A Zero Wage Increase

1

A ZERO WAGE INCREASE AGAIN?

Submitted by: Al-Jazzer M.A. Usad Rizal Daujr U. Tingkahan Andre Lawrence G. Ang Jan Eleazar A. Jimenez Robi B. Saavedra

Submitted to: Mr. Francis H. Arroyo

September 28, 2015

2

Problem Statement How can mark allocate an increase of wages to all of his employees in order to keep them motivated in their work place? Objective -

To be able to ensure that Mark could be able to allocate proper bonuses and increase in compensation in order for the employees to be motivated.

Brief Description of the Case Mark Coglin the store owner of a large hardware, furniture, and building center called House, Hearth & Home. The store was faced with a dilemma regarding how to manage the upcoming wage review process. After two consecutive years in 2009 and 2010 of frozen wages, employees were impatient for financial progress, but there was no spare money in the budget. It was possible to pump savings from upcoming process, improvement initiatives into wage increases; however, the owner had limited motivation to channel hard-won funds to underperforming employees. On the other hand, he was eager to reward the people who added value. A plan that rewarded only some employees could result in an angry backlash. He had to decide if he wanted to divert the savings into compensation and if so, he needed an effective distribution plan. Areas of Consideration Strengths: -

-

Great sense of time management and organizational skills displayed by Simon the floor manager. An effort of showing enthusiasm and creative thinking displayed by Aaron the Controller of the company. Wesley the yard foreman, he is has the responsibility to keep the yard organized and safe from customers from being hurt or for the inventory to be lost or damaged. Just like Simon Wesley always steps up and make sure things were done correctly. Quickly understanding the surrounding and the nature of the work ethics and the attitude of the employees in the company, being displayed by Kyle who works the forklift with Wesley There were employees that cared about their work and went the extra mile, even when no one was watching.

3

-

Mark has a personable, forthright and strong connection with this management team. Weaknesses:

-

Lack of discipline and morale amongst the employees Lack of supervision among the staffs No sense of customer service which is their main priority Mark having a lack of confidence, honesty and managerial control towards his employees and the company. Dishonest, unreliable, or incompetent of the employees and staff in the company. Lack of motivation towards the employees and staff. Opportunities:

-

-

Changing what their spending money on, that it be able to divert some of towards a wage increase. If the company be able to find money, there are many places in this company where you could invest like we could have a better security system, or could pay down some of the debt, or do some overdue building maintenance to ensure the company looks good for the customers. Competition for motivation of employees can be researched and implemented by the organization. Threats:

-

For the past two years in 2009 and 2010 there were no money for raises for its employees and also for 2011 also. Mutiny, Sabotage or Mass Exodus will come if the decrease in the sale will continue. If the employee theft problem would skyrocket if there was no wage increase.

Alternative Courses of Action 1. Establish a partnership with a different establishment who shares the same nature of service to its customers. Pros: -

Compensation would no longer be a problem.

-

No longer liable solely for any loss and damages. Cons:

-

The workplace environment may change and that Mark will no longer solely benefit from his business.

4

2. Let go of those employees who does not actively participate in the work place in order to pay less employees and compensate those who work hard. Pros: -

Save wages from those who do not deserve to get paid due to poor job performance; to be able to use the save money to properly compensate those who deserve a raise. Cons:

-

It’s not to ensure that the company would fully function, if Mark lets go of some employees. 3. Changing or diverting some of the money that the company is spending on

towards increasing the wages of his employees or towards paying the debts of the company, or towards its building maintenance, or towards a better security system for the company. Pros: -

This will give the company more money to use for the company or to give to its employees’ wages.

-

It will temporarily give time and money for the company to gain profit for sales and increase the motivation of its employees. Cons:

-

If most of the money that was used for spending was diverted it would lead to less inventory or supply for the company to provide the needed desire of the customer. 4. The company will keep all staff wages at their current rate and provide a

hybrid reward program as means of positive reinforcement. Pros: -

The hybrid reward system is an incentive program that will provide rewards for individual employees’ effort that strive to excel in the two areas the company most values, hard work and excellent customer service.

-

The program will ensure motivation amongst its employees. Cons:

5

-

In maintaining the current rate of staff wages will not comply with its employees, even though there are rewards or incentives. Employees yearn or desire more increase of salary that reward were it will take them a longer time to achieve when using the program.

Recommendation We recommend that the company will keep all staff wages at their current rate and provide a hybrid reward program as means of positive reinforcement. The incentive program will assess all individuals and teams for the present onwards. An opportunity for employees to nominate co-workers for individual rewards. The hybrid reward program will help in restoring motivation, enjoyment, value, and accountability in employees. Preventing both absenteeism and presentism and therefore increase productivity of the company and its future financial and managerial stability. Action Plan Who

What

When

Us

 Explain the program to management and staff simultaneously, in an effort of alleviating power distance within the company.

As soon as possible.

Mark

 Draft and implement of how the Hybrid program will performed and how will the distribution will be made.

2 weeks

Managers of different departments

 Will explain the awards and how to nominate co-workers and collect and submit the list of nominated employees to upper management.

As soon as possible.

All employees and managers

 Will need to review, revise and ask questions if there will be an amendment to the program

As soon as possible.

Conclusion

6