Production Rate For A Skilled Worker example essay topic

Table of contents 1- Introduction... (1) 2- Description of manufacturing industry- Description of Ilanco Inc... (2) 3- Description and analysis of the problems and theory application... (3) 4- Recommendations... (9) 5- Conclusion... (13) 6- Bibliography / Works Cited...

(14) Introduction The purpose of this report is to analyse the problems of employee motivation at Ilanco Inc., a relatively small manufacturing company located in Montreal. For many years, this company operates in sweater production, and belongs to the section of clothing manufacturing industry. Currently, approximately 70 employees are working for the company. As many manufacturing organizations, Ilanco has been experiencing a lot of problems with effectively motivating its employees. Such problems have been reflected both in the Motivating Potential Score Survey that we have conducted among the employees and in our interviews with some senior workers at the company. First, this report gives a brief overall description of the manufacturing industry and the company, Ilanco.

The major parts of the report outline and analyses the main motivation problems that Ilanco is experiencing. According to these specific problems, several very useful and practical recommendations have been made to help improve the employee motivation at Ilanco. Also, in order to make this paper more insightful, some relevant motivation theories have been applied to both the analysis and recommendation sections to help analyse the problems more deeply Industry Description Manufacturing is a key activity in any economy because of its far-reaching effects. Manufacturing firms represent 20% of Canadian GDP. There are around 40 000 manufacturing firms in Canada, employing almost 2 million people. Production value comes to $135 419 millions.

Manufacturing firms with less than 200 employees represent 96% of total number of manufacturing firms in Canada, employing 47% of Canadian labor force involved in processing industry. In Quebec, the manufacturing sector generates over 20% of province's GDP. Close to 11000 firms are operating, employing some 548 400 people. In Quebec, firms employing fewer than 200 people represent also 96% of the total number of manufacturing establishments. That is, employing 49% of province's men-power.

In Montreal, experienced labor force (1996 Census) represents 1 609 820 in all industries including manufacturing sector that employs 283 370 people. Despite the importance of manufacturing industry, employment has been decreasing in recent years. Description of Company As an example of manufacturing firm we " ll take a look at "Ilanco Inc". , relatively small company that falls under clothing industry sector. Company is located in Montreal's Chabannel area and can be seen as a classical example of clothing manufactory. The firm was established in 19 XX and is equally owned by two partners with considerable experience in clothing industry. Both partners do administrative work in the firm that produces ladies' and men's sweaters.

Because company does not have large variety of products, their workers are well trained, skillful and fully functional. Skilled labor is required for almost every part of production line. Products are tightly controlled and work is examined at every step of production process. For example, in the case of defective garments, they are being returned for reparation and later for final inspection. The average number of sweaters being produced in one working day is 1000 to 1200 sweaters. Ilanco Inc. employs 50-80 production workers depending on a season.

There is approximately 40% of male and 60% of female workers. Preparation of fabrics and other materials that include work on steaming press and cutting, are positions held by male workers, while pattern making and sawing positions are positions held by female workers. Other positions such as thread cutting and packaging are positions equally held by male and female workers. All age groups can be seen in this company varying from workers that are in their 20's up to the oldest worker that is 62. Concerning race, we found that production workers belong to all races. But what is very interesting is their ethnic background.

Big majority of workers are recent immigrants. There are only few of native English or French Canadians. Majority of production workers poses high school education with exception of some that have higher education. Work starts at 8 am and finishes at 4 pm. There is possibility to start at 7: 30 am and to finish at 5 pm. That is workers' choice.

Working on Saturdays is required only during high season. Production workers are poorly paid. The average salary is $7/hour. There are examples of workers that work for company for 7 years and get paid $7.75 per hour.

There is no regular salary increase. Workers have to ask for one, and the chance they will not get it. Everyone is paid by an hourly rate. No one in the company is paid by piece rate because of the type of work that is done here. There are no promotions, bonuses or similar benefits at Ilanco Inc. Description and Analysis of the problems Survey conducted with the employees of Ilanco Inc. resulted in reported lack of job satisfaction.

To reach as more employees as possible, we conducted the survey in both French and English. Results of questionnaires on calculating motivational potential score varied form 70 to 110. For the question on how much variety is there on their job, most employees answered - 'very little'. Other results gave a clear picture that employees have very little freedom decision wise, there is a lot of uncertainty, little control in setting their work pace and most of them find their jobs not challenging at all.

