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    Temporary Workers Friction Case Study

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    Special groups are portrayed here as sharing two common characteristics: They all have jobs with high potential for conflict, and resolution of this conflict is central to the goals of the organization. Probably because of these characteristics, special groups receive compensation treatment that differs from the approach for other employees. Unfortunately, most of this compensation differentiation is prescriptive in nature (i.e., all we have is opinion to guide us, not hard data), and little is known about the specific roles assumed by special groups and the functions compensation should assume in motivating appropriate performance. Future practice and research should focus on answering these questions.


    1. It's getting harder to find good people willing to serve on a corporate board of directors. Why do you think this is true?

    2. What makes professional/scientist jobs different, such that they qualify for special group status in many companies? Why is the compensation of knowledge workers so frequently linked to the amount of time these workers have been out of school?

    3. The differential between the salary of top executives and the lowest paid workers in the same country is quite small in Japan, at least in comparison to the U.S. The same is true in unions (president of union versus union workers). Explain why the differential might be small in Japan and in U.S. unions but much larger in private U.S. corporations.

    4. Romance Novels, Inc, located in Cheektowaga, NY, has gradually increased the number of contingent workers (full-time, temporary) from 10 percent of the workforce to about 28 percent today. Why might they do this? Also, what equity problems can arise from hiring contingent workers, especially when they work alongside regular employees?

    5. Why is it easier to explain a $2 million payout to Tiger Woods for working 4 days to win a Masters Championship than it is to explain why William Clay Ford made $30 million as CEO of Ford Motor Company?

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    Solution Preview

    Sarbanes-Oxley Act (SOX) of 2002 imposed a lot of new responsibilities and requirements on the corporate board of directors and the company. SOX's goal was to deter companies from committing accounting fraud, improving belief that the financial accounting reports were accurate for public companies and to protect shareholders. The paradigm shifted from the board working for management to management working for the board and the board being filed with independent and technical experts. Further, SOX allowed for more shareholder involvement in nominating board of director members (The information was obtained at http://www.insidecounsel.com/2012/01/01/8-ways-sox-changed-corporate-governance?t=department-management&page=9 '8 ways SOX changed corporate governance' Melissa Maleske January 1, 2012). In the past, board of directors were on three or four boards at the same time. However, the expectation has changed to a board of director member being on one board, which has led to a lot of vacancies on boards of directors (The information was obtained at http://www.thecro.com/node/352 'Help Wanted: Corporate Directors' James C. Hyatt).

    Special group status employees are critical to the ...

    Solution Summary

    A case study for temporary workers is provided. Whether it is harder to find people good willing to serve on a corporate board of directors is determined.