Case Study: the Overpaid Bank Teller

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Problem: State Bank has over time increased salaries to tellers that were so high that of the 23 tellers at State Bank they were being paid over what other local tellers were being paid; additionally no other employees outside of the tellers were receiving an exceedingly higher salary based on the other local banks averages. All of this information was compiled in a report based on survey results taken from State Bank and the other local surrounding banks. Analysis: Now that this information has been reviewed State Bank determined that salaries would need to be modified or moving forward the salary structure would need to be modified for the tellers, according to the competitive data and based on what the ladder in salary was for all other employees in the bank. State Bank implemented a cost of living increase 6-years ago and it appears that this was the financial pull that made the salaries of the tellers exceed the market average as well as make them even with other bank employees in terms of “salary ceilings”. Russell Duncan the president of the bank must work with the HR committee to fix the $26,000 overage primarily spent on teller’s salaries, and level out the pay structure so that the tellers are earning what they are worth but not making similar salaries as bank management or higher level employees in other positions.

Synthesis: Duncan and the HR committee can implement a new program specifically for tellers that could eliminate the cost of living raise and refer to the increase program as something different so that it can be modified at various times based on company financial and employee performance. As it stands it is difficult to resend a “cost of living” raise when the cost of living continues to rise, this way the employees won’t feel that they “require” the costs of living increase because it will be based on other factors a new program with a new name and structure. Another area that can be modified is the raise percentage gap based...
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