On the morning of Monday, April 28, George Smith was informed that effective May 1, he would receive an 8% increase. This increase comes two months before his scheduled performance review. His manager, Loretta Weeks, informed him that the basis for the raise was his performance over the past few months and his potential value to the company.

He was told this was a very significant increase. On Tuesday, a group of George's colleagues were drinking casual coffee. The conversation turned to a raise. One member of the team received a performance review in April, but there is no sign of an imminent pay adjustment. George made a comment regarding the amount of any such increase, specifically questioning the scope of the percentage increase. Another colleague replied that she was surprised to receive an increase across the board of 7% the previous Friday. A third individual received a similar raise. Undoubtedly stunning, George tried to find out, only to find out that some people had gotten "about" 6 to 8 percent gains. George apologizes and leaves the group.

That night, George wrestled with his conscience about that day's discussion. His first impression of the raise was that it was given based on performance. His second impression was completely sour. Several questions bothered him: Why did his boss raise his salary as an increase in merit? Is performance really the basis for a raise in his department? Was his boss hiding the truth about the raise? Will he be able to trust his boss in the future? On what basis will the increase be issued? Question: What can Loretta Weeks do to regain George Smith's confidence