The manager of Haines Company observes that the morale of employees in her company is low. She thinks that if their working conditions are improved, pay scales raised, and the vacation benefits made attractive, the morale will be boosted. She doubts, however, if an increase in pay scales would raise the morale of all employees. Her conjecture is that those who have supplemental incomes will just not be "turned on" by higher pay, and only those without side incomes will be happy with increased pay, with a resultant boost in morale.

Discuss the following:

1. List and label the variables as independent, dependent, intervening, or moderating.

2. Explain the relationship among the variables.

3. Develop a problem statement for the situation.