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A ZERO WAGE INCREASE AGAIN?

Submitted by:
Al-Jazzer M.A. Usad
Rizal Daujr U. Tingkahan
Andre Lawrence G. Ang
Jan Eleazar A. Jimenez
Robi B. Saavedra

Submitted to:
Mr. Francis H. Arroyo

September 28, 2015

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Problem Statement
How can mark allocate an increase of wages to all of his employees in order to
keep them motivated in their work place?

Objective
- To be able to ensure that Mark could be able to allocate proper bonuses and
increase in compensation in order for the employees to be motivated.

Brief Description of the Case

Mark Coglin the store owner of a large hardware, furniture, and building center
called House, Hearth & Home. The store was faced with a dilemma regarding how to
manage the upcoming wage review process. After two consecutive years in 2009 and
2010 of frozen wages, employees were impatient for financial progress, but there was
no spare money in the budget. It was possible to pump savings from upcoming process,
improvement initiatives into wage increases; however, the owner had limited motivation
to channel hard-won funds to underperforming employees. On the other hand, he was
eager to reward the people who added value. A plan that rewarded only some
employees could result in an angry backlash. He had to decide if he wanted to divert the
savings into compensation and if so, he needed an effective distribution plan.

Areas of Consideration
Strengths:
- Great sense of time management and organizational skills displayed by Simon
the floor manager.
- An effort of showing enthusiasm and creative thinking displayed by Aaron the
Controller of the company.
- Wesley the yard foreman, he is has the responsibility to keep the yard organized
and safe from customers from being hurt or for the inventory to be lost or
damaged. Just like Simon Wesley always steps up and make sure things were
done correctly.
- Quickly understanding the surrounding and the nature of the work ethics and the
attitude of the employees in the company, being displayed by Kyle who works the
forklift with Wesley
- There were employees that cared about their work and went the extra mile, even
when no one was watching.
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- Mark has a personable, forthright and strong connection with this management
team.
Weaknesses:
- Lack of discipline and morale amongst the employees
- Lack of supervision among the staffs
- No sense of customer service which is their main priority
- Mark having a lack of confidence, honesty and managerial control towards his
employees and the company.
- Dishonest, unreliable, or incompetent of the employees and staff in the company.
- Lack of motivation towards the employees and staff.
Opportunities:
- Changing what their spending money on, that it be able to divert some of towards
a wage increase.
- If the company be able to find money, there are many places in this company
where you could invest like we could have a better security system, or could pay
down some of the debt, or do some overdue building maintenance to ensure the
company looks good for the customers.
- Competition for motivation of employees can be researched and implemented by
the organization.
Threats:
- For the past two years in 2009 and 2010 there were no money for raises for its
employees and also for 2011 also.
- Mutiny, Sabotage or Mass Exodus will come if the decrease in the sale will
continue.
- If the employee theft problem would skyrocket if there was no wage increase.

Alternative Courses of Action

1. Establish a partnership with a different establishment who shares the same
nature of service to its customers.
Pros:
- Compensation would no longer be a problem.
- No longer liable solely for any loss and damages.
Cons:
- The workplace environment may change and that Mark will no longer solely
benefit from his business.
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2. Let go of those employees who does not actively participate in the work place
in order to pay less employees and compensate those who work hard.
Pros:
- Save wages from those who do not deserve to get paid due to poor job
performance; to be able to use the save money to properly compensate those
who deserve a raise.
Cons:
- Its not to ensure that the company would fully function, if Mark lets go of some
employees.
3. Changing or diverting some of the money that the company is spending on
towards increasing the wages of his employees or towards paying the debts
of the company, or towards its building maintenance, or towards a better
security system for the company.
Pros:
- This will give the company more money to use for the company or to give to its
employees wages.
- It will temporarily give time and money for the company to gain profit for sales
and increase the motivation of its employees.
Cons:
- If most of the money that was used for spending was diverted it would lead to
less inventory or supply for the company to provide the needed desire of the
customer.
4. The company will keep all staff wages at their current rate and provide a
hybrid reward program as means of positive reinforcement.
Pros:
- The hybrid reward system is an incentive program that will provide rewards for
individual employees effort that strive to excel in the two areas the company
most values, hard work and excellent customer service.
- The program will ensure motivation amongst its employees.
Cons:
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- In maintaining the current rate of staff wages will not comply with its employees,
even though there are rewards or incentives. Employees yearn or desire more
increase of salary that reward were it will take them a longer time to achieve
when using the program.

Recommendation
We recommend that the company will keep all staff wages at their current rate
and provide a hybrid reward program as means of positive reinforcement. The incentive
program will assess all individuals and teams for the present onwards. An opportunity
for employees to nominate co-workers for individual rewards. The hybrid reward
program will help in restoring motivation, enjoyment, value, and accountability in
employees. Preventing both absenteeism and presentism and therefore increase
productivity of the company and its future financial and managerial stability.

Action Plan

Who What When

Explain the program to
management and staff
Us simultaneously, in an effort of As soon as possible.
alleviating power distance within
the company.

Draft and implement of how the

Hybrid program will performed and
Mark 2 weeks
how will the distribution will be
made.

Will explain the awards and how to

Managers of different nominate co-workers and collect As soon as possible.
departments and submit the list of nominated
employees to upper management.

Will need to review, revise and ask

All employees and
questions if there will be an As soon as possible.
managers
amendment to the program

Conclusion
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