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Elaine Pierce had worked for the city of Metropolis in the water and sewer department for over two decades. She began working at age 17 when she was a junior in high school but she never graduated. Her 20-some years of hard work paid off when she was promoted to second shift supervisor two years ago. She had taken some management training programs offered by the local community college and felt that she had honed her management skills and was deserving of the promotion. She was proud of her accomplishments and was known as being thorough and conscientious to train and develop new hires. She was pleased with her success as a supervisor, but knew she still had a lot to learn. She reflected on the events of the past 24 hours.
In recent years, the city had struggled in balancing its budget. Therefore, there had been no raises, and employees were paying a higher medical premium. The local area was known as a place that attracted a large number of Bosnian, Asian, and other refugees. With the help of churches and social service agencies, the city had brought a large number of them into city employment. These employees were offered English as a second language course and other professional development and social skills courses. In addition to paying the cost of these courses, the city paid each employee for four hours of training each week.
Last night, Elaine was approached by Faith Newman, who expressed her concern about not having a raise for the last two years and her disagreement and frustration with the city’s pay policies. Newman was upset because she had learned that Hu Twong was making $0.50 per hour more than she. According to Newman, Twong had been employed by the city for four months, and she had been employed for 12 years. In addition, Twong was getting four extra hours of pay each week because he did not speak English well.
“I was under the impression that pay is a reward for doing the job well and working for the city a long time,” Newman said. “Experience doesn’t seem to matter. It’s not fair!”
After consulting HR director Evan Maloney, Elaine was really confused. Maloney explained that the HR department determined all pay rates. The mayor and the city council had dictated that no raises would be given in the last two years. Each job classification had a wide wage range, but seniority and experience differences had become nonexistent. Maloney confirmed that some of the new employees had been hired at higher rates than longer-term employees. Maloney explained to Elaine that city administration looked unfavorably on discussing wages with current employees. Maloney reminded Elaine to reaffirm that the city administration had been pleased with Newman’s work performance and that the pay situation was beyond the city’s control at this time. In conclusion, Maloney asked Elaine to try to soothe her employees’ feelings about pay as much as possible and to be patient. “Things will change sooner or later, and the more senior employees will be taken care of,” Maloney assured Ellen.
After reading the case, submit your answers to the following questions:

What are the problems and ethical issues facing Elaine Pierce?
Is it legal for employers to have policies prohibiting employees from discussing compensation? What statistics can you find on the prevalence of such policies by U.S. companies?   (Research the issue and provide legitimate sources for your answer. Ex. Wikipedia is NOT considered an appropriate source for scholarly justification).
Are policies against wage discussion among employees just to protect supervisors and HR managers from having to explain differences in wages? Why or why not?
After hearing what Evan Maloney had to say, what should Elaine Pierce do?
Pierce thought that Maloney’s response to her inquiries was inaccurate. Do you agree? If so, how might the situation have been better handled?
From chapter 7, which motivational theory do you think is most applicable in this case?  Why?
Why is communication so important in employee pay and motivation?

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