Reference no: EM132881153

The Transparency of the Compensation Structure

University of California (UC) employees were able to access a website that listed the salaries of each employee in the UC system, not only was those employees who were paid below the median not motivated to improve their performance, but they actually started looking for employment elsewhere. These are the types of concerns that companies have to wrestle with when they decide to release compensation data. Organizations have to be transparent in pay decisions and "Such transparency may include publishing a formal pay schedule and related policies for all to see, but it also must include consistent discussions between organizational leaders and their teams regarding a range of complex pay equity issues, both internal and external. Companies have to be committed to treating all employees fairly, and with dignity and respect," Westover says. Source: W. Terri. Does Compensation Really Motivate Performance? The Economist.

1. Situation Analysis

• What faults/issues may exist in the transparency of the compensation data and decisions?

2. Impact Analysis

• Possible impacts towards both employees and the University of California (UC) for such transparency.

3. Solutions / Recommendations

• Three (3) solutions/recommendations that the University of California could adopt to ensure that employees improve their performance, and loyal to the University?

4. Point of View (POV)

• Should the University of California disclose the compensation data to the employees?
• Should a company disclose the formal pay schedule, compensation decision, and compensation policies to employees?