What should be done?
Walt should motivate his employees by revising current piece rate. Meanwhile, he should reinforce his control system and redesign reward system to encourage high productivity performance.
Why should it be done?
First, there will be less incentive for employee to increase production output when the pay differential between piece-rate and hourly paid work is not enough. That’s why most of guys would not “bust ass” unless they could make at least $16 an hour on a job
Second, method department of Walt will retime and reduce the piece rate if a experienced worker are able to earn more bonus for certain job. The policy actually punish the high productivity without realize the folly effect of this action. The beauty of piece rate is higher productivity bring more profit to company. Employees earning more with piece rate means the company will earn more too. In addition, there’s nothing wrong for employees to earn more bonus if they’re doing a quality job as well as getting the work done quicker than others.
The last but not least, Gillette Metal did not seem to have policies discouraging workers from leaving early or sleep in warehouse during working hour. So Employees in Walt feels free to do such behavior.
The piece-rate system represents the ultimate relationship between pay and performance as a method of compensation that pays workers based on the number of units produced.Several years ago I worked for a company in Bowling Green, Kentucky. My position with this company was a data entry operator. The firm processed information for the post office and the video images were pieces of mail. I ...
How should it be done?
First, retiming the jobs in Gillette Metal by experienced employees, such as Vern and Bud so that Walt will know the actual working hours for each job.
Second, reset piece rate based on company profit margin and cost budget and make some adjustment according to the difficulty of each job to make sure more difficult job will be awarded with higher piece payment. Let higher productive staff to earn more because the fair payment will encourage high productivity.
Third, the function of method department should be changed. Engineers from Method department should work with experienced works to figure out how to improve the productivity and quality of products by creating new working procedure and tools or adjusting current ones. And they also should training new staffs and slow staff to improve company’s productivity as a whole.
Lastly, Foreman should really do monitoring and supervising work and make sure nobody sleeps in the warehouse during working hour and nobody leave early anymore. The most important work he should be done is that job assignment should base on each employee’s skill. If figure out anyone’s earning less than minimum wage at piece rate, it means they may not have necessary skills to work such job and you have to let them go or find another job for them to do.