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Re: Human Resource People Strategies – Performance Management Consulting Project for Catalyst Paper Crofton Division

Thank you for the opportunity to explore potential consulting project ideas with you for Catalyst Paper Crofton Division. I appreciate the time you spent with me sharing information about your organization, current situation and plans for the future. I understand the many challenges your organization currently faces. The recent downsizing and reorganization of your management workforce directly affects your employees and increases the risk of morale, retention and performance issues.

Following careful consideration of our discussions and your current situation I am pleased to submit the attached proposal to help you address challenges with your current employee performance management program. The proposal further explains the purpose, scope, objectives and anticipated benefits of the services I have to offer. As a human resources professional and MBA student, I have professional experiences and interests that align with your need to improve the performance of your staff workforce as you work through significant organizational change.

I appreciate your review and consideration of this proposal. I would welcome another opportunity to meet with you to further discuss the details of the services I have to offer and answer any questions you may have.

If you accept the terms and conditions presented please indicate your acceptance by signing the OCP proposal agreement form located on the last page of the attached proposal.

INTRODUCTION

The pulp and paper manufacturing facility located in Crofton, BC began operations fifty years ago as part of British Columbia Forest Products Limited (BCFP). Now owned by Catalyst Paper Corporation, Crofton Pulp and Paper operates as one of four independent manufacturing divisions within the company’s current structure. With five manufacturing lines, Crofton produces pulp and paper products for global customers.

Many changes have impacted the Crofton employees over the past decade including multiple changes in company ownership and identity. Major organizational transformations involving restructuring took place in 1996, 1998 and again in 2001. By the end of fiscal 2006, the company employed 768 union employees and 209 non-union management staff.

The senior management team (SMT) relies heavily on the skill and talent of its workforce to manoeuvre through constant change and industry challenges. A performance management (PM) program exists for non-union staff employees. According to past practice the SMT communicates expectations to managers and employees by providing a yearly timeline for PM related tasks and deliverables such as completion of yearly performance evaluations for employees. Unsure of the state of the actual PM practices at Crofton, Vern Phillips, the newly appointed Director of HR requires consulting assistance to enable a well informed and strategic decision making process for addressing Crofton’s PM in support of the future direction of the company.

PRESENT COMPANY SITUATION

Many changes have occurred within the organization over the past year:

In early 2007 a financial investment group, Third Avenue Management, purchased a large quantity of Catalyst shares making them the company’s single largest shareholder. Declining market prices, fiber supply challenges and a higher Canadian dollar have placed the profitability of the business in jeopardy and company strategy has turned to cost improvements.
In August 2007, Crofton’s SMT announced and implemented a new organizational structure involving an approximate fifteen percent downsizing of the non-union management workforce. Some employees were terminated immediately; others were notified of their termination with an effective date at year end. For many remaining employees, reporting structures, home departments, job positions and responsibilities as well as future opportunities within the company have or will change.

In September 2007, senior management announced changes to employee performance contracts, a component of the performance management program, directly altering the employee variable pay structure.

Continuous change, looming uncertainty and increasing workloads are affecting employee morale, motivation, and retention. With a leaner management workforce any employee performance and retention issues pose a significant threat to the business. As the SMT moves forward with plans to reestablish Crofton Pulp and Paper as a profitable, cost effective global competitor, the HR director is faced with the challenge of developing strategies to ensure the organization has the people resources it needs. The current situation highlights the importance of assessing the existing PM program to understand how it is being used and to ensure this component of the HR strategy meets the current and future needs of the business and its employees.

Problem Definition

A preliminary SWOT analysis reveals multiple challenges facing the company:

External Factors

Strengthening Canadian dollar adversely impacting profits
Lower cost producers entering the market, specifically in China
Increasing raw material costs, specifically oil and gas

Internal Factors

Financial:

Declining EBITDA
Weakening and extremely low share price; share price below book value
Declining availability of capital for reinvestment

Marketing:

Shrinking market in North American
Customers losing confidence in products due to disruptions in fiber supply
Customers demanding guaranteed production and sourcing alternate suppliers

Operations:

Aging assets without sufficient reinvestment
Union labour contracts expire in April 2008

Human Resources:

Reduced workforce resulting in a loss of talent and manpower
Morale, motivation and retention issues
Lack of focus on human resources processes, specifically performance management and training and development.

Technology:

Increasing complexity of technology
Loss of advanced technical support due to restructure

PROJECT PURPOSE AND SCOPE

Purpose

The purpose of the proposed consulting project is to conduct a Performance Management Program Evaluation that provides a narrative description of how the PM program is actually used by employees and managers within the organization and to develop recommendations for improvement. The project will be conducted through a research based methodology. Major project components include: discovery based research to investigate current practices, best practices research, gap analysis and recommendations for improvement.

