Overtime vs Hiring

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Overtime vs Hiring: A Case Study
Karla Buchting
BUS640
Dr. Steve McQueen
6/11/2012

Abstract This report aims to address the debate over whether it is more beneficial to hire new employees when faced with shortages, or cover the shifts with overtime. The issue is examined from the viewpoint of Columbia University’s Department of Public Safety, and takes into account factors and costs as found therein. This report includes a graphical comparison of the costs associated with each option, and analyses and discusses the greater expense of hiring.

One of the most debated topics in management is whether it is more beneficial to hire new employees or pay overtime to increase production or coverage. Many factors go into this decision,
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In effect, if a new officer is hired in this situation, and the disabled officer returns to duty, the department is now obligated to keep both positions filled permanently and has a new minimum level of staffing. * New hires are paid at a rate of 80% salary for the first two years, then 82.5% the third year, 85% the fourth year, then 100% from year five on. * Overtime is paid at one-and-one-half times salary for any work done beyond 40 hours in a week. If an employee works a shift during all 7 days of the pay period, work done on the 7th day is paid at twice salary. * Any mandatory overtime performed without at least one hour of advance notice is paid at double time. This is relevant because when electing to not cover openings with additional personnel, any emergency shortages could lead to mandatory overtime without notice. * Most posts on campus require continuous coverage 24 hours a day, 365 days a year. This means there are three distinct tours with their own unique dynamics for coverage. The 8x4 tour, for example, has the highest concentration of senior officers, meaning they accrue more vacation time than junior officers. The summer months are obviously prime time for vacation picks, and two officers are allowed out at a time during summer. This means that summer vacation time is booked solid on the 8x4, so the tour is perennially short two officers all summer. Also, as a medical research facility in addition to a university
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