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Name : Rakesh L Chawla

Roll No:NR10020

Class : Alpha

SUB: HRM (Case Studies)

SALARY INEQUITIES AT ACCME MANUFACTURING

CASE FACTS

 Mr Joe Black an MBA and LAW degree holder has recently took over as a president of ACME
Manufacturing which is family owned company and located in small eastern Arkansas.
 After a short period of his joining , he find that, there was considerable inequality in the pay
structure for salaried employees.
 Major reason of inequality is due to sex discrimination. Former President thinks that women
doesn’t require much money and also he believes they supervised less-skilled employees
than did the male supervisors.
 Black hired a compensation consultant for job evolution from nearby University and study
showed that HR director and 3 female supervisors were being underpaid.
 Now Black was unsure what to do .IF underpaid female supervisors took the case to the
EEOC office the company would be found guilty of sex discrimination and have to pay
considerable back wages.
 And if he increase the salary of female supervisors, male supervisors would be upset ,
 HR director agreed to take a sizable salary increase with no back pay, so this part of the
problem was solved. Black believed he had four choices relative to the female supervisors:
1. To do nothing
2. To gradually increase the female supervisors’ salaries.
3. To increase their salaries immediately.
4. To call the three supervisors into his office, discuss the situation with them, and jointly
decide what to do.

Q.1. What would you do if you were Black?


ANS. IF I were Black then according to the situation and keeping the interest of the all
employees, the first step would be to increase the salaries of female supervisors
gradually over a period of time as raising it suddenly would upset the male supervisors
because there won’t be any increase in their salary at that point of time , while not
increasing female supervisors salaries would lead to legal action against the firm.
Discussing the situation with them personally by calling them in the office will also show
biasness towards them.
Hence, company cannot take an immediate action to increase the salary rather raise it
gradually so that there are no grudges to other employees.

Q.2. How do you think the company got into a situation like this in the first place?
Ans. Joe Black who is the current President of the company has took over some time
back. His views were quit different from the former President Bill George . Bill George
was President for 35 years and he used to determine the salaries structure on basis of
individuals bargaining . There was no problem regarding hourly paid employees. There
was discrimination made on the basis of gender as well for the purpose of salary
allocated.
This has led to under payment to human resource director as well. The idea was that
women had their working husbands and hence need not be paid equalling to males.
Not only that, there were no similar supervisory jobs in which there were males and
female and hence the company didn’t decide for there jobs.
Job evaluation system was also missing.

Q.3. Why would you suggest Black pursue the alternative you suggested?
Ans. The alternative which Black must pursue is that of gradually increasing the pay of
female employees so as to come to a just mechanism of salary of employees
By gradually increasing the salaries it wouldn’t lead to an outburst of anger among other
employees.
The HR department would be able to plan the policies in a better way that would satisfy
all.
Moreover increasing the salary at once would lead to an increased cost of the
organisation .
Hence, company won’t have to give explanation to dissatisfaction raised by increasing
salary at once and would be at better position.

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