perceived they were being treated inequitably, we experience.docx

perceived they were being treated
inequitably, we experienced prob-
lems. Lowering prices meant incur-
ring losses; not lowering them
meant losing customers. The next
two financial quarters saw sales dol-
lars decline by 40 percent. As the
sales manager, I felt pretty rotten
presenting my figures to Fred.
With regard to Dinah, I now
faced a monumental problem. The
internal feeling was she should be
avoided at all costs. Because of price
erosions, we faced cutbacks.
Employees blamed her for produc-
tion layoffs. The internal friction
kept mounting. Dinah’s ability to
interface effectively with her col-
leagues and other departments
plummeted to a point where normal
functioning was impossible.
Fred called me into his office
two months after the Partco episode
and suggested that I fire Dinah. He
told me that he was worried about
results. Although he had nothing
personally against her, he felt that
she must go because she was seri-
ously affecting my department’s
overall performance. I defended

Dinah by stating that the Partco
matter would blow over and given
time I could smooth things out. I
pointed out Dinah’s accomplish-
ments and stated I really wanted her
to stay. Fred dropped the issue, but
my problem persisted.
Things went from bad to worse.
Finally, I decided to try to solve the
problem myself. I had known Dinah
well for many years and had a good
relationship with her before the inci-
dent. I took her to lunch to address
the issue. Over lunch, I acknowl-
edged the stress the Partco situation
had put on her and suggested that
she move away for a while to the
West Coast, where she could handle
that area independently.
Dinah was hurt and asked why
I didn’t just fire her already. I
responded by accusing her of caus-
ing the problem in the first place by
going to Partco.
Dinah came back at me, calling
me a lackey for having taken her
story to Fred and having brought
his management message back.
She said I hadn’t even attempted a
solution and that I didn’t have the
guts to stand up for what was right.
I was only interested in protecting

my backside and keeping Fred
happy. As her manager, I should
have protected her and taken some
of the heat off her back. Dinah
refused to transfer or to quit. She
told me to go ahead and fire her,
and she walked out.
I sat in a daze as I watched
Dinah leave the restaurant. What the
heck went wrong? Had Dinah done
the morally right thing? Was I right
in defending MagRec’s position?
Should I have taken a stand with
Fred? Should I have gone over
Fred’s head to Mr. Leed? Am I doing
the right thing? Should I listen to
Fred and fire Dinah? If not, how do I
get my department back on track?
What am I saying? If Dinah is right,
shouldn’t I be defending her rather
than MagRec?
Review Questions
1. Place yourself in the role of the
manager. What should you do
now? After considering what hap-
pened, would you change any of
your behaviors?
2. Do you think Dinah was right?
Why or why not? If you were
she and you had it to do all
over again, would you do any-

thing differently? If so, what
and why?
3. Using cognitive dissonance
theory, explain the actions of Pat,
Dinah, and Fred. ■
C A S E 5
It Isn’t Fair
Developed by Barry R. Armandi, SUNY–Old Westbury
M
ary Jones was in her senior year at Central University and
interviewing
for jobs. Mary was in the top 1 percent of her class, active in
numerous
extracurricular activities, and highly respected by her
professors. After
the interviews, Mary was offered positions with every company
with
which she interviewed. After much thought, she decided to take
the offer
from Universal Products, a multinational company. She felt that
the salary was
superb ($40,000), there were excellent benefits, and there was
good potential
for promotion.
Mary started work a few weeks
after graduation and learned her job
assignments and responsibilities
thoroughly and quickly. Mary was
asked on many occasions to work
late because report deadlines were

often moved forward. Without hesi-
tation she said “Of course!” even
though as an exempt employee she
would receive no overtime.
Frequently she would take work
home with her and use her personal
computer to do further analyses. At
other times she would come into the
office on weekends to monitor the
progress of her projects or just to
catch up on the ever-growing moun-
tain of correspondence.
On one occasion her manager
asked her to take on a difficult
......................................... THE OB SKILLS WORKBOOK
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been stellar, I’m delighted to give
you a 10 percent increase effective
immediately!
Mary: (mouth agape, and eyes wide)
Tom, frankly I’m flabbergasted! I
don’t know what to say, but thank
you very much. I hope I can con-
tinue to do as fine a job as I have
this last year. Thanks once again.

