Reference no: EM133034564

Money matters:

Rebecca, the HR manager, left the conference room with Abdul Syed and walked with him toward the entrance to the department. There she stopped, shook his hand, smiled, and said, "thank you for talking to me, Abdul. I really appreciate it. We all wish you the best of luck. Please stay in touch."

Abdul nodded and walked toward his office, As Rebecca returned to her office, she gestured for charlotte, The HR Specialist, to join her.

Exit Interview Results 

As she sat down in Rebecca's office, Charlotte said, "How did the exit interview go?" Rebecca sat down behind her desk and slipped off her shoes. She was feeling a little worried. She said, "Not great. I mean he was really open, but the news is bad. The compensation problem might be even bigger than we thought." "Uh oh," said Charlotte with a grimace. 'What did he say?" Looking at her notes, Rebecca replied, "He said he decided to leave when he found out Abigail Desai, the new accountant, was getting paid $13,000 a year mom than him." Charlotte gasped, "How did he find that out? Salaries are supposed to be confidential!" Shrugging, Rebecca said, "They always find out, Charlotte. You can count on it. No matter what we say, people will talk. Salaries never stay fully confidential." Charlotte countered, "Still, I don't get why he's mad. She should make more than him. Abdul's job as a financial coordinator is important, but Abigail is an accountant and that job has some serious responsibilities. That's why that job requires a lot more education and certification. Plus, she has a master's degree! That has to count for something. On top of all that, she is really good at her job. She has worked for some pretty progressive tech companies. I know she has brought in some great ideas even in the short time she's been here."

Tempting Employees Away 

Continuing, Charlotte said, was talking to her boss about this just last week. He was asking what the process was to increase her salary when she finishes her probationary period. She is so good that he is afraid he's going to lose her to another company. Apparently, she was seen having lunch with some people in suits, and the rumor is that it was an interview." Rebecca groaned. 'Don't tell me that! We can't have another person lured away. Alex would lose his mind. From what I can tell he's still reeling from losing that project manager named Jake a few months back. He brought me in at least partly to stop this sort of thing from happening. But first, let's get back to Abdul and his problem with Abigail. I don't know if he knew about her master's degree. He just noticed that their jobs are somewhat similar but she makes a lot more money even though he has been here longer. That really didn't seem fair to him. And he mentioned that his new job pays a lot of mom than what he was getting here. The scary part is if he starts telling people that, I wouldn't be surprised if more people start considering other options." 

Underwhelming Pay 

Looking troubled, Charlotte replied, don't want to add fuel to the fire, but while you were meeting with Abdul I was making some calls. I just had our two top candidates for that software position turn me down. Both of them said we weren't offering as much as they were hoping for. Could it be that we don't pay well? That seems weird to me. I've heard some people say that we are very generous." "Both those candidates said no?" Rebecca asked her voice heavy with disbelief. It took forever to find them. Let's look at upping the offer." Charlotte replied, 'The offers were already a little above what we usually start people out at. But I guess we can do it if you think that's a good idea" Rebecca sat back in her chair and gazed out the window, as she said "Let me think for a minute. This is a tough one Talk about being stuck between a rock and a hard place. If we don't go higher, we won't be able to hire good people. But if we do go higher, the people we already have will feel like they are getting the short end of the stick. I'm honestly not sure what to do next." "What if we're focused on the wrong thing?" Charlotte thought out loud, and then continued, "What if we should be looking at other ways to pay people that won't make salary comparisons between old and new employees a problem?" Rebecca picked up Charlotte's conversation thread and said, "Charlotte, that's it! We should be looking at options like hiring bonuses and retention bonuses. One-time payments that won't be ongoing increases in our staffing costs."

Now caught up in their brainstorming and happy to use some of her HR education, Charlotte replied, and we could investigate variable pay options to reward our strong performers. We need to think beyond just salary to keep the employees we've for happy and bring on some more top talent?' 

DISCUSSION QUESTIONS 

1. Based on what you know about the company so far, what compensation philosophy is WEC using?

2. What forms of variable pay do you think would be useful for Charlotte and Rebecca to consider implementing? Why?

3. What can be done in the future to help ensure that WEC is perceived as having both internal and external equity?