Hank Adamson Case Study

1810 Words 8 Pages
Hank Adamson, the current CEO at the fashion retailer—RightNow!—faces the dilemma of having had all 165 of his employees’ salaries publicly exposed to each other. As a result, conflicts amongst his employees have ensued from dismay at their pay compared to others, not just on a basis of department to department but the realisation and confusion that many employees in the same job roles within the same departments are being paid differently. In some cases the discrepancy is by gender, age and by assertive negotiations. The purpose of this current case study analysis is to determine what Hank should do in regards to the exposed salary information of his employees. The way in which recommendations will be stated is to look towards the evidence …show more content…
By avoiding conflict an organisation is able to gain and maintain more control over its company believing it employs a ‘paternalistic’ policy for the betterment of its employees, limiting their autonomy and ability to leave the role and organisation (Colella et al., 2007). Day (2007) adds on to this stating that the best case results of pay secrecy will lead to a reduction in perceived inequality amongst workers, and in the worst case, avoid negatively associated conflicts. But, limits put on employee’s abilities to compare and contrast salaries with other companies on the job market, prevents these employees from recognising other, if not better, opportunities (Colella et al., 2007). Furthermore, while avoiding inter- and intra- departmental conflict, the trust and perceived fairness of employees are diminished, employee motivation and engagement reduces over time and when employees aren’t performing to their highest standard, the question of whether a company is really employing the best individuals is raised (Colella et al., …show more content…
Harriet Duval (CFO) establishes that the exposure of salaries has cast a light on ‘all those differences in pay—they’re the result of stuff you could never talk about out loud…you couldn’t explain them so you wouldn’t try’ (p.4). Effort or performance used to determine pay levels are the fundamentals of the criteria for pay allocation (Colella et al., 2007). Evidently, at RightNow! subjective measurements of pay criteria have been utilised and are unable to justify the decisions made in regards to employee’s pay allocation where assessing an individual’s skills and competencies is difficult in establishing what placates managements’ expectations. However, even if an open pay communication policy was in inception there is still a degree of subjectivity and as such can increase any employee’s perspective of unfairness more so than any perceived unfairness in a closed pay communication policy (Day, 2007). Hence, using as much of an objective criteria for pay allocation as possible would create a more transparent pay-to-performance link where performance can be more justifiable and in turn actually alleviate the effects from the disadvantages of pay secrecy (Collela et al.,

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