DISCUSSION QUESTION

Imagine that you manage human resources for a small business. You have recently prepared a report on the market rate of pay for salespeople, and the company’s owner says the market rate is too high. The company cannot afford this level of pay, and, furthermore, paying that much would cause salespeople to earn more than most of the company’s managers.

• Why is this a problem? Should managers automatically be at the top of the pay scale?
• Suggest three possible measures the company might take to help resolve this conflict.