Team Project 1: Is there Discrimination at Service Pro, Inc.?

It all started out peaceably enough. Tom Johnson, one of the new service reps, asked Al Washington and Michael Post about their salaries. It was an innocent enough question and the answers suggested that all three were making about the same money. Nobody seemed concerned. Then,Michael Post said that he had seen a memo on his boss’ desk on which salaries for the entire department were listed and noticed something "funny." All three of them were near the bottom of the list. In fact, he said, "Just about every other black in the department was in the bottom half of the list.

"Well, this started the three of them wondering out loud about whether their company, Service Pro,Inc., was discriminating against minorities. They kicked it around all through lunch and then talked about it again each day for the next week. And each day, somebody would come in with information from one of the other offices from throughout the country that continued to suggest that all minorities,not just black employees, were not being paid on par with their white counterparts. They had "rough"information from four additional offices that, when they calculated averages, suggested that minorities were making about $500 a month less than white employees.

This incensed Tom Johnson. He told the others, "When Al Miller recruited me here last year, he told me that Service Pro’s management believed in affirmative action. He promised me that I would go as far in this company as my effort and good work would take me. I’m not saying that this past year has been bad, but this salary stuff makes me wonder about whether I should stay or start looking for a place where minorities are treated the same as whites!" Al Washington and Michael Post agreed.

The more they talked, the more they felt betrayed by a company that at first looked like a place that would ignore skin color. Indeed, they were all impressed with the company’s strong affirmative action stance. They were told that advancement, and salary, would depend on how well they did their jobs—that they could expect to move from an Assistant Service Rep (Grade 1) to Service Rep (Grade 2) in two to three years and then move to Senior Service Rep (Grade 3) somewhere from three to four years later. They were led to expect annual performance reviews, with pay raises determined by their performance during the previous year. They liked the developmental program Service Pro had to offer and looked forward to the responsibility that their jobs would offer as they moved up the career progression ladder. It was disappointing to think that Service Pro might turn out to be the kind of place where skin color would limit their opportunities.

Tom Johnson didn’t say anything for several weeks about the salary incident. On his own, however,he started reading about fair employment law and his options if he believed that his civil liberties were being violated. He even called the local office of the Equal Employment Opportunity Commission(EEOC) and spoke with a field agent about his situation. The agent, Mark Malone, suggested that he bring the matter up with his supervisor. Mark Malone told him that, in his experience, appearances were not always what they seemed, and that usually matters such as this are easily explained by the company. He did, however, clarify that a $500 per month salary difference between minorities and non-minorities was not trivial and would, indeed, command the attention of EEOC if Tom Johnson were still concerned with this issue after going through official company channels.

Tom Johnson, escorted by his two friends, went to see Howard Kirk, his department manager.Howard Kirk seemed somewhat agitated when Johnson confronted him with the "facts." He simply dismissed their protest as complete nonsense. He told the three of them to leave the management work to managers and to get back to work so they could learn their jobs well enough to earn a good evaluation and, thus, a good pay raise next year. When Tom Johnson "wondered out loud" about whether their performance evaluations were chosen to justify lowered pay raises to minorities,Howard Kirk flew off the handle. He abruptly told them to quit trying to cause trouble. He informed them, rather curtly and very loudly, that "... salary is based on performance and loyalty to the company. The single best way you can improve your salaries is to pay as much attention to your jobs as apparently you’re paying to information that is none of your business." He then "dismissed" them.

Predictably, Tom Johnson found the content and tone of Howard Kirk’s remarks offensive. Together with Al Washington and Michael Post, they have now organized a small group of minority peers who have threatened to visit the EEOC claims office in order to pursue their conviction that Service Pro practices discriminatory pay practices.

Larry Greer, President of Service Pro, got word of the problem almost immediately through the grapevine. Larry Greer called a meeting with Johnson, Washington and Post that afternoon. It was a more relaxed conversation. Greer began by asking them to explain their concerns. Tom Johns on went through the "facts," this time adding information about how they were treated by Howard Kirk.

Larry Greer responded by assuring the three of them that Service Pro did not discriminate against anybody. He repeated Howard Kirk’s message about how pay is determined, but without the offensive tone. Indeed, Larry Greer outlined the voluntary affirmative action program initiated by Service Pro over two years ago as being just an example of the philosophy that Service Pro values what people do on the job over their race or gender. Tom Johnson was willing to listen to the pay policy and talk about the affirmative hiring program, but continued to focus on the apparent salary differences that occurred despite such policies. He insisted that salary equity be achieved and, thus,would not relinquish his claim of discrimination. However, because he was impressed by Larry Greer’s statements regarding the company’s affirmative stance in hiring, Tom Johnson expressed a willingness to meet with Greer again, once additional information became available.

Larry Greer promised that he would report back to his three employees personally at the second meeting, based on having looked into this matter and into the data relevant to it. Larry Johnson, and the others, seemed willing for Larry Greer to gather and organize that information.

Assignment: Responding to the Charge of Racial Discrimination

Larry Greer has asked your team to perform a preliminary investigation of the issue and to report your findings to him prior to his meeting with Tom Johnson. You have been given employment information of a random sample of 140 service representatives within the company.

Your team will need to examine the employment and pay history data collected and attempt to resolve the issues brought forth by Mr. Johnson. Based on your team's understanding of the issues and your team's interpretation of the employment and salary data, write a short report to Mr. Greer summarizing your team's beliefs about the presence or absence of salary discrimination. Use important details from your team's data analysis to support your team's findings. If the team's analyses suggest apparent discrimination, the report should contain suggestions on the types of action that will "remedy" this salary discrepancy.

A business report can vary in length from a few pages to hundreds of pages. For this particular assignment, the report should be about 5 to 10 pages (single space). The team is only required to prepare a simplified business report that includes the following sections:

1. Executive summary

2. Details of the problem, analysis findings, and recommendation

3. Appendix: Details of the analysis performed (including any hypothesis testings and regression analyses)

Note:Do not forget to submit the Excel spreadsheet (showing all the analyses) together with the report. Make sure everything looks professional.

Tip:Keep in mind that the report will be graded not only on the content but also on grammar and presentation/look. Make sure your team has proof read everything before submitting it. The style of the report has to be formal (but still readable and interesting). The report submitted should also be professional looking (i.e. something you will submit to your boss and/or clients).