Case Stuy

1. What are Simpson’s dilemmas?
Michael Simpson obtained his MBA two years ago and was working in the consulting division of Avery McNeil. He was recently promoted to manager, but his salary was not increased. He heard that the firm paid the new MBA’s and one of his colleagues higher salaries than him, while they were not assigned nearly the same level of responsibility. He was considering whether to stay or to explore opportunities with other companies. In this situation, what dilemma did Michael Simpson face? What was his feeling?
Simpson worked hard and got the promotion quickly because the firm provided the opportunity for him to achieve his goal of advancing quickly. There is no guarantee that he would get the same exciting job in a different company and he might lose the potential advancement. Besides, the company invested time and money in him. He provides a wealth of knowledge and expertise on specific clients. His resignation would lead to a loss of revenue. Finally, he has a strong social network in this company. He enjoys working at Avery McNeil and the professional relationships that he has built over the past two years. People know him and his quality of work. If he decides to pursue a better paying job elsewhere, he will essentially start all over again. Should Michael stay or go? If stay, can he overwhelm the dissatisfied emotion? Will his boss give him a good explanation? If leave, will he still be valued in the new company?

2. Use 2 different theories of motivation discussed in class and in the textbook to explain Simpson’s dilemma and his current feelings? Please be analytical and specific.
According to this story, Simpson’s dilemma and current feelings involved two primary motivation theories: Vroom’s expectancy theory of motivation and Equity theory of motivation. 1) Vroom’s expectancy theory of motivation
Vroom’s expectancy theory is one of the most widely accepted theories of motivation. It proposes that work motivation or job satisfaction is related to the perceived association among effort, performance, and rewards. The effort will lead to high performance; high performance will lead to outcome; and the outcome would be desirable. “Employees will be motivated to exert a high level of effort when they believe that effort will result in a desired reward, such as salary increase, promotions, etc”2.
Here is a detailed example in Simpson’s case:
Simpson worked hard in the hope of getting a promotion and a pay increase. One of the factors he decided to work in Avery McNeil is that this company offered the greatest potential for rapid career progression. However, he put forth great efforts and was promoted to manager without any raise of salary. In his opinion, salary is a kind recognition of his performance. He compared his proposed raise to his colleagues and believes that their performance and responsibilities are not exceed equal to his; he felt it was unfair that he was paid the same or even less salary than his colleagues. The outcome is not desirable. In his mind, the effort, performance, and rewards were not in balance. 2) Another related theory is Adams’s Equity Theory of Motivation.
“Adams’s equity theory was first developed in 1963 by the American psychologist John Adams.”3 It attempts to explain how people strive for fairness and justice in social exchanges or give-and-take relationships. In other words, employees weight what they put into a job (inputs) against what they get from it (outputs) and then compare the fairness of the employee-employer exchange.
Generally speaking, “inputs include effort, loyalty, hard work, commitment, skills, abilities, adaptability, enthusiasm, and personal sacrifice. On the other side, the outputs typically include financial rewards, such as salary, benefits, compensation, or perks; and intangible rewards, for instant, responsibility, sense of achievement, job security, sense of advancement, etc.”3 When employees perceive inequity, they will act to correct the situation. The result might be change input and output, increase absenteeism, choose a different comparison reference, or voluntary resignation. In this case, Simpson compared himself to his colleagues (other-outside) and compared his present job rewards with past job rewards (self-inside). There were two new MBA’s that joined Avery McNeil and they were paid $2,000 more than Michael. Besides, one of his colleagues, Martha Lohman, was rehired at a salary considerably higher than her former level. She did not have the same level of responsibility as Simpson but was earning more salary than him. He felt inequity with the relative lower salary because he was promoted to manager and had more working experience, more responsibility and less pay. He felt frustrated and his motivation was influenced significantly by his rewards. The low motivation and dissatisfaction led him to consider if he should stay or leave Avery McNeil for a better paying job.

3) If you were Simpson’s manager, and he approached you with this problem, how would you respond? Please be specific.
According to this case, Simpson was in an underpaid inequality situation. If I were his manager and he approached me with this issue, I would tell him the company was using the pay for performance paying plan. His colleagues were paid higher because they did a good job and worked hard. Besides, I would suggest for him to try to change his fixation on pay and look at the rest of his compensation as well as the opportunity he has in front of him as a new manager. Finally, I would show good faith by offering him an increase in salary that exceeded the other people in his work group to align higher pay for higher responsibility.

References 1. Kreitner, R., & Kinicki, A. (2013). Theories of Motivation. In Organizational behavior (pp. 206-231). New York, NY: McGraw-Hill/Irwin. 2. Adams’ Equity Theory. (n.d.). Mind Tools New Articles RSS. Retrieved from http://www.mindtools.com/pages/article/newLDR_96.htm 3. Principles of Management: Motivation Theories: Behavior. (n.d.). Principles of Management: Motivation Theories: Behavior. Retrieved from http://www.cliffsnotes.com/study_guide/Motivation-Theories-Behavior.topicArticleId-8944,articleId-8909.html

References: 1. Kreitner, R., & Kinicki, A. (2013). Theories of Motivation. In Organizational behavior (pp. 206-231). New York, NY: McGraw-Hill/Irwin. 2. Adams’ Equity Theory. (n.d.). Mind Tools New Articles RSS. Retrieved from http://www.mindtools.com/pages/article/newLDR_96.htm 3. Principles of Management: Motivation Theories: Behavior. (n.d.). Principles of Management: Motivation Theories: Behavior. Retrieved from http://www.cliffsnotes.com/study_guide/Motivation-Theories-Behavior.topicArticleId-8944,articleId-8909.html