Analyze the given case and discuss.
New Delhi Shopping Point has about 300 employees, 200 of whom are on the permanent rolls, whereas the rest are outsourced. About 50 per cent of the employees were females. Since it was a new entrant in the business, the retail chain has adopted the ongoing practice of job evaluation rather than framing its own job evaluation and classification system. As a result, the chain failed to establish a mutually agreed compensation design plan and was accused of deliberate pay inequity, without valuing diversity issues. This institutional failure to establish pay equity ultimately led to successive strikes by dissatisfied employees. Eventually, these employees formed unions with strong opposing political affiliations.
The company then formed a task force with cross-functional team managers to educate employees on the methods of job correlation and job pricing. The idea behind the force was to receive the support of employees to develop a mutually accepted job evaluation scheme and rationalize the company’s pay differentiation strategies. Although this scheme might have reduced the employees’ dissatisfaction on pay parity, it failed to eliminate inequity, resulting in dissension amidst a small section of employee.
In a retail store, customers notice dissatisfied employees immediately, especially when their queries go unheard, when they are left to guess the price of an item whose price tag is missing, or when they are not properly informed about product features. The business of a retail chain suffers when it fails to captivate customers. The New Delhi Shopping Point faced all these predicaments, resulting in a substantial loss of business and significant reduction in customers.
Facing successive business losses, the company ultimately decides to discuss the pay parity issue and to arrive at a solution. It also agreed to develop a suitable job evaluation scheme, aligned with compensation design plan. All the unions agreed to the proposition of the company and promised to come out with a win-win solution on the pay parity issue. Some of the issues suggested by unions for discussion in the joint meeting were- correctly capture some key features of work done by female employees, differentiate between the quality of customer relations offered by a male and female employee, understand the success rate (in terms of percentage of customers) of male and female employees, etc. A section of female employees complained that though their success rate was better than their male colleagues, they were still paid less than their male counterparts. They threatened to refer the matter to the Human Rights Commission, if conciliation failed.
Discussion question
As a team member, representing the management, suggest a way for the company to achieve pay parity through mutual consensus.
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