Slade Plating Case - Management Summary

Slade Plating Case

Management Summary

Despite the success of the Slade Company as manufacturer of metal products designed for industrial application, the production manager, Ralph Porter, was concerned about the dishonesty among employees in the Plating Department. Some of the workers were misusing the punch in-out system for those who wanted to leave early or arrive late. Given the long working hour and low payment, they lacked of motivation in performing their tasks, resulting in the dishonest action. However, because of informal groupings among some of them, they operated as a team to work harder doing peak orders. Therefore, the desired output of the department was still satisfied. Yet, some employees who were not in the main group were slack off and misused the system even during the peak period, which potentially resulted in internal conflict in the department. Thus, in order to motivate employees and prevent the dishonesty, we propose to remove punch in-out system and launch a better payment system with both financial and non-financial incentives. Also, the working environment should be improved with various campaigns to enhance the unity in the department. We also move an employee who could not perform fully his talent to other department to maximize his capacity. With these solutions, the Slade Company could motivate their employees, encourage the teamwork, avoid internal conflict, and finally increase the productivity in the Plating Department.

Analyzing the present situation

There were 38 workers in the Plating Department of the Slade Company. Their jobs, working conditions, values and tasks varied significantly. They were all dependent on each other as they only received their workload after work at the previous stage was done. Work was supervised by a punch in-out system and a supervisor, Otto Schell. Payment was low and the working hours were long due to the company policy to keep training and benefit cost down by requiring overtime instead of hiring new workers. In addition, informal groupings were formed in the department, which significantly affected the daily run of the work. The largest group was the Sarto group, which could practically influence the whole department as others tended to copy this group’s ideas and values. Without doubt, this group was a real driving force of the department, both by motivating themselves and others by being opinion leaders. Its informal leader, Tony Sarto, was the most effective, most helpful and inventive minded worker in the department, which relied on his input in many things. Clark’s group also sought social contact with the Sarto group and hanged out together sometimes. On the other hand, other workers outside the groups tended to perform poorly. For example, Herman Schell, an old and experienced employee, had lowest productivity skill rating. He demotivated others, had bad attitude and had not built informal relationship with anyone in the department. However, Bob Pearson was an exception. He was working the hardest of all and performed the best in the department.

Interestingly, because of the informal relationship within the groups, the punch-out system was misused by everyone with different practices, except for the 10 women in the rack assembly. Workers tended to punch the time cards for their co-workers who were leaving early after the supervisor left the plant. The production manager was also concerned with this dishonesty among some employees. However, laying off was not a practice in this department because the company wanted to keep training cost down and employees valued feeling of security derived from this policy.

Problem Statement

From the analysis, the punch-out system is not a real ...

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Problem Statement

From the analysis, the punch-out system is not a real problem but it is a part of the big issue. It did not help increase motivation or performance of the employees at all. In fact, the system itself encouraged the dishonest action since workers get paid according to the working hours. (This might be seen as fair as the payment is low, and the extra work was done during weekends, if needed. However, morale and honesty are the issues here.) Therefore, one of the key issues is the lack of a corporate motivational and incentive system for employees. It is definitely a big issue, considering the long working hours and the low payment. Workers misused the punch-out system whenever they can. Yet, they still kept up good and finished work because of the grouping. They helped each other for the group, but not for the company – they are not interested in the company’s success. As a result, they did not commit to their work and company, which influence the dishonest action in the company. Moreover, the security in their employment is also counterproductive with regards to performance. Although the employees misused the punch-out system, they knew that they would not be fired from the company due to this policy.

In addition, internal conflict existed among the employees due to difference in values, morale and attitudes, with Herman Schell in the center. Workers tended to stick with their informal group in the company and did not mingle that much with outsiders as they did with co-workers inside their group. This action could also bee seen as hindering the company in creating a good working environment for their workers since they were separated to each group and they lacked unity. But we, as a team, are not united in this. Especially since people who were in Sarto’s group and Clark’s group (so their group was formed upon purely their will) tended to perform better than those who did not join the crowd according to the productivity skill rating. This might be because the working environment was not suitable for them and it did not support the workers to become committed to the company. We should try to create a better working system to promote the teamwork as a whole department; not just separated groups, in order to increase the overall productivity of the department.

Therefore, we stated the main question, main task for this company as ‘How to motivate employees to increase their productivity as teamwork and discourage the dishonesty among them?’ The main problem does not stem from the punch-out system, but it lies in the company’s payment and incentive system and working environment that encouraged the workers to punch out the time card for each other. Thus, we try to develop alternative solutions to motivate workers and encourage teamwork in the department.

Proposals for action – Alternative Solutions

In order to motivate employees, we will remove the punch-out system and create the proper payment and incentive program for employees. Moreover, we will support friendly working environment, encourage teamwork and build relationship among employees in the department, and set up an award for workers who have high productivity.

1. New payment and incentive system: A thorough re-planning of the payment and incentive system of the department is necessary. Payment based on time spent at work is not appropriate because time is not a proper measurement for performance and/or quality of work. A better system, with performance appraisal, should be introduced. The new system could be the payment including based salary and per-piece rate. Importantly, quality shall be insured. If there is high rate of defective output, the reduction is to be made to the salary.