After exchanging some parting
remarks and some more thank-
you’s, Mary left Tom’s office with a
smile from ear to ear. She was float-
ing on air! Not only did she feel the
performance review process was
uplifting, but her review was out-
standing and so was her raise. She
knew from other employees that the
company was only giving out a 5 per-
cent average increase. She figured
that if she got that, or perhaps 6 or
7, she would be happy. But to get
10 percent . . . wow!! Imagine . . .
Sue: Hi, Mary! Lost in thought? My,
you look great. Looks like you got
some great news. What’s up?
Susan Stevens was a recent hire,
working for Tom. She had graduated
from Central University also, but a
year after Mary. Sue had excelled
while at Central, graduating in the top
1 percent of her class. She had lauda-
tory letters of recommendation from
her professors and was into many
after-school clubs and activities.
Mary: Oh, hi, Sue! Sorry, but I was
just thinking about Universal and
the opportunities here.
Sue: Yes, it truly is . . .

Mary: Sue, I just came from my perfor-
mance review and let me tell you,
the process isn’t that bad. As a mat-
ter of fact I found it quite rewarding,
if you get my drift. I got a wonderful
review, and can’t wait till next year’s.
What a great company!
Sue: You can say that again! I couldn’t
believe them hiring me right out
assignment. It seemed that the com-
pany’s Costa Rican manufacturing
facility was having production prob-
lems. The quality of one of the prod-
ucts was highly questionable, and the
reports on the matter were confusing.
Mary was asked to be part of a team
to investigate the quality and report-
ing problems. The team stayed in
poor accommodations for the entire
three weeks they were there. This
was because of the plant’s location
near its resources, which happened to
be in the heart of the jungle. Within
the three-week period the team had
located the source of the quality prob-
lem, corrected it, and altered the
reporting documents and processes.
The head of the team, a quality engi-
neer, wrote a note to Mary’s manager
stating the following: “Just wanted to
inform you of the superb job Mary
Jones did down in Costa Rica. Her
suggestions and insights into the
reporting system were invaluable.

Without her help we would have been
down there for another three weeks,
and I was getting tired of the mosqui-
toes. Thanks for sending her.”
Universal Products, like most
companies, has a yearly performance
review system. Since Mary had been
with the company for a little over one
year, it was time for her review. Mary
entered her manager’s office nervous,
since this was her first review ever
and she didn’t know what to expect.
After closing the door and exchang-
ing the usual pleasantries, her
manager, Tom, got right to the
point.
Tom: Well, Mary, as I told you last
week this meeting would be for
your annual review. As you are
aware, your performance and com-
pensation are tied together. Since
the philosophy of the company is to
reward those who perform, we take
these reviews very sincerely. I have
spent a great deal of time thinking
about your performance over the
past year, but before I begin I
would like to know your impres-
sions of the company, your
assignments, and me as a
manager.
Mary: Honestly, Tom, I have no com-

plaints. The company and my job
are everything I was led to believe.
I enjoy working here. The staff are
all very helpful. I like the team
atmosphere, and my job is very
challenging. I really feel appreci-
ated and that I’m making a contri-
bution. You have been very helpful
and patient with me. You got me
involved right from the start and
listened to my opinions. You taught
me a lot and I’m very grateful. All
in all I’m happy being here.
Tom: Great, Mary, I was hoping that’s
the way you felt because from my
vantage point, most of the people
you worked with feel the same. But
before I give you the qualitative
side of the review, allow me to go
through the quantitative appraisal
first. As you know, the rankings go
from 1 (lowest) to 5 (highest). Let’s
go down each category and I’ll
explain my reasoning for each.
Tom starts with category one
(Quantity of Work) and ends with
category ten (Teamwork). In each
of the categories, Tom has either
given Mary a 5 or a 4. Indeed, only
two categories have a 4 and Tom
explains these are normal areas
for improvement for most
employees.

