Management Study

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Management Case Study

Christy Arnette



Dr. Loretta Gorman

To: Mr. Austen
From: Christy Arnette
Subject: Decrease Employee Payroll
Mr. Austen,
I am sending you this email in response to your request to lower employee payroll by 15%. I’ve studied the issue and I have a description of the actions I’ve come up with to reach this goal.

As you know, this company has recently hired new employees including women and minorities to remedy the lack of diversity in our workplace. With this ethical dilemma, I have come to some problems because I have been instructed to decrease my payroll by 15% because of the financial difficulties within the company. I don’t want to let these new workers down, so I’m going to change directions and move away from job performance and seniority and find other ways to decrease payroll.

I had a meeting with the employees in my department today and gave them a description of the payroll issue and asked for any suggestions they had. Seniority employees offered to take a pay cut to help, and others offered to work two days less during the month to help with this issue.

I can come up with an incentive program to raise production on the days that all employees are present for work. This will give employees that offered to take pay cuts a little extra to cover their loss for their good ethical behavior. I have done some calculations and I think we can meet the 15% employee payroll deduction with a 1% bonus. There will be no losses of employees or benefits and the incentive program will help the businesses bottom line.

After you’ve reviewed this email, any input or advice on this decision would be appreciated.
Thank You,
Christy Arnette
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