Human Resources Case 62

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Case 62

In Case 62, there are many problems concerning compensation. State Bank, one of four large banks in a large southwestern town is struggling with compensation issues, and has issues concerning their overpaid bank tellers. Russell Duncan, the President of State Bank, is responsible for the implementation of the results-pay system, cost of living raises, and other progressive resource practices. However, with all of the positives that Duncan has created, his policies have created troubling issues in his bank that could possibly affect the future status and morale of his employees. The main issue affecting the bank is the overpaid bank tellers. According to a study conducted by another bank in town, 23 tellers at State Bank are being paid on average $22 per week more than tellers at other banks in town. While this is not a bad statistic, it contradicts what other positions in State Bank are making in comparison to the competition. The study showed that employees holding other positions in the bank such as loan officers, file clerks, and branch managers were being paid wages similar to those paid by other banks. As a result of this statistic, further issues may arise. If this information were released to the employees within the organization, it could cause problems for management and HR. Long-term problems such as decreased employee morale could occur as well, which could lead to performance problems for the bank. This problem could further escalate, in which the bank risks losing employees in certain departments. However, before the bank takes action on this situation, they need to research where statistics came from, and if it is reliable. If the statistics are reliable, then the bank can implement a plan; if the statistics are not reliable, they bank should still be prepared to discuss the issue with the employees within the bank if the information were to leak. In the case, the HR committee met and discussed the issues...
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