Their Grass is Greener! Pay Conflict at Yuanbo Education Group (Simplified Chinese Version)
(14 pages of text)
At the end of 2017, the human resources director at Yuanbo Education Group, a fast-growing educational service enterprise located in Shanghai, China, was struggling to calm down the managers, who were complaining about their salaries. Managers of the established business units were paid a relatively lower base salary but often with a sizable bonus tied to a revenue target. In contrast, the new hires for the recently established business units were paid a much higher base pay but with little or no bonus available. Both veteran and new managers were dissatisfied with their pay structure. The human resources director knew that he needed to take action soon. But what should he do and where should he start?
This case can be used for courses at the undergraduate and the master’s level (e.g., MBA and MSc) in human resource management, compensation, and organizational behaviour. The case can be used to achieve the following learning objectives:
- To introduce students to various forms of pay (e.g., base salary, merit-based pay, performance-based bonus, stock ownership, and profit-sharing) and the benefits and concerns associated with each form.
- To illustrate the challenges of implementing performance-based pay and the interdependence among compensation, performance evaluation, and business strategy.
- To allow students to apply psychology and management theories (e.g., Expectancy Theory, Equity Theory, and Social Comparison Theory) to understand employees’ responses to the pay structure of their compensation.
- To illustrate the importance of communication and participative decision-making in determining employee compensation and other company policies.
China, Medium, 2017-2018
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