Brainard, Bennis and Farrell.

Situation Analysis_Brainard, Bennis & Farrell.

The problem that needs to be solved here is the seniority versus performance issue based on the current points system.

Advantages:

Seniority system:

Existence of this system gives the partners the assurance of economic security when they are nearing retirement age, which they believe they deserve, because they have played a major role in building this firm. This, also, ensures stability in the work culture. (See exhibit 2).

Performance system:

The young partners are more inclined towards making fast money and profits and this system supports their interests, as they are solely judged on their individual contribution, in terms of hours worked and the quality of work done. Therefore, this system increases the efficiency of work. In addition, this kind of work culture would attract younger recruits. The problem of dead weight is solved, as the firm would not pay a greater share to individuals who are comparatively unproductive.

Disadvantages-

Seniority system:

This system is unfair to the younger partners as a large proportion of the profit goes to the Senior Partners, who are comparatively less productive.

Performance system:

This system is unfair to the senior partners as they have played a major role in building the firm and its reputation. As this system is more inclined towards individual progress and profits, the system would not encourage employees to manage the firm as a whole. Also, it goes against the culture of the firm! In addition, there is a possibility of mobility of employees to firms which offer a higher compensation.

Since, following either one of the two systems is unfair, either, to the senior or younger partners, the current compensation system that is laid down, is a hybrid of both the systems. The current system takes into consideration 11-12 criteria’s (refer to exhibit 1), based on which points are allotted. The employees are unhappy with the present compensation system,...