Cecil Hogan is a cost analyst with Manhattan Insurance Company. Manhattan is applying standards to its claims payment operation. Claims payment is a repetitive operation that could be evaluated with standards. Cecil used time and motion studies to identify an ideal standard of 36 claims processed per hour. The Claims Processing Department manager, Lynn Weese, has rejected this standard and has argued that the standard should be 30 claims processed per hour. Lynn and Cecil were unable to agree, so they decided to discuss this matter openly at a joint meeting with the vice-president of operations, who would arbitrate a final decision. Prior to the meeting, Cecil wrote the following memo to the VP.
To: Taylor Meadows, Vice-President of Operations
From: Cecil Hogan
Re: Standards in the Claims Processing Department
As you know, Lynn and I are scheduled to meet with you to discuss our disagreement with respect to the appropriate standards for the Claims Processing Department. I have conducted time and motion studies and have determined that the ideal standard is 36 claims processed per hour. Lynn argues that 30 claims processed per hour would be more appropriate. I believe she is trying to “pad” the budget with some slack. I’m not sure what she is trying to get away with, but I believe a tight standard will drive efficiency up in her area. I hope you will agree when we meet with you next week.

Discuss the ethical and professional issues in this situation.