Combating Pay Inequalities – Analysis of Business Problem

Every employee wants to work and earn good pay. Such pay must be commensurate to level of work and commitment to the work. Moreso, the qualifications and work experience together with the aforementioned, all add to what constitute the parameter for setting the employee’s pay. Therefore, all employees of the different ranks cannot earn same amount of pay. The level of pay depends on your rank in an organization.

A case from ABP – Analysis of business problem, was shared this week to us to analyze. This case showed how Dan Price, the major shareholder and CEO of a private credit card processing and financial service company announced publicly a minimum wage of $70,000 to both existing and new hire. This announcement stunned a lot of the employees while some of them could not hold back their excitement. The news went into the social media space and all and sundries admired and envied the employees of this company.

This excitement and good gesture by the major shareholder and CEO of the company was short-lived when the younger brother and a minority shareholder took to a lawsuit against his brother Dan Price for making such a decision without consulting him nor any-other stakeholder. Things began to turn negative as employees starting leaving the company because most of them felt uncomfortable with the whole idea. Some customers withdrew their businesses as they anticipated price increase.

The question is should Dan price have made such an announcement? Shouldn’t he have done his due diligence check with engaging the thought of some professionals who are saddled with employee relationship and benefit management? What he feels would be historic ended up being a regret.

The equality pay agenda is an ethical issue. Some of the experienced and more qualified staff members felt cheated. How can they earn same amount with a new hire or someone who is not more experienced or qualified to them?

Dan price should be open to engage the major stakeholders in the business starting from the employees, to the customers and his brother. This case was looked into by my group and we ended up analyzing the case by considering the power and interest of each stakeholder as stated below:

Brother

Keep engaging with his brother and explain his decision from his point of view. Use data to demonstrate the growth in customer base and there is a positive prospect in the long run. Also, he needs

Employees

Existing employees – Host a town hall to pacify the disgruntled ones and tell them why he had to do it. Remind higher earners that he appreciates their work too. He should ensure that any action to be taken which may affect employees directly or indirectly ought to be given a deep thought. The impact of such action should always be weighed against its benefit.

 Media

Continue to feature on programs and engage media interviews regularly. This would strengthen its public relation campaigns.

Customers

Engage customers through different channels like emails and other media. Remind them that the prices won’t go up. Engage customers that have left. #EMBA27