Case preparation assignment #2: A zero wage increase again?

David Zarama (201924898); Daniel Rojas (202013434); Antonio Afanador (202020530); Juan David León (201813977)

Mark´s perspective in wages & rewards

Considering that an increase to all the employee wages might be unfair because the unproductive
employees would receive the same compensation as the good ones, Mark wants to address
wages/rewards. These rewards have the objective of motivate the best employees who are the
lifeblood of the company and deserve those benefits due to their good performance and
organizational citizenship. On the other hand, it would at least be useful to avoid turnover from the
best and most needed employees but also would motivate them to keep doing good their job and to
improve in it, that would also motivate the bad employees to improve in order to receive those
rewards. The last, should be effective taking into account the organizational behavior theory from
Robbins and Judge were they affirm that a merit-based pay creates a sensation of relationship
between performance and rewards.

Expected Outcomes of increasing salaries

At the moment of determining the possible results of the allocation of wage increases, Mark needs
to keep in mind various factors, like what drives the employees (extrinsically/intrinsically), current
performance, and how do they feel towards their actual salary.

First, there´s the effects of implementing a generalized increase of salary´s. Taking this decision
would implicitly be expressing that in a certain degree, the company is satisfied with the current
performance results of its employees, thus there wouldn’t be an introspective look from the
employees towards their work, specially by the portion of slackers “Mark realized that … 15 % of
his employees would … save the company money if they left”(MacMillan, 2011), this would
encourage keeping the bad practices adopted in the workplace which would potentially represent
more expenses.

Even though, the idea of recognizing workers with top performance in their activities this is not
well seen by others if there is not a previous wage increase plan that compensate workers according
to goals they achieved in a certain time. What would happen if Mark only increased the salary to
Aaron, Simon and Wesley, the other workers as Dougie, Marie or Anne may feel disappointed and
look for another job or steal products from the company that will lead to more economic
responsibilities to the company while the process of hiring new people and loosing inventory, but
not everything are bad news because according to Aaron by reducing cost in areas such as
advertising will benefit the investment in other areas like security.

On the other hand, the perception of the workers could be missing a side of the story in which even
though the employees are aware that the company´s overall performance and the context of the
current economy hasn’t allowed increases in wages, the type of employees who are demotivated in
this aspect, have the motivation driven through extrinsic factors like money “dissatisfied
respondents tended to cite extrinsic factors, such as … pay”(Robbins & Judge, 2017). In terms of
motivation, another aspect to keep in mind is what drives the best employees of the company
(Aaron, Simon, Wesley) to excel at their labors. Their behaviors indicate (through Mark´s
perspective) that they´re driven by intrinsic perspectives “Watching Simon …, Mark was impressed
by the dedication he had to doing things right”(MacMillan, 2011) Simon´s example shows that his
way of working has been internally developed “Intrinsic motivators are concerned with the quality
of work life, are likely to have a deeper and longer-term effect because they are inherent in
individuals and not imposed from outside”(Osabiya, 2015), this shows that the reason by which top
performance workers haven’t been affected by the lack of monetary recognition is because they
have deeper internal motivators than the workers who have a need for an extrinsic motivation.

3.

I consider that the rise of the wages should be for everyone, first because if they only rise it for the
those who are making a better job a discontent will appear between all the personal of the company.
In the other hand, following the self-determination theory of motivation extrinsic rewards will
reduce intrinsic interest in the tasks not really improving the performance of the employees.
However, what impulse the people are the intrinsic motivations “a sense of challenge and
achievement, receiving appreciation, positive recognition, and being treated in a caring and
considerate manner.” (Osabiya, 2015. For this reason, Mark should rise the wages for all the
employees in a 2.5 to 3 percent not for increase their motivation as a principal reason, but a like a
secondary wat to demonstrate that the company care about them. Instead of that, they should come
up with a strategy in where they make a better tracing on the personal worker performance, setting
goals, giving them feedback, considering the task characteristics and the goal commitment for
leading them to a higher performance.

Reward systems

The employees with poor performance in the company, like Marie, Anne and Dougie, have shown
as mentioned before that they are driven through extrinsic motivation of factors like money, so a
merit based reward could be implemented in the company, in order to motivate these type of
employees in improving their performance, but since the company has monetary problems, the
reward system implemented to these workers needs to be given at the end of the period, when there
´s more certainty about the outcome of the company over the improved behaviors of the employees.
On the other hand, no-cash-based rewards are necessary to improve not only the performance of
the employees mentioned before, but also to improve the sense of belonging and organizational
citizenship. These objectives can be realized more effectively with profit sharing plans. These plans
offer to the employees to buy shares of the company at a lower price than the market one. The last
will certainly motivate the employees who own those shares given that they are now owners of it.
That will, as Robbins and Judge affirm, will improve employee's attitudes towards the organization.
Bibliografía:

MacMillan, K. (2011) A zero wage increase again? Harvard Business school

Judge, T. & Robbins, S. (2017) Organizational Behavior. Pearson 17th global edition.

Osabiya, J. (2015) The effect of employees’ motivation on organizational performance. Journal of

Public Administration and Policy Research