Management

A Management Dilemma Mr. Hong Lingjun, manager of the Data Analysis Department of Dongfang Co. Ltd, a small research firm, pondered how he should utilize a salary increase budget of 50,000 Yuan (7.5% of total payroll) to reward the five semiprofessional employees in his unit. He knew that he did not have to spend the full budget, but under no circumstances could he exceed it. In his opinion, all of these individuals were properly paid in relation to their relative performance and seniority one year (12 months) ago, when he last adjusted their compensation. The rate of inflation last year was 7%. Mr. Hong had assembled the following summary of his performance appraisals and other pertinent data to assist in determining his recommendations, which he knew were needed immediately.

|Name |Present Salary |Title |Salary Grade |Years In |Performance |Personal Circumstances |
| | | | |Dept. | | |
|Sun Ronggen |150,000 yuan |Analyst |6 |5 |Acceptable quality; several important|Married. Large family dependent on|
| | | | | |deadlines have been missed but may |him as sole support. |
| | | | | |not be his fault. | |
|Wang Qiang |130,000 yuan |Analyst |6 |2 |Outstanding. Sometimes a bit “pushy” |Single. No dependents. Has no |
| | | | | |in making requests and suggestions |pressing need for money. Reported |
| | | | | |about the department. |to