Fashion retailer Right Now Case
Hank Adamson is the Chief Executive officer of Right Now, a prestigious retailer of apparel that conforms with fashion standards of young women. Under his stewardship, the company had expanded its retail chain of stores in twenty eight states through a spirited marketing campaign. In pursuit of greater advantage in the market, Hank had sought the expertise of young and talented website designers meant to create a functional website for the company. The website was meant to generate substantial business opportunities for the retail company in the corporate world (Martocchio, 2010). Treece McDavitt was one of the technical employees working on the website project. The 26-year old lady was however not a good team player. She was always keen to listen to the gossip of fellow employees at lunch time regarding serious disparities on the payroll of the company.
Unlike her fellow workers who just gossiped and never dwelt on the matter, Treece took the matter of unfair compensation at heart. She actually arranged to sabotage the company by exposing the crucial information about employees’ salaries to the public before quitting her job. Treece hooked up with another disgruntled employee who worked at the company’s human resource department to obtain delicate information on the workers’ payroll. Being accessible to files at the human resource department and possessing significant computer skills, Treece exposed through an email attachment, the entire information pertaining to workers’ salaries and allowances to fellow workers. She actually camouflaged the email to each and every employee before leaving the company (Henderson, 2005).
The entire company got information about what each one of them earned and the massive disparities that existed. Workers keen to solve the matter kept seeking the attention of their Chief Executive Officer, Hank immediately after receiving the email. The company’s Vice President, Charlie Herald and the Chief Financial Officer, Harriet Duval are the main advisors to the CEO and are quick bring the matter to the attention Hank Adamson. The leakage of the company’s compensation system made employees furious as regards to the wage disparities (Rynes & Gerhardt, 2003). The subsequent mistrust and confusion that followed the leaking of the payroll resulted in poorly paid workers quitting their jobs while those that received hefty salaries felt superior. Workers who felt they were being underpaid demanded for salary increments.
Charlie Herald was convinced that salaries should be kept confidential away from the public access. It is apparent from the discussion of the three managers, that employees working in the IT department received the highest pay packages despite being young at the company. In addition, it becomes evident that there are serious salary inequalities at Right Now as wages do not conform to work experience and performance (Balkin & Gomez Mejia, 2002). On the other hand, Mr. Hank maintains that salaries are tied to individual performance and are results oriented. Whether or not the payroll is publicized appears not to bother the CEO while Harriet and Charlie insist that information regarding compensations should kept as a secret in order to avoid flare ups at the company. Hank argues that making the compensation system public helps to sustain the reputation of the company as an honest and fair organization. Theoretically, the idea sounds novel but practically leaking the payroll has caused much panic and anxiety at the company.
The managers also agree that workers became nervous and suspicious of each other when they realized the disparities that existed on the payroll. Definitely, Right Now compensation system is out of order and requires urgent harmonization (Mazin & Smith, 2004). The human resources database should be also be secured from external interference such as what Treece conspired. An employee committee could be established to investigate the matter of salary disparities professionally. The committee should among other responsibilities investigate whether the company actually pays employees according to their performance, experience and expertise. It is also important that information regarding employees’ salaries should be kept confidential in order to avoid resentment from developing among the workers (Nelson, 2008). The current situation where the leakage appears unmanageable as workers contemplate resigning from their jobs, Hank should ensure that he has convinced workers they are properly compensated in order to avoid a trade dispute.
Typware case
Renate Schmidt, the human resources director for Typware Software Company is confronted with a difficult hiring scenario. Typware is interested in hiring Anne Prevost, an accomplished marketing expatriate from the United States to work at its headquarters in Germany. Anne has a successful career and track record from her previous assignment with Oxon’s Technologies. Jurgen Mehr, Typware’s European head of marketing and his counterpart at the human resources department are uncomfortable with the exorbitant hiring of Anne (Podmoroff, 2005). The two discuss the issue at length pointing out the huge compensation package Anne Typware wants to pay for hiring Anne and relocating her family from the United States to German.
Apparently, Anne is the very first international assignee to work in Typware’s headquarters in Germany as an executive employee. Typware’s Chief Executive, Thomas Gutschein is ready to pay Anne to the tune of two hundred and forty four thousands pounds since he considers her a brilliant catch for their international business strategy. This raises eyebrows in the managerial ranks as arguments ensue on whether the decision aligns itself with the company’s business strategy (Knouse, 2005). Thomas insists that the American marketing expatriate is worth the huge salary package taking into consideration her track record and experience in her previous appointment. Anne is described as “an intelligent careful strategist with proper understanding of the global software industry.” She is attributed to having propelled her previous software company into a profitable international business empire against harsh economic conditions.
Seistrand Systems, a competitor of Typware is equally interested in hiring Anne offering substantial stock options for her expertise. This compels Thomas to seek the services of Anne being a talented professional in order to increase the prospects of reviving Typware position in the international market (Holbeche, 2008). Renate and Thomas discuss the salary issue further during a lunch meeting without much success. It is clear from the discussion of the human resources director and the Chief Executive that Typware is deficient of a defined salary and benefits scheme for expatriates despite being interested in international business. Thomas is satisfied with the salary package Anne has proposed from the notion that Typware has to pay market rates for international labor taking note of differences in taxation, inflation and currency among other factors (Vance & Vaiman, 2008). Apparently, Typware lacks an established salary scale which could stabilize competing interests in different countries.
