February 13, 2001 Examples Of Organizational BehaviorAn example of organizational behavior that I would like to discuss focuses around a conversation I had with one of my older brothers. The topic that we discussed was that of equity, but not only from an employee’s point of view, but also from that of a manager.At the time I was employed with Nextel Communications. I had been hired on with little prior experience, which was definitely reflected by my relatively low compensation plan. After about a year of very glowing reviews and wonderful overall performance, I found myself at a point of negative inequity. As I compared my level of output with those around me, I discovered that my level of output was equal to, or exceeded that of my peers. Unfortunately, as stated earlier, my compensation was relatively very low.
This state of negative inequity concerned me enough that I sought counsel from my elder brother before I made the attempt for a merit increase in my level of compensation. At the time my brother was the manager of sales for the Western US region. He had a fairly large team and I knew he had much experience in the area of management, hiring, and pay to performance ratios (outcomes to inputs). I related to him my situation, and my arguments for why I felt I deserved an increase in compensation. He had a few very helpful ideas and suggestions, but one thing he said really stood out.
My brother told me one of the ways in which he determines the compensation of his employees. Basically, he asks himself, “If I could only have one person on my team, and I had to pick one person out of my whole team to keep… who would it be?” Next, he does the same scenario, but with his second most valuable employee. This process is continued until he has an ordered list of all of his team, with the most valuable person listed first, and then a descending list sorted by level of contribution to the group. The next step is he lists all of the compensation plans of the employees within the group. Finally he analyses the layout, and the compensation plans should also be in descending order to match the level of contribution from the employees. Of course there are other factors that could come into play, but ceteris paribus (holding all other things equal) there should be a direct relationship between level of contribution and amount of compensation.
I realized that managers must also look at equity just as much as employees do in order to run an effective business. I took a few days to gather my thoughts, and determined that I had a good argument for the necessity of a merit increase. Fortunately for me my employer agreed and awarded me a 12% merit increase!