Reference no: EM132190329

From the Wall Street Journal: “In today’s job market, where talent, energy and mobility count a lot more than seniority, new hires often earn more than seasoned veterans. Managers anxious to recruit and hang on to employees with particular skills routinely ignore traditional salary scales and pay whatever they must to get and keep them. Increasingly, they must offer even more than what they themselves earn to attract the best candidates. As pay becomes increasingly arbitrary, lopsided and unfair, …managers deliberately keep their employees in the dark about their co-workers’ salaries, and hope that employees remain silent as well… But what happens when the word gets out?” Several years ago, Agency.com inadvertently posted a salary spreadsheet (imagine!) on its New York staff’s e-mail. Employees learned of large salary ranges in many job categories (e.g., salaries for creative directors ranged from $65k to $125k). Salaries had accelerated so fast that even employees who had been with the company for only two years were sometimes making significantly less than new employees. Given your knowledge of equity theory, what do you predict will happen? What should Agency.com have done to redress the inequities?