DETERMINING PAY RAISE
The Scientific Equipment Manufacturing company is a small manufacturing unit located in Peenya, Bangalore. The company is non-unionised and manufactures analytical equipment for hospital laboratories. Approximately one year ago, the manager of the Component Assembly Department established three production goals for the department. The goals were : (i) reduce raw material storage costs by 10 per cent ; (ii) reduce variable labour costs (i.e. overtime) by 12 per cent; and (iii) decrease the number of quality rejects by 15 per cent. The manager told the six unit supervisors that the degree to which each supervisor or exceeded these goals would be one of the major inputs for their merit – pay increases for the year. In previous years, merit increases were based on seniority and an informal evaluation by the department manager. The six supervisors worked on separate but similar production lines. A profile of each supervisor is as follows :
Amitha Aged 28, single; three years with the company after receiving her degree from the Bangalore University. Has a job offer from another company for a similar job that provides a substantial pay increase over her present salary. The scientific Equipment does not want to lose Amitha because her overall performance has been excellent.
Shindhe Aged 32, married with three children; three years with the company, high school education. One of the most stable and steady supervisors. However, he supervise a group of workers who are known to be unfriendly and uncooperative with him and other employees.
Anandan Aged 34, married with four children; high school equivalent learning; one year with the company. Came to Karnataka six years ago from Tamil Nadu. A steady worker, well-liked by his co-workers, but has difficulty in learning the local language. He has, therefore, problems of communication within