You have been employed as a HR Specialist in the Compensation and Benefits sector of a well-known furniture store called Kleinfelds furniture. Kleinfelds Furniture has been a leader in the furniture industry for more than 35 years. The company has pursued a low-cost strategy in order to sustain its success and this has worked for some time. In the last few years Kleinfelds Furniture has observed that they have begun to struggle as their direct number of competitors continue to increase over time. As a result, they company has decided to adopt a differentiation strategy approach in an effort to boost sales. The company has recognized that there is need to change and update their furniture line to a more modern look.

This has prompted the inclusion of the Human Resources Department as they have recognized the need to increase the workforce so as to ensure the presence of the necessary skills and for manufacture. As such a team of ten additional manufacturers were hired. However, they are compensated almost double the amount of the existing workforce. Management has justified this stating the new employees have been trained prior to their employment with Kleinfeld Furniture which puts them at a rank above the rest. This has left the employees who have worked with the company all for more than ten years very disgruntled.

For this scenario assume the role of an HR Professional and answer the questions outlined above. Whats wrong here? What can be done? What steps should be taken to rectify the problem?