A Zero Wage Increase: Case Study
A Zero Wage Increase Again
The given case poses the problem faced by the protagonist concerning the wage raise. Mark Coglin, the owner of House, Hearth and Home is contemplating his options for the annual wage increase. The troubled economy has impacted his business, resulting in lower sales and a paucity of funds. However, the company has managed to save some money by means of cost cutting, which could be used elsewhere to improve productivity and efficiency. The employees have not been given a raise since last two years, and a third consecutive year of wage freeze might not be advisable. Mark Coglin has to address the wage increase issue while taking into consideration all these facts. The author has tried to solve the problem posed in light of the various theories of motivation
Of the various options available to him, the one that the author proposes is as follows. The author believes that the employees should be given a wage raise as per the following model.
1. All the employees should be given a wage increase corresponding to the rate of inflation of the past three years. This would be a fixed component which would be the same for all employees regardless of their personal performance. This measure would send out a signal that the management is sensitive to the troubles faced by them in these difficult times and make sure the hygiene factor of pay according to the Two Factor theory is met. It might also serve in reducing the incidents of theft and sabotage, and may help in changing the perception of the employees about the company and motivate them to work with dedication.
2. At the same time, to make sure that the performing and hard working employees stay motivated and are appreciated, a differential component can be included in their salaries which would be performance based. The assessment of this performance would be based on the opinions of the management. This would be a positive reinforcer, as per the Reinforcement Theory, for the efforts of
The given case poses the problem faced by the protagonist concerning the wage raise. Mark Coglin, the owner of House, Hearth and Home is contemplating his options for the annual wage increase. The troubled economy has impacted his business, resulting in lower sales and a paucity of funds. However, the company has managed to save some money by means of cost cutting, which could be used elsewhere to improve productivity and efficiency. The employees have not been given a raise since last two years, and a third consecutive year of wage freeze might not be advisable. Mark Coglin has to address the wage increase issue while taking into consideration all these facts. The author has tried to solve the problem posed in light of the various theories of motivation
Of the various options available to him, the one that the author proposes is as follows. The author believes that the employees should be given a wage raise as per the following model.
1. All the employees should be given a wage increase corresponding to the rate of inflation of the past three years. This would be a fixed component which would be the same for all employees regardless of their personal performance. This measure would send out a signal that the management is sensitive to the troubles faced by them in these difficult times and make sure the hygiene factor of pay according to the Two Factor theory is met. It might also serve in reducing the incidents of theft and sabotage, and may help in changing the perception of the employees about the company and motivate them to work with dedication.
2. At the same time, to make sure that the performing and hard working employees stay motivated and are appreciated, a differential component can be included in their salaries which would be performance based. The assessment of this performance would be based on the opinions of the management. This would be a positive reinforcer, as per the Reinforcement Theory, for the efforts of