Quiz 9: Pay-For-Performance: the Evidence


Case Summary: A Father puts his two sons into a landscaping business and provides incentives to the sons instead of flat wages based on their work levels. In the second week, two sons started quarrelling as they were unhappy with the incentive system introduced by their father. As per the current case context, the problems that might have led to problems or quarrel between the sons are as follows: • The difference in the incentive rates depending on the nature of the work is observed to be the prime reason, as it creates fluctuations in the income levels of the each brother • Higher the incentive, higher would be the demand for that particular nature of work - in this case, it is Pulling weeds in spite of also being the tough job • The incentive designed are also comparatively low, when compared to the rates charged for the customers and also, in relation with the time invested • In could also be this way, the time invested might be more by one person that pays less incentive and on the other side, the time spent might be low but the incentive earned might be high depending on the nature of work • Finally, the brothers might be quarrelling on the fact that the father is earning more whereas, disbursing very little towards the brothers Thus, it is advised for the father to rather check individual competency of the sons and then deciding the incentives based on the work allotment.

This case is about a fast food restaurant BB. The restaurant is currently facing grave issues related to employee satisfaction, productivity, and production planning. 1. There were several problems faced by the BB restaurant. One of the biggest problems was poor workforce scheduling. Due to this reason, the restaurant was understaffed by five employees during the rush hour. There was inadequate manpower planning as no extra employees were appointed to compensate for the employees who were absent. There was a total chaos at the restaurant as employees were forced to do multitasking. Some of the employees were new to the restaurant, hence unable to handle the pressure during rush hour. Employees lack adequate training to perform their job under the pressure of peak rush. Furthermore, due to shortage of manpower, the drive times has increased, and the customers were piling-up at the drive-through window. Employees were not provided rest as per their needs. Most importantly, the stock management process was not standardized that added to the problems of this disorganized workplace. Communication and coordination issues are also observed in this case. 2. Compensation can be one of the significant reasons for some of the problems faced at the restaurant. The people mostly affected by compensation issues are Person O and Person L. As per their statements they were required to perform extra tasks which do not come under their job responsibilities. As per the case, Person O works between 50 and 60 hours per week at the base salary of 34K. However, he is not eligible for the overtime pay. It can be a major cause of dissatisfaction for him. Average working hour of Person L is also 55 hours and he receive 23K as compensation, which is also high as compared to normal working hours. In addition to it, employees working in the restaurant are also forced to share the workload of employees who are absent. It makes them put extra effort at work without any extra pay. 3. With diligent use of rewards, the restaurant can significantly improve the work environment. For example, recognition and awards can be given to employees putting their extra efforts at work. It would motivate them to happily perform the extra work assigned to them, if in case they need to perform additional tasks. Furthermore, flexible working hours and proper lunch breaks can also be used to help the employees maintain a work life balance. All these factors would contribute towards the development of a positive and energized atmosphere at the restaurant. 4. Hours of work can be considered as a reward for the employees as per their personal, financial, and social needs. Some employees might prefer working extra hours to get extra payment. However, monetary pay in terms of working extra hours cannot always be preferable for the employees. The author was happy working 20 hours a week, whereas Person C was unhappy with 30. There can be several reasons contributing to this factor, including nature of work, job satisfaction, compensation, work pressure, etc. Schedules can be used as rewards as employees can be provided flexible working hours, so that they can maintain their work life balance. For example, in the mentioned case, Person M should be scheduled to leave the premises early so as to pick her daughter from school. It would not only improve her work life balance, additionally, it would enhance her job satisfaction and performance. Furthermore, breaks should be provided to employees as per their requirement, rather than on timely basis. It would also enable the employees to take proper rest between their work.

Case summary: FM Wraps is facing employee turnover in fast pace and most of this take place when an employee completes 18 months of his duties with the organization. In this, Mr. Y is an employee of FM Wraps and has to determine the reasons for employee turnover, its intensity and has to explain to his boss that how bad it is for an organization to face employee turnover. Employee retention stands for the retaining of the employees in the organization. Today, employee turnover is the major problem that every organization faces wherein employees leave organization and quit their jobs for several reasons ranging from less salary, bad boss, bad work environment etc. Solution: To determine whether the turnover rate is high or not, Mr. Y has to analyze the job positions and the number of people those who have left these positions in the time period of two to three years. In this, an analysis will be done so as to know the number of employees who have left the particular positions in the organization, and the frequency and intensity in which the position was vacated. Even the major reasons for leaving of jobs have to determined, and if the analysis reveals that the turnover has taken place continuously at the same positions again and again in a particular time phase, then it could be stated that the turnover rate is high. It is extremely important for an organization to have strategically lower turnover rate and this could be explained by Mr. Y to his boss in a way that when employees work in the organization for large number of years with stability, then the kind of experiences he gain and the training he receives is capable of making him more skilled and experienced in undertaking his tasks at workplace which increases the overall productivity and growth of the organization. On the other hand, if an organization faces large scale employee turnover, then this acts badly for the organization's growth and stability. This is because when an employee after undergoing training and development in the organization leaves that organization within a small period, then the organization faces a great loss in terms of resources that were spent over the employee's training which he has taken alongwith him while leaving the job and might be utilizing at some other place. This creates a significant and strategic loss for the company as the company again has to recruit, train develop employees to fill vacant positions. To reduce turnover at FM wraps, Mr. Y has to reevaluate the various positions, their pay structures and the duties that each position in the organization has to deliver. This way the reasons for employee turnover could be recorded and by making necessary improvements in them, employee turnover could be successfully reduced.