This is a clear indicator that there is an existing motivational problem and that management ought to do something in order to motivate their employees because they are very valuable asset to company's good performance. Problems within Ilanco Inc. - Low Wage - Little Opportunity for Learning- No Profit sharing - Communication, Appreciation, Feedback- No Bonuses - High Turnover, Absenteeism- Long Working Hours - No Flex - Time Low Wage At Ilanco, employees are paid at a certain rate for each hour of production worked. The hourly wage is as low as $7.00 for newly hired workers, and even for skilled and experienced workers that have been with the fir for a long time, the rate is just at $7.50 to $8.50 per hour, which is the highest pay in the manufactory.

Also, it's quite hard to get a salary increase for most of the workers; even when a person gets one, the increase is very limited. It seems that employer keeps his employees' pay at the minimum wage at all times. Obviously, such a low wage is a serious problem. On the one hand, the owners and managers expect the workers to produce as many as sweaters as possible in their working hours. On the other hand, given the fixed hourly wage rate, there's no incentive for workers to take efforts to make maximum production.

If the average production rate is 1000 sweater per day, no one is willing to make more than that even the person is able to produce far more than this number. Even though the wage rate has nothing to do with units completed, workers are always rushed to get the more work done. No Profit Sharing / No bonuses As long as the company is operating, whether it is performing well or not, seems not very important to its workers since there's no profit sharing at Ilanco. Earning a profit or incurring a loss is only a matter to its owners, and the workers always get their somehow fixed salaries. It seems that the company is doing well due to loads of work employees are handling day after day, and its owners do not seem to have lots of expenses.

The employees are likely to focus on only short terms, and no one tends to take a longer view with respect to the company's performance, participate in the company's activities and get involved in the product development or innovation. In addition, the owners are not showing interest to include their employees in company life other then the one they already have within the same. Long Working Hours / No Flex - Time At Ilanco, on average, workers work for 43 hours per week (from 8 a.m. to 5 p.m. from Monday to Thursday and from 8 a.m. to 3 p.m. on Friday). However, they may be asked to work for some extra hours or on Saturday if the factory receives too many orders at once.

Such a schedule of long working hours obviously is not a good time arrangement that brings many negative effects of which the most harmful one is fatigue. It is hard to motivate exhausted workers. Nominally, the company offers flex-time to its employees that they may be able to choose to work from 7.30 a.m. to 4.30 p.m. instead of 8 to 5. However, this alternative of so-called flexible work schedule doesn't make any difference to the workers since they still don't have much control over their own time.

Little Opportunity for Learning The employees value learning opportunities because they know their immediate and long-term survival is linked to their ability to learn new skills that will help to keep their employability factor high. Therefore, learning is one of the most important motivation factors. However, Ilanco doesn't provide its workers with many learning opportunities. On regular basis, very poor training program is offered to newly hired workers to teach them some basic skills of machine operation or plate making.

If some workers want to learn more about mechanics and techniques, they have to figure out a way by themselves. They even have to provide themselves with basic tools such as scissors. Communication, Appreciation, Feedback Communication is a powerful way of showing people that they are recognized just as silence can be an extremely hurtful way of punishing employees. Workers need to know first that the management notices what they are doing and second that the managers are prepared to tell them the truth of their behavior -- -good and bad.

Otherwise, many other problems can arise. Usually production workers at Ilanco do not have any contact with higher level management, but only with their supervisors, and that is very limited. At Ilanco, managers usually fail to give workers feedback about how they are doing, especially when they are doing great. When workers are not performing well, managers are likely to respond, but fail to provide constructive ways of how to improve their employees' performance.

However, when workers are doing a great job, managers don't give any positive feedback. Productivity is the only thing that managers care about, so the management of Ilanco simply takes this attitude -- "I pay you this amount of money, and you have to get this amount of work done" -- -as grant. Workers would appreciate their efforts to be recognized by the management. Simple comments such as "Thank you" or "Wow! That's a great job" from supervisors could make workers feel that their hard work and performance is appreciated by the company. Even a pat on the back and a smile can make workers feel good and think that what they are doing is worthwhile.

These things are trivial, but may lighten a boring working day. Unfortunately, managers at Ilanco overlook the positive effect of recognition and fail to show their appreciation to the workers. High Turnover and Absenteeism At Ilanco, in most instances, employee jobs are highly fragmented and with limited responsibility or authority. Every worker keeps doing almost the same things day after day and is only responsible for his or her own particular task.

