Case Brief

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The University of Southern Mississippi
College of

The Treadway Tire Company:
Job Dissatisfaction and High Turnover at the Lima Tire Plant

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Executive Summary
_________________________________________________________________

The Treadway Tire Company is a major supplier of tires to original equipment
manufacturers and markets for replacement tires. The Lima Plant is one of the company’s main
manufacturing plants and was recently overhauled with major technological improvements in a
$100 million dollar renovation project. The closing of Treadway’s Greenville, South Carolina
plant has moved volume to the Lima Plant and resulted in the decision for the plant to change to
continuous operations. It now operates with two 12-hour shifts 24/7. The new improvement has
increased overall quality and allows the plant the opportunity to become Treadway’s number one
production plant.

In spite of these great attributes, the Lima Plant is experiencing several problems
including job dissatisfaction and high turnover rates in its foremen positions. A gap in
communication exists between the foremen and the hourly paid line workers. The job duties of a
line foreman are extensive and many times go unappreciated. Many attribute a lack of training
as the initial source of the turnover, as many foremen are placed on the line without adequate
knowledge of their required responsibilities. Other areas of concern, for both foremen and all
workers, are the 12-hour shifts. Foremen do not see many opportunities for advancement to
higher level positions of management within the company. Several alternatives were suggested
including a return to 8-hour work shifts, quarterly meetings, and mentoring programs for
foremen.

After identifying problems within the Lima Plant and offering multiple viable
alternatives, we recommend Treadway immediately consider implementing the following: start
new mentoring and training programs, restructure the organizational chart, provide longer
breaks, and increase communication levels within the company. Each recommendation takes
into consideration both long-term and short-term goals and approaches. The Treadway Tire
Company has a valuable opportunity for growth with its Lima Plant. With teamwork and a good
implementation of the provided recommendations, the Lima Plant is positioned for a future of
excellence.

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Situation Overview
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Company Background

The Treadway Tire Company employs nearly 9,000 individuals between its eight various
manufacturing plants located in North America. The company produces two Treadway Tire
brands as well as a few private tire brands, making it a major player in the tire equipment market.
The tire manufacturing industry is very susceptible to changes in costs due to market price
fluctuations of raw materials required for the production of tires. Raw materials make up roughly
55% of the total production cost of tires. One of the major components to the manufacturing
process is petroleum and the cost of this commodity has more than tripled the last four years
(2003-2007). This cost increase has invariably created challenges for Treadway Tires, as well as
all tire manufacturers around the globe.

One of Treadway’s production plants is the Lima Tire Plant, located in Lima, Ohio. In

2000, the Lima Tire Plant made efforts to modernize and expand its operations by investing $100
million in the plant with hopes of increasing its capacity and exploiting newly developed
technologies. This expansion allowed the Lima Plant to become a top producing facility for
Treadway. The factory is monumental in size, totaling 2.5 million square feet on 128 acres of
land. In 2007, the Lima Tire Plant produced 25,000 tires for passenger and light truck vehicles.
The Lima Plant is still not the number one producing facility for Treadway, although since the
2000 expansion it certainly has the capacity and potential to meet this challenge. The Lima Plant
employs approximately 1,120 people; 150 are salaried and 970 are hourly. The hourly employees
of the Lima Plant are members of the United Steelworkers Union, which protects these workers
by monitoring pay rates, overtime, health and safety issues, benefits, and grievance procedures.

Treadway faced some difficult financial decisions which were compounded by the

increasing price of petroleum, and in 2006 closed the doors of its Greensville, South Carolina
plant. Treadway moved the Greenville productions to the more efficient Lima Plant. This
massive increase lead Lima to change its operations to run on a 24/7 schedule. The majority of
employees now work 12-hour shifts. This change allowed Treadway to reduce the headcount of
employees, reduce fixed costs, and maximize its production volume.

Situation Background

Accompanying the additional production requirements from Greenville, South Carolina
was Ashley Wall, the new Director of Human Resources. The Lima Plant has some major
problems affecting its foremen, and this has resulted in an extremely high turnover of these
positions. Understanding why 23 of the 50 foremen positions have turned over in the last year, as

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well as how to change this issue has become Ashley Wall’s top priority. The rising prices of raw
materials is not something Ashley can affect directly; however, she does possess the power to
improve production and cut costs by solving the high turnover problem, which has begun to
create feelings of dissatisfaction throughout the whole plant.

