ORGANISATIONAL BEHAVIOUR EMERGING KNOWLEDGE. GLOBAL INSIGHTS. 6E by Steven L. McShane, Mara Olekalns, Alex Newman and Angela Martin Case Study Chapter 5

A case of confused academics* By Mohammadbagher Gorji and Sahar Siami, University of Tasmania S&K, an educational institution named with minimalistic flair, was established in the middle of the 1990s. Having rapidly developed several branches in different parts of the country, it came to employ some 10 000 personnel, half of whom worked as academic staff. From the beginning, S&K's senior manager had gained the academics' agreement that they would accept wages that were lower than those offered by rival institutions. In return, they were largely free of the usual rules that apply to the academic staff of an educational establishmentespecially those that insist on their full-time presence in the office. S&K's academic staff could work with other educational institutions on a part-time or casual basis to make up for their low incomes. Around a decade after it was founded, and following changes in senior management to meet the rigorous demands of the education sector, things were looking good for S&K. Peter, S&K's new manager, decided to prioritise improving the quality of its educational standards, and he put a focus on enhancing the physical environment and establishing new branches. He also changed the academic staff's performance appraisal criteria, letting it be known that those who were unable to achieve the minimum performance requirements would face a pay decreaseas well as other penalties. In the case of academic staff who were performing at a high level, Peter notified them that S&K would consider awarding them certificates of merit and paying for international conference registration fees. The academic staff quickly realised that meeting the new criteria would require significantly more work, and they found the new high-performance rewards inadequate and unfair. Therefore, they requested a pay increase to bring their working situation into line with that of their counterparts in other educational institutions. However, although Peter acknowledged the existence of a pay disparity, he explained that the recent investment in the physical environment and the extra costs of establishing new branches meant that it wasn't currently possible to increase pay significantly. Peter also issued a statement saying that he was confident that S&K's highly qualified and experienced academic staff would understand the obstacles it was facing and would, indeed, do everything they could to help overcome them. In return, Peter said, S&K would pledge to increase pay as much as the institution possibly could, as soon as they possibly could. Some years later, Peter kept his promisebut with a pretty insignificant pay increase. The pay gap between S&K and other similar institutions still existed. As a consequence, the academic staff declined executive job offers and refused to provide the institution with organisational and managerial support. Some of them simply quit S&K and joined rival institutions. Consequently, S&K eventually found itself facing a deterioration in both its teaching and its research standards. By the time S&K was entering its third decade of operation, things in the education sector had changed. For one thing, a policy of privatisation had dramatically increased the number of competitors in the field. Secondly, decades of diminishing birth rates had resulted in a decline in the number of potential students. Finally, the public sector's lead advisors on education increased the level of supervision on educational indices. To meet this configuration of challenges, S&K's board of directors decided to modify the highest level of the management structure. This heralded the arrival of a senior management team, led by Tom that quickly set about making fundamental changes. First, Tom brought in a considerable number of new staff at the middle- and branch management levels, primarily to impose the senior management team's will. Next he cracked down, demanding the compulsory full-time office presence of academic staff and prohibiting them from working with other institutions. Tom also emphasised the importance of academic staff engaging in S&K's general problem-solving processes, as well as playing their part in improving the quality of its education and research. The high investment in the physical environment had caused financial difficulties that resulted in occasional delays in paying the staff. In response to both the financial stress this put academic staff under and to the performance pressure engendered by their expanded role, the academic staff asked Tom to consider a pay increase; they had, after all, been paid less than academic staff in similar institutions for over 20 years. Tom responded by saying that S&K was in a precarious position, what with the high number of competing institutions and the decreasing number of studentsand students were, of course, S&K's main source of income. Tom went on to say that S&K were facing a vast surplus of human resource and a lack of budget. Therefore, he said, it would not be possible to increase salaries; in fact, he added, the focus of their energies was on not having to make redundancies. He concluded this riposte with a reminder that every member of the academic staff was expected to put his or her every effort into tackling the current crisis. After receiving the response, the academic staff members started to ponder how they should react. *This case is based on actual events, but the institution's name and some of its characteristics have been changed. Discussion Questions 1. What do you see as the main problem facing S&K, and which factors have caused it? 2. Analyse S&K's current situation using expectancy theory. 3. Analyse S&K's current situation using equity theory. 4. In your opinion, what measures can S&K take to motivate its academic staff? 5. If you were an academic staff member of S&K, what would you do?