Management Fundamentals 5th Edition by Robert Lussier

Exercise 22

Jack Chen started his small business about five years ago in the Garment District in New York City. Chen Clothes Manufacturing employs around 35 people. The five teams at Chen work in one big room in which all clothes are made. One of the teams makes custom shirts for quality men's clothing stores. Jack works in a separate office and spends most of his time on marketing, finance, and human resources management. He does not spend much time with the manufacturing employees. Team leaders are responsible for keeping team production records and hours worked, training team members, and helping them when there is a problem. Team leaders do not get involved with discipline.
Unlike some of his competitors, Jack does not want to run a sweatshop, so he pays employees a salary rather than a low piece rate for actual work performed. However, if employees don't produce an average of 48 shirts, they lose their jobs. Jack's employees have a higher rate of job satisfaction than competitors' employees do, and Chen has a quality reputation.
With all the competition, Jack is not making much money. He wants to get employees to produce more shirts. Jack thought about buying new machines as a capital expenditure, but he really did not have the money or the desire, because his current machines were working fine. Jack also considered changing to piece-rate pay. However, he figured that paying employees more to produce more would have an offsetting effect and would not benefit him much. He also feared that if he went to piece-rate pay he might have quality problems, which he did not want to risk. Jack prides himself on being ethical and socially responsible to all stakeholders.
Jack came up with the idea of setting a new quota in addition to the 48-shirt standard. Employees could leave work early once they had met the new 53-shirt quota. Jack figured that he was not pushing his employees too hard and that they could get out of work around a half-hour earlier each day.
Jack met with the employees in the shirt team and told them, "I want to try a new idea, which I think is fair to everyone, for the next two weeks. If you produce 53 shirts, you can go home for the day and get your full pay. I figure you can get out around 4:30 instead of 5 o'clock without having to rush your work. The same level of quality is required, and quality will be checked as usual. If you want, you can continue to produce 48 shirts and work the full eight hours." They discussed the new system, and they all liked the idea of working less hours for the same pay. If it did not work, they would go back to the old system.
On the Monday following the first week, Jack got his weekly production reports, which state the number of units made by each worker and the hours each employee worked, arranged by team. Jack got around to reading them after closing time, as usual. He went right to the shirt team report to see how the new system was working. Jack was happy to see that everyone was producing 53 shirts and getting out around 4:30. However, on Friday, Sue made 53 shirts and left at 2:30. Jack did not understand how this was possible. He decided to talk to Sue to see what was going on.
On Tuesday morning, Jack visited Sue at work and asked her how it was possible to get out at 2:30. Sue said, "All I did was adjust my machine and place this new gadget on it to speed it up. Plus I developed a new procedural sequence in which I make shirts. Watch how much faster I can sew now; especially placing buttons on is so much faster." Jack watched her in amazement as she made a shirt. He did not know what to say. He told her to keep up the good work and went back to his office.
As Jack walked back to his office, he wondered to himself: "Should I continue to let her leave that early? Do the other workers think it's fair for Sue to get out so much earlier than they do? This is only a two-week trial, subject to changes that are fair to everyone. What is the fair thing to do?"
Be sure that you are prepared to explain your answers to the following questions.
What (a) content, (b) process, and (c) reinforcement motivation theories were used by Jack when he changed the standard to allow employees to go home early?