Hank Adamson Case Summary

Hank Adamson was a chief executive officer of RightNow!, a retail chain specializing in women's discount clothing. His management team, which includes Charlie Herald, VP of human resources and Harriet Duval, the chief financial officer confronted with the managerial dilemmas from the aftermath of leaked compensation information of 165 employees via internal email at the company headquarters building.
As a result, employees are upset over their compensations when they compare their salary to work colleagues with similar job function. The incident could affect employee morale within the company. For instance, the lower paid employees would reduce their productivity to meet what they reckon are a reasonable substitute for their compensation. On the other hand, higher paid employees would feel the pressure from their work colleagues because they earn more thus must produce more which would create a more stressful workplace environment.
Further, the management now has to worry about the perception of the pay gap and discrimination based on gender, age, race, etc. Furthermore, the company had fundamental problems in HR processes such as the hiring procedure, pay structure, and lack of transparency. As a result, the management team came up with three possible actions to remediate these
The move would increase transparency and keep the management team truthful with the company’s compensation system without personal bias. Moreover, if it implements correctly, it would increase the trust, critical feedback, reduce turnover, and improve motivation within the organization since all employees must earn their keep. Furthermore, the model had been successfully used by the Whole Food Market with tremendous success. However, there is some drawback such as personal privacy issue and without addressing the fundamental issues of pay structure, it may be difficult to