The 50 line foremen amount to the largest number of salaried employees at the Lima

Plant. These foremen oversee all phases of production as well as the quality assurance work. The
vast majority of the foremen resulted from internal hires via promotion from other positions,
while the rest were hired out of college or transferred from other Treadway Tire plants. Since
arriving at the Lima Plant, Wall has had a goal of increasing the new external hires, as she feels
there are not a sufficient number of quality candidates to promote from within the company.

The position of line foreman is an extremely stressful and demanding job requiring a

large variety of duties to manage within a single 12-hour shift. Along with meeting strenuous
goals set by upper management, the line foremen also must deal with administrative duties, and
resolve various personnel and resource issues for the unionized staff in which they manage. This
includes staffing the line, which, because of long hours and stressful working conditions, causes
many employees to often call out from work. The foremen are also in charge of ensuring that
health and safety standards are met, as well as resolving any technical and mechanical issues that
arise and halt production. From the perspective of the plant manager, the foremen’s most
important job is to meet the set performance goals, which are quite steep. From the foremen’s
perspective ensuring that the line production can start each day free from technical issues is their
most important goal. If a foreman failed in meeting all the target goals set by management they
are susceptible to rough verbal reprimands and poor performance reviews.

One of the major issues brought to Wall’s attention through surveys, exit interviews, and

conversations with foremen and line workers is a general lack of respect and communication
throughout the ranks at Treadway. The plant manager seconds these assertions and also
attributed the plant’s overall moral problems to these communication problems. The foremen are
not a part of a union, and are therefore left out of grievance discussions between management
and line workers. This undermines the foremen’s authority with their staff, and further
contributes to the lack of communication.

Aside from communication issues at the Lima Plant there are a lack of opportunities for

promotion for foremen. There exist few salaried positions above the foreman level. In the past
year there has only been one line foreman to be promoted, and there are not any positions
forecasted to become available. Combined with Wall’s desire to hire more outside candidates,
the chance for a foreman to advance within the company is extremely slim. These issues, among

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others, are highlighted in the exit interviews conducted by Wall at the time foremen decide to
leave their position. The largest issue addressed in these interviews and surveys is a lack of
training. Below listed in bullet points are issues and concerns addressed by the foremen in
surveys and exit interviews.

Issues addressed by and concerning Foremen:
Excerpts from this year’s Lima Employee Survey:
● Only 14% feel management is sensitive to employee problems
● 56% do not feel prepared to accomplish the duties of their job
● 6% viewed their supervisor as a positive role model

Comments Foremen made with regard to their roles:
● “Younger line foremen…don’t get enough training – especially in how to work with the

union and manage their employees.”
● “If hourly employees feel they can get away with something – they’ll do it.”
● “We have to do a better job of communicating…”

Selections from a foreman’s exit interview who quit of his/her own volition:
● “I was effectively left alone, without the necessary skills/tools and couldn’t get my job

done.”
● “I received no training…”
● Wish there had been “more communication …and training…”

○ Selected “Dissatisfied” in the following areas:
■ Training and development
■ Working conditions
■ Advancement opportunities
■ Supervisors

Ashley Wall has a hard task in solving Lima’s issues that will require much of her time
and attention. This is made more difficult for her, considering she attempted to implement a new
rotational training program that was denied by the plant manager due to budget cuts. She plans to
research and develop an analysis of the foremen turnover situation, as well as a detailed plan to
combat these issues over the next 5 weeks.

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Problem Identification
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Problem 1: Lack of Training and Development
Foremen are placed in charge of a segment of the tire manufacturing process and they are
responsible for handling personnel matters, resource issues, and various administrative duties.
The foremen are placed in positions of responsibility without fully understanding the job
requirements and are not provided adequate training. They are treated disrespectfully by hourly
workers and threatened with poor performance reviews from their supervisors whenever issues
arise. Previous mentoring programs developed by Walls, were not approved due to cost cutting
mandates.

Problem 2: Lack of Communication
Every level of the organization recognizes there is a communication problem. The foremen feel
isolated from the rest of management and feel upper level management ignores their concerns.
The foremen also have a difficult time communicating with the hourly workers because their
roles as supervisors are not respected.

Problem 3: 12-Hour Shifts
Prior to the shutdown of the Greenville Plant, the Lima Plant ran three 8-hour shifts. Once the
workload from Greenville shifted, the Lima Plant switched to continuous operations, running
two 12-hour shifts. This has led to an increase in last minute sick calls and tardiness. The
foremen are left to scramble at the last minute to find replacements to ensure that operations do
not stop.

