A zero plan work
A ZERO WAGE INCREASE AGAIN?
INTRODUCTION
The given case is about a company named House Hearth & Home. The company deals in hardware, house ware, building supplies and home furnishings. Its annual sales were around Cnd$20 million. The profit margin has tightened due to the 2008 economic crisis because of which there was no wage increase in 2009-2010. The company owner Mark Coglin is in dilemma whether to give a wage increase this year or not, which would mean no increase in salary for 3 consecutive years.
THE OPTIONS AVAILABLE WITH THE COMPANY OWNER
No Salary increment for anyone:
PROS
• If no increment is provided to the employees then will they really leave their job as feared by Mark Coglin? – Considering the present market conditions are not bullish due to economic crisis, the employees might not be having the option of switching their jobs immediately. So it is highly likely that they will remain in the company itself.
• Undeserving employees will not get the salary raise- As around 15 % of employees are not committed to their work, they don’t deserve increase in their salary.
• Help in saving money - The Company could save a good amount of money by not giving a salary raise to the employees and can invest the same in other productive ways.
CONS
• Demotivating environment – If employees are not provided salary raise then it will create further chaos among them. Further, those who are performing well (like Simon and Kyle) in the current scenario might get demotivated as well. Employees like Dougie, Marie and Anne, might start taking more leaves and may not attend to customers properly.
• Theft problem – The employees might start stealing some useful items from the store. This will further affect the inventory, as well as the work culture in the company.
INTRODUCTION
The given case is about a company named House Hearth & Home. The company deals in hardware, house ware, building supplies and home furnishings. Its annual sales were around Cnd$20 million. The profit margin has tightened due to the 2008 economic crisis because of which there was no wage increase in 2009-2010. The company owner Mark Coglin is in dilemma whether to give a wage increase this year or not, which would mean no increase in salary for 3 consecutive years.
THE OPTIONS AVAILABLE WITH THE COMPANY OWNER
No Salary increment for anyone:
PROS
• If no increment is provided to the employees then will they really leave their job as feared by Mark Coglin? – Considering the present market conditions are not bullish due to economic crisis, the employees might not be having the option of switching their jobs immediately. So it is highly likely that they will remain in the company itself.
• Undeserving employees will not get the salary raise- As around 15 % of employees are not committed to their work, they don’t deserve increase in their salary.
• Help in saving money - The Company could save a good amount of money by not giving a salary raise to the employees and can invest the same in other productive ways.
CONS
• Demotivating environment – If employees are not provided salary raise then it will create further chaos among them. Further, those who are performing well (like Simon and Kyle) in the current scenario might get demotivated as well. Employees like Dougie, Marie and Anne, might start taking more leaves and may not attend to customers properly.
• Theft problem – The employees might start stealing some useful items from the store. This will further affect the inventory, as well as the work culture in the company.