Scope

As currently proposed, the project involves:

Completion of one formal document, a Performance Management Program Evaluation that will provide the information and analysis required for the HR director and SMT to understand the current state of the PM program in order to strategically plan for the future of PM at Crofton.
Recommendations for improvement based on short and long term needs of the business, employees and managers and a proposed implementation plan for recommendations where applicable. (Short term refers to the immediate year following the project; long term refers to beyond the first year).
As the project progresses, depending on findings and timing, recommendations and / or revisions to the current PM training and communication materials may be included.

The project does not involve:

Analysis of any PM type activity related to bargaining unit employees who are currently excluded from the PM program.
Implementing recommendations or any implementation plan.
- Gap analysis in comparison to best-of-class research.
Evaluation, analysis or research related to technological PM solutions.

APPROACH and METHODOLOGY

Approach

The project will be conducted according the following steps:

1. Project set up:

Develop research plan

2. Detailed SWOT analysis:

A preliminary SWOT analysis was conducted in preparation of this proposal.
Conduct a thorough SWOT analysis to identify strengths, weaknesses, opportunities and threats impacting the business.

3. Best Practices Research

Conduct secondary research to investigate PM best practices from literature.
Research will focus on PM concepts and approach, rather than technological solutions.

4. Internal Organizational Research

Develop an interview instrument and submit an ethical review for research approval to the Royal Roads University (RRU) Ethical Review Board.
Conduct primary research to investigate the current PM practices and needs at Crofton through staff and management interviews.

5. Internal Data Gathering and Review

Collect and review relevant available data on PM program related activity within the organization.

6. Analysis

Incorporating information collected in each of the previous stages, analyze gaps between current practices and: a) senior management expectations, b) employee and manager expectations, c) strategic goals of the business, d) performance management best practices.

7. Recommendations and Implementation Plan

Develop recommendations for improvement based on short and long term needs of the business, employees and managers.
Develop a recommended implementation plan moving forward based.

8. Presentation of results

Review draft with client followed by presentation of final document.

Methodology Details

Develop research plan:

Determine needs and methods for gathering information relevant to existing / past performance management program activity.

Primary research:

Conduct interviews with an appropriate sample of management and employee stakeholders.

Secondary research:

Literature review of performance management best practices focused on concepts and approach not technological solutions.

PROJECT SCHEDULE and MILESTONE DATES

Project work will begin following your acceptance of this proposal with completion of the final deliverables on or before March 14, 2008. Your acceptance is required within 5 days of receiving this proposal for the project work to be completed within this time frame.

PROJECT PHASE	MONTH (Nov to March)					COMPLETED BY
PROJECT PHASE	N	D	J	F	M	COMPLETED BY
1. Project Set Up						November 30, 2007
2. SWOT Analysis						November 30, 2007
3. Best Practice Research						November 30, 2007
4. Internal Organizational Research						December 21, 2007
5. Internal Data Gathering and Review						December 31, 2007
6. Analysis						January 11, 2008
8. Draft Report and Presentation						February 15, 2008
9. Final Revisions						February 29, 2008
8. Submit Final Report (sign off by client, advisor and RRU)						March 14, 2008

TIMING AND COST ESTIMATES

The final project will be completed over a 4 month period requiring a minimum of 360 hours of work. Final deliverables will be provided to you the client and submitted as a requirement of the Royal Roads University MBA program and therefore offered free of consulting fees. Limited expenses include office supplies, printing and copying costs. Royal Roads University estimates a project value of $30,000 to the client based on scope and required hours of work.

ANTICIPATED OUTCOMES and BENEFITS

The project will provide an analysis of Crofton’s performance management program that will assist senior management in:

Understanding how the current PM program is used at Crofton.
Revising the current program to meet organizational needs and business objectives.
Setting a benchmark and measuring the success of improvement strategies implemented in the future.
Enabling the organization to efficiently and effectively conduct PM activities.
Improving the PM skills and knowledge of managers.
Improving the value of PM to individual employees and their managers.
Improving motivation, morale, retention and performance of the staff workforce.
Identifying and planning for required employee development and succession planning to meet the future needs of the organization.

SUMMARY of PROJECT DELIVERABLES

Following completion of the project you will receive 2 printed copies and 1 electronic file of the following documents:

Performance management program analysis document (approximately 75-100 pages plus appendices) including short and long term opportunities for improvement and applicable recommended implementation plan.
Power Point Presentation summarizing findings and recommendations

CONSULTANT’S CREDENTIALS and CONTACT INFORMATION

I completed a Bachelor of Science (B.Sc.) degree from the University of Waterloo in 2001 and 6 years working experience in the human resources field. I began my MBA in Executive Management in April 2006 at Royal Roads University. To date I have successfully completed the required course work for the program preparing me with skills and knowledge essential to working with clients to investigate potential business concerns, diagnose issues that need to be addressed and deliver effective solutions.

MBA course work specifically relevant to this project include: Project Management, Business Research Methods, Consulting Skills, Change Management and Organizational Relations.

My consulting philosophy centers on client partnerships; working directly with clients to provide tools, information and mutually developed solutions to ensure the client’s specific business needs are addressed.

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