Appendix: Cases for
Analysis
The following cases, which reflect a range of compensation issues and organizational types,
can be used in a variety of ways.
They are presented without questions attached, which allows instructors flexibility in their use.
They can be used in conjunction with the end-of-chapter case questions to illustrate
compensation issues relevant to that chapter and to provide opportunities for applying
compensation concepts. They can also be used as a basis for major term assignments or group
projects. Some cases are short enough to be used as exam cases. And, of course, they can
serve as a basis for lively class discussions of many important compensation issues.
Case 1—Henderson Printing
Case 2—The Fit Stop
Case 3—Multi-Products Corporation
Case 4—Patriot Transportation Holding Inc.
Case 5—Plastco Packaging
Case 6—Alliston Instruments
Case 7—Eastern Provincial University
,CASE 1—HENDERSON PRINTING
Henderson Printing is a small- to medium-sized manufacturer of account books, ledgers, and
various types of record books used in business. Located in Halifax, the company has annual
sales of about $12 million, mostly in the Atlantic provinces.
The owner, George Henderson, is a firm believer in making a high-quality product that will
endure many years of use. He uses only high-grade paper, cover stock, and binding materials.
Of course, this has led to high production costs and high prices. He also believes in a high level
of customer service and is willing to make the products to customers’ specifications whenever
they so request. However, resetting the equipment for relatively short production runs of
customized products takes considerable extra time and, of course, also drives up costs.
The firm employs about 80 people, most of whom work in production. The firm has a few
supervisors to oversee production, but their responsibilities are not clearly spelled out, so the
supervisors often contradict one another. There is no system for scheduling production; in fact,
there are few systems of any kind. Whenever there is a problem, everyone knows that you have
to go to George if you expect a definite answer.
The company also has several salespeople who travel throughout the Atlantic region; most of
them are relatives of George or his wife. The company has one bookkeeper to keep records
and issue the paycheques, and several office employees to handle routine administrative
chores. The firm has no specialists in accounting, marketing, human resources, or production;
George handles these areas himself, although he has no real training and little interest in any of
them except production. He focuses most of his attention on ensuring product quality and on
dealing with the countless problems that everyone brings to him every day. He has often been
heard to exclaim, in his usual good-natured way, “Why am I the only one who can make
decisions around this place?” as he deals with each of these problems.
When George was growing up, both his parents (his father was a printer and his mother was a
seamstress in a garment factory) had to work hard in order to scratch out a living for their
family. In those days, employers who showed little consideration for their employees were the
norm, and George resolved that things would be different if he ever became an employer.
Today, George tries hard to be a benevolent employer. Although he feels the organization
cannot afford any formal employee benefits, he often keeps sick workers on payroll for a
considerable time, especially if he knows the worker has a family to support. George is well
liked by most employees, who have shown little interest in unionization during the few
approaches made by union organizers.
George has no formal system for pay and tends to make all pay decisions on the spur of the
moment, so almost everybody has a different pay rate. He has never gotten around to giving
annual raises, so any employee who wants a raise has to approach him. He gives raises to
most people who approach him, but the amount depends on his mood at the time and on how
well he knows the employee. For example, if the firm has just lost a major customer, raises are
lower, and if the firm has just booked a large order, they are higher. They are also higher if he
knows the employee has a family to support, or if the employee’s spouse has been laid off, or if
the employee has added a new member to the family.
George believes that a good employer should recognize the contributions made by employees
during the year. As a result, every Christmas—if profits allow—he gives merit bonuses to
, employees, which he says are based on their contributions to the firm. One day in early
December, he sits down with his employee list, in alphabetical order, and pencils in an amount
next to each name.
Everybody gets something, but the amounts vary greatly. If he can associate a face with the
name (which is difficult sometimes because of high employee turnover), he tends to give larger
bonuses. And if he can remember something such as a cheerful attitude, the bonuses are
higher still. But if he remembers anyone complaining about that employee (he usually can’t
recall the exact reasons), the employee gets a smaller bonus. Not surprisingly, longer-term
employees tend to receive much higher bonuses than new employees. He has noticed this
tendency but assumes that if an employee has been with the firm longer, that person must be
more productive, so this is fair. He personally distributes the bonus cheques on the last working
day before Christmas.
Because he has just turned 60, George is planning to retire in the next year or two and turn the
business over to his daughter, Georgette Henderson, who is just finishing her commerce
degree at Dalhousie University. Ironically, it was on his 60th birthday that his bookkeeper
informed him that there wasn’t enough money in the bank account to meet payroll.
