1. Is the company at the point where it should be setting up a formal salary structure based on a complete job evaluation? Why?
Yes, by setting up a formal salary structure is being fair to the employees because the salary being paid based on the job task rather than pay the salary based on gender. When the salary structure being fair, it leads satisfaction among the employees and as a result the turnover will be at low rate. Besides, the company also can control their financial operation by doing budget allocation planning for their business operation. Moreover, the formal salary structure will make the employees clear on the amount pay for his or her job position. Thus, it can make easier to the related manager to do a process of salary payment.
2. Is Jack Carter’s policy of paying 10% more than the prevailing rates a sound one, and how could that be determined?
First of all, First of all, according to this case, carter does not make any formal surveys, it is a correct action for Carter. Carter should pay more attention to the requirements of employees for building a formal pay policy. Secondly, Carter Company should pay different salaries for different job department rather than gender. Thirdly, it can determine a job’s relative worth by job evaluation. However, Jake has no enough evidence for building a pay policy. In our opinion, Carter may choose a job evaluation commitment to ensure right pay policies.
As far as we concerned, Jake Carter’s policy of paying 10% more than the prevailing rates is sensible. There are five steps for making a rational pay plan. Primarily, employer conducts informal salary survey and formal survey. Then employers use salary survey to know what others are paying. Secondly, Carter chooses job evaluation methods to determine the worth of one job. Thirdly, the company pays the similar salary for similar jobs. Fourthly, Carter can use a wage curve to help assign pay rates to each job. Then it is easy to price jobs with a wage curve. Lastly, we know Carter does not develop pay ranges. Therefore, it is important for developing pay ranges to motivate high performance employees.
At the same time, Carter needs to correct out-of line rates. In this case, we disagree that men and women have different salary, it is unfair. Thus, Carter must ensure that men and women are paid comparably for essentially the same work. Jack Carter’s policy of paying 10% more than the prevailing rates a sound one because he believes that within the higher payment he could reduce the turnover among the employee and also at the same time can fostering the employee loyalty to organization. It could be determined by providing facts that Jack pays the 10% more to the worker. Besides, it’s very much better, if the payment done to the workers that are showing the loyalty to the organization.
3. Similarly, is Carter’s male-female differential wise? If not, why not?
Our opinion, the answer is no, Carter’s shop does not have male-female differential wise. And they are also equal to their employees. Because Carter Cleaning Centers do not make a formal and legal wage structure to their employees, and at the same time Carte Cleaning Centers also does not use a good compensable factors to their employees, it will cause some bad effects to their employees and it also bring about different treatment. Wages rates are based mostly on those prevailing in the surrounding community. According to the Equal Pay Act of 1963, it requires that men and women who do the same job in the same organization should receive the same pay.
The term `same pay` refer to no difference is acceptable. In addition the law, also defines that one consider as doing the same level of job if they are equal in term of skills, effort, responsibility and working condition. However, the Equal Pay Act of 1963 includes four exceptions that allow employers to pay another gender more than another. Some of those exceptions are like more seniority, better job performance, greater quantity or quality of production and lastly certain other factors like paying extra to employees that working the night shift.
Back to this case study, there is no such exceptions includes in the reason provided by the Jack as to justify why he decided to pay 20% more than woman to men workers. The reason provided by him is they are stronger and can work hard for longer hours and also they all have family to support. This justification is the one that can’t be acceptable at all if refer to the law and it also show discrimination towards the female worker. This is because, according to Equal Pay Act 1963, rather than the four exceptions as mention above, female and male workers should receive the same amount of payment if they hold the same job that are substantially equal.
In addition, this unwise decision of Jack Carter’s policy will result in many negative effects such as increase in turnover among female worker, job dissatisfaction. Besides, there will be also more arguments in order to get an equal pay rate and lastly it will lead to an unproductively result to the organization.
Question 4: Specifically, what would you suggest Jennifer do now with respect to her company’s pay plan?
For the development of the company, there are several suggestions from us to Jennifer do now with respect to her company’s pay plan. More details about the suggestion will be discussed in the following paragraph.
First, in the question 1, we had mentioned this point, setting up a formal salary structure. Based on this point, for the employees, they will feel more fair and unambiguous about how much they can get and it also makes the managing easier and more clearly for managers, there are strict certain structure to avoid the unfair things happen.
Second, make a necessary formal survey in order to determining the amount that company should pay at what type of job responsibilities in order to avoid the mistake such as imbalances of salary payment. No matter what careful we are, we also would make some errors, so recheck the results are very necessary and important. In the case, the company conducts informal surveys among friends and cleaners trade associates. By doing this, it would reduce the cost and it is good for getting vast and direct information. But the independent information source could give great risks to the company in the future. Therefore a formal survey to the employees is more effective rather than informal survey in order to get feedbacks from employees regarding the pay system.
Third, about the policy of paying 10% more than the prevailing rates, as a company, profit is the first thing. Although, this policy can foster employee loyalty, but to the long-term, the employees will accustom this situation and cannot motivated them to do better. Changing the policy like rewarding the outstanding employees with this policy, not all, this not only can reduce the cost, but also can motivate employees to get the higher prevailing rates.
Fourth, abolish the policy of paying men about 20% more than women for the same job. Although her father’s explained that men are stronger and can work harder for longer hours, and besides they all have families to support, this policy considered bias to the men employees and of course it can course dissatisfaction to the women employees and they will feel unfairly treated. In pay system, it is better to have an official approved procedure on determining the right employees who’s qualify to be rewarded on the bonuses or salary increment and it should be based on the employees work performance. Don’t do like that, regarding somebody who work hard and better is effective method.