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MLA
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Management
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English (U.S.)
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Benefit Strategy of Miller Manufacturing Company (MMC)

Essay Instructions:

Assume that you are the Director of Employee Benefits for the Miller Manufacturing Company (MMC) and report to the Senior VP of Human Resources. MMC was founded in 2000 and manufactures pumps, valves, and mechanical switches used throughout the world. MMC holds several patents developed by the founder, Harry Miller, who is the Chairman. The day-to-day operation of the business is run by Mr. Miller's son, Harry Jr., who at age 46 has been the CEO for the past 8 years. MMC has been consistently profitable, with a 10-year compound growth rate in earnings per share of 22%. In 2010, the company went public, with 60% of the shares held by institutional investors. Six percent of the shares are held by the MMC Employee Stock Ownership Plan (ESOP) and the remaining 34% held by the Miller family. MMC has 1600 employees worldwide with all manufacturing done in two plants located in North Carolina (650 employees) and Ohio (400 employees). The corporate offices consist of 150 salaried exempt and non-exempt employees located at the Ohio plant. The corporate group includes the corporate staff and centralized sales and customer service functions. The balance of salaried employees (400) consists of sales and service representatives stationed worldwide. MMC has no unions at the present time. The current MMC benefits program is detailed later in this document. You have just returned from a meeting with the CEO and the Senior VP of Human Resources. You have learned that MMC has been contacted by Olson-Young Enterprises, Inc. (OY), located in Santa Clara, California. OY was founded in 2008 by an electronics engineer who had previously worked for MMC in the early 2000s. OY manufactures electronic switches for pumps and valves. MMC does compete with OY, but OY has had problems in recent years with product quality and customer service. The market for electronic switches is growing at about 30% per year with most of the current market share held by one company in Japan and one company in Germany. OY is the only US manufacturer and has a 15% market share. OY has 300 employees; all are located in the US. Their sales and service outside of the US are handled by a network of nonemployee, contracted representatives. OY is closely held, with only 10 shareholders.


Questions to Answer for your Boss:


1. What do you think the benefits strategy of MMC has been? How does the benefits strategy match what you know about the organization?


2. What do you think the benefits strategy of OY has been? How does the benefits strategy match what you learned about the company?


3. Identify 3 benefit challenges and 3 benefit opportunities that are apparent when looking at combining the benefit plans at the two companies?


4. Identify 3 benefit challenges and 3 benefit opportunities that would exist if the OY employees were to become covered by the MMC benefit program.


5. Identify 3 benefit funding opportunities that are available at either company.


6. Assume the acquisition of OY goes through. Select 3 benefit programs and provide your recommendation on harmonizing those programs for the combined company.


7. Assume the acquisition of OY falls through. Identify 3 benefit changes that should be considered by MMC anyway?

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Miller Manufacturing Company
Benefit Strategy of Miller Manufacturing Company (MMC)
From the MMC's case study, it is evident that the company has coined its employee benefit programs on the wellness strategy whereby the cost of a benefit should reciprocate on the impact of the benefits to employees' productivity. This is evident in the company's cost of benefit which quite low at $0.35 on a dollar compared to OY's which stands at $0.42 on $1 for salaried employees. There is a clear variation when these two aspects are looked at keenly.
Benefit Strategy of Miller Manufacturing Company (MMC)
The benefits strategy of Olson Young Enterprises has been based on equity where employees are perceived to be equal. The stated strategy of benefits at OY is informed by the types of benefits programs it offers. For instance, its life insurance benefit treats its officers equally with each one of them entitled to a payment benefit of $100,000 regardless of the number of their salaries. The company has tried its best to ensure that its workforce is well taken care of, so as to eliminate complaints and such. Equal treatment can have a lot of spill over benefits for the company, as everyone has their hands on deck, working diligently out of a spirit of appreciation and reciprocation.
Benefit Challenges and Opportunities when Combining MMC and OY
Opportunities
Earning distribution is one of the elements that present an opportunity for MMC to take over OY because the average earnings for both companies are more or less the same with MMC's average standing at $45,000 and OY standing at $52,000. Workforce profiles for two companies is also an opportunity that can be explored as the distribution of workers in various categories in the workforce is similar to the production sector in both companies having the largest share of employees. Finally, both companies have similar benefits programs except for few programs which can be harmonized easily.
Challenges
On the contrary existence of unionized employees on OY only is likely to pose a challenge during the takeover as MMC does not have slots for unionized workers. Age in the two companies is another element that can pose a challenge with OY having a youthful workfo...
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