TJ is a cost analyst with STU Insurance Co. STU is applying standards to its claims payment operations. Claims payment is a repetitive operation that could be evaluated with standards. TJ used time and motion studies to identify an ideal standard of 36 claims processed per hour. The Claims Processing Department manager, Pat, has projected this standard and has argued that the standard should be 30 claims processed per hour. Pat and TJ were unable to agree, so they decided to discuss this matter openly at a joint meeting with the VP of Operations, who would arbitrate a final decision. Prior to the meeting, TJ wrote the following memo to the VP: To: AJ Doe, Vice President of Operations
From: TJ, Standard Cost Analyst
Re: Standards in the Claims Processing Department
As you know, Pat and I are scheduled to meet with you to discuss our disagreement about the appropriate standards for the Claims Processing Department. I have conducted time and motion studies and have determined that the ideal standard is 36 claims processed per hour. Pat argues that 30 claims processed per hour would be more appropriate. I believe Pat is trying to "pad" the budget with some slack. I'm not sure what Pat is trying to achieve with this, but I believe a tight standard will drive efficiency up in the Claims Processing Department. I hope you will agree when we meet with you next week.
Discuss the ethical and professional issues in this situation.
Please write your response first (2 to 3 paragraph).