This redesign does not mean to run up salary costs for the company. On average, salaries shall stay the same at the introduction period as just before. Later on, a higher performance might be accompanied by higher salary. This solution is not raising the salary of the employees – and is not designed to do so, unless justified by better work. Also, we believe that raising the salary is not a solution to the problem. Since workers are motivated in a different way, higher salary would not result in a better performance for the company. With the new system, they could have higher salary by producing more to earn more from piece-rate, which in effect increase the productivity of employees and higher profit to the company. However, there is no guarantee for success for this new system. Moreover, the cost of changing to the new system should be taken into consideration as well.

2. Employee of the month: Other non-financial incentives shall complement the new system to build up bonds and loyalty to the company. Such incentive could be an “Employee of the month” award to recognize outstanding and/or highest achievements. Pride could eventually be accompanied by company paid trips or other prizes. Together with new incentive system, employee would be more motivated and productive. If they work hard, not only they will get more salary, but they also gain recognition and pride as well. Also, this will make the employees feel that they are meaningful to the firm.

However, managers need to develop proper measurement in order to judge whether who the best employee is in each month. Otherwise, it will not be fair to the workers and this program will not work. Moreover, employees who work hard and have never received any award, might be jealous and become demotivated. Therefore, managers have to carefully design the appropriate criteria for this program.

3. Activities to promote teamwork: As we discussed earlier, workers who were in the groups tended to perform better because they helped each other out. Since there were various separated groups, the working atmosphere did not support the teamwork as a whole department. Therefore, managers should develop activities to build up the relationship among every worker and the unity in the Plating Department. For example, managers could arrange the BBQ party on Friday’s might, set up the sport day once a year, or even organize the trip during long weekend. These activities could tighten the relationship among employees and supervisors because they have more time to socialize together. Moreover, this could create a strong tie between workers and the Slade Company. They would become more loyalty and feel that the company is more than just a place to work. As a whole department, they will help each other in order to productively generate profit to the company in the way that the company’s success is their success as well.

Because relationship is the sensitive issue, there is still no guarantee for success in this campaign. If workers do not like to socialize with each other, this program will not be effective. Also, in order to arrange each activity, the company’s resources are needed. Given the unreliable efficiency, managers have to decide whether to pursue this strategy or not.

4. Friendly competitive environment: The working environment should be changed from boring and routine atmosphere to be fun and friendly competitive environment. The managers can set up teams for workers according to the task that they do. For example, the supervisor can set up 3 teams from 6 aisles, 2 teams from 5 tanks, 2 teams from Rack Assembly, and 2 teams from the rest of the tasks. Then, the goals should be assigned to each team with the proper measurement system. Currently, workers just perform their job day by day with no goal or objective, resulting in low productivity and misuse of the punch-out system. Therefore, managers should assign them the achievable goals to motivate and encourage them to work as a team to increase their productivity and performance as a group. Moreover, Tony seemed to be the only influential leader in the department. Thus, with this program, we can support other workers to master such abilities with time in their own teams. The team that has highest productivity will receive the award and recognition for each period. This program does not only create fun and excitement in working, it also encourages the teamwork and discovers the leader in each group.

However, this campaign also depends on the employees whether they want to participate or not. If they just do not care about the competition, this program will not become successful. In addition, managers have to do the complicated tasks, such as developing the appropriate measurement, setting up the goal, and organizing the competition fairly so that there will be no conflict between teams.

Recommendations

In our opinion, we think that Mr. Porter should “blow the lid off the whole mess”. But fairly, admittedly and constructively. If he still does not make any action towards the problem, the employees will continue misuse the system and they will not be motivated. Therefore, he should remove the punch-out system and apply the new payment and incentive concept to the department. Not only the dishonesty question among employees will be solved but they will be more motivated and more productive in order to earn more income. Moreover he should improve the working environment by implementing various team-building approaches, setting up friendly competitive working atmosphere and giving award and recognition for outstanding employee. These campaigns could strengthen the relationship between each worker and make them feel they are a part of the company – not just plain workers. Eventually, they will become loyal to the company and their performance will become better. Then, the dishonest action will not exist anymore.

However, for Herman Schell, he is found to be inappropriate and non-manageable and thus to be removed from the department, to say, “promoted” to other department to maximize his personal abilities and talents that we unfortunately cannot utilize in this department. This, we acknowledge, is a very easy and usually not the manager’s way to solve an issue like that. But we believe we just identified the case when a significant and sustainable change is not likely at all and by getting rid of him would eliminate the conflict source from the group and enhance group dynamics on the floor in all. Of course, a con to that is the feeling of safety, the lifetime job experience of the workers. Yet, we believe this does not endanger the good workers’ positions and therefore does not pose threat to the regular employee. A reason why he might not have been sacked before – apart from the general practice of the department – is probably the family ties to Otto Schell, the supervisor. In our opinion, such ties can be good but in no way shall be hindering performance, and this shall not be a base for delivering improper results both professionally and personally in the workplace.