Case Study 3 - Compensation Dilemmas - Human Resources BA 314

This assignment requires applying your knowledge of chapter 11 and 12 in the textbook and topics discussed in the class.

Read the following case study and answer the question for any five scenarios. Provide explanation supporting your position for each scenario.

1. Based on an evaluation of the knowledge , skills , and abilities needed to do each job , a company has determined that two jobs ( Job A and Job B ) are equal . However , when the firm studies the labor market , it finds that applicants for Job A are plentiful whereas those for Job B are very scarce . Should the firm offer less pay to those who apply for Job A , or should the pay be equal ?

2. Assume that the supply of electrical technicians is low - so a firm hires a group of them at $ 18 per hour . Two years later , due to a recession , the supply of technicians is high so the market rate for them is now $ 15 per hour . Should the firm pay new hires $ 18 or $ 15 ? Should it lower the pay of existing technicians to $ 15 ?

3. Jim is given an extremely large raise because of his superb work record one year . As a result , he is currently earning $ 50,000 whereas others at the firm holding the same job are earning $ 45,000 . Everyone expects Jim to continue to excel and enhance the entire unit's productivity . Unfortunately , Jim's performance drops off after the first year and is now just average . What should be done about his pay ? Should it be reduced to reflect his current performance ?

4. One year , Ethan's performance is truly spectacular ( just as good as Jim's had been in the previous case ) . However , the company has no raise money available that year so no one , including Ethan , receives a merit raise . Is this appropriate ?

5. Mary and Sue both work in the same department . Mary believes that Sue is being paid considerably more than she is . In fact , both employees are being paid about the same amount . Mary wants a pay raise and complains to her boss and the compensation manager . What should the compensation manager say , assuming the firm follows the policy of not revealing the pay of individual employees ? Should Mary be told the amount of Sue's pay ? Or , should Mary only be told that there is a " misunderstanding " and that her belief is incorrect ? Or , should some other approach be taken ?

6. When Mary was hired , she was told verbally that she would receive a raise when she finished her college degree and yet another raise when she was given additional responsibility . She accepted the job offer based on this understanding . However , during the next two years , the firm experienced slow sales and had to ask all factory employees to accept a 12 percent pay decrease . But Mary , who does not work in the factory , has finished college and has accepted more responsibility . Should she receive a raise ?

7. Two firms in the chemical solvent industry decide to merge . Employees in the testing department of Firm A have enjoyed high pay for many years . However , Firm A is purchased by Firm B , which has a history of paying low wages . As a result , employees in Firm A's testing department earn on average $ 2.00 more per hour than those at Firm B. Upon completion of the merger , what wage levels should prevail ? Should wages be cut for those who worked for Firm A ? Or , should wages be increased for those in Firm B ?

8. Sue is a 55 - year - old employee of Company A. Her children are out of college and her parents have both died . Company A offers a child care program to all employees along with an elder care program . However , Sue , like many other employees , has no need for these services , neither now or in the future . Should the company retain these programs ? Should alternative benefits for employees who have no use for such services be offered ?

9. Helen works as an accountant for a firm in the textile industry . During non - working hours , she does extensive volunteer work for the American Red Cross , Meals on Wheels , and the American Heart Association . Helen's employer wants to maintain a favorable image in the community , so it wants every employee to donate money to the United Way . Should the employer pressure Helen to donate money ? Keep in mind that if Helen does not donate money , other employees may not either , which could result in an unfavorable image in the community for the employer . On the other hand , Helen already donates time , which has a monetary value , and she may feel that it is unfair to be asked to donate even more.

10. Frank works 25 hours per week for a mail order firm in the packaging department . He receives no benefits other than those required by law . Frank does the same type of work as three other employees , all of whom work full time . These employees qualify for pensions , medical care , long - term disability , child care , etc. Is this a good business practice ? Assume that Frank would like to work full time , really wants to receive benefits , and feels harmed because of his shortfall . On the other hand , the firm is not legally required to pay Frank benefits , Frank only works part time , and it would be expensive to pay benefits to all part - time employees , including Frank .