APPROACH:

Thorough examination of the case was done to understand the details. The
business scenario and the case problem were examined carefully. Positive and
negative findings of the case were analyzed and various topics such as Employee
Pay Programs, Employee Involvement Programs and Motivation Theories were
studied to come up with the possible solutions to the problem.

CONTENT:
House, Hearth & home, a large hardware, furniture and building centre, has not
been able to earn sufficient profits due to the global downturn. As a result no
wage hike has been given to the employees from the last two consecutive years
and the employees are getting impatient for financial progress. The owner of the
store is faced with the dilemma of managing the upcoming wage review process.
He wants to reward the hard working employees out of the pumped up savings
from the process improvement initiatives but has limited motivation to pay to the
underperforming employees but this preferential treatment in wage hike may
result in an angry backlash in the store. Also, he is unsure if he wants to divert the
savings into compensation or to re-invest them in the business. He needs to
devise an effective wage distribution plan.

CRITIQUE:
The in-depth analysis of the case shows that the business has several factors that
contribute to its success and others that hinder its efficiency.
The store has pool of certain employees like Simon (Floor Manager), Aaron
(Company Controller), The Kitchen Designer, Wesley (The Yard Foreman) and Kyle
(Worker) who were dedicated, creative, knowledgeable and self-motivated. These
employees are genuinely concerned for the store and strive hard to do their work
effectively with utmost sincerity without any incentive and external motivation.
On the other hand, there has been lack of motivation from the store owner, Mark
Coglin. He expects his employees to outperform without realizing the need of
effective motivation. He is judgmental and has a presumed image of people in his
mind. He does not understand the need to appreciate his employees efforts at
the right time as he missed to congratulate the kitchen designer and thank Aaron
for the brilliant work they had done, which even he realizes.

Also, no wage increase in the past two years has indirectly cost the store even
more as the problem of employee theft has cropped up due to lower morale of
the employees.

CONCLUSION:
To build the morale of the employees, reduce the employee theft incidents and
reward the deserving people, a minimum wage increase must be done for all the
employees. But this increase may be kept different for different employees. For
example, there is a scope to give all the employees 2.5% to 3% increase. But
instead of opting a uniform increase, a performance based increase system may
be adopted. The high performing managers could be given 3% increase, high
performing foreman could be given an increase of 2.5% and so on. The under
performers may be given a bare minimum increase of 0.75%-1%. This will compel
them to work harder and put in more efforts so as to earn equal to their
colleagues who are performing well.
Also since the nature of the employees work require them to be in direct touch
with the customers, who are key to the stores survival, they should be motivated
enough from the owner, Mark Coglin, so that they are able to relate themselves
with the store and work in the best of their abilities. There should be enough
incentive plans for them to boost them up so that they channelize their energies
efficiently in satisfying customers, operational activities etc. He should start
Employee Recognition programs to value the efforts of the hard working
employees.