Analysis
The following cases, which reflect a range of compensation issues and organizational types,
can be used in a variety of ways.
They are presented without questions attached, which allows instructors flexibility in their use.
They can be used in conjunction with the end-of-chapter case questions to illustrate
compensation issues relevant to that chapter and to provide opportunities for applying
compensation concepts. They can also be used as a basis for major term assignments or group
projects. Some cases are short enough to be used as exam cases. And, of course, they can
serve as a basis for lively class discussions of many important compensation issues.
Case 1—Henderson Printing
Case 2—The Fit Stop
Case 3—Multi-Products Corporation
Case 4—Patriot Transportation Holding Inc.
Case 5—Plastco Packaging
Case 6—Alliston Instruments
Case 7—Eastern Provincial University
,CASE 1—HENDERSON PRINTING
Henderson Printing is a small- to medium-sized manufacturer of account books, ledgers, and
various types of record books used in business. Located in Halifax, the company has annual
sales of about $12 million, mostly in the Atlantic provinces.
The owner, George Henderson, is a firm believer in making a high-quality product that will
endure many years of use. He uses only high-grade paper, cover stock, and binding materials.
Of course, this has led to high production costs and high prices. He also believes in a high level
of customer service and is willing to make the products to customers’ specifications whenever
they so request. However, resetting the equipment for relatively short production runs of
customized products takes considerable extra time and, of course, also drives up costs.
The firm employs about 80 people, most of whom work in production. The firm has a few
supervisors to oversee production, but their responsibilities are not clearly spelled out, so the
supervisors often contradict one another. There is no system for scheduling production; in fact,
there are few systems of any kind. Whenever there is a problem, everyone knows that you have
to go to George if you expect a definite answer.
The company also has several salespeople who travel throughout the Atlantic region; most of
them are relatives of George or his wife. The company has one bookkeeper to keep records
and issue the paycheques, and several office employees to handle routine administrative
chores. The firm has no specialists in accounting, marketing, human resources, or production;
George handles these areas himself, although he has no real training and little interest in any of
them except production. He focuses most of his attention on ensuring product quality and on
dealing with the countless problems that everyone brings to him every day. He has often been
heard to exclaim, in his usual good-natured way, “Why am I the only one who can make
decisions around this place?” as he deals with each of these problems.
When George was growing up, both his parents (his father was a printer and his mother was a
seamstress in a garment factory) had to work hard in order to scratch out a living for their
family. In those days, employers who showed little consideration for their employees were the
norm, and George resolved that things would be different if he ever became an employer.
Today, George tries hard to be a benevolent employer. Although he feels the organization
cannot afford any formal employee benefits, he often keeps sick workers on payroll for a
considerable time, especially if he knows the worker has a family to support. George is well
liked by most employees, who have shown little interest in unionization during the few
approaches made by union organizers.
George has no formal system for pay and tends to make all pay decisions on the spur of the
moment, so almost everybody has a different pay rate. He has never gotten around to giving
annual raises, so any employee who wants a raise has to approach him. He gives raises to
most people who approach him, but the amount depends on his mood at the time and on how
well he knows the employee. For example, if the firm has just lost a major customer, raises are
lower, and if the firm has just booked a large order, they are higher. They are also higher if he
knows the employee has a family to support, or if the employee’s spouse has been laid off, or if
the employee has added a new member to the family.
George believes that a good employer should recognize the contributions made by employees
during the year. As a result, every Christmas—if profits allow—he gives merit bonuses to
, employees, which he says are based on their contributions to the firm. One day in early
December, he sits down with his employee list, in alphabetical order, and pencils in an amount
next to each name.
Everybody gets something, but the amounts vary greatly. If he can associate a face with the
name (which is difficult sometimes because of high employee turnover), he tends to give larger
bonuses. And if he can remember something such as a cheerful attitude, the bonuses are
higher still. But if he remembers anyone complaining about that employee (he usually can’t
recall the exact reasons), the employee gets a smaller bonus. Not surprisingly, longer-term
employees tend to receive much higher bonuses than new employees. He has noticed this
tendency but assumes that if an employee has been with the firm longer, that person must be
more productive, so this is fair. He personally distributes the bonus cheques on the last working
day before Christmas.
Because he has just turned 60, George is planning to retire in the next year or two and turn the
business over to his daughter, Georgette Henderson, who is just finishing her commerce
degree at Dalhousie University. Ironically, it was on his 60th birthday that his bookkeeper
informed him that there wasn’t enough money in the bank account to meet payroll.
