Changes at Scout Mortgage

This seemed like a great fix but the new hires faced

Info iconThis preview shows pages 6–8. Sign up to view the full content.

View Full Document Right Arrow Icon
This seemed like a great fix but the new hires faced the issue of role conflict, feeling as though they weren’t being fairly compensated because of the differences in pay grades. This caused many to ask to be switched to a commission-based salary. According to Mangels, “There was whispering, ‘Why are you guys working for $4000 per month when you could be making $12,000?” (Hellriegel and Slocum, 2009, page 533). This caused tension for the new hires and the owners knew they couldn’t keep their employees wages at different levels. The workplace stress caused other problems for Scout’s owners. For Mangels and Walsh, this decision caused them both great intrapersonal conflict. The intrapersonal conflict they struggled with falls under the approach-avoidance category, meaning, “an individual must decide whether to do something that is expected to have both positive and negative outcomes” (Hellriegel and Slocum, 2009). The positive outcomes of their decision would be saving money on payroll and being able to pass those savings on to the customers. Without having to charge customers as much, they can build market share by being the company that offers the lowest rates in the business. This will help create revenue and make Scout’s
Background image of page 6

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
shareholders happy. The negative outcomes of this decision are losing quality employees, either by firing them or by their choice to leave the company at will. Without these employees, Scout could lose some valuable clients and take an initial loss after this decision is implemented. Some conditions that also made this decision difficult were the fact that the positive and negative outcomes were fairly close. The loan officers were making good money for the company, but without them the company would be saving a lot from their commission-based salaries. There is also the issue of relationships. These employees were important to Mangels and Walsh and they felt like families and friends, not just co-workers and subordinates. Mangels said it best when he stated, “How do you tell someone they’re overpaid and no longer needed?” (Hellriegel and Slocum, 2009, page 533). The amount of intrapersonal conflict that Mangels and Walsh faced affected the ethical intensity of their final decision. There are six determinants of ethical intensity: magnitude of consequences, probability of effect, social consensus, temporal immediacy, proximity, and concentration of effect. In this case, all six of these determinants are in effect. First, the magnitude of intensity for this decision is based on how the lowering of salaries affects Scout Mortgage’s employees. Due to the amount of money they would be losing with this pay-cut, the magnitude of intensity is pretty high. This loss of pay can affect their ability to pay for their homes, put food on the table, and other necessary every day expenses. Due to their current salary, they are accustomed to a certain standard of living and that would drastically change. The probability of effect is very high. Mangels and Walsh tried another strategy first, hoping for effective results, but hiring the new
Background image of page 7
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page6 / 11

This seemed like a great fix but the new hires faced the...

This preview shows document pages 6 - 8. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online