Case Study - Erwin Oil

INTRODUCTION

The purpose of this assignment is to help in the pay determination of five branch managers at Ewing Oil. Being the Texas district manger, we are supposed to use our discretion in making the decision to disburse $10000 amongst the managers in accordance with their performance and also taking into cognizance the internal and external equity factors. The equity factor is important because employees are bound to make comparisons about their pay in respect to others in the same firm(internal) and in other industries(external).This will help them in making decisions about their worth at the job and if they need to move or they are comfortable at the job. Therefore the allocation of the money speaks of their value to the firm so it is important to communicate the message appropriately which is the task at hand.

BODY

According to the information at hand, we have five branch managers who have diverse backgrounds, experience and the likes and all these factors must be considered in rewarding their efforts on the job. Inasmuch as these factors are important, the most important is their performance on the job. The variety of personality that they bring into the workplace affect their output so it is necessary to be familiar with all those factors when making decisions as sensitive as a pay raise. The individuals from underprivileged backgrounds should be factored in because they probably had to strive harder to attain degrees, parents that have children have to be considered. It is also important to take note of the ages, social status, skills and responsibilities of employees. All these help in appropriately rewarding them.

ISSUES

Based on the information given above, the size of the raise given will not be shared equally, even though that will be a convenient solution, the reality is, not everybody brings in the same quota to the job. People should be rewarded according to their performance. Hence, the top player which appears to be David Green gets the most which is 24%.Ellen Panza gets 21%, Julio Perez gets 20%, Larry Foster gets 18%, while Frank Kemp gets 17% all out of the said $10000 budget.

When considering how to give the money out, we noted that David Green had better appraisals, he had stayed long with the company, and he also had an MBA. All these factors made him stand out of the pool, hence he needed to be given more to encourage him and retain him at the company

Ellen also has an MBA with good appraisals, but as the only female manager, she should be encouraged. Ellen deserves $2100 because it is common knowledge that she has taken interviews and could leave the company for another firm that could possibly offer more incentives. It is important to retain her at the firm, especially as she is young and single so she most likely has less commitment and could be open to more responsibilities.

Julio gets 20% because