MGT501 VU GDB Solution Spring 2012

The ABC Company had announced an ambitious expansion program, which included increasing production capacity and doubling the work force in less than five years in 2007. At the time of wage revision, the management designed a two-tier structure: existing employees will be eligible for a higher salary, and those who are recruited fresh will get a lower salary – though job description and job specification are the same. The management argued that this is the best policy and is widely followed in deregulated companies abroad.
Requirement:
In your opinion, is it a fair policy or not (regarding existing and fresh employees); discuss with proper arguments.

Solution:
 


 
Its a fair decision because fresh graduates lack of experience need trainings unaware of organizational working criteria, inexperienced , unaware of working environment Whereas exiting employees  are experienced well aware of working criteria of the organization management can delegate their authorities to them and more reliable they dont need special training for routine tasks. This is the best policy and is widely followed in deregulated companies abroad.

 

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