Tom: As you can see, Mary, I was very
happy with your performance. You
have received the highest rating I
have ever given any of my subordi-
nates. Your attitude, desire, and help
are truly appreciated. The other peo-
ple on the Costa Rican team gave
you glowing reports, and speaking
with the plant manager, she felt that
you helped her understand the
reporting system better than anyone
else. Since your performance has
W-108 THE OB SKILLS WORKBOOK
.......................................
day at the meal table also raise the
percentage figure. An occasional
bucket of sauce may be spilled or a
pizza accidentally burned.
In the event of an employee
mistake, the expense is supposed to
come from the individual. Because
of peer pressure, the night manager
seldom writes up a bill for the erring
employee. Instead, the establish-
ment takes the loss and the error
goes unnoticed until the end of the
month when the inventory is taken.

That’s when the manager finds out
that the percentage is high and that
there will be no bonus.
In the present instance, the
manager took retaliatory measures.
Previously, each employee was enti-
tled to a free pizza, salad, and all the
soft drinks he or she could drink for
every 6 hours of work. The manager
raised this figure from 6 to 12 hours
of work. However, the employees
had received these 6-hour benefits
for a long time. Therefore, they sim-
ply took advantage of the situation
whenever the manager or the assis-
tant was not in the building.
Although the night manager theoret-
ically had complete control of the
operation in the evenings, he did not
command the respect that the man-
ager or assistant manager did. This
was because he received the same
pay as the regular employees, he
could not reprimand other employ-
ees, and he was basically the same
age or sometimes even younger
than the other employees.
Thus, apathy grew within the
pizzeria. There seemed to be a fur-
ther separation between the man-
ager and his workers, who started
out as a closely knit group. The man-
ager made no attempt to alleviate
the problem, because he felt it

would iron itself out. Either the
employees that were dissatisfied
would quit or they would be content
to put up with the new regulations.
As it turned out, there was a rash of
of college at such a good salary.
Between you and me, Mary, they
started me at $45,000. Imagine
that? Wow, was I impressed. I just
couldn’t believe that they would . . .
Where are you going, Mary?
Mary? What’s that you say, “It
isn’t fair”? What do you mean?
Mary? Mary . . .
Review Questions
1. Indicate Mary’s attitudes before
and after meeting Sue. If there
was a change, why?
2. What do you think Mary will do
now? Later?
3. What motivation theory applies
best to this scenario?
Explain. ■
C A S E 6 A
Perfect Pizzeria
P
erfect Pizzeria in Southville, in deep southern Illinois, is the
second-largest

franchise of the chain in the United States. The headquarters is
located in
Phoenix, Arizona. Although the business is prospering,
employee and
managerial problems exist.
Each operation has one man-
ager, an assistant manager, and from
two to five night managers. The
managers of each pizzeria work
under an area supervisor. There are
no systematic criteria for being a
manager or becoming a manager
trainee. The franchise has no formal-
ized training period for the manager.
No college education is required.
The managers for whom the case
observer worked during a four-year
period were relatively young (ages
24 to 27) and only one had com-
pleted college. They came from the
ranks of night managers or assistant
managers, or both. The night man-
agers were chosen for their ability to
perform the duties of the regular
employees. The assistant managers
worked a two-hour shift during the
luncheon period five days a week to
gain knowledge about bookkeeping
and management. Those becoming
managers remained at that level
unless they expressed interest in
investing in the business.
The employees were mostly col-
lege students, with a few high school

students performing the less chal-
lenging jobs. Since Perfect Pizzeria
was located in an area with few job
opportunities, it had a relatively easy
task of filling its employee quotas. All
the employees, with the exception of
the manager, were employed part
time and were paid the minimum
wage.
The Perfect Pizzeria system is
devised so that food and beverage
costs and profits are computed
according to a percentage. If the per-
centage of food unsold or damaged
in any way is very low, the manager
gets a bonus. If the percentage is
high, the manager does not receive a
bonus; rather, he or she receives
only his or her normal salary.
There are many ways in which
the percentage can fluctuate. Since
the manager cannot be in the store
24 hours a day, some employees
make up for their paychecks by help-
ing themselves to the food. When a
friend comes in to order a pizza,
extra ingredients are put on the
friend’s pizza. Occasional nibbles by
18 to 20 employees throughout the
W-109

