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COMPENSATION STRUCTURE

DEVELOPMENT
CASE STUDY
SALARY DISCRIMINATION AMONG THE
LIBRARY STAFF
WAHEED SHAHMIR
13/3/2016

3422

INTRODUCTION
Discrimination of any kind in the working environment is taken on a serious

note because it affects the morale of the employee as well as the


productivity of worker.

According to Becker, economic discrimination occurs when a majority

group for example white discriminates against minority group such as black
or brown and such discrimination leads to reduction in the minority groups
income although both the groups are performing similar jobs.

Empirical Studies have shown that in United States there is a gap of nearly

40% between mens and womens average earnings and a gap of about
30% between the earnings of white and black. Seidel (2000) refers to this
type of inequity as within-job wage discrimination.

BACKGROUND OF THE CASE


Franklin Pierce University Library has appointed a new staff, Jean Rohs

(white staff) under the supervision of Carol Parker (black staff).

Mrs Parker have come to notice a sharp increase in the salary of the newly

appointed Mrs Rohs, Miss P a r k e r feels that the increase is because the
new staff is white and she is being discriminated.

Anyhow the HR Director has answered all Miss Parkers queries in a written

formal letter denying any practice of discrimination in the organizations


pay system.

Mrs Parker is not aware of the organization pay policy in practice.

PROBLEM STATEMENT
The employees in the organization are not aware of the compensation system in place

and the Human Resource (HR) department has a very limited role in the organization
in order to decide and train the employees on this matter.

SOLUTIONS
Following are the solutions that are provided from the HR Directors point of view:
The organization needs to emphasize in providing training and briefing on company

policies and practices. As discussed by Mathis R.L. and Jackson J.H. (2008) some of the
highly recognized HR best practices include : employment security, selective
recruiting, high wages, information sharing, training, and promotion from within,
performance measurement. The use of these HR best practices will illustrate HR
strategies that help both employees and employers to obtain performance. In this case
study a well-informed Miss Parker would not have gone through a tough week by
writing in to the HR Director to relieve her anxiety on this matter. This would have
been time saving and would have also provided the employees with the confidence
and trust in the management of the organization.

SOLUTIONS
It is important to keep the employees informed on the pay policies of the

organization. According to the research done by G.Miner in 1974, out of 184


organizations that took part in the survey, nearly three fourth had a written
statement of the firms basic compensation policy. However it was found ,
the policy statements are not always communicated to all employees by
organizations; nearly one third of the companies that had such statements
distributed them to managers only. This makes it hard for the employees to
plan and to move forward in the salary scale of the organization without
knowing the pay structure and where they stand in that system itself.
Hence, creating misunderstanding as such in the case of Miss Parker.

HR plays an integral part in managing various functions of the HR in the

organization. HR has developed from merely a segment of the organization


to a joint function in strategic, managerial and operational levels of
management. Holding these portfolios , HR department should be allowed to
handle and manage the compensation procedures , stages and training of
the organization workforce as they seem fit.

RECOMMENDATIONS
Based on the choices available, the best way to answer the

misunderstanding of Miss Parker would be to provide a complete training or


briefing to all the employees on the pay structure practiced in the
organization and to be precise the delicate matters of pay rise,
performance required and basic practices should be put forth to the
employees at the beginning of their service or whenever there is a revise in
policies of the organization . This practice would reduce misunderstanding
among the employees as well as reduce unnecessary complaints as in the
case of salary discrimination

CONCLUSION
Salary and compensation for the employees of the organization is an

important factor to attract and retain the employee, it is also a very


sensitive matter as it can affect the working relationship among employees
as well as the relationship between the employee and the employer
themselves. It is very important for the employer to keep the employees
informed regarding the payments they receive.