Valeria Morales

Case Study

A Zero Wage Increase Again?

Question 1

Organizational is a multidisciplinary field that draws on theories and principles from

psychology, sociology, and other social sciences to understand how people behave within

organizations, and to develop theories, principles, and models that can be used to improve

organizational performance. Since Mark is having an issue with employee’s efficiency and,

wage distribution, and overall lack of impactful managerial motivational approach,

organizational behavior would be a great and correct tool, considering it is concerned with

the study of how people behave within organizations, and how organizations can be

structured and managed in ways that optimize the behavior of individuals and groups in

order to improve organizational performance

Question 2

I believe failing to offer a pay raise for a third year in a row wouldn’t be a good look, it

would reflect poorly on the business in the eyes of both the workers and several external

stakeholders, including the shareholders. The company may seem that is in a bigger

financial burden and may cause the star performers to leave. There may be protests and

agitations among some sections of the workforce. All of this would eventually have a

negative impact on the company's financial situation. Second, if the business decides to
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stick with its no wage raise approach, even its best performers may decide to quit and find a

new job where they would pay the fairly. As a result, employee turnover is likely to rise.

There would be long-term effects, such as uncertainty among new candidates for

employment.

If there is a total wage increase, I do believe at first employees would be happy. However, I

don’t believe it would make the workforce more efficient. At that point the lazy workers

may still stay in the company and would not really be a solution to the bigger managerial

and cultural issue Mark is going through.

If only some employees, the stars, would receive a wage increase I do believe they would

be happier and try to do their jobs even better. But the rest of the company would be jelous

if they see there isn’t even a chance for them to get better wages. It could affect the

inventory and the jealous employees may stole several things… If that is the option I think

should be handled with a lot of care.

The goals or organizational behavior would make Mark take a better decision since by

predicting, explaining, managing and implementing the right strategy he could improve

company culture and therefore improve performance.

Question 3

I think the managerial roles are extremely important to take into consideration when

dealing with the wage dilemma. At a peak of company inefficiency and bad labor, the

company can’t afford to lose their star performers. They need to take their needs into

account and motivate them even more and compensate their work. Mark needs to
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understand he needs to improve company culture and make the values of the company

clear, like accountability. For employees to take responsibility for their own actions and a

reward system could come into play, instead of raising everyone’s wage.

Question 4

As stated, I believe it would be a horrible decision to choose the black or white option,

meaning to not raise wages or to raise wages as a whole. Since in one corner you could

create a horrible perception of the company’s finance, and you may lose the best assets of

the company which are the star performers. And on the other hand, you would reward

people for not doing enough and wouldn’t be fair to the employees that do put their 110%.

And in the case of only giving some employees a raise and to ignore the others could also

cause extreme jealousy which leads to infidelity from employees and the inventory would

be compromised.

By using organizational behavior and understanding how to effectively manage a group of

individuals, while at the same time reward their individual success would be the best-case

scenario for Mark.

Question 5

I think Mark should implement a Hybrid reward incentive, while also increasing certain

base wages, like their performance stars.

I believe first, company culture needs to be established and implemented, share companies’

values, and make employees understand the privilege and benefit of working at House
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Hearth & Home. Then I would make clear objectives for the managers to have on their

subordinated and to take notes on the individuals’ workers performances. They need to

develop training programs for the employees and improve their effectiveness. And if some

people don’t work in the new company structure or don’t improve, they should be fired.

Since they are costing more than what they make.

Also, a reward type of bonus should be implemented when complying with goals. The

managers should set clear SMART goals, and if the employees complete it they get a small

bonus each month, but paid 45 days after the second month in a row. In that way you don’t

have liquidity problems, and employees get their cash when their good job already made an

impact in the balance.

I would also make bonuses as a managerial team, and if a specific team complies with their

goals, another bonus is taken into consideration.

This way you only actually raise wages to your star performers, and then reward the

employees that are actually doing their job by structuring a variable income.

This would have a positive effect on the workforce, by positive reinforcement, and would

make their attitudes better and more willing to chase that extra mile and get the job done.