perceived they were being treated
inequitably, we experienced prob-
lems. Lowering prices meant incur-
ring losses; not lowering them
meant losing customers. The next
two financial quarters saw sales dol-
lars decline by 40 percent. As the
sales manager, I felt pretty rotten
presenting my figures to Fred.
With regard to Dinah, I now
faced a monumental problem. The
internal feeling was she should be
avoided at all costs. Because of price
erosions, we faced cutbacks.
Employees blamed her for produc-
tion layoffs. The internal friction
kept mounting. Dinah’s ability to
interface effectively with her col-
leagues and other departments
plummeted to a point where normal
functioning was impossible.
Fred called me into his office
two months after the Partco episode
and suggested that I fire Dinah. He
told me that he was worried about
results. Although he had nothing
personally against her, he felt that

she must go because she was seri-
ously affecting my department’s
overall performance. I defended
Dinah by stating that the Partco
matter would blow over and given
time I could smooth things out. I
pointed out Dinah’s accomplish-
ments and stated I really wanted her
to stay. Fred dropped the issue, but
my problem persisted.
Things went from bad to worse.
Finally, I decided to try to solve the
problem myself. I had known Dinah
well for many years and had a good
relationship with her before the inci-
dent. I took her to lunch to address
the issue. Over lunch, I acknowl-
edged the stress the Partco situation
had put on her and suggested that
she move away for a while to the
West Coast, where she could handle
that area independently.
Dinah was hurt and asked why
I didn’t just fire her already. I
responded by accusing her of caus-
ing the problem in the first place by
going to Partco.
Dinah came back at me, calling
me a lackey for having taken her
story to Fred and having brought
his management message back.
She said I hadn’t even attempted a

solution and that I didn’t have the
guts to stand up for what was right.
I was only interested in protecting
my backside and keeping Fred
happy. As her manager, I should
have protected her and taken some
of the heat off her back. Dinah
refused to transfer or to quit. She
told me to go ahead and fire her,
and she walked out.
I sat in a daze as I watched
Dinah leave the restaurant. What the
heck went wrong? Had Dinah done
the morally right thing? Was I right
in defending MagRec’s position?
Should I have taken a stand with
Fred? Should I have gone over
Fred’s head to Mr. Leed? Am I doing
the right thing? Should I listen to
Fred and fire Dinah? If not, how do I
get my department back on track?
What am I saying? If Dinah is right,
shouldn’t I be defending her rather
than MagRec?
Review Questions
1. Place yourself in the role of the
manager. What should you do
now? After considering what hap-
pened, would you change any of
your behaviors?
2. Do you think Dinah was right?

Why or why not? If you were
she and you had it to do all
over again, would you do any-
thing differently? If so, what
and why?
3. Using cognitive dissonance
theory, explain the actions of Pat,
Dinah, and Fred. ■
C A S E 5
It Isn’t Fair
Developed by Barry R. Armandi, SUNY–Old Westbury
M
ary Jones was in her senior year at Central University and
interviewing
for jobs. Mary was in the top 1 percent of her class, active in
numerous
extracurricular activities, and highly respected by her
professors. After
the interviews, Mary was offered positions with every company
with
which she interviewed. After much thought, she decided to take
the offer
from Universal Products, a multinational company. She felt that
the salary was
superb ($40,000), there were excellent benefits, and there was
good potential
for promotion.
Mary started work a few weeks
after graduation and learned her job
assignments and responsibilities

thoroughly and quickly. Mary was
asked on many occasions to work
late because report deadlines were
often moved forward. Without hesi-
tation she said “Of course!” even
though as an exempt employee she
would receive no overtime.
Frequently she would take work
home with her and use her personal
computer to do further analyses. At
other times she would come into the
office on weekends to monitor the
progress of her projects or just to
catch up on the ever-growing moun-
tain of correspondence.
On one occasion her manager
asked her to take on a difficult
W-107
been stellar, I’m delighted to give
you a 10 percent increase effective
immediately!
Mary: (mouth agape, and eyes wide)
Tom, frankly I’m flabbergasted! I
don’t know what to say, but thank

