DUE DATE THU 7/07 @ 5PM

Grading Rubric for Cases

Your grade is a combination of the following elements:

1. Appropriate length of answer. One paragraph per question answered. Individual question minimum of 3 well-structured sentences in 12 point font.

2. Identification of correct human resource or management topic.

3. Full quality answers which include research to determine how to apply standards, regulations, or laws covering human resources. These cases require you to research current federal employment law, regulations, and issues in order to answer them correctly.  Review “Website resources” tab. Also you can google topics, laws, cases, etc.

4. Correct notation of sources listed at the bottom of each answered case. You should list the textbook and any websites or other resources you used; cite direct quotes from sources in parenthesis and put (author’s last name, page #).

Case #73 “Merit Increases”, p. 223. Merit pay is something that most organization have as part of compensation and how they administer it either creates motivation or demotivates employees. Think about whether the cases or merit pay are actually merit pay and how you would justify the use of these payments. How does it tie to performance? You will need to answer questions on page 224.

Your answer should be at least 2-3 pages with references listed at the end of the document on page 4 and in MLA 7th edition format

****** QUESTIONS SHOULD BE LISTED AND NUMBERED WITH ANSWERS PROVIDED BELOW *****

Instructors Manual – Use Only as Guide – Plagiarism Software will be used!!!

73. INCIDENT: MERIT INCREASES

                I. OVERVIEW:

                This incident focuses on the uses and abuses of “merit” as a criterion for salary increases.  While most organizations give “lip service” to “merit” as the principle criteria for wage and salary adjustments, the term is subject to many meanings and interpretations.  In this incident, Dean Smith has a different interpretation of “merit” than does Dr. Jones.  The instructor may wish to discuss how “merit” is interpreted at his or her own university for faculty and other categories of personnel.

                The incident is loosely based upon an actual event which illustrates a rather common problem among academic administrators.  Despite the term “merit,” some higher-level academic administrators (Deans, Vice Presidents) often prefer to give equal or near-equal percentage salary increases to department chairs and program directors because it is easier, they don’t have to justify the differentials to those receiving lower increases, and thus feel (mistakenly) that it minimizes conflict.

                The long-term result of this policy is that the better faculty avoid academic administration, leadership in the College is provided by the “lowest common denominator,” and the College becomes mediocre or worse.  In the actual case upon which this incident is based, the Chairperson resigned his chair, went back to the faculty, and eventually took an administrative position at another university.

                II. OBJECTIVES:

                The purpose of this exercise is to serve as a catalyst for discussing a wide range of issues related to “merit” salary increases.  Students need to be made aware of the fact “merit” is not always based on performance.  The administration of merit increases is often deficient because the administrator doesn’t want to put in the effort to accurately assess performance or because he/she lacks the courage to confront the poor performers and help them overcome their deficiencies.  The “bottom line” is that it is administratively easier to give equal across-the-board “merit” increases and many lazy administrators choose this “path of least resistance.”

                Students also need to become aware that employees compare their contributions and their rewards with those of others in assessing whether their own relative position is “equitable.”  A policy of equal rewards for unequal contributions does not minimize conflict since the more productive employees feel they have been treated inequitably.

III. ANSWERS TO INCIDENT QUESTIONS:

1. Describe the nature and causes of the compensation problem describe this incident.

                This problem is due to an inability and/or unwillingness of an academic administrator (Dean Smith) to make distinctions among different department chairs and reward them accordingly. 

2.  Are “merit” salary increases always based on “merit?”  Why or why not?

                Obviously, whether or not a merit system of salary increases actually represents true merit depends on who is administering the system.  In many cases, equal across-the-board increases are given with the implicit assumption that all employees in a given category are equally meritorious.  Such an assumption is rarely true.  A true merit system requires a sophisticated system for appraising employee performance.  It also requires administrative willingness to make distinctions, and handle any complaints from less-productive subordinates.  Many administrators are unwilling or unable to develop a sophisticated performance appraisal system or to deal with the potential complaints from less-productive employees.  Consequently, they fail to provide true merit increases and the long-term effect is declining organizational productivity.

3.  Why has Dean Smith had a policy of equal percentage salary increases for all department chairs despite the stated university policy?  Are all the chairs equally meritorious?

                As discussed above, it is easier to not make distinctions and to assume all chairs are equal.  In this way, Dean Smith doesn’t have to justify below average increases to the less-productive chairs.  All chairs are not equally meritorious, but Dean Smith needs to develop a more sophisticated performance appraisal system to measure performance.

4.  How do you think Dean Smith’s “merit” increases will affect Carl and his performance as department chair and faculty member?  Why?  What can Dean Smith do to motivate Carl if a large differential pay increase based on performance is out of the question?

                Carl’s performance will be negatively affected in all areas.  Providing public support for Carl and nominating him for various honors and awards may help to alleviate these negative outcomes.

5.  What are the long-range benefits of a true “merit” program?  What are the problems associated with the lack of such a “merit” system for department chairs?  Why?  If the Dean does not change his policy, what are the long-run implications for the college?

                Jones should ask Dean Smith to establish a true merit system in which the value of various activities, accomplishments, and criteria are clearly communicated.  He might also want to make a case that part of the evaluation be based on administrative performance and part on academic performance.  The long-run benefits of a true merit system are attraction and retention of high-quality faculty for administrative positions and a more effective leadership team for the College.  The present lack of such a true merit system results in mediocre performance and loss of the more productive administrators.

                The discussion is not likely to change Dean Smith’s mind.  His philosophy developed over a long period of time and has “worked” in the sense he is still Dean and has apparently avoided previous confrontation with department chairs concerning salary increases.  Carl is unique among the chairs in that he continues to be productive in an academic sense.  The Dean has little incentive to change for one person.  In the long-run, the Dean will have the leadership team he deserves and it will be difficult for the College to rise above mediocrity.