Problem 4: Chain of Command and Authority of Foremen Diminished
Although the foremen are responsible for operations and staff, they have no authority. When
disciplinary issues arise with hourly employees, the foremen are not interviewed by Human
Resources personnel and their disciplinary decisions are often reversed without explanation. The
hourly workers do not respect the foreman position because they know the foremen are
powerless.

Problem 5: Lack of Recognition
Foremen are responsible for a variety of personnel, resource, and administrative duties. They are
also responsible for ensuring work stoppages are quickly resolved. Management posts daily
forecasts and performance levels and foremen who do not meet the forecast performance levels
are publicly reprimanded. However, they are not recognized for exceeding performance goals.

Problem 6: Promotional Issues
Most foremen do not see any chance for advancement to higher level positions. This lack of
advancement easily leads to a feeling of stagnation within a job role and therefore creates general
job dissatisfaction.

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Alternatives

Alternatives to Problem 1:
● Create a Human Resources Training Specialist Position. Treadway should offer a variety

of training programs to reinforce basic shared skills, approaches, and values that will
build confident employees and contribute to organizational success. The programs will be
implemented and produced by this new position.

● Targeted Training Programs. Programs are designed to target each managerial level and
build on previously learned information/skills.
Targeted training programs include:
○ All salaried employees attend mandatory 8-hour training programs held quarterly

during a regularly scheduled shift to address updates to technology and how to
properly adjust to changes in management.

○ Foremen – receive training to enhance leadership and communication skills,
behavior modification skills, and productivity management skills.

○ General Supervisors – receive training for effective communication, conflict
management, time management, performance management, labor relations, and
situational leadership.

○ Production Managers – receive training in leadership, communication, delegation,
and strategic planning.

● Create Tuition Reimbursement Programs. Requirements for participation include: being
a full-time employee with at least one year of company service, pursuit of a degree
relevant to the industry, and maintain a 2.5 or above GPA.

● Develop and Administer Mentoring Programs. A seasoned foreman will mentor a new
foreman so the new foreman can learn what the job entails and how to handle situations
unique to the foreman position.

Alternatives for Problem 2:
● Monthly/Quarterly Meetings. All salaried employees would attend scheduled meetings

to discuss issues and maintain a two-way communication forum. This provides all
managerial employees an opportunity to communicate issues, needs, or recommendations
pertinent to operating production lines effectively and efficiently.

● Town Hall Meetings. Plant manager would address all employees to communicate an
array of information to keep all employees abreast of company/plant issues.

Alternatives for Problem 3:
● Return to the three 8-hour Shifts and Continue 24/7 Operations. Employees would rotate

shifts every three months. This would help reduce the number of call-outs and tardiness.
● Offer the Option for Employees to Vote on 8 or 12-hour Shifts. This will include the

employees in the decision making process.
● Add Additional Breaks and Longer Lunch. Continue to operate with the 12-hour shifts,

but add more breaks and a longer lunch break on a rotating basis for employees, so that
operations are not interrupted. The increase in breaks will provide adequate periods of

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rest for the employee and help to prevent worker burnout. Staggering and rotating
employee breaks keeps operation moving and prevents production from halting.

● Create Incentive Programs for Hourly Worker. By creating an incentive program,
workers are more likely to come to work and arrive on time.

Alternatives to Problem 4:
● Clearly Define the Foreman Role. A foreman’s role should be shown in the

organizational chart as a team leader. Their job is to work side-by-side with hourly
employees and to serve as a mentor/trainer. Disciplinary, staffing, and payroll
responsibilities would transfer from the foreman to the general supervisor position to
alleviate tensions between employees and foremen. The foreman would still be
responsible for handling vacation requests, timesheets, and other administrative duties
that affect his/her team.

● Restructure the Organizational Chart. Currently, the organizational chart shows that
salaried and hourly employees report to Human Relations. The chart should be
reorganized to place the hourly employees under the foremen in their respective sections.

● Improve Communications between Human Relations and Foremen. Currently, when
disciplinary matters are handled by HR, the foreman is kept completely out of the loop
when the union represents the hourly worker and often, the worker is not disciplined.
The foreman should become part of the disciplinary process and kept abreast of the
disciplinary decisions.

Alternatives to Problem 5:
● Create Recognition Program. Instead of highlighting only negative performances,

Treadway should create a recognition program to highlight successes. This can be
implemented through positive reinforcement measures such as luncheons, “employee of
the month” parking spaces, and award ceremonies.