you very much. I hope I can con-
tinue to do as fine a job as I have
this last year. Thanks once again.
After exchanging some parting
remarks and some more thank-
you’s, Mary left Tom’s office with a
smile from ear to ear. She was float-
ing on air! Not only did she feel the
performance review process was
uplifting, but her review was out-
standing and so was her raise. She
knew from other employees that the
company was only giving out a 5 per-
cent average increase. She figured
that if she got that, or perhaps 6 or
7, she would be happy. But to get
10 percent . . . wow!! Imagine . . .
Sue: Hi, Mary! Lost in thought? My,
you look great. Looks like you got
some great news. What’s up?
Susan Stevens was a recent hire,
working for Tom. She had graduated
from Central University also, but a
year after Mary. Sue had excelled
while at Central, graduating in the top
1 percent of her class. She had lauda-
tory letters of recommendation from
her professors and was into many
after-school clubs and activities.
Mary: Oh, hi, Sue! Sorry, but I was
just thinking about Universal and
the opportunities here.

Sue: Yes, it truly is . . .
Mary: Sue, I just came from my perfor-
mance review and let me tell you,
the process isn’t that bad. As a mat-
ter of fact I found it quite rewarding,
if you get my drift. I got a wonderful
review, and can’t wait till next year’s.
What a great company!
Sue: You can say that again! I couldn’t
believe them hiring me right out
assignment. It seemed that the com-
pany’s Costa Rican manufacturing
facility was having production prob-
lems. The quality of one of the prod-
ucts was highly questionable, and the
reports on the matter were confusing.
Mary was asked to be part of a team
to investigate the quality and report-
ing problems. The team stayed in
poor accommodations for the entire
three weeks they were there. This
was because of the plant’s location
near its resources, which happened to
be in the heart of the jungle. Within
the three-week period the team had
located the source of the quality prob-
lem, corrected it, and altered the
reporting documents and processes.
The head of the team, a quality engi-
neer, wrote a note to Mary’s manager
stating the following: “Just wanted to
inform you of the superb job Mary

Jones did down in Costa Rica. Her
suggestions and insights into the
reporting system were invaluable.
Without her help we would have been
down there for another three weeks,
and I was getting tired of the mosqui-
toes. Thanks for sending her.”
Universal Products, like most
companies, has a yearly performance
review system. Since Mary had been
with the company for a little over one
year, it was time for her review. Mary
entered her manager’s office nervous,
since this was her first review ever
and she didn’t know what to expect.
After closing the door and exchang-
ing the usual pleasantries, her
manager, Tom, got right to the
point.
Tom: Well, Mary, as I told you last
week this meeting would be for
your annual review. As you are
aware, your performance and com-
pensation are tied together. Since
the philosophy of the company is to
reward those who perform, we take
these reviews very sincerely. I have
spent a great deal of time thinking
about your performance over the
past year, but before I begin I
would like to know your impres-
sions of the company, your
assignments, and me as a

manager.
Mary: Honestly, Tom, I have no com-
plaints. The company and my job
are everything I was led to believe.
I enjoy working here. The staff are
all very helpful. I like the team
atmosphere, and my job is very
challenging. I really feel appreci-
ated and that I’m making a contri-
bution. You have been very helpful
and patient with me. You got me
involved right from the start and
listened to my opinions. You taught
me a lot and I’m very grateful. All
in all I’m happy being here.
Tom: Great, Mary, I was hoping that’s
the way you felt because from my
vantage point, most of the people
you worked with feel the same. But
before I give you the qualitative
side of the review, allow me to go
through the quantitative appraisal
first. As you know, the rankings go
from 1 (lowest) to 5 (highest). Let’s
go down each category and I’ll
explain my reasoning for each.
Tom starts with category one
(Quantity of Work) and ends with
category ten (Teamwork). In each
of the categories, Tom has either
given Mary a 5 or a 4. Indeed, only
two categories have a 4 and Tom
explains these are normal areas

