When Salaries Aren’t Secret Harvard Case Solution & Analysis

When Salaries Aren't Secret Case Study Solution


Right now was one of the best retailers for women’s fashion clothes that sold clothes an off price as compared to their competitors in the market. Right now had grown rapidly under the supervision of the 48 year old CEO of the company, Hand Adam son. The company today had stores in around 28 states of the country. Last year 20 tech savvy professionals were hired to create killer website for the company that had been just launched in the last month. This site was generating substantial business and it had already began to win awards.

On the last day of the job, Treece McDavitt, who was about to leave Right now had accessed the computer wizard and she had emailed the salaries of each of the 165 employees to each of the staff members. Most of the employees of Right now became infuriated, as they were making too little as compared to the other employees while the other employees were embarrassed that they earned much higher than the other employees working at similar position did. The whole company was in abuzz.

Compensation system defines the program through which the rewards are distributed to the employees of the company and their salaries are paid. The design process of the compensation begins with the identification of the goals and outcomes of the organization. This means developing the compensation philosophy of the company. Equity and fairness is defined as a key component for designing a compensation program. This motivates the employees and provides job satisfaction to the employees. The compensation strategy of the organization needs to match the organizational objectives and the desired outcomes. However, all these factors were almost absent at Right now.

In this consultant’s report, we have analyzed all the issues presented in the case study in the light of the organizational justice theories and the theories of motivation. Furthermore, we have developed a number of alternatives and analyzed them too. Based on the detailed analysis of the case, it is recommended for Mr. .Hank to change the compensation system to pay for performance, as this will create expectancy among the employees to earn more and become more competitive. Equity would also prevail within the organization and procedural justice would be evident.

Case Analysis

First, we discuss the current system of deciding the salaries of the employees and make use of theories to support the analysis.

Current Compensation System of Rightnow

Currently, the salaries of all the employees had been kept private so far and since the salaries had been made public, it has been seen that there are major differences between the salaries of all the employees and it is clear that these differences have nothing to do with the skills or the experience of the employees. Some of the hardworking employees of the company are being paid less as compared to other employees on their similar positions. Similarly, higher salaries are being paid to the newly hired employees keeping the job market in view, while the salaries of the experiences employees had not increased at a good pace within the same job market.

In terms of the Procedural Justice theory, it is evident that procedural justice does not prevails in the organization and that the salaries of the employees are not decided based on the skills or the experience possessed by the employees. There seems to be lack of transparency and fairness of the processed to make all the salary decisions. For a process to be considered as procedurally fair all the concerned parties need to be heard and a fair decision needs to be made (Tyler, 2003). The quality and the level of the interpersonal interactions have been weak at Right now and this has impacted on the perception of all the employees about fairness in their salaries and fairness during conflict resolution (Tyler(, 2003). Even if there are differences in the salaries of the employee working at similar positions, then the managers need to have concrete reasons to support such disparities and encourage their employees.


When Salaries Aren’t Secret Harvard Case Solution & Analysis



Motivation of the employees on the Job

Although, the case does not state anything about the motivation of the employees to work on their jobs, however, it seems that motivational factors are lacking at Right now. In terms of the Two Factor Theory of Herzberg, we can say that Right now had good motivator factors in their organization and these intrinsic factors such as increased responsibilities, interesting work, recognition and achievement were all present in the company however, the company lacked in developing suitable hygiene factors such as salary and security (Schultz, 2010). It had been seen that the salary debacle had created a buzz among all the employees of the company. Salary has become one of the major hygiene factors that are nonexistent at Right now...........................

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