Case #1: Health and Safety Meets Incentive Design, Compensation, and Performance Management
Pittiulak looked over the latest accident report and sighed to himself. One of his most junior workers had slipped off a ladder and broken his arm. Pittiulak felt terrible for the worker and his family and he was also worried about his ability to staff up-coming jobs. The injured worker would be away for weeks, if not months. This was the third significant accident in four months and it was simply unacceptable. Something was going very wrong with his painting and renovation work teams. He would need to fix it before more people got hurt, but how?
Pittiulak owned and managed a small renovation and dry-walling firm in Yellowknife, Northwest Territories. He had 19 fulltime workers, each with different areas of expertise. Four of them were licensed, highly skilled tradespeople (two carpenters, one plumber, and one electrician), while five others had formal training and extensive experience in framing and dry wall installation. The remaining ten were less experienced general labourers who took instructions from the senior members of the team on each project. When he received a new job Pittiulak would select the employees with the right skills for the job and then he would create a self-managed project team. The team would work together until the project was complete and then they would move on to the next one. Authority was not formally assigned but the teams generally deferred to the most senior non-tradesperson. The tradespeople would not generally take on the role of informal team leader because they might be on several teams simultaneously since they weren’t necessarily needed at the job site every day.
Four months previously Pittiulak had noticed that many of the projects were taking longer than expected and senior workers seemed poorly motivated, often goofing off and wasting time. The junior workers were picking up on the attitude and becoming less productive too. This created scheduling problems as jobs got backlogged. Customers got upset, in particular those whose renovations involved breaching walls of their home. Such repairs needed to happen during the brief summer months and with their harsh climate there was not a lot of room for error. Pittiulak decided to create a new team incentive to go along with the hourly wages he paid. His hourly wages were as follows:
tradespeople earned $60 an hour
workers with formal drywall/framing training earned between $19-$28 an hour depending on the amount of experience they had (they got an extra $1.50 per hour for every year of experience topping out at $28)
general labourers earned between $13-$18 an hour depending on the amount of experience they had (they got an extra $1.50 per hour for every year of experience topping out at $18)
in addition Pittiulak provided all legally required benefits but he did not offer any optional benefits. Prior to implementing the plan described below he had no formal employee recognition or incentive plans.
Pittiulak decided that he would provide each project team with a target completion date (as usual), but now if they met that deadline the entire team would get a cash bonus. The bonus depended on the project but ranged from $35.00 to $75.00 per person per project. It was expected to cost roughly $48,000 per year. While expensive Pittiulak made sufficient profit to afford that amount in performance incentives (although little more), plus he hoped to make the money back in increased efficiency.
The bonus was well received and seemed to accomplish its goals. The percentage of projects completed on time increased from 63% to 88% over a four month period. Pittiulak could understand why. Last time he had visited a job site he had noticed the senior drywall installers hurrying up the labourers who were painting to make sure the job got done in time. The painters had looked tired and harried but they had gotten it done! Unfortunately they’d had to replace a few tiles since in their haste the painters hadn’t moved a drop sheet over and paint had gotten on the floor, but it was still done on time.