for improvement for most
employees.
Tom: As you can see, Mary, I was very
happy with your performance. You
have received the highest rating I
have ever given any of my subordi-
nates. Your attitude, desire, and help
are truly appreciated. The other peo-
ple on the Costa Rican team gave
you glowing reports, and speaking
with the plant manager, she felt that
you helped her understand the
reporting system better than anyone
else. Since your performance has
W-108 THE OB SKILLS WORKBOOK
.......................................
day at the meal table also raise the
percentage figure. An occasional
bucket of sauce may be spilled or a
pizza accidentally burned.
In the event of an employee
mistake, the expense is supposed to
come from the individual. Because
of peer pressure, the night manager
seldom writes up a bill for the erring
employee. Instead, the establish-

ment takes the loss and the error
goes unnoticed until the end of the
month when the inventory is taken.
That’s when the manager finds out
that the percentage is high and that
there will be no bonus.
In the present instance, the
manager took retaliatory measures.
Previously, each employee was enti-
tled to a free pizza, salad, and all the
soft drinks he or she could drink for
every 6 hours of work. The manager
raised this figure from 6 to 12 hours
of work. However, the employees
had received these 6-hour benefits
for a long time. Therefore, they sim-
ply took advantage of the situation
whenever the manager or the assis-
tant was not in the building.
Although the night manager theoret-
ically had complete control of the
operation in the evenings, he did not
command the respect that the man-
ager or assistant manager did. This
was because he received the same
pay as the regular employees, he
could not reprimand other employ-
ees, and he was basically the same
age or sometimes even younger
than the other employees.
Thus, apathy grew within the
pizzeria. There seemed to be a fur-
ther separation between the man-
ager and his workers, who started

out as a closely knit group. The man-
ager made no attempt to alleviate
the problem, because he felt it
would iron itself out. Either the
employees that were dissatisfied
would quit or they would be content
to put up with the new regulations.
As it turned out, there was a rash of
of college at such a good salary.
Between you and me, Mary, they
started me at $45,000. Imagine
that? Wow, was I impressed. I just
couldn’t believe that they would . . .
Where are you going, Mary?
Mary? What’s that you say, “It
isn’t fair”? What do you mean?
Mary? Mary . . .
Review Questions
1. Indicate Mary’s attitudes before
and after meeting Sue. If there
was a change, why?
2. What do you think Mary will do
now? Later?
3. What motivation theory applies
best to this scenario?
Explain. ■
C A S E 6 A
Perfect Pizzeria

P
erfect Pizzeria in Southville, in deep southern Illinois, is the
second-largest
franchise of the chain in the United States. The headquarters is
located in
Phoenix, Arizona. Although the business is prospering,
employee and
managerial problems exist.
Each operation has one man-
ager, an assistant manager, and from
two to five night managers. The
managers of each pizzeria work
under an area supervisor. There are
no systematic criteria for being a
manager or becoming a manager
trainee. The franchise has no formal-
ized training period for the manager.
No college education is required.
The managers for whom the case
observer worked during a four-year
period were relatively young (ages
24 to 27) and only one had com-
pleted college. They came from the
ranks of night managers or assistant
managers, or both. The night man-
agers were chosen for their ability to
perform the duties of the regular
employees. The assistant managers
worked a two-hour shift during the
luncheon period five days a week to
gain knowledge about bookkeeping
and management. Those becoming
managers remained at that level
unless they expressed interest in
investing in the business.

The employees were mostly col-
lege students, with a few high school
students performing the less chal-
lenging jobs. Since Perfect Pizzeria
was located in an area with few job
opportunities, it had a relatively easy
task of filling its employee quotas. All
the employees, with the exception of
the manager, were employed part
time and were paid the minimum
wage.
The Perfect Pizzeria system is
devised so that food and beverage
costs and profits are computed
according to a percentage. If the per-
centage of food unsold or damaged
in any way is very low, the manager
gets a bonus. If the percentage is
high, the manager does not receive a
bonus; rather, he or she receives
only his or her normal salary.
There are many ways in which
the percentage can fluctuate. Since
the manager cannot be in the store
24 hours a day, some employees
make up for their paychecks by help-
ing themselves to the food. When a
friend comes in to order a pizza,
extra ingredients are put on the
friend’s pizza. Occasional nibbles by
18 to 20 employees throughout the

W-109

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