A Management Dilemma

Mr. Hong Lingjun, manager of the Data Analysis Department ofDongfang Co. Ltd, a small research firm, pondered how he shouldutilize a salary increase budget of 50,000 Yuan (7.5% of totalpayroll) to reward the five semiprofessional employees in his unit.He knew that he did not have to spend the full budget, but under nocircumstances could he exceed it. In his opinion, all of theseindividuals were properly paid in relation to their relativeperformance and seniority one year (12 months) ago, when he lastadjusted their compensation. The rate

of inflation last year was 7%. Mr. Hong had assembled thefollowing summary of his performance appraisals and other pertinentdata to

assist in determining his recommendations, which he knew wereneeded immediately.

Name / PresentSalary / Title / SalaryGrade / YearsInDept. /Performance / Personal Circumstances

Sun Ronggen / 150,000 yuan / Analyst / 6 / 5 / Acceptablequality; several important deadlines have been missed but may notbe his fault. / Married. Large family dependent on him as solesupport.

Wang Qiang / 130,000 yuan / Analyst / 6 / 2 / Outstanding.Sometimes a bit "pushy" in making requests and suggestions aboutthe department. / Single. No dependents. Has no pressing need formoney. Reported to lead a rather "wild" life outside theoffice.

Chen Xiaohua / 120,000 yuan / Junior Analyst / 5 / 8 /Consistently an excellent performer, though not assigned to thefull range of duties of an analyst. Dependable. Often initiatesimprovements in work methods. / Married. Husband is a successfularchitect. Children in high school.

Tan Min / 160,000 yuan / Senior Analyst / 7 / 15 / Acceptable,but not outstanding. Few original contributions recently. Seems tobe a "plodder". Content to get by with minimum performance andparticipation. / Married. Financially pressed because he has 2children in college (one plans to go on to med. School).

Shen Ronghua / 110,000 yuan / Junior Analyst / 5 / 6 /Acceptable volume of performance, but continues to make costlymistakes. Has repeatedly been warned about this over the lastyears. / Single. Has a dependent mother who is chronically ill.

Case Analysis Questions:

Please make a salary increase proposal for each employeeaccording the provided information.