Bonus Decision Making- Using Equity Theory Four managers in a large national insurance company are described below. The national sales director of...
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Please answer this question:Bonus Decision Making- Using Equity Theory 

Four managers in a large national insurance company are described below. The national sales director of the company has given you/your team the task of allocating $100,000 in bonus money to these four managers. It is entirely up to you/your team to decide how to divide the money among these people. The only requirements are that all of the money must be distributed and that no two branch managers can receive the same amount. The names and information are presented in no particular order. You should assume that economic conditions, client demographics, and other external factors are very similar for these managers.

i) How would you allocate the $100,000 bonus money among the managers?  Give the amounts (and %) of the overall bonus that you would assign to each of the managers. (See sample forms below).

ii) Why did you assign the bonus money in the manner that you did? For example, what was the criteria (inputs and outputs) would you based your decision on? What is the relative weight/importance of the each of the criteria?

iii) Discuss and compare your bonus allocations with those of your groupmates'. 

Manager Profiles-

  • B. B has been in the insurance business for over 27 years and has spent the past 21 years with this company. A few years ago, B's branch typically made the largest contribution to regional profits. More recently, however, it has brought in few new accounts and is now well below average in terms of its contribution to the company. Turnover in the branch has been high and B doesn't have the same enthusiasm for the job as he/she/they did. B is 56 years old and is married with five children. Three children are still living at home. B has a high school diploma as well as a certificate from a special course in insurance management.
  • E. In the two years that E has been a branch manager, his/her/their unit has brought in several major accounts and now stands as one of the top units in the country. E is well respected by his/her/their employees. At 29, he/she/they is/are the youngest manager in the region and one of the youngest in the country. The regional director initially doubted the wisdom of giving E the position of branch manager because of his/her/their relatively young age and lack of experience in the insurance industry. E received an undergraduate business degree from a regional college and worked for five years as a sales representative before joining this company. E is single and has no children.
  • L. L has been with this organization for seven years. The first two years were spent as a sales representative in the office that he/she/they now manages. According to the regional director, L rates about average as a branch manager. He/she/they earned an undergraduate degree in geography from a major university and worked as a sales representative for four years with another insurance company before joining this organization. L is 40 years old, divorced, and has no children. He/she/they is a very ambitious person but sometimes has problems working with his/her/their staff and other branch managers.
  • S. S is 47 years old and has been a branch manager with this company for 17 years. Seven years ago, his/her/their branch made the lowest contribution to the region's profits, but this has steadily improved and is now slightly above average. S appears to lack a sense of urgency in performing key duties of his/her/their job but is well liked by his/her/their staff and other branch managers. His/her/their experience in the insurance industry has been entirely with this organization. He/she/they previously worked in non-sales positions, and it is not clear how he/she/they became a branch manager without previous sales experience. S is married and has three school-aged children. Several years ago, S earned a diploma in business from a nearby community college by taking evening courses.

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