WHEN SALARIES AREN'T

SECRET

Submitted to, Submitted by,

Dr.Mausami Sen Gupta Mohammed Rayyan

Professor PGCM-2112

SDM-IMD SDM-IMD
Case Breakup

• In t r o d u c ti o n

• Tr ou b l e

• First Thought

• Is s u e s i d e n t i fi e d

• In T h e o r y

• P ra cti ca l r e s o l u ti o n

• Ac ti on s

• C o n cl u s i o n
Introduction

• Right now was one of the best retailers for women’s fashion clothes that
sold clothes at an off -price as compared to their competitors in the
market.

• Right now had grown rapidly under the super vision of the 48-year-old
CEO of the company, Hank Adamson.

• The company had stores in around 28 states of the countr y.

• Previous year 20 Tech professionals were hired to create a website for

the company that had been just launched in the last month. This site was
generating substantial business and it had already begun to win awards.
 Trouble

Treece(a talented and rebellious new employee), who was about to leave Right now, had accessed the
Company files(HR) and she had emailed the salaries of each of the 165 employees to all the staff
members.

Most of the employees of Right now became infuriated, as they were making too little as compared to
their counterparts while the other employees were embarrassed that they earned much higher than
their counterparts working at similar positions.

The issue had created a buzz at the workplace with many furious and agitated for the way they had
been treated in an unfair manner.
First Thought

• Hank had two trusted advisors in the company whom he sought for
advice in such a situation.

• Charlie Herald, vice president of the human resources and CFO

Harriet Duval.

• Charlie advises Hank to make all the salaries of the employees public
and follow the ‘You have a lemon, you make lemonade’, approach.

• Harriet advices about damage control and that the management

should apologize to all the employees. Fur thermore, Harriet had also
advised that the compensation system of the company should be
cleaned up and all the salaries should be kept private
Issues identified

Experienced employees and old-timers being paid lower salaries as

compared to the newly hired employees.

Disparities with the salaries of all the employees were not on the basis of
skills but it was on the basis of the competitive market conditions.

Most of the employees that were being paid less strongly felt that there
was no fairness within the compensation system of the company.
 In Theory
• According to the equity theory, employees in
the organization are motivated by the sense
of fairness in the interactions and this is
supported by the social comparisons that are
made by the employees.
• Employees in an organization compare their
Performance and compensation with that of
their counterparts and if there are diff erences
then equity does not prevail in the
organization and they feel demotivated.
Practical Resolution
• In a joint agreement With the CFO & VP the
CEO decided to take the advice of Charlie
which was about disclosing the salaries
public.

• Follow the ‘You have a lemon, you make

lemonade, approach.
Actions

• Make public disclosure of the salaries.

• Patiently and sympathetically listen to all the employees.

• Assure an honest review and for a detailed look into the

salary disparities.

• Strengthen the computer security in order for this like

situation to never repeat.
 The whole case points out the
following
• Pay Disparities have to be addressed
timely and eff or ts have to be made to
keep it healthy.

• Company data has to be very secure,

Conclusion which falling into wrong hands can stir

up huge trouble.

• Keep a healthy environment in the

company by having sessions about
healthy work-life.

• Motivate employees by recognizing their

eff or ts monetarily and psychologically.