Question

Betty Crawford is a staff accountant for a local CPA firm. For the past 15 years, the CPA firm has given employees a year-end bonus equal to two weeks’ salary. On November 30, the firm’s management team announced that there would be no annual bonus this year. Because of the firm’s long history of giving a year-end bonus, Betty and her co-workers had come to expect the bonus and felt that the firm had breached an implicit agreement by discontinuing the bonus. As a result, Betty decided that she would make up for the lost bonus by working an extra six hours of overtime per week for the rest of the year. The firm's policy is to pay overtime at 150% of straight time. Betty’s supervisor was surprised to see overtime being reported, because there is generally very little additional or unusual client service demands at the end of the calendar year. However, the overtime was not questioned, because employees are on the “honor system” in reporting their work hours.

Instructions:

Answer each question below in a way where you use at least 200 words to answer both questions ( NOT 200 words per question). After doing this, please respond to one of your peer's responses by using at least 100 words in your response.

1. Is the firm acting in an ethical manner by eliminating the bonus? Explain your answer.

2. Is Betty behaving ethically by making up the bonus with unnecessary overtime? Why?

Answer 1

1. The firm is not acting ethically by removing bonus without informing the employees since the company has the practice to pay bonus every year so employee may create some obligation because they think they will pay from bonus but if employer suddendly cancel the bonus employees will not be able to settle their obligation. Considering legal point of view employers are not liable to bonus if theydont have profit or they have some other plans but in that case employer need to inform the employees in advance that they will not pay so the employees can make proeper arrangements . However not paying bonus should not become practice employer need to take care of their employees as well

2. Betty not acting ethically by working unneccessarily without any reason she is trying to manupulate the laws of company it is fact that the company has not paid the bonus but working late is not the correct solution as the company can take serious action against her and she might loose her job, instead she should communicate her problem to the management and request them to reconsider their decision as the final decision lies with management to pay bonus or not.

One of my peer feel same what i have mentioned he feels paying bonus is solely discretionof management no one can force them to pay only you can request them on the other hand management can't cancel the bonus without informing the staff in advance