Human Resources

Assignment 1

Human Resource Management

1. Describe the nature of the organizations, its size, and any specific human resource challenges it faces.

American Electric Power is a majority investor-owned electric utility company that serves approximately thirty-eight eastern and central U.S. cities and also eastern Canada. AEP is divided into seven major geographic local operating companies including AEP Ohio, AEP Texas, Indiana Michigan Power, Kentucky Power, Appalachia Power, Public service Company of Oklahoma, and Southwestern Electric Power Company, and also provides electricity to more than five million customers over a span of eleven states. In order to properly function and to have continued success, AEP must possess a large and knowledgeable workforce. They have on staff approximately twenty thousand full-time employees, not including all of the contract workers that they have on staff. A large part of AEP’s success is their low turnover rate. AEP works very hard to create a healthy and happy working environment for its employees, but having such a large staff doesn’t come without a few hiccups. The fact that AEP has such a low turnover can be the cause for a problem. At one point having such a low turnover proved to be costly for the company. When an employee has been with a company for a long time their salaries tend to continue to increase, paying out such large salaries to such a large group of people made it almost impossible for the company to hire new employees. Without new employees the company struggle with the topic of evolving. People didn’t want things to change, struggled to offer new ideas. This is when AEP decided to open up early retirement; this allowed the company to provide their veteran employees with the opportunity to retire without losing any benefits; this allowed AEP to bring in fresh faces with new ideas, all at lower salaries.

2. Describe the major legal concerns of the organization