Abstract
The purpose of this article is to consider the situation of the Houston pay contraction case in the context of evidence-based management. The situation is summarized by the author. The main principles of evidence-based management are stated and analyzed in terms of the given situation. It is concluded that the key principles (ethics and stakeholder concerns, practitioner judgment and expertise, local data and experimentation, and principles and evidence derived from formal research) should be more closely attended.
The Case of Houston Pay Contraction in Terms of Evidence-based Management
The case protagonists are Professor Emma Miller and CEO Robert Anderson. The situation is as follows: Anderson’s company Aerospace Inc. has three manufacturing plants. It has lost the contracts for two of them. The CEO had to manage the payroll, which meant either firing some workers or cutting their wage at 15%. Anderson thought that the layoff would have a dramatic impact on the employees and their families, which meant cutting the wages. He assumed the cuts would seem dishonest to them, and they would go into a theft. Promising Professor Emma Miller that she would be allowed to hold a field experiment on organizational equity, he asked her to assist in informing the employees their wages would be shortened.
The problems Professor Miller faces are related to the following: in the course of the experiment, she has to illustratively demonstrate the positive impact of common reason on people’s perception of difficult circumstances (on account of her experience in organizational justice). Secondly, she has to rely on the statistical data of employee theft and the shrinkage as the indicator of the local data. Another source of information is the CEO’s personal view on the payroll management regarding his employees’ private life situations.
In general, entrepreneurs and managers do not often refer to the proved data, instead relying on their own experience in making decisions. Concerning the Houston case, it is notable that the main source of the CEO’s payroll management decision is his own vision of what suits his workers and what does not. Grounded on his biased ideas, such decision might be irrelevant. Considering the needs of the company and the workers, Professor Miller should develop a critical attitude towards seemingly logical claims and seek for invalid reasoning in them (Pfeffer & Sutton, 2006).
As to the data accessible in this case, there is a 1997 study suggesting that approximately a half of all workers are involved in a theft. The origin and methods of collecting of such statistics should be questioned (Barends, Rousseau, & Briner, 2014). Besides, the relevance of it is doubtful because, by now, it appears rather outdated. The “shrinkage” records are more appropriate, but they, too, have to be thoroughly checked.
As far as ethics is concerned, the notion and explanation of the organizational justice is present in the case, but not relied upon. The stakeholders (both the employers and the employees) should be kept in the track of the events directly related to them (Rousseau & McCarthy, 2007).
However, although Professor Miller is well aware of the necessity to take the opinion of the workers into account when making a decision, she does not inform them directly of the potential wage cut. Also, according to the last point of the six A’s of the evidence-based practice, she should have first evaluated the possible outcome of all decisions she would possibly make (Barends, Rousseau, & Briner, 2014). Instead, Professor made a mental note that she should eventually come to some conclusions and started to work on the project; with the people and their salaries involved, such behavior does not seem ethical.
To conclude, all the materials and sources used by the protagonists (both Emma Miller and Robert Anderson) should be verified. Evidence-based management does not allow biased personal opinions, instead relying on tested facts. The outdated information should be considered irrelevant. In terms of ethics, when the stakeholders are concerned, it is impermissible to leave either of the parties ignorant of a decision that is to be made.
References
Barends, E., Rousseau, D. M., & Briner, R. B. (2014). Evidence-Based Management: The Basic Principles. Amsterdam, The Netherlands: Center for Evidence-Based Management.
Pfeffer, J., & Sutton, R. I. (2006). Evidence-Based Management. Harvard business review, 9(1), 1-13.
Rousseau, D. M., & McCarthy, S. (2007) Educating Managers from an Evidence- Based Perspective. Academy of Management: Learning and Education, 6(1), 84-101.