Case Study: Salary Inequities at Acme Manufacturing Essay

1188 Words Oct 29th, 2014 5 Pages
When it comes to developing strategic pay plans it is important to have a good understanding of some basic factors to determine pay rates. Employee compensation is “all forms of pay going to employees and arising from their employment” (Dessler, 2013, p. 352). According to Dessler (2013), it consists of both “direct financial payments and indirect financial payments.” As we explore the case study of Acme Manufacturing, we will see the salary inequities and the struggles that the newly appointed president, Joe Black, has to go through to fix those issues. In an article titled “Fair Pay or Power Play?” Shin (2013) reported that “pay inequity provides strong motivation for CEOs to restore equity.” For this case, I will identify some issues …show more content…
• Salaried employees pay was seen as a matter of individual bargaining with the past president.
• Human resource director was underpaid.
• Three female supervisors earned somewhat less than male supervisors.

For 35 years, Bill George the founder of Acme had an operational structure and he did not see any issues with the way he ran the company. Unlike his successor, he did not pay any attention to equal pay structure. No one ever mentioned issues of inequity between female employees and male employees they never complained so he never addressed the inequity issue. The fact that each employee could negotiate their own salary created a huge equity gap in the compensation process. Failing to have a standard compensation plan made it unfair across the board for employees. Gender discrimination also played a huge role in the issues within Acme. In an article titled “The Legal, Ethical, and Strategic Implications of Gender Discrimination in Compensation: Can the Fair Pay Act Succeed Where the Equal Pay Act has Failed?”; gives an account from a national group known as “Business and Professional Women USA” which reported polls were showing that unfair pay tops the list of concerns that working women have, as it is a problem that plagues them throughout their working lives and even affects their pension and retirement benefits, which are often based on the income they receive during

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