Alternatives to Problem 6:
● Develop Paths for Promotion. The foremen should have a career ladder with steps to

reach the general supervisor position and identify additional training/education needed
for promotion within Treadway Tire Corporation.

● Drop back to 8-hour Shifts. This creates additional foremen, general supervisor, and
production manager positions; therefore, providing additional opportunities for
advancement within Treadway.

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Analysis & Evaluation
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This situation calls for a unique set of criteria. The criteria chosen for this case are employee turnover,
cost, and production.

Employee Turnover – for this case, employee turnover is defined as the rate of foremen that leave the
company for any reason. The employee turnover rate for foremen is 46%, making this the single most
important issue in the case. This makes employee turnover an excellent criterion to evaluate alternative
towards resolving the issue. Due to the importance of this criterion, the weight of this criterion is 0.45.

Cost – cost is defined as an expenditure of money, time, or labor. Any change will incur a cost that
affects the financials of the company. All companies are in the business to make money and any
expenditure of funds, time, or labor must be justified to increase profits. Senior management must
understand that the expenditure of funds is vital to the success of the organization. Cost is very
important, but not quite as important as fixing the employee turnover rate. This criterion is rated at 0.35.

Production – production is defined as the process of manufacturing or creating an item for sale.
Treadway produces tires and the production is very high at the Lima Plant. Any alternative will have an
effect on the production rate and this will need to be taken into consideration. Production, although
important to the organization, is not quite as vital to the resolution of the case. This criterion is rated at
0.20.

As shown in Table 1: Rate Scale, each alternative is rated on a five (5) point scale ranging from excellent
(5) to poor (1). The point values are used to determine which alternative(s) are selected. Cost will be
rated inversely – the higher the cost to implement an alternative the lower the rating it will receive.

Table 1: Rate Scale

Excellent Exceptional Good Fair Poor

5 4 3 2 1

As each alternative is evaluated against the established criteria of employee turnover, cost, and
production, the rating will be recorded in Table 2: Weight and Score Review. After all alternatives have
been rated, the score will be tabulated by multiplying the rate score to the corresponding weight. The
three totals will be added together to obtain the final score for each alternative.

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Table 2: Weight and Score Review

Employee
Turnover

Cost Production Score

Weight 0.45 0.35 0.20 1.00

HR Training Specialist Position 4 1 3 2.75

Targeted Training Programs 5 2 5 3.95

Tuition Reimbursement 4 3 3 3.40

Mentoring Program 5 3 4 4.10

Monthly/Quarterly Meetings 4 4 3 3.80

Town Hall Meetings 4 3 3 3.45

Return to 8-hour Shifts 5 1 3 3.20

Offer Shift Options to Employees 5 2 2 3.30

Add More Breaks/Longer Lunch 5 3 3 3.90

Create Incentive Program 4 4 4 4.00

Define Foreman Role 5 4 4 4.45

Restructure Org Chart 5 4 3 4.25

Improve HR/Foreman Comm. 5 4 3 4.25

Create Recognition Program 5 4 3 4.25

Develop Paths for Promotion 5 3 5 4.30

Evaluation

1. Create HR Training Specialist Position (2.75)
● Employee Turnover – Creating the HR Training Specialist position to facilitate

orientation and training programs to the Treadway staff. This will increase employee
engagement at all organizational levels. Train foreman on their job responsibilities,
handling disciplinary actions, completing administrative duties, handling union issues,
and strategic planning. This would have an excellent impact on lowering employee

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turnover as there will be an individual responsible for all trainings. This criterion
received a rating of 4.

● Cost – There would be additional expenses to form this position in order to create and

implement training programs, remove the employees from the work environment during
training, and regularly update training programs to ensure accuracy and relevance. Even
though the expenses can be justified, it will be difficult for the organization to authorize
the additional costs considering the current economic status of the tire manufacturing
market. This criterion received the lowest rating of 1.

● Production – By providing an individual responsible for creating and implementing sound

training programs, all employees will better understand their job requirements. In turn,
production should increase. This new position should guarantee positive results from the
training programs and this criterion received a rating of 3.

2. Targeted Training Programs (3.95)
● Employee Turnover – By offering training programs to employees it helps the employee

to feel more engaged and committed to the organization. Implementing these programs
will improve job morale, teach new skills, and increase the candidate pool for internal
promotions. These programs will send a consistent message throughout all the
organizational levels. This criterion received the highest rating of 5.

