Case Analysis -

A zero wage
increase again
?

By Group 2
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• Mark Coglin , the store owner of ‘House, Hearth, Home’

is facing a dilemma with respect to managing wage
SITUATION distribution. It is an important issue as the employees
have not received any financial progress from 2 years
ANALYSIS • Mark overhears Simon, the floor manager on a call with
Doughie , who had called in for a sick leave and learns
that he is not the only one ,four people had previously
called with the same excuse
• Mark values employees like Simon and Aaron, who works
as a financial advisor ,as they are sincere with their work ,
in contrast to workers like Marie and Anne , who do not
prioritize their customers
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• Mark visits Aaron’s office for the wage review and finds
that there are no funds for wage increase and the sales have
SITUATION been already down this year. Interestingly, Aaron lists few
ideas which could cut expenses and save money for wage
ANALYSIS increment by 2-3 % for each employee
• Mark then sees Wesley, another responsible employee of
the store working along with a young man, Kyle on forklift
• Mark heads back to his office, knowing that the problems
of lost inventory and employee theft would skyrocket if
there was no wage increase this year as well
• Mark is in dilemma that implementation of Aaron's idea
would require him to work for extra hours and he has
limited motivation left
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• There has been zero wage increase in the past two years
PROBLEM • Dissatisfied and demotivated employees
• Lack of recognition and rewards to exceptional employees
ANALYSIS • Despite ideas given by Aaron for cost savings, Mark is
unable to act on it
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Decision To compensate employees following steps can be taken:

 Cut the costs and distribute added income towards
Analysis salaries
 Funding can be raised or a short term loan can be taken
 Once wage increment is done, plan for future growth of
the company
 Explain the employees to focus on profit maximisation
 Introduce new policies and lay off employees on their
bad performance
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PLAN • Absenteeism without prior notification should be warned of

OF serious consequences

ACTION
• Incentives based on their performance can be implemented that
will encourage other employees to improve their performance

• Cost Reduction and more savings should be given importance

and raised up in board meeting

• Priority should also be given to proper security arrangements to

stop any theft of inventory in future
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 Company could introduce new policies and can have a

Contingencies system where every employee gets a feedback from
their supervisors and on basis of that lay off certain non-
Plan performing employees and this feedback could further
be basis for-
 Incentives to employees
 Promotion to employees
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Thanks!