1. Is the decision managers at Aetna made to have a $16 an hour wage floor a programmed or nonprogrammed decision? 

2. How did managers recognize the need to make this decision? 

3. To what extent do you think satisficing was involved in making this decision?

4. How would you evaluate this decision according to the four criteria that managers use to evaluate the advantages and disadvantages of different courses of action? 

Amid signs of a tightening labor market, Aetna Inc. plans to boost the incomes of its lowest paid workers by as much as a third in a bid to draw top prospects and reduce turnover.The move by the big health insurer highlights larger debates over the pace of the economic recovery and the compensation of people toward the bottom of the wage scale. Around 12% of Aetna’s domestic work force will receive a raise to a floor of $16 an hour.The company’s shift reflects changes in the insurance industry, which is increasingly selling coverage to individuals.

State and local governments around the country have moved to raise minimum wages, often generating pushback from business groups.Aetna said it appeared that none of the approximately 5,700 workers set to benefit, who include part-timers, are currently making the minimum wage in their localities.

Next year, Aetna will also let workers with household income below a certain threshold choose health coverage with lower out-of-pocket charges without paying more in monthly premiums, a shift it said could save a worker with a family as much as $4,000 a year.The total cost to Aetna for both changes will be $14 million in 2015 and approximately $25.5 million next year. The company hopes to pay for this expense by reducing its turnover cost of about $120 million a year.

The changes by Aetna are also tied in to economic recovery, which will heighten the competition for employees.