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Fundamentals of Management 6th Edition by Ricky Griffin
Edition 6ISBN: 978-0538478755Fundamentals of Management 6th Edition by Ricky Griffin
Edition 6ISBN: 978-0538478755 Exercise 1
Choosing a Compensation Strategy
Purpose: This exercise helps you better understand how internal and external market forces affect compensation strategies.
Introduction: Assume that you are the head of a large academic department in a major research university. Your salaries are a bit below external market averages. For example, your assistant professors make between $45,000 and $55,000 a year, your associate professors make between $57,000 and $65,000 a year, and your full professors make between $80,000 and $90,000 a year.
Faculty who have been in your department for a long time enjoy the work environment and appreciate the low cost of living in the area. They know that they are somewhat underpaid but have tended to regard the advantages of being in your department as offsetting this disadvantage. Recently, however, external market forces have caused salaries for people in your field to escalate rapidly. Unfortunately, although your university acknowledges this problem, you have been told that no additional funds will be provided to your department.
You currently have four vacant positions that need to be filled. One of these is at the rank of associate professor, and the other three are at the rank of assistant professor. You have surveyed other departments in similar universities, and you realize that to hire the best new assistant professors, you will need to offer at least $60,000 a year and that to get a qualified associate professor, you will need to pay at least $70,000. You have been given the budget to hire new employees at more competitive salaries but cannot do anything to raise the salaries of faculty currently in your department. You have identified the following options:
1. You can hire new faculty from lower-quality schools. They will likely accept salaries below market rate.
2. You can hire the best people available, pay market salaries, and deal with internal inequities later.
3. You can hire fewer new faculty, use the extra money to boost the salaries of your current faculty, and cut class offerings in the future. Instructions:
Step 1: Working alone, decide how you will proceed.
Step 2: Form small groups with your classmates, and compare solutions.
Step 3: Identify the strengths and weaknesses of each option.
Follow-up Questions:
Assume that you chose Option 2. How would you go about dealing with the internal inequity problems?
Purpose: This exercise helps you better understand how internal and external market forces affect compensation strategies.
Introduction: Assume that you are the head of a large academic department in a major research university. Your salaries are a bit below external market averages. For example, your assistant professors make between $45,000 and $55,000 a year, your associate professors make between $57,000 and $65,000 a year, and your full professors make between $80,000 and $90,000 a year.
Faculty who have been in your department for a long time enjoy the work environment and appreciate the low cost of living in the area. They know that they are somewhat underpaid but have tended to regard the advantages of being in your department as offsetting this disadvantage. Recently, however, external market forces have caused salaries for people in your field to escalate rapidly. Unfortunately, although your university acknowledges this problem, you have been told that no additional funds will be provided to your department.
You currently have four vacant positions that need to be filled. One of these is at the rank of associate professor, and the other three are at the rank of assistant professor. You have surveyed other departments in similar universities, and you realize that to hire the best new assistant professors, you will need to offer at least $60,000 a year and that to get a qualified associate professor, you will need to pay at least $70,000. You have been given the budget to hire new employees at more competitive salaries but cannot do anything to raise the salaries of faculty currently in your department. You have identified the following options:
1. You can hire new faculty from lower-quality schools. They will likely accept salaries below market rate.
2. You can hire the best people available, pay market salaries, and deal with internal inequities later.
3. You can hire fewer new faculty, use the extra money to boost the salaries of your current faculty, and cut class offerings in the future. Instructions:
Step 1: Working alone, decide how you will proceed.
Step 2: Form small groups with your classmates, and compare solutions.
Step 3: Identify the strengths and weaknesses of each option.
Follow-up Questions:
Assume that you chose Option 2. How would you go about dealing with the internal inequity problems?
Explanation
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If the second option is chosen, the ineq...
Fundamentals of Management 6th Edition by Ricky Griffin
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