EXERCISE

Allocating Merit Raises

I. Objectives:

A$.$ To make you aware of the difficulties involved in making merit raise decisions.

B$.$ To familiarize you with possible criteria a manager can use in making merit raise decisions.

C$.$ To give you practice in explaining the procedure you used in determining merit raises.

II$.$ Out$-$of$-$Class Preparation Time: $10-20$ minutes to read exercise and decide each professor's merit raise.

III. In$-$Class Time Suggested: $30-40$ minutes.

IV$.$ Procedures: Either at the beginning of or before coming to class, you should read the exercise and determine merit raises for each professor.

To start the exercise, the instructor will divide the class into groups of three to five students. Each group should develop a fair procedure that will be used to determine merit raises and then decide the dollar raise to be given to each professor. After each group finishes, one member will wite the raise amounts or the board or overhead for all class members to see. Then, once all groups have disclosed their raises. a spokesperson for each group will explain the procedure used to detemine their raises.

Situation

Small State University is located in the eastern part of the United States and has an enrollment of about $8,000$ students. The College of Business has $40$ full$-$time and more than $30$ part$-$time faculty members. The College is divided into five departments: Management, Marketing, Finance and Accounting, Decision Sciences, and Information Technology. Faculty members in the Management Department are evaluated each year based on three primary criteria: Teaching, Research, and Service. Teaching performance is based on student course evaluations over a two$-$year period. Service to the university, college, profession, and community is also based on accomplishments over a two$-$year period. Research is based on the number of journal articles published over a three$-$year period. Teaching and research are considered more important than service to the university. In judging faculty performance, the Department Chair evaluates each professor in terms of four standards: Far $3$ Exceeds Standards, Exceeds Standards, Meets Standards, and Fails to Meet Standards. The results of this year's evaluations are shown on the next page.