Harvey Finley is in quite the predicament. He his company’s net profit should be approximately $107, 614.21 greater than he expected for this year. The problem is that his secretary/receptionist is making six to seven times the amount of an average “good” secretary/receptionist in the local market and has been for a few years.
There’s a few ways this issue can be addressed. One way would be to talk to Ms. Brannen and advice her that there has been an oversight in her salary over the past few years and for the upcoming year the oversight will be corrected and her salary will be adjusted to $25,000 per year with no percent of sales bonus. Another way to address the issue is to fire the manager who should have reported this oversight to Finley and promote Ms Brannen to his position while adjusting her salary to $55,000 per year and explaining the oversight to her as well. One more solution to this issue would be to let things be the way they are since the company has been doing great and growing the way things currently are.
The two most important value drivers to consider in establishing the Value Over Time maximization are “individual employee values” and “owner values”. Let’s start identifying the specific aspects of the first value driver, the individual employee values. The facts remain that the reason Finley hired Ms. Brannen was mainly based on her individual values and performance at her two previous jobs. She held a two year office administration degree, she was very articulate, bright and most of all she was enthusiastic about assisting in launching this start-up company with Finley. She also had two extremely positive feedbacks from her previous employers that said “they would rehire her in a minute if she were still available.” The problems lie with her not being satisfied with the initial salary offer for this position. Salary was the only issue with Ms. Brannen other than that she was perfect for this new position at Troupville Business Systems. A few potential problems with Ms. Brannen would be that she only moved from Houston was because she was going through a divorce. What would happen if she were to get back together with her husband? Another potential problem with her would be the fact that she has a small child. If the child is sick then she will not be able to come into work. This would be an issue since at the moment she would be the only other employee. Also Ms. Brannen has two very good references and if she accepts this position and continues to look for another position elsewhere that may pay better and she can potentially leave Troupville Business Systems.
The potential positive impacts on Value Over Time for Ms. Brannen is that she will continue to shine and prosper as a great striving employee the company will grow. She is the front line and the first person the customer see’s or speaks to when they make the first contact to Troupville Business Systems. She has already proven herself since the launch of this company as being a key player in the success of this start-up company. A few potential negative impacts maybe that Ms. Brannen gets comfortable at the salary she is at and realizes that in her hiring package the terms and agreement were that she was to receive $14,000 salary plus 2% of sales. There was no clause to when this would be removed and she can just put herself on cruise control and still make six figures. I expect her effect to be a positive one over time since this is the person Ms. Brannen is. You can tell a lot by looking at a person’s past performance history and we know she is a person who not only strives to be the best at her job position but also picks up on other job position duties and can perform them just as well if not better than others. We know she is able to handle sales calls if no sales person is available and the client/customer has never noticed.
There are ways to turn something negative into...