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Does Money Motivate?

About four months ago, Greg Holcomb was promoted to supervisor of the claims department for
a large eastern insurance company. It is now time for all supervisors to make their annual salary
increase recommendations. Greg doesn’t feel comfortable in making these recommendations,
since he has been in his job only a short time. To further complicate the situation, the former
supervisor has left the company and is unavailable for consultation. There are no formal
company restrictions on the kinds of raises that can be given, but Greg’s boss has said the total
amount of money available to Greg for raises would be 8 percent of Greg’s total payroll for the
past year. In other words, if the sum total of the salaries for all of Greg’s employees was
$100,000 Greg would have $8,000 to allocate for raises. Greg is free to distribute the raises just
about any way he wants, within reason. Summarized below is the best information on his
employees that Greg can find from the files of the former supervisor of the claims department.
This information is supplemented by feelings Greg has developed during his short time as
supervisor. Sam Jones. Sam has been with Greg’s department for only five months. In fact, he
was hired just before Greg was promoted into the supervisor’s job. Sam is single and seems to be
a carefree bachelor. His job performance so far has been above average, but Greg has received
some negative comments about Sam from his coworkers. Present salary: $26,000. Sue Davis.
Sue has been on the job for three years. Her previous performance appraisals have indicated
superior performance. However, Greg does not believe the previous evaluations are accurate. He
thinks Sue’s performance is average at best. Sue appears to be well liked by all of her coworkers.
Just last year she became widowed and is presently the sole supporter of her five-year-old child.
Present salary: $28,000. Evelyn Boyd. Evelyn has been on the job for four years. Her previous
performance appraisals were all average. In addition, she has received below-average increases
for the past two years. However, Evelyn recently approached Greg and told him she feels she
was discriminated against in the past due to both her age and her sex. Greg believes Evelyn’s
work so far has been satisfactory but not superior. Most employees do not seem to sympathize
with Evelyn’s accusations of sex and age discrimination. Present salary $24,000. Jane Simond.
As far as Greg can tell, Jane is one of his best employees. Her previous performance appraisals
also indicate she is a superior performer. In addition, Greg knows Jane badly needs a substantial
salary increase due to some personal problems. In addition, all of Greg’s employees are aware of
Jane’s problems. She appears to be well respected by her coworkers. Present salary: $25,000.
Ralph Dubose. Ralph has been performing his present job for eight years. The job is very
technical, and he would be difficult to replace. However, as far as Greg can discern, Ralph is not
a good employee. He is irritable and hard to work with. In spite of this, Ralph has received
above-average pay increases for the past two years. Present salary: $30,000.
QUESTIONS
1. What size raise would you give each of these employees?
Total Salary = Sam + Sue + Evelyn + Jane + Ralph = 26 + 28 + 24 + 25 + 30 = 133.000
A lot of salary can be raised at = 8% x 133.000 = 10640
- For Sam Jones, I do not raise his salary for many things. Although Sam Jones's
performance is above average but Sam Jones's work does not meet the criteria of salary
increases, let alone the added problem that there are negative comments from other
employees against Sam Jones.
 - For Sue Davis, I'll raise her salary of 3000 dollars. This is because Sue davis has
worked for the company for 3 years, her work is also no problem, and moreover Sue
Davis has become a widow for her five children. Nevertheless I did not dare to increase
the salary of Sue Davis is too high because I still do not believe because the previous
evaluation is less reliable.
- For Evely Boyd, I'll raise her salary of 2000 dollars. This is because Evelyn Boyd has
worked for 4 years in the company. Salaries that are not too high fit given to Evely there
is motivation to work better and not disturbed to the problem of discrimination.
- For Jane Simond, I'll raise her salary of 4000 dollars. Surely this is due to the excellent
performance given by Jane Simond. With the increase in salary Jane Saimond will be
motivated to work harder again.
- For Ralph, I will not raise his salary because of some things that need to be fixed from
him. Although Ralph is very difficult to replace, it is expected that by not raising his
salary Ralph can make Ralph able to realize what his mistakes are

2. What criteria did you use in determining the size of the raises?

-Experience
-Level of education
-Initiative and creative
-loyalty
-honesty
-responsible
-cleverness
-achievement
3. What do you think would be the feelings of the other people in the group if they found out
what raises you recommend?
- they should know the problem of themselves that cause their salary. Especially for Ralph
Dubose and Sam Jones. They should know their problem when the do work.
4. Do you think the employees would eventually find out what raises others received? Would
it matter?
- Yes I think employees would eventually find out what raises other received. And its good for
motivate them to work harder.