Salary discrimination case study


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Salary discrimination case study

  1. 1. BSMH 5013Human Resource ManagementCase Study 04Salary DiscriminationAmong the Library Staff814284 - PRIDHIVRAJ NAIDU21stApril 2013
  2. 2. Table of ContentTopic Page NumberIntroduction 01Background Case 01Problem Statement 02Options to solve the case 02Recommendation 03Conclusion 04
  3. 3. 1. IntroductionDiscrimination in the working environment is seen as a serious matter, which could affect the morale of theemployee as well as the quality of work provided by the worker as well. According to Becker, economicdiscrimination occurs when a majority group (white) discriminates against minority group (non-whites) andsuch discrimination reduces the minority group’s income (P.Formby, 1966).Empirical evidence points to a persistent gap of approximately 40% between men’s and women’s averageearning in the United States and to a gap of approximately 30% between the earnings of white and black(Cain, 1986). Another plausible explanation for racial differences is rooted in history of racialdiscrimination. Minorities have continually received less pay than their White counterparts for performingthe same or similar jobs. Seidel (2000) refers to this type of inequity as within-job wage discrimination.2. Background of the casePierce University Library has appointed a new staff, Jean Rohs (white staff) under the supervision of MissCarol Parker (black staff). Miss Parker have come to notice a sharp increase in the salary of the newlyappointed Miss Rohs, Miss Parker feels that the increase is because the new staff is white and she is beingdiscriminated. Anyhow the HR Director has answered all Miss Parkers queries in a written formal letterdenying any practice of discrimination in the organizations pay system, Miss Parker is not aware of theorganization policy in practice.3. Problem StatementThe employees in the organization are not aware of the compensation system in practice and the HumanResource (HR) department has a very limited role in the organization to be able to decide and train theemployees on this matter. Solutions are provided from the HR Directors point of view.4. Three options to solve the problem
  4. 4. The organization needs to emphasize in providing training and briefing on company policies and practices.As discussed by Mathis R.L. and Jackson J.H. (2008) some recognized HR best practices include:employment security, selective recruiting, high wages, information sharing, training, and promotion fromwithin, measurement. The use of these HR best practices will illustrate that HR strategies help bothemployees and employers to obtain performance. In this case study a well-informed Miss Parker would nothave to go through a tough week by writing in to the HR Director to relieve her anxiety on this matter. Thiscould have been time saving and also provides the employees with the confidence and trust in themanagement of the organization.It is important to keep the employees informed on the pay policies of the organization. According to theresearch done by G.Miner,(1974) out of the 184 organizations taking part in the survey, nearly three fourthhave a written statement of the firm’s basic compensation policy, concerning such matters as payingcompetitive salaries, when employees can expect wages increase and how raises are determined. However,the policy statements are not always communicated to all employees; nearly one third of the companies thathave such statements distribute them to managers onlyThis is makes it hard for the employees to plan and to move forward in the salary scale of the organizationwithout knowing the pay structure and where they stand in that system itself. Hence, creatingmisunderstanding as such in the case of Miss Parker.HR is an integral part of the organization in managing various functions of the HR in the organization. HRhas developed from merely a segment of the organization to a joint function in strategic, managerial andoperational levels of management (Anne.M.D, Fombrun.C and Tichy.N., 1981) Holding these porttfolios,the HR department should be provided the liberty to handle and manage the compensation procedures,stages and training of the organization. As mentioned by Mr.Tripton the HR director of the organization, theHR needs a more flexible hand in managing remunerations of the staffs.
  5. 5. 5. RecommendationBased on the choices of solution, the best way to answer the misunderstanding of Miss Parker would be toprovide a complete training or briefing to all the employees on the pay structure practiced in theorganization and to be precise the delicate matters of pay rise, performance required and basic practicesshould be put forth to the employees at the beginning of their service or whenever there is a revise inpolicies of the organization.This practice may reduce misunderstanding among the employees as well as reduce unnecessary complaintsas in the case of salary discrimination. Also an early call to maintain or increase performance to achievecertain pay strata could also be a good motivation factor to the employee to perform well in theorganization.6. ConclusionSalary and remuneration for the employees of the organization is an important factor to attract and retain theemployee, it is also a very sensitive matter as it can affect the working relationship among employees aswell as the relationship between the employee and the employer themselves. It is very important for theemployer to keep the employees informed regarding the payments they receive.
  6. 6. ReferencesAnne.M.D , Fombrun.C, Tichy.N. (1981). Human Resources Management : A Strategic Perspective.Organizational Dynamics (pp. 51–67).G.Miner, M. (1974). Should Pay Policies be Secret or Open? Personnel Journal, Inc., 39–41.Gain. (Jlen G. 1986. "The Economic Analysis of Labor Market Discrimination: A Survey." InOrleyAslienfelter and Richard Lajard, eds..Handbook of Labor Ecotiomici, Vol, 1. New York: ElsevierScience Publishers, pp. 693-785.Mathis R.L., Jackson J.H. (2008), Human resources management, Thomson South-Western,USAP.Formby, J. (1966). The extent of wage and salary discrimintion against non-white labour.Southern Economic Journal, 140–150.