The Well Paid Receptionist
Analysis of “The Well Paid Receptionist” Harvey Finley is in quite the predicament. He his company’s net profit should be approximately $107, 614. 21 greater than he expected for this year. The problem is that his secretary/receptionist is making six to seven times the amount of an average “good” secretary/receptionist in the local market and has been for a few years. There’s a few ways this issue can be addressed. One way would be to talk to Ms.
Brannen and advice her that there has been an oversight in her salary over the past few years and for the upcoming year the oversight will be corrected and her salary will be adjusted to $25,000 per year with no percent of sales bonus. Another way to address the issue is to fire the manager who should have reported this oversight to Finley and promote Ms Brannen to his position while adjusting her salary to $55,000 per year and explaining the oversight to her as well. One more solution to this issue would be to let things be the way they are since the company has been doing great and growing the way things currently are.
The two most important value drivers to consider in establishing the Value Over Time maximization are “individual employee values” and “owner values”. Let’s start identifying the specific aspects of the first value driver, the individual employee values. The facts remain that the reason Finley hired Ms. Brannen was mainly based on her individual values and performance at her two previous jobs. She held a two year office administration degree, she was very articulate, bright and most of all she was enthusiastic about assisting in launching this start-up company with Finley.
She also had two extremely positive feedbacks from her previous employers that said “they would rehire her in a minute if she were still available. ” The problems lie with her not being satisfied with the initial salary offer for this position. Salary was the only issue with Ms. Brannen other than that she was perfect for this new position at Troupville Business Systems. A few potential problems with Ms. Brannen would be that she only moved from Houston was because she was going through a divorce. What would happen if she were to get back together with her husband? Another potential problem ith her would be the fact that she has a small child. If the child is sick then she will not be able to come into work. This would be an issue since at the moment she would be the only other employee. Also Ms. Brannen has two very good references and if she accepts this position and continues to look for another position elsewhere that may pay better and she can potentially leave Troupville Business Systems. The potential positive impacts on Value Over Time for Ms. Brannen is that she will continue to shine and prosper as a great striving employee the company will grow.
She is the front line and the first person the customer see’s or speaks to when they make the first contact to Troupville Business Systems. She has already proven herself since the launch of this company as being a key player in the success of this start-up company. A few potential negative impacts maybe that Ms. Brannen gets comfortable at the salary she is at and realizes that in her hiring package the terms and agreement were that she was to receive $14,000 salary plus 2% of sales. There was no clause to when this would be removed and she can just put herself on cruise control and still make six figures.
I expect her effect to be a positive one over time since this is the person Ms. Brannen is. You can tell a lot by looking at a person’s past performance history and we know she is a person who not only strives to be the best at her job position but also picks up on other job position duties and can perform them just as well if not better than others. We know she is able to handle sales calls if no sales person is available and the client/customer has never noticed. There are ways to turn something negative into something neutral or even better into a positive effect.
In the event that Ms. Brannen was offered a better paying position with another firm, Finley would be able to evaluate her for the time that she was working for him to see if she is worth the difference in salary. He would have also had time to make some sales and see how the potential sales market is doing and instead of offering her 2% in sales which obviously we now know was a bad strategy, can offer her more upfront in salary. A person that likes the job they are doing will not leave for one or two thousand dollars more.
So Finley can be true to her and make a counter offer in hopes that she would accept and stay. As for the other negative aspect of her getting back together with her husband in Houston and move back there, Finley would either have to offer her a significant more salary or find her husband a position at Troupville Business Systems. The other important value driver to consider in establishing the Value Over Time maximization is “owner values”. As the owner Finley’s main concern is to keep his business running. Another concern is to make more and more profit each year.
Owners need to worry about reputation risk as well and the well being of each of their employees. Some problems Finley is facing with his company, Troupville Business Systems, is that he is paying his secretary more than double what his highest paid manager is making. The problem Finley is facing is not knowing what should be done about this or how to approach the issue. The potential problems that may arise if the current situation is not addressed is that it will cause an up roar with the manager & salesman to find out that a secretary/receptionist is making much more than they are.
Managers as well as other employees not knowing her hiring benefits will demand a raise. Another potential problem is that rumors will most likely be started that they are having relations and that’s why a secretary is making six figures. A potential positive impact would be that other employees will see that being a hard worker and sticking through the highs and lows of a business really pays off. This may motivate all other employees to be outstanding or above average performers. The employees have witnessed the value over time with Ms.
Brannen and have seen the long-term effects on her salary. A negative impact would be that employees who have already been at Troupville Business Systems and have not seen the value over time in the bonus or benefits will demand a raise or quit. Salary is always a delicate situation to deal with and this is why it is not considered acceptable talk in the office. Another negative impact is over time if the company grows and does not have an increase in sales then Ms. Brannen will still be making more than Finley since he has more overhead to pay for.
There are steps that can be taken to negate a potential negative effect. First of all no one should be discussing compensation at all inside or outside the office. Second in case it does get out then there should be a one on one sit down with each employee to discuss their performance, not Ms. Brannen’s. Finley does not need to justify his actions to his employees; he only needs to treat them fairly. Now let’s evaluate the case where the company’s expense gets higher and the sales stay the same and Ms.
Brannen is making more than Finley. In this case Finley will have to renegotiate Ms. Brannen’s contract to reflect expenses as well if he does not decided to give her a base salary and no bonus that is. I believe the interactive effect these value drivers will have over time will be positive. During the maturity of Troupville Business Systems we can seen that Finley is a successful leader and Ms. Brannen is an outstanding employee who goes above and beyond her expected duties. These two make a good successful team.
Over the years you can see that she has proven herself and should be promoted to a higher ranked position. She deserves the 2% sales bonus because she was with this company from the start and has stuck through the toughest times thus far. The best alternative solution for both effects would be for both Finley and Ms. Brannen sit down and review her contract, salary and bonus and come to an agreement on a fair salary and a possible promotion since she and proven her loyalty and performance to Troupville Business Systems. I’m sure Ms. Brannen realized that this day would come.
And as long as the compensation is fair she will not leave since she is so invested in the company. In conclusion I would consider the best course of action would be to offer Ms. Brannen a managerial position within Troupville Business Systems. This will make her happy to get a respectable and long overdue promotion as well as a fair competitive salary of $60,000 a year with no percent bonus in sales. And if she is more motivated by a percent in sales then offer her $50,000 plus 1% of sales with a minimum of $5,000 annual or $20,000 maximum cap.
This is fair for both value drivers for Finley as the owner and Ms. Brannen as the Individual employee. If I were Finley the first step would be for me to evaluate her performance and hard work since the start of Troupville Business Systems. I would bring her into my office and have a one on one with her. I would start off by saying how much off an asset she is to the company and how much appreciate her hard work is and has paid off in the success of the company. Then I would proceed by offering her a managerial position within the company.
I would advise her that she will need to be trained for managerial duties and will be on an evaluation period as a manager for 3 months. Depending on the decisions made by her and how well she can manage a team she will be offered the permanent position. After she is given the formal offer she will have to decide whether she prefers being a secretary/receptionist or taking on new exciting role as a manager with Troupville Business Systems. Now the difficult part, this is where Finley should bring up the current compensation and offer Ms.
Brannen a new compensation package. Advise her that the old compensation will be reduced to an above average rate for a secretary/receptionist and that this new opportunity will be a much better move for her career path. He will need to talk her up a bit like saying that she is management material and how good this is for her career path. Most likely she has been expecting this day to come and will choose to be a manger rather than go with a different company as a secretary. It’s a win/win move on parts of both parties.