Is there a reasonable basis for believing that the company is discriminating against women? If so, explain what it is and if not, explain why not.
There is a reasonable basis for believing that the company is discriminating against women because the owners know and the data shows that the women who work in the plant are paid less than their male counterparts for performing the same job. The women who work in the office are also paid less than males in the same pay band. Under Title VII of the Civil Rights Act of 1964 it is unlawful to discriminate against individuals with respect to compensation based upon their gender. In addition, the owners are aware of the discrepancy in pay between men and women and feel that it is fair to pay women less because they believe that the company's female employees could not find higher paying jobs with other employers in the area. There is no reason, outside of gender, why female employees are paid less than male employees which is discrimination.
II. Is there reason to believe that women could file an equal pay lawsuit? If so, explain the reason and if not, explain why not.
The women in the manufacturing plant could file an equal pay lawsuit, because pursuant to the Equal Pay Act of 1963, it is illegal to discriminate against employees on the basis of sex. The act provides that women and men working in similar jobs must receive equal pay for equal work. The women working in the office may not have as strong of a claim in an equal pay lawsuit because they are not doing similar work to the plant workers. There are no men working in the office to establish a prima facie case that the women are paid less than a man would be paid to do the same job. The fact that women are paid less than men in the same pay band would provide evidence sufficient for an investigation by the EEOC.
III. What additional information would be useful in determining the answer to question two (2)?
Job descriptions for the work performed by the women in the office would be useful in determining if their jobs are significantly different from plant workers. Job descriptions for the plant workers would also establish that the men and women are doing the same job. It would be useful to know if any males have ever worked in the office and what pay they received and what their job descriptions were.
It would be useful to know the amount of experience, education and general qualifications of the workers in the plant to know if there is a disparity of skills between men and women that could possibly be a defense to the lower pay for women. The number of women in supervisory positions and the promotion process for selecting supervisors may also provide information useful for determining if the unequal pay extends to management.
A history of the pay for women and men in the plant and office would useful to analyze the historical starting and current wages for all workers.
IV. What would be the consequences of each of Sam's options to all of the people involved (e.g., women, men in the plant, the company, his family)?
If Sam files a whistleblower complaint with the EEOC, he is likely to be fired by the company. Even though it would be a violation of the retaliation laws under the whistleblower statute it is still likely to happen given that the company's owners seem to be ignorant of employment laws. This could lead to a retaliation claim by Sam against the company, but this would likely take years to resolve, and in the meantime Sam may find himself unable to find another job due to the stigma attached to whistleblowers. This could create a hardship on Sam and his family, especially if it's a small community where many people are likely to learn of the situation.
The upside to Sam's filing a complaint is that if the EEOC finds discrimination, which is very likely, it could sue the company to obtain back pay for the women who were unfairly discriminated against. There is also the likelihood that punitive damages would be sought against the company for its actions because the owners acted intentionally. The outcome of a lawsuit, whether it is settled or not, would require an overhaul of the company's practices to ensure a system of equal pay going forward. This may have negative consequences for the female workers who may be treated poorly by their male co-workers due to the lawsuit. The fact that many of the workers are friends and family may also cause friction for Sam if remains employed because in their minds they might not see a problem with helping out the company by taking less pay. There is also the possibility that the lawsuit could force the company out of business, since it is a new company with a growth strategy of under pricing its product it doesn't have a large amount of capital to invest in litigation.
On the other hand, if Sam doesn't file any complaint he is putting himself at risk of being personally liable for being involved in the ongoing discrimination (Arroyo, 2010). If Sam is sued for discrimination and a judgment is obtained against him, he could end up paying the judgment which may cost him his home and personal assets.
Although Sam feels that trying to get the company to change its policies would not meet with success, it doesn't mean he shouldn't try. Sam may be able to get help from the company's attorney, if they have one, who could help Sam explain the risks of liability and the possible consequences to the company if a lawsuit is brought.
V. How has the company's strategy affected its human resource policies?
The reliance on low cost labor in its growth strategy has encouraged HR policies which are discriminatory. The company has hired mostly friends and family, who presumably want to help the company grow, and may be willing to work for less pay then is currently available in the market. The company has not considered how to bring new workers into the workforce with the current compensation model. The company has put the majority of its profits back into the business to improve technology, but it has not improved wages or developed a policy aimed at retaining and rewarding high performing employees. As the company grows these human resource policies will fail to attract the best employees and will encourage turnover as workers leave for better paying jobs.
VI. How should cultural norms affect compensation systems?
Compensation systems are affected by cultural norms because these systems are intended to motivate employees by using an appropriate compensation model which ensures that the benefit received by the employee is equal to its perceived value. Organizations should always consider those aspects of compensation design which they regard as fundamental to their own company culture (Parker, 2002). All cultures comprise a spectrum of individuals and, provided all cultural norms are not disregarded, a non-conforming aspect which is important to a strong corporate culture will still attract a number of individuals in any culture (Parker, 2002).
The particular culture of the organization and the employees that are attracted to that organization are determinative of the compensation systems that will work best in that particular company. For example, people who come to work with the expectation that they are going to be rewarded with "benefits" for what they provide to the employer would be attracted to organizations with a merit pay rather than a seniority-based pay (Li, 2004). On the other hand, seniority-based pay links the compensation of the employees with the length of time that they have been with the organization, so people come to work with the expectation that they are going to be rewarded with "benefits" for their loyalty to the employer (Li, 2004, p. 7). In yet another system, people with communal orientation consider the needs of others more, so they would probably support the notion that senior employees should receive more benefits as they have more needs for their children and their future plans after retirement from the organization and would likely prefer seniority-based pay to merit pay (LI, 2004, p. 7).
Companies often do business internationally and use different business models for global expansion, including setting up facilities in other countries. The cultural norms vary widely from nation to nation and effective compensation strategies that are successful in motivating one culture of people is not always successful when used in other groups. People have different beliefs, value systems, socio-political influences, religious affiliations and family structures. Understanding how these factors affect the success of compensation systems is essential to operating in a multi-cultural world.
VII. Should satisfaction with the pay be the only criterion for evaluating the compensation system? If yes, why should it be and if…