Circus Oz Case Solution

2. Problem Statement

The General Manager of Circus Oz – Linda Mickleborough – needs to determine the compensation of a new position in the organization. The position is titled Director of Development. The decision poses a dilemma for Linda because the compensation for this position is twice that of the highest salary paid within the organization. The organizational culture is built around equity. The top management of the company has maintained a low salary differential within the organizational hierarchy until now. The creation of the new position is likely to lead to a feeling of resentment among the organizational staff. If Linda chooses not to create the job position, she faces the risk of alienating an important sponsor of the organization; namely, Australia Council.

3. Company Strategies

There are three potential strategies for the company in the perspective of the dilemma mentioned above:

Hire the New Candidate at the Market Compensation Rate

The first strategy for Linda is to continue with the recruitment of Paul McGil. Paul McGil possesses the required credentials to carry out the job function. The advantage of this strategy is the potential high performance of the McGil. He is a senior management consultant who has provided consultancy to Circus Oz in the past. Another benefit of McGil’s recruitment is the support of Australia Council on the recruitment. The drawback of this approach is the disruption in the current organizational culture of Circus Oz. The resentment among the employees on McGil’s salary is likely to impact negatively the performance of the employees at the lower levels of hierarchy. Linda may need to revise the salaries of the current employees. This action will create stress on the financial resources of the company.

Do not Create the New Job Position

The second strategy for Linda is not to create the position of the Director of Development.