number of levels - senior, junior, intermediate, and beginner - for each job family and
assign a grade to each level.
 Determine the number of pay grades, or monetary range of a position at a particular level, within
each department.

5. Determine an appropriate employee benefit structure.

 Determine the difference between each salary and incentives step.
 Determine a minimum and a maximum percent spread.
 Slot the remaining jobs.
 Review job descriptions.
 Verify the purpose, necessity, or other reasons for maintaining a position.
 Meet with the compensation committee for review, adjustments, and approval.

6. Develop an employee benefits and incentives administration policy. Develop and document the general
company policy.
 Develop and document specific policies for selected groups.
 Develop and document a strategy for merit raises and other pay increases, such as cost-of-living
adjustments, bonuses, annual reviews, and promotions.
 Develop and document procedures to justify the policy (e.g. a merit raise schedule).
 Meet with the employee benefits committee for review, adjustments, and approval.

7. Obtain top executives’ approval of the employee benefits and incentives program.
 Develop and present cost impact studies that project the expense of bringing the present staff up
to the proposed levels.
 Present data to the employee benefits committee for review, adjustment, and approval.
 Present data to the executive operating committee (senior managers andofficers) for review and

8. Communicate the final program to employees and managers.

 Present the plan to the employee benefits committee for feedback, adjustments, review, and
 Make a presentation to executive staff managers for approval or change, and incorporate
necessary changes.
 Develop a plan for communicating the new program to employees, using slide shows or movies,
literature, handouts, etc.
 Make presentations to managers and employees. Implement the program.
 Design and develop detailed systems, procedures, and forms.
 Work with HR information systems staff to establish effective implementation procedures, to
develop appropriate data input forms, and to create effective monitoring reports for senior
 Have the necessary forms printed.
 Develop and determine format specifications for all reports.
 Execute test runs on the human resources information system.
 Execute the program.

9. Monitor the program.

 Monitor feedback from managers.
 Make changes where necessary.
 Evaluate the program if it is an effective solution and adjust or modify when necessary.

Gordon College
Tapinac Sports Complex
Bachelor of Science in Accountancy

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