Unformatted text preview: s recent graduates when I’ve been at the company now for
over two years! I’d like to buy a house soon, but with housing
costs rising and inflation following, that will depend on my
Several days later, Simpson was working at his desk when
Dave Barton, a friend and colleague, came across to Simpson’s
office. Barton had been hired at the same time as Simpson and
had also been promoted recently. Barton told Simpson, “Hey,
Mike, look at this! I was walking past Jane’s desk and saw this
memo from the human resource manager lying there. She
obviously forgot to put it away. Her boss would kill her if he
The memo showed the proposed salaries for all the individuals in the consulting group that year. Simpson looked at
the list and was amazed by what he saw. He said, “I can’t
believe this, Dave! Walt and Rich will be getting $12,000
more than I am.” Walt Gresham and Rich Watson had been Chapter 4 Values, Attitudes, and Work Behaviour hired within the past year. Before coming to Avery McNeil
they had both worked one year at another consulting firm.
Barton spoke angrily:
Mike, I knew the firm had to pay them an awful lot to attract
them, but to pay them more than people above them is ridiculous!
Simpson: You know, if I hadn’t seen Walt and Rich’s salaries,
I would think I was getting a reasonable raise. Hey
listen, Dave, let’s get out of here. I’ve had enough
of this place for one day.
Barton: Okay, Mike, just let me return this memo. Look,
it’s not that bad; after all, you are getting the
largest raise. On his way home, Simpson tried to think about the situation more objectively. He knew that there were a number of
pressures on the compensation structure in the consulting division. If the division wished to continue attracting M.B.A.s
from top schools, it would have to offer competitive salaries.
Starting salaries had increased about $23,000 during the last
two years. As a result, some of the less experienced M.B.A.s
were earning nearly the same amounts as others who had been
with the firm several years but had come in at lower starting
salaries, even though their pay had been gradually increasing
over time. Furthermore, because of expanding business, the
division had found it necessary to hire consultants from other
firms. In order to do so effectively, Avery McNeil had found it
necessary to upgrade the salaries they offered. The firm as a
whole was having problems meeting the federally regulated
Equal Opportunity Employment goals and was trying especially hard to recruit women and minorities.
One of Simpson’s colleagues, Martha Lohman, had been
working in the consulting division of Avery McNeil and
Company until three months ago, when she was offered a job
at another consulting firm. She had become disappointed with
her new job and on returning to her previous position at Avery
McNeil was rehired at a salary considerably higher than her
former level. Simpson had noticed on the memo that she was
earning more than he was, even though she was not given
nearly the same level of responsibility as he was. Simpson also
realized that the firm attempted to maintain some parity
between salaries in the auditing and consulting divisions.
When Simpson arrived home, he discussed the situation
with his wife:
Simpson: Diane, I know I’m getting a good raise, but I am
still earning below my market value—$20,000 less
than that headhunter told me last week. And the
fact that those two guys from the other consulting
firm are getting more than I shows the firm is prepared to pay competitive rates.
Diane: I know it’s unfair, Mike, but what can you do? You
know your boss won’t negotiate salaries after they
have been approved by the compensation com- 131 mittee, but it wouldn’t hurt to at least talk to him
about your dissatisfaction. I don’t think you should
let a few thousand dollars a year bother you. You
will catch up eventually, and the main thing is that
you really enjoy what you are doing.
Simpson: Yes I do enjoy what I’m doing, but that is not to say
that I wouldn’t enjoy it elsewhere. I really just have
to sit down and think about all the pros and cons
in my working for Avery McNeil. First of all, I took
this job because I felt that I could work my way up
quickly. I think that I have demonstrated this, and
the firm has also shown that they are willing to
help me achieve this goal. If I left this job for a
better-paying one, I might not get the opportunity
to work on the exciting jobs that I am currently
working on. Furthermore, this company has time
and money invested in me. I’m the only one at
Avery that can work on certain jobs, and the company has several lined up. If I left the company
now, they would not only lose me, but they would
probably lose some of their billings as well. I really
don’t know what to do at this point, Diane. I can
either stay with Avery McNeil or look for a higherpaying job elsewhere; however, there is no guarantee that my new job would be a “fast track” one
like it is at Avery. One big plus at Avery is that the
people there already know me and the kind of
work I produce. If I went elsewhere, I’d essentially
have to start all over again. What do you think I
should do, Diane?
Source: Nadler, D. A., Tushman, M. L., & Hatvany, N. G. (1982).
Managing organizations: Readings and cases. Boston: Little, Brown. 1. Use discrepancy theory concepts to explain Michael
2. Use equity theory to explain Michael’s feelings. Provide
details about inputs, outcomes, and likely comparison
3. Comment on Mike’s likely perceptions about procedural
fairness at Avery McNeil and Co.
4. Apply Affective Events Theory to the case. How did the
memo affect the mood in the office? What emotions are at
5. Use Exhibit 4.7 to analyze the factors that might determine if Mike quits his job at Avery McNeil.
6. Speculate on the likely consequences of Mike’s dissatisfaction if he does not quit the firm.
7. Comment on how Mike’s organizational commitment
may be changing.
8. What should Mike do now?...
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This note was uploaded on 10/01/2010 for the course FGT mba12ehtp taught by Professor Angwi during the Spring '10 term at Télécom Paris.
- Spring '10