● Cost – The initial and annual costs to implement and maintain the new training programs

would be high. The costs associated with the training programs would need to be
budgeted annually. The training programs are considered a long term investment to
improve employee retention. Factoring the investment against the cost is the reason this
criterion received a rating of 2.

● Production – The training programs will help the employee to gain relevant knowledge to

enhance their skill sets and to understand and further develop their own competencies.
This leads to the overall development of individual employees, motivating them to be
more productive at work. This criterion scored high and received a rating of 5.

3. Tuition Reimbursement (3.40)
● Employee Turnover – Wall observed that the majority of potential in-house hires for the

foreman position did not have a degree. Treadway also has a desire to promote from
within the organization. Creating the tuition reimbursement program should encourage
potential foreman candidates to obtain the required degree and will subsequently help
decrease the turnover rate. This criterion received the highest rating of 5.

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● Cost – Although the organization will incur an additional expense, these programs are tax
deductible and after the tax benefit the company will incur little expense. For these
reasons, this criterion received a rating of 3.

● Production – Foremen with an education are more likely to analyze situations better and

may be able to reduce the effect problems have on production as they arise. Since there
are controls in place with the newly modernized equipment, the overall impact will be
neutral. This criterion received a rating of 3.

4. Mentoring Program (4.10)
● Employee Turnover – By establishing a mentoring program, the foremen will benefit

from individual employee growth and development and improve their productivity. They
will better understand their positions and will be more motivated. A strong mentoring
program will have a positive impact in reducing the employee turnover rate. This
criterion received a rating of 5.

● Cost – There will be an additional expense incurred by creating the mentoring program.

However, this cost can justified because it will help reduce the employee turnover which
has an overall negative impact on profitability and it will also help to increase the
production output of the company. This criterion received a rating of 3.

● Production – A well mentored employee will be more likely to ensure the production line

will continue uninterrupted, be more motivated to reduce employee issues, and have the
potential to suggest improvements with the production rates. This criterion received a
rating of 4.

5. Monthly/Quarterly Meetings (3.80)
● Employee Turnover – Establishing better communication with managers, which includes

the foremen, will go a long way to helping the foremen feel like they are being heard and
not ignored. Even the highest levels of management at the Lima Plant recognize the need
for better communication. Establishing monthly/quarterly meetings will offer an
opportunity for all levels of management to increase communication. Lack of
communication was cited by exiting employees for reasons to leave the company. This
criterion received a rating of 4.

● Cost – Although managers will be pulled away from plant management for a short period

of time, the economic impact will be minimal. Multiple meetings with staggered
participation will ensure all foremen can attend while minimizing the impact to
production. This criterion received a rating of 3.

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● Production – Since foremen and other managers will be pulled away for a short period of
time, meetings can have negative impacts on production. On the other hand, meetings
can also help improve the production rate. For this reason, the overall impact will be
neither positive nor negative. This criterion received a rating of 3.

6. Town Hall Meetings (3.45)
● Employee Turnover – Town hall meetings are another alternative to provide top-down

information to all of the employees. This will help employees feel like they are being
kept in the know and will feel part of the company. Town hall meetings also offer an
opportunity for employees to ask questions to upper level management. This will help
reduce employee turnover. This criterion received a rating of 4.

● Cost – Holding town hall meetings will require a temporary halt to production, but the

overall cost will be minimal since it will also help reduce employee turnover. This
criterion received a rating of 3.

● Production – Since there will be a temporary shutdown of production during the meetings,

there will be an impact to the production rate. However, this interruption will be short
and production can quickly resume. This criterion received a rating of 3.

7. Return to 8-hour shifts (3.20) *This alternative relates to problem 3 and 6
● Employee Turnover – The 12-hour shifts have caused issues with the hourly employees

and they often call in sick or are tardy. The 12-hour shifts also cause an overall feeling of
fatigue and this contributes to employees leaving the workforce. Returning to the 8-hour
shifts will cause a huge boost to morale. This criterion received the highest rating of 5.

● Cost – Returning to the 8-hour shift rotation will require the company to hire new

employees, additional management, and support personnel to oversee the new employees.
This will be a huge burden on the budget. This criterion received the lowest rating of 1.

● Production – Due to additional shift changes and the required additional personnel to

operate an added shift, the 8-hour shifts will have a slightly negative impact on
production. This criterion received a rating of 3.

8. Offer Shift Options to Employees (3.30)
● Employee Turnover – Providing the employee the opportunity to work either 12- or 8-

hour shifts, will increase employee morale and will offer them …