Hank Adamson Case Summary

Hank Adamson was a chief executive officer of RightNow!, a retail chain specializing in women's discount clothing. His management team, which includes Charlie Herald, VP of human resources and Harriet Duval, the chief financial officer confronted with the managerial dilemmas from the aftermath of leaked compensation information of 165 employees via internal email at the company headquarters building.
As a result, employees are upset over their compensations when they compare their salary to work colleagues with similar job function. The incident could affect employee morale within the company. For instance, the lower paid employees would reduce their productivity to meet what they reckon are a reasonable substitute for their compensation. On the other hand, higher paid employees would feel the pressure from their work colleagues because they earn more thus must produce more which would create a more stressful workplace environment.
Further, the management now has to worry about the perception of the pay gap and discrimination based on gender, age, race, etc. Furthermore, the company had fundamental problems in HR processes such as the hiring procedure, pay structure, and lack of transparency. As a result, the management team came up with three possible actions to remediate these
potential problems.
The first action, the VP of human resources suggested that keep the compensations information public.
The move would increase transparency and keep the management team truthful with the company’s compensation system without personal bias. Moreover, if it implements correctly, it would increase the trust, critical feedback, reduce turnover, and improve motivation within the organization since all employees must earn their keep. Furthermore, the model had been successfully used by the Whole Food Market with tremendous success. However, there is some drawback such as personal privacy issue and without addressing the fundamental issues of pay structure, it may be difficult to
implement.
The second action is to continue to keep the compensation information private. It would minimize hurting people's egos and silent the noses of the unfairness. Nonetheless, since the compensation information is already leaked out, it would be difficult to reverse the aftershock. Also, it would create more frustration and mistrust in the management team for employees. Therefore, continue to hold back the information would display the intention of the cover up that consequently could lead to internal retaliation and sabotage.
The third action is to partially post the company financial reporting by department and salary range based on position pay grade. It would provide more transparency. However, it would not fix the immediate issues of mistrust in the management and jealousy among employees.
In conclusion, the first action provides the best solution for the company in the current situation. It would help the management team rebuild a relationship with staff to contain the possible retaliation and motivation problem. At the same time, the company must fix the fundamental problems in HR processes such as pay scale, transparency, integrate employee feedback to improve the organization’s procedure. Again, if the company implements both action one and fix the underlying problems correctly, employees would feel more appreciated for their work thus have more sense of belonging to the organization rather than just feeling like pay labors. Finally, the management cannot always use a financial reward to earn employees royalty in a highly competitive business environment. Therefore, it is vital that it creates a non-financial reward, to gain intrinsic motivation of the employees.