Problem
Miracle Mission is in the midst of its annual compensation planning strategy session. Miracle's current system has everyone receiving a cost-of-living increase, and depending upon their performance appraisal rating, an additional percentage. The highest increase maxes out at 7%.
Vince, the Manager of Compensation feels that the compensation increases offered based on the performance appraisal rating are too high. He would like to see more money used to support the employees in making sure that they have all the skills necessary to do their job. Then they can produce results and be rewarded. According to Vince, only employees who contribute and perform well should receive pay increases.
Take the role of Vince. How would you explain your philosophy using one of the theories that we have studied? What are the benefits that you see? What are the disadvantages?
Use the information in this scenario to comment.