Management 14th Edition by Leslie Rue,Lloyd Byars ,Nabil Ibrahim

Exercise 10

An Informative Coffee Break
On a Monday morning, April 28, George Smith was given the news that effective May 1, he would receive a raise of 13 percent. This raise came two months before his scheduled performance appraisal. He was informed by his manager, Tom Weeks, that the basis for the raise was his performance over the past several months and his potential worth to the company. He was told that this was a very considerable increase.
On the next day, Tuesday, a group of fellow workers in George's office were engaging in their normal coffee break. The course of conversation swung to salary increases. One of the group had received a performance review in April, but no indication of an impending salary adjustment had been given to him. George made a comment concerning the amount of any such increases, specifically questioning the range of increase percentages. A third individual immediately responded by saying how surprised he was in getting an "across the board" 12 percent increase last Friday. A fourth individual confirmed that he too had received a similar salary increase. Definitely astounded, George pressed for information, only to learn that several people had received increases of "around" 11 to 13 percent. George broke up the gathering by excusing himself.
That evening, George wrestled with his conscience concerning the forgoing discussion. His first impression of his raise was that it had been given based on performance. His second impression was decidedly sour. Several questions were bothering him:
1. Why did his boss tender the raise as a merit increase?
2. Is job performance really a basis for salary increases in his department?
3. Did his superior hide the truth regarding the raise?
4. Can he trust his boss in the future?
5. Upon what basis will further increases be issued?
What effect do you think that this new information will have on the effort put forth by George Smith?