For example, in the sewing section, some workers make solely sleeves while some others produce solely sweater bodies. When asked if his or her job is meaningful, most workers respond "You gotta' be kidding!" It's easy to imagine that how boring it is to operate the same machine and perform the same task day after day. As a result, employee absenteeism and high turnover arise at Ilanco. Workers that quit their jobs in production are usually younger ones. Theoretical Application There is an ongoing debate over questions relating to worker alienation and job enrichment. These questions include drop in job satisfaction, lowered productivity, higher quit, absentee rates.

On one side of this debate is an unusual alliance that agrees that worker discontent is rapidly rising and that work reforms are urgently needed. According to arguments of other side, "the extent to worker's job satisfaction has been overstated, and that worker's primary demands are still for higher pay and greater job security". They believe that "workers can be best satisfied throughout traditional means such as enriching the paycheck (rather that a job), providing shorter hours or early retirement (on the argument that if the job is bad, one should spend less time on it), and showing greater concern for occupational safety and health". (O.B. Research and Issues. p. 19) During our research, we found that money and its equivalents are the best way to motivate blue-collar workers, but intrinsic motivation should not be put on a side and forgotten. Probably the typical worker would react positively to having more challenging work, they have learned to cope with a lack of challenge. Production line workers tend to focus their lives away from the jobs. As a consequence, they are producing only 'fair day's' work.

Pay by the hour is seen as task-contingent reward. Task-contingent means it is obtained only by participation or completion of the given task, without further conditions. We learned that performance-contingent rewards, that could represent pay by piece rate, undermine intrinsic motivation. So that is first positive thing in Ilanco. Their workers would probably be less motivated and satisfied if they were paid by piece rate. The managers may unintentionally undermine intrinsic motivation.

"The use of extrinsic task contingent incentives, when applied to behaviour's that are intrinsically motivated, may lead to reduced motivation in the long run when the incentive is no longer available" (Engle). "Job enrichment offers hope of increasing satisfaction and productivity in some areas, but their main advantage lies in providing more flexible work force, improving communication among workers from different levels... ". (O.B. Research and Issues. p. 21) Changes in productivity, high turnover, absenteeism, etc. can be explained by demographic and occupational differences of the work force. Age, sex, race, education, and occupation seem to be most important. Poorly educated people, women and minorities tend to hold less challenging and less paid jobs. We have seen before that this is exactly how production is structured in Ilanco. These are the people that will always score low in job satisfaction and motivation.

What we found interesting is that workers with 'some college' but no college degree seem less satisfied, these workers feel overeducated for their jobs (Survey Research Center). There is a massive change in cultural values, particularly among young workers. They have always been less satisfied then the older ones, and this particular generation have been raised according to permissive standards. These young workers are less afraid of economic insecurity then their elders and less willing to postpone gratification.

Success among them is measured less in monetary and physical terms and more in terms of self-fulfillment, living an agreeable life style and doing meaningful work (O.B. Research and Issues. p. 21). The proof we " ve seen in Ilanco; most workers that leave this company are young ones". ... workers seek social belonging, independence and social growth. They aspire to ascend what Maslow called 'the needs hierarchy' ladder, from satisfaction of physical, through safety, social, egoistic, to self-actualization needs. Thus, once basic extrinsic needs are satisfied, intrinsic needs assume greater importance. Organizations fail to recognize these and follow instead what McGregor called 'theory X' assumptions that workers dislike work in such fashion that the individual is condemned to isolation, passivity, dependence and the use of minimal abilities" (O.B... p. 24). The following is an example how Maslow's theory was put to work.

The owner of one electronic firm relied heavily on Maslow's Motivation and Personality and used it as a guide to make his employees happy, and - he hoped- more productive. He believed that each worker benefits from a sense of closure, of seeing a finished product that he or she has personally built. With happier and healthier employees, he felt, his company would likewise be happier and healthier. He replaced assembly line and replaced it with production teams of six or seven workers. Each team learned how to best produce its share of products. Each unit took responsibility for assembling, inspecting and packing.

Every employee learned the entire assembly process. Breaks were not taken as scheduled but whenever convenient for the team. Besides paying his employees twenty five percent more, the owner also gave departments more autonomy by allowing them to keep their own financial records, thereby allowing him and his top managers for long range planning. He offered extra trainings for everyone involved. Since these changes took place, employees' moral was superb, turnover was a fraction of national average, and sales and productivity were soaring. This example is strong evidence in favor of Steiner's thesis, stating that "human motivation is brought about by self-determination of free individuals, that choose their own working place and working context by un compelled treating between equals".

