Overview/Introduction

Marsha Lloyd has accepted a job offer as an Assistant Professor from Fred Massie, Head of the
Department of Management at Central University. She started her new position with much enthusiasm, and
she was well received by her new colleagues. But despite her confidence about her accomplishments and
overall performance throughout the semester, Marsha felt that she was rewarded unjustly when she received a
7.2% increase based on the 7% pay raise pool that are distributed based on performance merit. After
confronting Fred Massie, she felt better for having discussed the matter, but became frustrated again after
learning that two of her colleagues who complained about their increase had been granted a favorable
disposition.

Statement of Strategic Issues

The main strategic issue in this case is Central University’s lack of transparency in compensation
and rewards. Specifically, this has led to strategic secondary issues that include: organizational injustice,
conflict, job dissatisfaction, loss of motivation and loss of organizational citizenship behavior and performance.

Analysis
Based on Organizational Justice concepts, Marsha experienced distributional injustice, procedural
injustice, and informational injustice. For her, there was distributional injustice because she perceived that
based on her performance, Marsha deserved the highest possible raise. There was procedural injustice for her
because the process of giving higher raises to senior professors on the basis of “correcting previous inequities”
unjustly puts her at an disadvantages because of external factors that she doesn’t have control over. Finally,
the fact that Marsha was constantly not informed about the evaluation of her performance, the standards for
getting higher raises, and the fact that you can appeal, made her perceive that she experienced great
informational injustice. Because of these injustices, Marsha experienced two main organizational problems:
conflict and job dissatisfaction in the workplace. She had heated discussions with her supervisor and
colleagues, and subsequently felt that she was not getting her fair share for the work she was doing. Because
of these injustices and organizational problems, we expect Marsha’s motivation and job performance to
decline. This was already shown when Marsha became less inclined to show organizational citizenship
behavior, and said that she was no longer going to decline consulting jobs to focus on university duties. This
can be explained and predicted by two motivation theories: Equity Theory and Expectancy Theory. Under
Equity theory, since there is a perception of inequality, we can expect Marsha to reduce the outcomes she
produces to make it match only the pay she gets. Under expectancy theory, we can predict that Marsha is less
likely to show high job performance, because there is already a bigger disconnect in the performance-reward
relationship. If these are not resolved, Marsha is bound to feel more dissatisfied, and to perform much worse.

Recommendations and Implementation

In the short term, Central University should address informational injustices by documenting clear
policies and procedures on how pays and raises should be given. This should come in a form that can be
easily referenced by and disseminated to other people. It should also contain a clear criteria of what great job
performance looks like. In the middle term, Central University should reorganize organizational responsibilities
such that multiple people are in charge of pay and raise decisions. There should be a system where multiple
layers of management deliberate first before giving pay and raises. This is more procedurally sound than the
subjective acceptance of appeals Marsha saw. Finally, Central University should cultivate a culture of
transparency and open communication in the future. This can be done by opening more communication
channels, and by encouraging and rewarding employees for making use of these.
Albos, Del Mundo, Garcia, Lapira, Ramos, Reyes
BA 151 WFU-II Group 1 | Case #3 Case of the Missing Raise
Appendix

Strategic Issue Diagram

Distributive
Injustice
Loss in
Performance
Conflict,
Lack of Job
Transparency Procedural dissatisfaction,
in Pay Injustice Loss of
Motivation
Loss in OCB
Informational
Injustice

Recommendations
Short Term Middle Term Long Term

1. Clear job performance 1. Clear pay and raise 1. Cultivating a culture of

criteria
2. Clear policy and procedure
on raise and pay
3. Proper documentation and
dissemination of criteria,
policy, and procedure
deliberation process
2. Multiple and multi-level
decision making body
3. Documentation and
communication of
deliberation results
transparency and open
communication
2. Opening more
communication channels

Albos, Del Mundo, Garcia, Lapira, Ramos, Reyes

BA 151 WFU-II Group 1 | Case #3 Case of the Missing Raise