OVERPAID BANK

TELLERS
HARI MULYADI
STATE BANK
President Russell Duncan
Believes employees are the most
important asset
Established Progressive HR
Practices
Cross Training, continous
Improvement, result-base
compensation System, COLA raises
4 Banks were evaluated
Bank tellers at state bank were received an average of $22 more
Employees holding other positions (branch Manager, Loan Officer etc) were being
paid similarly to other banks
Wage Survey
Bank 1 Bank 2 Bank 3 State
Bank
372 369 375 394
Average Weekly Earnings of Local Bank Tellers 1. Although none of the bank tellers knew
how much their raises would be, they
were all expected both merit and Cost
of Living raises
2. If other employees were to find out the
over payment, friction could develop
3. State bank did not want to lose any
bank tellers as they were highly
competent
Concerns
Question 1:
If you were on the HR commitee of State Bank,
what decisions would you suggest regarding
raises for the tellers?
Answer:
1. State Bank should not base their wages off a
wage survey cunducted by a competitor.
Utilizing a third party to conduct a wage
survey before making a decision would be
better option
2. Lower the raises to tellers, as they have not
been told how much their raises would be.
therefore reducing raises does not seem like
it would have an impact on employee
satisfaction or productivity

Question 2:
How much faith should the HR commitee
place in the accuracy of the wage survey?
Answer:
Not reliable
Lacking other measures such as level of
education, experience and seniority
Does not account for other benefits
Question 3:
Critique State Bank's policy of giving
merit raises the range from 0-8%,
depending on job performance
Answer:
Align with State Bank's Culture
Major considerations
Internal and External Equity
Recommendation
Establish a Policy
Question 4:
Critique the Bank's policy of giving
cost-of-living rises. Do you think they
should be eliminated?
Answer:
1. Russell Duncan has created a
culture that has a reputation for
establishing the most progressive
human resource practices.
2. Cost of living raises align well
with the organizations continuous
serach to increase employee
satisfaction
3. Cost of living raises protect
employees from the declining
value of the dollar
Class Question?