Critical Thinking HR

In this assignment you will be determining annual pay raises for a small group of Management Professors while confronting several compensation issues including pay inversion (long-term employees paid less than new hires based on the current market rate) and the concept of "red circling" or freezing salaries that are outside of normal salary range guidelines that must be addressed as part of your solution.  A chart must be included with your submission.   Your chart should include each professor's name, current salary, proposed pay raise and new salary.  

Please see the attachment for complete details on this assignment.

Allocating Merit Raises: Situation

NOTE: This assignment does NOT have a length requirement as this can be completed several different ways. Your rationale should include support from your text and a full rubric is attached.

Develop a fair procedure that will be used to determine merit raises and then decide the dollar amount raise to be given to each professor with a rationale.You must explain your criteria and procedure rationale. How did you determine what was “fair” (equity theory)

In this exercise, students are required to determine which of many variables (e.g., teaching, research, service, length of service at the university, number of students taught) should be included in determining merit raises and how each should be weighed. The concept of merit raises argues that rewards should be based on job performance. Yet, how does one define “job performance”? Students can be challenged to defend their definitions and weights. This exercise demonstrates the difficulty of applying the merit pay concept to practical situations.

This exercise also relates to other wage and salary administration issues besides merit pay. Most HR textbooks argue that organizations should establish a tier of pay grades, each of which should be based on the skills, knowledge, and abilities required to perform a job. Then, within each pay grade, pay is determined by the job performance and, perhaps, length of service of each individual. In this exercise, the university does not appear to have developed a series of pay grades for professors. Rather, Assistant Professors, Associate Professors, and Full Professors all seem to be lumped together into one grade, if indeed, any grades exist at all.

This raises the issue of whether the university should develop different duties and pay grades for each rank. Also, the exercise raises the issue of what salary should be given to an individual who steps down from a former administrative job. In this case, Prof. Ricks has stepped down from the position of Dean of the College and is still receiving a salary that reflects those old job duties, not the ones associated with a professor’s job. Should the University change its pay policy so that this does not happen in the future? Should Prof. Ricks still receive raises given his/her high salary or should no raises be given until other professors catch up?

The exercise also raises the issue of pay inversion. Prof. Matthews is receiving a higher salary that Prof. Housman even though the later has a far superior record. The university probably justifies this on the basis that in order to attract new professors, it must pay market rate. In addition, it would argue that it can’t afford to raise the pay of all the other faculty who are affected. This raises the question of what is “market rate”. It also raises the issues of whether it is fair, ethical, and in the best interests of the university to follow this policy? What alternatives does it have? What are the possible negative long-term outcomes of this policy?