I’m working on a management discussion question and need guidance to help me learn.
I am chairman of the board of directors (and have been for the past 28 years) of an agency that serves the cognitively impaired in our community. The CEO just sent me a salary review for me to approve and then to be discussed and approved by the finance committee and executive committee and then by the full board of directors. This is a nonprofit agency with over 400 employees and about $13,000,000 annual budget. Most of the funding comes from state and federal government sources. Most of the employees are direct service care employees. We have about 50 who work in medical services. There are also department heads and management staff. The highest paid employee is not the CEO (it is someone in medical services). These are difficult financial times. Based upon the readings this week and over the past week, what would you suggest that I give serious consideration to as I look over these salaries? This is a real life issue. The finance committee and executive committee will meet next week. What issues are important to consider?
The CEO would like to give a 1% raise to all employees with good reviews. One member of the board of directors said that he did not think that an increase was required simply because a person gets a good performance review. The CEO thinks that the review does not mean much if it does not result in a financial reward. These are lean times. Is keeping your job adequate reward for good performance during these lean times? Employee turnover has improved over the past few years. We have more new job applications than in many years. We want to respect our tight budget but at the same time treat our employees right. Based upon your readings this week, what factors should be considered in making these decisions?