This owner's innovations and democratic atmosphere in the company greatly improved work motivation. This example should serve as an introduction to our recommendation to the management of Ilanco Inc. Recommendations Based on the present situation at Ilanco, the management has to make some drastic improvement to motivate the employees. Extrinsically, to solve the above mentioned problems, the management has to consider the following seriously: o Increase the Hourly Wage Rate (HWR).

First of all, the HWR should be at least at the level of legal regulation. Secondly, the HWR should be competitive to industry standard to avoid unnecessary turnovers, especially those skilled employees. Otherwise, it will definitely be harmful to the company in long term. No one wants to turn the company into a "training school". So, the new recommended HWR for new employees is $7.50, while the level for skilled employees is $8.50 to $9.00 depending on each individual staff. There should also be an evaluation system to decide whether a staff has reached the "skilled worker" level.

The best way to do this is to schedule a test on site after a certain period, say six months from the date of employment. The assessment should not only rely on the pieces of sweater one produces during a certain length of time, but also rely on the quality check result. Most importantly, a "skilled worker" could be demoted to an "unskilled worker", thus the HWR would also be reduced if he / she could not perform as he / she should, in particular when quantity and / or quality of the production continues to slide after he / she reaches the higher level. o Staff Incentive Plan (SIP) and Risk Sharing Policy (RSP) should also be implemented. The SIP includes both the quantity and quality parts. As mentioned above, if the average production rate is 600 pieces per day for an unskilled worker, then the one who produces more than 1000 pieces per working day at quality pass level would be awarded. If the average hourly production rate for a skilled worker is over 80 pieces, then the one who produces more than 100 pieces would be awarded.

The award is $0.80 per additional piece for unskilled workers and $1.00 for skilled workers. RSP is made for the profit purpose of the company. A deduction of $0.40 and $0.50 per poor quality piece would be implemented for unskilled workers and skilled workers respectively. The worker who produces the poor quality sweaters has to re-make them until it pass the quality check without any additional pay.

And anyone who short-produces more than 3% of the average rate per day would also be "fined" at $0.50 per piece in excess of the 3%. An Overtime Pay System (OTP) should also be added. However, only the overtime hours required by the company will be paid at 1.5 times of the HWR of per worker. o Promotion Opportunity. Any skilled worker who has been in the company for at least one year and has been over-produced more than 5% at quality pass level for 3 consecutive months would head up a 5-member production team. He / she can earn $0.20 per piece of every team member's extra production in access of the average rate per month. A team will have two unskilled workers and two skilled workers and the team leader.

After being a team leader for at least two years, the staff can anticipate further promotion or higher-level assignments that is related to the training program. Of course, the two-year period of a team-leader should be successful, i.e. satisfying result by evaluation in every 6-month period. Intrinsically, the first problem that needs to be solved is the career enrichment. Most importantly, necessary training should be provided to each individual worker.

Besides the on-site training regarding producing, some other training should also be available for the career path, e.g. management skill training, team work concept training, internal competition concept training among teams, etc. All the training sessions are for the development of individual staff's career demand. As Judith M. Harackiewicz put it:" My recommendation is that business owners pay employees well and fairly... and then do everything possible to help them forget about money. Attempts to improve an organization with the compensation system are doomed to failure...

What then? The quick answer is that there are no quick answers. But three C's offer a good framework: choice, collaboration, and content. Choice means that employees should be able to participate in making decisions about what they do every day. Collaboration concerns the need to structure effective teams.

Content refers to the tasks on which people work; as Frederick Herzberg put it, 'If you want people motivated to do a good job, give them a good job to do'". The management should also encourage the innovation ideas from all the staff. Managers should have open-door policy that allows common employee to walk into their offices and talk about their ideas, concepts and opinions about the company's today and tomorrow. There should be a regular think tank session every three months to encourage all the employees to make suggestion to the management. In addition, an appraisal system in every 6 months should be implemented at every level of the company, i.e. team level, department level, company level. There would be different levels of staff performance, e.g. company warning, improvement required, average, competent and outstanding, to name a few.

The result of the appraisal is connected to wage increase, bonus and promotion. In summary, Ilanco has a lot of serious problems in terms of staff motivation. If the above recommendations are not taken into consideration by the management, then there is a high possibility for the company to be just a start-up training school. There will still be high turnover rate, low productivity, unmotivated staff, and uncompetitive working environment. There is really no "bright" future for the company.

It probably can still be profitable, but it's just short-term focused. Once there is a down turn in market demand, Ilanco can hardly survive because of its extremely narrow product line. The management should realize that it is the staff that makes the profit for the company. Without reasonably motivated staff, the company could never focus in long term survive in the business.