People management case study at a upmarket pie company.

In 2003 Camilla Stephens started a pie business that struggled to become profitable. It needed to be refinanced and downscaled in 2004, but from a smaller base it began to grow. Before starting the business, Camilla had been Head of Food at Starbucks UK and also Deputy Editor of Good Housekeeping magazine, so she had a terrific understanding of food trends. Seeing the success of Innocent Drinks and Green and Blacks, she focused clearly on hand-made, very high quality, high-priced pies. Think Chicken and Red Pepper rather than Chicken Balti.

In the early years the pie business supplied local cafes and caterers, but in 2006 Camilla (with new partner/husband James Footit) developed the Higgidy brand. This proved an incredible turning point. Within 18 months Higgidy was stocked in Sainsbury, Booths and Waitrose supermarkets, giving national distribution and a big boost to sales.

Suppliers to the big supermarket chains usually automate their production process to boost output and to benefit from economies of scale. Higgidy, however, remains resolutely a producer of hand-made pies. This means that higher sales = more staff. In 2004 the business had 10 staff; by 2010 they had 140 (see graph below).

Higgidy had started as a family business, hiring in friends when necessary. Today the couple have to find a way to motivate staff in a job that is – inevitably – repetitive. In August 2010, Footit told the Financial Times: “Food factories aren’t always the nicest places to work, and we want to be different from that.”

Footit and Stephens have a three-pronged strategy for motivating their staff. The first is to create strong social bonding among staff and management. Every Wednesday all factory staff have lunch together, eating the pies and quiches made in the Shoreham-by-Sea factory. When Higgidy’s buyer Darren Ellis was off work with a broken foot, the warehouse team was bussed to Ellis’s house for lunch. Camilla is clear on the importance (and modest cost) of this kind of informal team-building.

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The second element of their approach is to run English lessons for staff – reflecting the fact that their workforce speaks 20 different languages. The final part is a profit-sharing scheme. Higgidy will split 16% of the annual profits among employees, according to their performance and seniority in the business. This scheme is only just being introduced, as this year (2010) is the first time profits have been made (a financing total of £700,000 was needed to get Higgidy through its first 6 years).

Questions

1. Explain two problems that might be involved in motivating a workforce doing repetitive work.

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Questions

1. Explain two problems that might be involved in motivating a workforce doing repetitive work.

2. Analyse the motivational approaches taken at Higgidy from the perspective of one of the following theorists:

a) Herzberg

b) Maslow

c) Mayo

3. Increasing staff numbers from 10 to 140 is likely to require changes to the organisational structure of the business. Examine two problems that this might have created at Higgidy.

4. The profit-sharing scheme is to be based on seniority and performance. Discuss whether it would be better to split the profit-share equally between the 140 staff.

Possible approaches

1. Explain two problems that might be involved in motivating a workforce doing repetitive work.

Possible answers include:

The workers might have developed a negative mindset, in which they ‘leave their brains at the factory gate’, i.e. come to earn money, not to think; so if the workers have got used to repetitive work, they may not like to be pushed out of their comfort zone
Workers doing mindless tasks can accept being paid minimum wage rates; if more is asked of them, they may start to think they deserve higher pay; that’s fine if productivity improves, but difficult if it doesn’t

2. Analyse the motivational approaches taken at Higgidy from the perspective of one of the following theorists:

a) Herzberg

b) Maslow

c) Mayo

Herzberg:

The Prof would have approved of the hygiene factors being put in place, but worried that no effort was being put into motivators; to Herzberg, profit sharing is a financial incentive and therefore a hygiene factor; nice efforts regarding teamwork and the social side of employment at Higgidy is also a hygiene factor; he would have applauded the English classes, seeing them as a way to develop each employee – yet he would have noted that this was not really fundamental to the job itself
His conclusion, therefore, would be – good, it’s important to show that you care and that you’re trying to provide the best for staff – but that only avoids dissatisfaction; for real satisfaction the motivators must be triggered, and that would mean getting away from the repetitive tasks.

Maslow

The management emphasis on teamwork would clearly fit into Maslow’s social needs, with perhaps the nice gesture regarding the buyer meeting that employee’s esteem needs as well
The financial incentives can be regarded as chiming with Maslow’s physical needs, but also self-esteem (‘I have a 10% bonus and I’m worth it’)
The teaching is a genuine way to help staff fulfil themselves – and can therefore be taken as a form of self-actualisation. The very fact that it doesn’t directly help the business could be thought particularly important for staff – making them more loyal to Camilla and James

Mayo

Mayo would applaud the focus on unofficial/informal teamwork; he was the first person to stress the importance of the informal aspects of leadership and teamwork;
Mayo would have seen James and Camilla’s interest in staff welfare as perhaps giving rise to the Hawthorne Effect: stimulating higher efforts from the staff
He would also applaud relating the profit share to performance, which would require a way of monitoring who’s performance was a bit special; again, management interest in staff performance could give rise to the Hawthorne Effect.

3. Increasing staff numbers from 10 to 140 is likely to require changes to the organisational structure of the business. Examine two problems that this might have created at Higgidy.

Possible answers include:

It sounds from the text as if Camilla and James are both hands-on bosses; that gives rise to the possibility of shared leadership, which is very difficult to manage effectively. It would not have mattered when 10 employees could learn from their own experience about the relationship between the co-leaders ; but when staff numbers rise it would become more difficult
Increases in staff numbers tend to stretch managerial spans of control until the point when a restructure is needed to bring an extra layer of hierarchy into the enterprise. That means more employees who don’t really know the bosses. As explained above, that could be difficult
A further problem caused by more layers of hierarchy is slower vertical (especially two-way vertical) communication; this can reduce operational efficiency and can down the firm’s efficiency (eg in responding to serious customer complaints).

4. The profit-sharing scheme is to be based on seniority and performance. Discuss whether it would be better to split the profit-share equally between the 140 staff.

FOR equal profit share?

Equal shares avoid two potential problems: first, the issue of equity/fairness in relation to the payments; if, for example, there’s a £140,000 profit pot to distribute, £1,000 per staff member will seem very fair, whereas bosses getting £5,000 while shopfloor workers get £500 will feel wrong
The second issue is the hint in the text at performance-related bonuses, i.e. bosses deciding ‘you’re a good worker, here’s £1,200’; ‘you’re notsogood, here’s £800’; a great deal of research evidence suggests that this is a recipe for disharmony; bosses shouldn’t set themselves up as ‘wise men’, handing out cash to the worthy, but not to the unworthy; as Herzberg made it clear 50 years ago, financial incentives risk causing dissatisfaction without creating any long-lasting satisfaction (or loyalty)

AGAINST equal profit share

It could be argued that equal payouts will alienate the high achievers and hardest workers (‘I’m here till 8.00 every night and I never have a day off; he takes every third Monday off and leaves at 5.00 on the dot’). Therefore equal shares may create disharmony among the firm’s top performers, risking creating higher labour turnover
Some people believe that performance-related bonuses encourage ‘good behaviours’, such as working hard to turn a sales contact into a sales contract (hey, that’s neat!)

Adil Khan