A Zero Wage Increase Again?
Montclair State University
The owner of large furniture and building center, Mark Coglin was trying to figure out how to manage the next upcoming wage review process. For two consecutive years, his store’s staff has had to settle with a zero wage increase. Mark knows that if his staff were to settle for a third year without a raise, moral issues amongst his employee’s would arise leading to an exponential growth of problems; aside from the ones he already faces from a day to day basis. It was impossible to pump savings from upcoming process improvement initiatives into wage increases; however Mark had limited motivation to channel hard-won funds to underperforming employees. With the zero wage increase it was becoming difficult to motivate employees to show up to work, yet be productive while on the job. Mark is facing many issues such as an increase in absenteeism and lack of productivity amongst his staff. On the other hand, Mark was eager to reward the people who worked hard around his store. But to come up with a plan that rewarded only some employees could result in an angry backlash. He had to decide if he wanted to divert the savings into compensation and if so, he needed an effective distribution plan.
Mark was aware that some of his employees were putting forth an extra effort on the job, while others simply were not. Could this have been an issue caused by the zero wage increase which leads to the lack of acknowledgement by management in their employees; which in turn lead to a decrease in employee’s morale? Employee’s like Dougie are calling out “sick” when they are obviously not, as the manager explained “[employees] come in on the Tuesday talking about the great road trip they had.” Mark believes that the company would save money if about 15 percent of his employee’s; those who were unreliable, dishonest, and incompetent or always in the middle of the latest work drama like Dougie would just leave. At the same time there are those employee’s who have not received a raise but maintain high levels of productivity. Employees such as Simon, a floor manager, have captured the attention of Mark as one the employee’s who deserve acknowledgment for their work through a wage increase. Mark will still not be able to disperse the allotted funds among the entire staff if he takes the procedures recommended by Aaron, the company controller.
At Mark’s meeting, Aaron highlighted a couple of ways the store could save money which would allow for some kind of wage increase. Although the increase would not be a lot, it would be a glimmering light for a chance of a change in the right direction when it comes to wage increases. There were a couple of things that the store was spending money on that would allow certain employees to receive a wage increase. Possible ways the store could save money is by removing some ineffective advertisements, and reducing the size of their inventory. But the store could use some better equipment to save it from theft issues. The store could use a better security system since it seems as if customers or the employee’s are stealing items from the store. Employees are frustrated with the way the store has handled their wage increases and are now stealing from it. Employees have lost their morale and loyalty to the company and Mark needs to figure out how to get it back on track with the possibility of there not being another wage increase for the 3rd consecutive year. Articulation of the Issues
There are various issues that need to be addressed by store manager Mark. The first issue that needs to be addressed is trying to figure out how to increase his staff’s commitment to the organization. As stated many employees are calling out sick when they are not and this is costing the store money. The workers are beginning to feel that there is no chance of growth at this job and they should start looking for a new job with growth opportunities. This lack of...
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