n the past two years Horton Manufacturing Company expanded very rapidly. It was producing a unique electronic device, and sales were excellent. Because of this expansion many additional employees were added in most areas of the companyàoperations. This increased staff required more first-level supervisors, and these people were largely promoted from the existing workforce.

In most instances the supervisors were chosen because they were efficient and dependable workers who knew their jobs well. The rapid growth of the company caused overtime work, and many employees became used to the extra income this provided. Horton was a nonunion company and had a very good labor relations record.

When employees were promoted to supervisory positions, they were considered members of management, and they became salaried employees. They usually entered the salary range for the job just above the minimum, but were considered for increases in six-month periods until they reached the midpoint of the range after which annual consideration took place. So, a newly appointed supervisor who performed well could reasonably expect three or four increases in the first two years on the supervisory job. Supervisors, however, did not receive overtime pay which was restricted to the hourly paid staff.

In the past six months, ten people had been promoted to first-level supervisory positions. All of these people along with eight more supervisors are now confronting the companyàpresident with the fact that they are now earning less money as supervisors than they did as line employees when the regular overtime they worked increased their pay. They were quite adamant about their position, believing that they had more responsibility and were working harder than ever. They firmly believed that they deserved overtime pay or a higher salary. 

What should the president do??

Are the supervisors justified in their complaint??

Should supervisors be paid overtime??

1. Could the company have planned their growth and promotion process more effectively?