MOTIVATION THROUGH COMPENSATION EXERCISE

You have to make salary increase recommendations for eight managers that you supervise. They have just completed their first year with the company and are now to be considered for their first annual raise. There are no formal company restrictions on the kind of raises you can give, however, keep in mind that you may be setting precedents.Indicate the size of the raise that you would like to give each manager by writing a dollar amount next to their names. Also, indicate the percentage increase in each managerís base salary. You have a total of $25,700 available in your salary budget to use for pay raises. Please use your entire budget.

Employee Profile Sheet

$ Increase:______ % of Base Salary:______ A. J. Adams. Adams is not, as far as you can tell, a good performer. You have checked your view with others, and they do not feel that Adams is effective either. However, you happen to know Adams has one of the toughest work groups to manage. Adamsís subordinates have low skill levels, and the work is dirty and hard. If you lose Adams, you are not sure whom you could find as a replacement. Salary: $30,000.

$ Increase:______ % of Base Salary:______ B. K. Berger. Berger is single and seems to live the life of a carefree swinger. In general, you feel that Bergerís job performance is not up to par, and some of Bergerís "goofs" are well known to the other employees. Salary: $33,800.

$ Increase:______ % of Base Salary:______ C. C. Carter. You consider Carter to be one of your best subordinates. However, it is quite apparent that other people donít agree. Carter has married into wealth, and, as far as you know, doesnít need additional money, Salary: $36,900.

$ Increase:______ % of Base Salary:______ D. G. Davis. You happen to know from your personal relationship that Davis badly needs more money because of certain personal problems. As far as you are concerned, Davis also happens to be one of the best of your subordinates. For some reason your enthusiasm is not shared by your other subordinates, and you have heard them make joking remarks about Davisís performance. Salary: $34,100.

$ Increase:______ % of Base Salary:______ E. J. Ellis. Ellis has been very successful so far. You are particularly impressed by this, since it is a hard job. Ellis needs money more than many of the other people and is respected for good performance. Salary: $35,300.

$ Increase:______ % of Base Salary:______ F. M. Foster. Foster has turned out to be a very pleasant surprise to you, has done an excellent job, and is seen by peers as one of the best people in your group. This surprises you because Foster is generally frivolous and doesnít seem to care very much about money and promotion. Salary: $32,700.

$ Increase:______ % of Base Salary:______ G. K. Gomez Your opinion is that Gomez just isnít cutting the mustard. Surprisingly enough, however, when you check with others to see how they feel about Gomez, you discover that Gomez is very highly regarded. You also know that Gomez badly needs a raise. Gomez was just recently divorced and is finding it extremely difficult to support a house and a young family of four as a single parent. Salary: $30,800

$ Increase:______ % of Base Salary:______ H. A. Hunt. You know Hunt personally. This employee seems to squander money continually. Hunt has a fairly easy job assignment, and your own view is that Hunt doesnít do it particularly well. You are, therefore, quite surprised to find that several of the other new managers think that Hunt is the best of the new group. Salary: $31,500.

Adapted from Lewicki, R.J. et al. Experiences in Management and Organizational Behavior, 3rd Ed. Wiley, 1988.