Case Study on Communication on Compensation Package

Mary Chans life-altering discovery at work really communicated her companys pay practices. Swamped with work at an asset-management firm, she went into the office over the weekend and found a document abandoned on the copy machine. The document contained the base compensation, raises, performance rating, and bonus information for 80 of her colleagues. Ms. Chan was outraged that a noted screw-up was making $50,000 a year more than more competent colleagues, while some new hires were earning almost $100, 000 more than their counterparts with more experience. The discovery led her to question why she was working weekends for less pay than others were getting. I just couldnt stand the inequity of it, she says. Three months later she quit.

But Ms. Chan couldnt bring herself to share the information with her colleagues. I would have been better off not knowing any of that, she explains. I couldnt give it to people who were still working there because it would make them depressed, like it made me depressed.

Questions for Case B:

B1. How would you have reacted if you were Ms. Chan? Explain why. (2 Marks)

B2. Put yourself in the place of the compensation manager at Ms. Chans company. Based on the pay model and what you now know about compensation, are there any possible business- and work-related explanations for what Ms. Chan observed (i.e., the screw-up getting $50,000 more: new hires earning $100,000 more than more-experienced employees; and Ms. Chan making less pay than others)? (5 Marks)

B3. As the compensation manager, what would you do if Ms. Chan had brought you this document, and asked for your help in understanding what was going on. (Firing the person who left it on the copier is not an option. It may have been you.) (3 Marks)