Question

You are currently being considered for a major promotion within your company to vice president of marketing. In your current position as manager of advertising, you supervise five managers and two hourly workers. As part of the annual salary review process, you have been given the flexibility to grant your employees an average 3 percent annual sal- ary increase; however, you are strongly considering a lower amount. This would ensure that your department’s expenses stay under budget and would send the message that you are able to control costs. What factors do you need to consider in making this deci- sion? How would you proceed?

Answer 1

Step 1: Identifying the goal

The first step in decision making is to identify the goal. In this scenario there is a multi-dimensional goal.

• To control costs.
• To ensure employee satisfaction.
• To maximise impact on the higher management.

Step 2: Collecting necessary information to make a decision

The responsibility of a manager is to take informed decisions. So it is necessary to gather the information related to the issue for obtaining a better understanding of what needs to be done. In this case the manager has to collect the data about the task-to-task performance of the employees under review. It will be necessary to ensure that nobody is discriminated againsted. One could also carefully identify the non-performing employees who are responsible for loss of production and give them a negative increase in salary if deemed fit.

Step 3: Considering the consequences

The possible consequences have to be carefuly weighed. For example it should not happen that the employees get disheartened due to poor salary increase and decide to leave the company. Therefore the cost controlling measures have to taken very carefully to ensure minimal damage to the company's human resources. The manager may for example devise a plan to delay the salary increase or make the increase in a step by step manner to minimise bad impact on the company's budget.

Step 4: Making the decision

Once all the information regarding the concerned employee's performance have been scrutinised the manager has to write them down in a logical manner to support his stand as to why there is a lack of substantial salary increase. In any case the management should be accountable for all its decisions since the future of the company depends on these decisions.

Step 5: Evaluating the decision

The last step is to evaluate the decision once it has been implemented. There can be various mis-judgements along the way. Hence it is absolutely necessary to measure the impact of the decision by considering the consequences it has caused. This enables the manager to improve his decision making skills. So in our case we have to see how many employees have been unsatisfied due to the decision and if it has resulted in loss of valuable human resources to the company. If yes then how this loss could have been prevented. Also consider if it was possible to come out with any alternative solution.