You Make the Call-Situation 3

question 28

Essay

You Make the Call-Situation 3
When Peter Mathis learned that a former employee had filed a complaint alleging that Ready Delivery, his Albuquerque-based freight hauling business, had fired her because of her race, it seemed like the right time to rethink his company's human resource management methods. The complaint was eventually dismissed, but that didn't stop Mathis from worrying about the possibility that other employee problems might arise in the future. And with 12 workers already on the payroll, he was finding that the paperwork associated with payroll preparation, government regulation, tax reporting, and other human resource management matters was beginning to consume too much of his time at the office.
A professional employment organization (PEO) approached him about taking over much of Ready Delivery's human resource management work. It would cost the company 3 percent of payroll, but the PEO could also offer additional benefits and services (at additional cost, of course) that might help the company in other ways, too. For example, joining the PEO would give Mathis's employees access to better health and dental care plans that would actually be less expensive than those the company currently offered. It could also provide affordable group life insurance benefits, making the switch even more attractive. Mathis realized that partnering with the PEO could reduce his flexibility in selecting benefit options, but he was nonetheless giving serious consideration to accepting the offer.

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Definitions:

Quantity Supplied

The total amount of a good or service that producers are willing and able to sell at a given price level, at a specific time.

Excess Demand

Occurs when the quantity demanded of a good or service at the current price exceeds the quantity supplied, often leading to upward pressure on prices.

Market Equilibrium

A state where the supply of goods matches demand, resulting in stable prices.

Market Equilibrium

Market Equilibrium is a state in which market supply equals market demand, meaning that goods supplied at a certain price are exactly matched by the goods demanded at that price.