Expatriate salary packages vary from one country to another creating confusion and resentment among employees especially those in management positions (Wilson, 2003). The responsibility of resolving Anne’s situation lies in the hands of Renate being Typware’s head of human resources. She appears confused which direction to take and seeks the services of Rainer, a consultant in a human resource firm but in vain. Typware’s haphazard approach in human resource matters is manifested in the manner in which Renate fumbles between conflicting opinions without a reference policy. In her conversation with Anne, Renate discovers that the new expatriate expects a comprehensive compensation package which would cater for her children’s education and health, extended family and other executive allowances.
The telephone conversations ends in disarray with Renate begging Anne to compromise in the whole deal while Anne insists she is competent enough for the huge remuneration and expects a timely conclusion on the matter since several other companies are interested in her expertise. The stand off persists as Typware management is torn between divergent opinions on the issue. The lack of a proper compensation scheme that is aligned to the company’s business strategy complicates negotiations for remuneration of international assignees (Deep rose, 2007).
Conclusion
Typware global expansion initiatives are experiencing delays occasioned from internal wrangles arising from a haphazard payment system and stereotypes. Globalization and expansion into foreign markets should be guided by a defined procedure that appreciates cost-of-living differences, tax and exchange rate variations and the competitive market demands (Martocchio, 2010). There is doubt Typware is in need of Anne’s experience as it expands into international markets. Definitely, there should be a bonus structure in place for harmonizing tax and exchange rate differences that exist between countries in order to cushion expatriates from external expenses.
Typware is under obligation to pay Anne a higher salary than her base pay in her previous job. Her pay package should also include incentives aligned with defined performance indicators. In order to thwart internal eyebrows regarding her hefty salary package, her tenure at the company should be on contract which should be reviewed based on her performance. Cultural integration of foreign assignees into Germany such as Anne’s case should be encouraged in order to avoid racial stereotypes. Anne, being fluent in German having worked and studied there before, is the most appropriate expatriate to work at Typware’s headquarters taking into consideration her problems in international markets. The Right Now case should be resolved through a reward strategy that recognizes individual effort of employees. Performance appraisals should be consistent with the business strategy of the company and the key performance indicators outlined for each employee (Henderson, 2005).
It is unethical for Throw Now’s remuneration system to be made public. Posting workers’ salaries on the cyberspace is not an act of transparency by the management but an embarrassment of the Right Now’s disparities in payments. It is evident that salary inequalities are rampant at the company irrespective of workers’ experience or duration of employment (Rynes & Gerhardt, 2003). New recruits are paid higher than employees who have been working at Throw Now for years. The management appears biased towards the IT employees being keen on developing a website for marketing its products internationally. The leakage of the payroll reveals the degree of mismanagement and corruption at Right Now in view of the relentless complaints about salary inequalities by workers.
Workers’ grievances over remuneration imbalances between the junior and senior employees are substantiated by Treece email containing sensitive information from the human resource department. The manner in which authorities address the issue reveals lack of professionalism. Employee motivation needs to be restored through appropriate reward schemes that recognize individual efforts and teamwork. Such reward strategies include public recognition, promotions, scholarships for further studies and monetary gains among others (Balkin & Gomez Mejia, 2002). Decision making process At Throw Now is flawed as there is no clear procedure for handling workers’ grievances.
Computer security should be enhanced to safeguard integrity of the company’s information. Employees working in the IT and the human resource departments should be screened to establish their level of proficiency and compliance to professional ethics. It is important that employees in these departments uphold integrity in the manner in which they handle information such as workers’ wages. Above all, leader-follower relations should be improved towards a cohesive organization with proper channels for communicating feedback on labor-related issues (Mazin& Smith, 2004). Workers should also be involved in decision making and problem solving initiatives.
References
- Balkin, D. B. & Gomez Mejia, L. R., 2002. Compensation, organizational strategy, and firm performance. Washington: South-Western Pub. Co., College Division.
- Deep rose, D., 2007. How to recognize & reward employees: 150 ways to inspire peak performance. New York: AMACOM Div American Mgmt Assn.
- Henderson, R. I., 2005. Compensation Management in a Knowledge-Based World. New Jersey: Prentice Hall.
- Holbeche, L., 2008. Motivating people in lean organizations. Boston: Butterworth- Heinemann.
- Knouse, S. B., 2005. The reward and recognition process in total quality management. Milwaukee, WI: ASQC Quality Press.
- Martocchio, J., 2010. Strategic Compensation: A Human Resource Management Approach: International Edition. London: Pearson Education, Limited.
- Mazin, R. A. & Smith, S. A., 2004.The HR answer book: an indispensable guide for managers and human resources professionals. New York: AMACOM Div American Mgmt Assn.
- Nelson, B., 2008.1001 ways to reward employees. Michigan: Workman Publishers.
- Podmoroff, D., 2005. 365 ways to motivate and reward your employees every day– with little or no money. New York, NY: Atlantic Publishing Company.
- Rynes, S. & Gerhardt, B. A., 2003.Compensation: theory, evidence, and strategic implications. London: SAGE.
- Vance, C. & Vaiman, V., 2008. Smart talent management: building knowledge assets for competitive advantage. Cheltenham: Edward Elgar Publishing.
- Wilson, T. B., 2003. Innovative reward systems for the changing workplace. New York: McGraw-Hill Professional.