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One of the managerial issues in this case is employee motivation. Motivation is the process of encouraging or influencing people to behave in a particular manner, which they would have otherwise not behaved without the encouragement or the influence.
Employees need to be motivated so that they may work hard towards the achievement of organizational objectives. Employees may be motivated either by internal or external sources. Internal motivation comes from an individual and is also known as intrinsic motivation while external motivation comes from outside sources and is also known as extrinsic motivation.
The Schering-Plough’s motivational strategies seem to be poorly organized especially when it comes to the motivation of long serving employees like Fred’Maiorino; who had served the organization for over 35 years with exemplary performance.
People like him not only need increase in payment (an extrinsic motivation) but also non-monetary rewards like promotion to cater for their intrinsic motivational needs. The organization should have promoted Mr. Fred’Maiorino to the position of a manager. His decline in performance may be attributed to boredom of working in a similar position (sales representative) for so long. If he could have been promoted, he could have served the organization more diligently and whole heartedly.
The other managerial issue in the case is that of conflict management and resolution. A conflict is a form of disagreement between two parties on a particular issue which is of interest to them.
In organizational context, conflict may occur between organizations (inter-organizational conflict) or between members of one organization (intra-organizational conflict) which may involve individual employees and their management and or intergroup conflict. Conflict may be substantive or affective. Substantive conflict is usually perceived as objective and to some extent, positive while affective conflict is usually negative and subjective (Carsten & Vliert, 1997).
In the case of Schering-Plough, the nature of conflict is intra-organizational as well as affective, pitting Mr. Fred’Maiorino on one side and his supervisor cum manager Mr. Jim Reed on the other. The two were not only long serving members of the organization but had also advanced in age, thus making their conflict complicated and hard to solve.
The organization should have had in place a conflict resolution mechanism for such members. It should not have left the two to work together and expect them to solve their disagreements because none could acknowledge the views and arguments of the other despite their different ranking in the organization. What the organization should have done is to invite the two to a board’s meeting and discuss their disagreements. This could have perhaps solved their disagreements in an amicable manner.
Lastly, the other managerial issue is that of personnel management and especially in regard to recruitment, staffing and firing of employees. The organization introduced the early retirement plan in anticipation that majority of its elderly staff would accept it. It went on to hire new young staff to replace those who were presumed to accept the early retirement plan. However, this was not to be because only 29 of the 98 elderly employees could accept the plan.
This left the organization with excessive staff; which forced it to device weird and crooked means of terminating the employment of the elderly employees through witch-hunting and unjust victimization. The dismissal of Mr. Fred’Maiorino was therefore not based on facts but on malice. This made the organization pay him a whopping $8.44 million as age discrimination award. The poor personnel management policy therefore made the organization lose a very productive employee as well as funds in his compensation.
Carsten, K.W., & Vliert, E.V. (1997). Using conflict in organizations. London: SAGE. Print.