Fair Pay for Pecan Workers
Cloverdale Pecan Company is one of the country's largest processors of pecans. Located in a medium-size southern town, it employs approximately 1,350 people. Although Cloverdale owns a few pecan orchards, the great majority of the nuts it processes are bought on the open market. The processing involves grading the nuts for both size and quality, and shelling, packaging, and shipping them to customers. Most buyers are candy manufacturers. Cloverdale, which was started 19 years ago by the family of company president Jackson Massie, has been continually expanding since its inception. As do most growing companies, Cloverdale has always paid whatever was necessary to fill a vacancy without having a formal wage and salary system. Jackson Massie suspected that some wage inequities had developed over the years.
His speculation was supported by complaints about such inequities from several good, long-term employees. Therefore, Massie hired a group of respected consultants to do a complete wage and salary study of all the nonexempt jobs in the company. The study, which took five months to complete, confirmed Massie's suspicion. Wages of several jobs were found to vary from the norm. Furthermore, the situation was complicated by several factors. First, many of the employees earning too much were being paid according to union wage scales.
Cloverdale is not unionized, but most of its competitors are. Second, many of those in underpaid jobs were being paid at rates equal to those for similar positions in other companies in Cloverdale's geographic area. Third, because of a tight labor market, many new employees had been hired at the top of the range for their respective grades. The study also revealed that the nature of many jobs had changed so much that they needed to be completely reclassified.
QUESTIONS
1. What should Cloverdale do to correct the existing wage inequities?
2. How could the company have prevented these problems?
3. If it is recommended that some jobs be placed in a lower pay grade, how might Cloverdale implement those adjustments?