Question

Ethical dilemma......................................Ethical dilemma..................................Ethical dilemma.....................................Ethical dilemma

Suzanne Cureis an American who has been a well-regarded Motorolan for many years. She worked in a division of Motorola that was highly profitable. One of the reasons for her satisfaction with the corporation was that she had been involved in a fine performance bonus plan. The benefits she and her family enjoyed were more generous than those available to employees in a number of other divisions. She had often wondered about those discrepancies, but since her own situation was so good, she never took the time to look into the matter in any great depth.

Three year ago, however, things took a turn which made her look into it deeply indeed. Suzanne was given a promotion and assigned to manage an operation in Pacifica, a rapidly developing Pacific Rim nation. Her assignment was to build up the operation significantly, and she succeeded beyond most people’s expectations. In the process, she got to know many Pacifican Motorolans quite well, and was struck by their strong commitment and loyalty to the corporation and to their work units.

In Pacifica, it was not the tradition for companies, local or multinational, to award performance bonuses, and Motorola conformed to this pattern. Suzanne noted that most local employees were quite happy to work for Motorola because they felt that they earned competitive wages and enjoyed good job security. Local Motorolans knew little about performance bonuses, nor were they aware that such rewards varied among different divisions and geographies within the corporation.

Suzanne decided to pursue an innovative pilot project, and, on the basis of her excellent track record, managed to convince her Motorola superiors to allow her to try it for a period of three years. The project was to introduce rewards for good performance, in the form of a quarterly bonus. What made the project truly audacious, though, was that each employee would receive the samemonetary amount, regardless of salary level. (New employees with less than one year’s service were handled differently, and the bonus was handled separately form merit raises, promotions in grade, etc.)

At the end of the first year, the total bonus turned out to be $456 for each employee, regardless of rand or salary. This amount was seen as trivial by the higher-paid employees but, in this low-wage country with considerable annual inflation, was eagerly welcomed by the lesser-paid ones. Suzanne had learned, from extensive dialogues with local employees, that they preferred to be rewarded as members of a unit. They would have regarded individual bonuses as unfair and divisive.

The program is now in the early stage of its second year. Already, the results have been encouraging. Productivity has generally risen. Employees, especially those at lower pay levels, seem enthusiastic. None of those at higher levels appear quite satisfied with the new arrangement, but few have complained formally. Various surveys conducted at this facility confirm that morale is generally higher, as measured by a number of quantitative indicators.

Answer the following questions.

1.         What is the issue?

2.         Are there any ways that the performance bonus program be improved?

3.         What are possible pitfalls in this bonus program over the short-term? The long-term?

Answer 1

1. The issue is regarding the bonus as reward for good performance at Motorola in the region of Pacifica where there is no concept exist of rewarding employees with bonuses. There was a pilot project done by one of the experienced employee of Motorola from America Suzanne Curies who had succeeded doing the same at her former workplace in America with thumping results and performances. Since the pilot project has completed successfully and it turned out to be very promising and widely welcomed by the employees at Pacifica, however those employees at higher level are quiet dissatisfied. Overall according to large opinion the morale of employees is high and the same is confirmed by the quantitative indicators.

2. As already this concept is new to the employees and they are positively responding to the same, this bonus plan should be continued as it is and shouldn’t be changed. However, they should get the higher-paid employees also involved by at least giving performance bonus yearly or half yearly just as to uplift their morale and make them participate equally in contributing to the company. This will help the company in maintain harmony and balance across all classes of employees.

3. Short Term Pitfalls: Since this concept of rewarding the employees with performance bonuses is new in the region of Pacifica, employees may expose themselves for self exploitation and working out of their usual work-timing or shifts and this may impact their health and quality of output generated by them further more employees will try to get themselves hired at the facility and situation of overcrowding may take place. That is to say fear of greed may penetrate. Long Term Pitfalls: The employees may become habituated to such performance bonuses to such an extent that in case any financial crisis strikes the company, there could be possible revolt and strikes in the company by the employees forcing the company to meet their bonus requirements.