Fred Maiorino had been a successful sales manager for Schering-Plough Corporation for thirty-one years before Jim Reed was named general sales manager over the South Jersey sales district that included Fred’s sales territory. Afterwards, Reed implemented several changes to try to boost sales including a new performance appraisal system and a hands-on coaching style to motivate his sales staff. The problem arose with Reed’s inability to motivate Fred (Buller & Schuler, 2003).
The major issue is this case is Reed’s inability to motivate Fred, which inevitably led to the dismal of a long-time loyal employee. The major issues associated with this motivation problem include …show more content…
Reed was managing Fred with the agency theory in mind which “assumes no trust in the relationship” (Kidder, 2005, p. 392). This was displayed in Reed’s assumption that Fred was falsifying his time by not leaving his house until after 8:30 a.m. and then had Fred suspended based on it. Fred was appalled that Reed was questioning his integrity after his 33 years of loyal and dedicated service to the company. Fred had perceived a social contract of job security for his loyalty to company and when his security was threatened, he perceived it as a violation of the contract. Robinson & Rousseau (1994) explain that based on their research and studies “ the employees whose trust was most affected by violation were those planning to build a career with their employer” (Robison & Rousseau, 1994, p. 256-257). According to Grimmer & Oddy (2007) this “traditional expectation of ‘cradle to grave’ employment characterized by life-long employment in exchange for loyalty and commitment is no longer valid” (p. 154). Instead it has been replaced by hard work and skill flexibility with having a job (Grimmer & Oddy, 2007); however, it is still perceived by Fred as a violation of the psychological contract between the employee and the employer. “Even normally honest and ethical employees may resort to harmful behaviors if they feel that they work in