Initially Pittiulak had been thrilled with the success of his team incentive. He couldn’t help but notice, however, that in the same four month period three workers had been injured. One had fallen off a ladder while trying to get a tool that was just out of reach, one had cut off two fingers after failing to install the safety guard on a cutting tool, and the third had slipped on spilled coffee that nobody had cleaned up, hitting his head and getting a mild concussion. It was strange since in the three years before that they had only had one significant accident. Furthermore he noticed that work sites were getting tense, with more interpersonal conflicts between team members than he had experienced previously. Sometimes he was being called and asked to mediate disputes about work processes, which was frustrating when he just wanted the team to figure out those mundane details themselves and leave him to his management tasks. Pittiulak wondered if there could be any connection between his incentive program and their poor safety record and deteriorating social environment. After consideration he realized that he needed to…
1.What are the strengths and weaknesses of the current compensation package that Pittiulak offers his workers? Consider base pay, incentive pay, and benefits when answering and explain your reasoning. (8 marks)
2.What type of bonus, incentive, and/or recognition program would maximize both efficiency and safety while maintaining a respectful workplace? Develop a detailed bonus/incentive/recognition strategy for all employees that clearly explains what behaviours and outcomes you will compensate, including what specific criteria are you will use to decide who gets a bonus/award, how you will measure it (performance assessment techniques), and what the bonus/award will consist of. Explain why your strategy would be effective. (10 marks)
3.Is there a potential for unintended consequences related to the incentive plan that you proposed in question two? If so, what could happen and how could you prevent it? (4 marks)
4.Should Pittiulak introduce any optional benefits? If so, which ones and why? Remember to consider profit margins, employee motivation, and productivity when answering. (4 marks)
Case #2: Job Analysis Meets Recruitment and Selection
Fiona is the owner of a small seasonal company that specializes in painting residential houses in Winnipeg and the surrounding area. Most of their business consists of painting exteriors, although occasionally they do work inside the homes as well. Due to the climate the company only operates from May to September and she generally hires about 28 college and university students as painters. Each year she selects her one best employee and offers them a supervisory job the following year. The Supervisor spends the day driving from site to site checking up on teams of 4-6 painters, making sure that their work is being completed well and safely. Fiona takes care of all the office and administration duties herself including sales, customer follow-up, scheduling, and training new hires on basic safety standards and safety equipment usage. Although she is very busy in the summer months she can manage the workload and stress since it is only a few months of the year. By handling everything other than the actual painting and supervising herself she keeps her costs low enough that she can live off the profits for the remainder of the year without working another job.
In the past all of Fiona’s painters have had one job title and job description. This year, however, the person that she hired as a Supervisor pointed out in early June that some of the teams were much more productive than others. When Fiona investigated she realized that teams made up entirely of novice painters performed the worst. Not only were they the slowest, but they were responsible for more than their fair share of customer complaints and minor accidental injuries. The groups with multiple experienced painters were highly productive, which was not surprising. What was surprising was that teams were equally highly productive even if there was only one member who was experienced – so the increase in productivity was not just because more experienced painters could paint faster individually. Something else about having experience qualitatively changed the way the team functioned as a whole. But what was it?
If having experience improves productivity far beyond simple work pace then it would make sense to attract enough experienced workers that one can be placed in every group (although not necessarily more than one since only one seems to be required to achieve the advantage). It would be worth paying them more since they help entire teams become more productive. One way to do so might be to create 2 different job titles with associated differences in job description and compensation level. One job title would be “Painter Level 1 – Novice”, and the other would be “Painter Level 2 – Expert”. The problem was that Fiona didn’t really understand why the more experienced people were getting better results or what they did differently in a team setting that maximized productivity for all. She needed to analyze the two jobs out in the real world to better understand their differences, allowing her to write job descriptions and move forward with the two distinct job titles in the following year.
1.Which 2 job analysis research methods would be most appropriate for this setting and why? Explain your reasoning for each method in 3-4 sentences. (4 marks)
- What are the most likely potential consequences Fiona would face if her job analysis turns out to be inaccurate? Be specific, identify 4 different potential consequences, and make sure that your comments are relevant to the situation and context presented. (4 marks)
- Recommend 2 recruitment methods that would be appropriate for hiring novice painters. Explain your reasoning for each method in 1-2 sentences. (4 marks)
- If a job category of “Painter Level Two – Expert” is created that includes coaching and mentoring in the job description would you use the same recruitment methods that you recommended in the previous question or different ones when recruiting for that role? Explain your reasoning in 2-3 sentences. (2 marks)
- Recommend 1 selection test that would be appropriate for novice painters and two selection tests that would be appropriate for the supervisory position. Explain your reasoning for each one in 2-3 sentences, making sure that you refer to each test’s reliability, content validity, and criterion validity. (6 marks)
- Would it be legal and appropriate for Fiona to make the following things mandatory requirements to get a job as a novice painter? Answer each one separately and provide your reasoning in a sentence or two. Note that “legal” and “appropriate” represent different standards and you need to address both. If you identify any of them as illegal reference the specific legislation that it falls under. (12 marks)
- Canadian job experience
- A criminal records check
- Canadian citizenship
- Being a university student
- Being willing to wear safety equipment on the job
Case #3: Diversity Management Meets Training and Performance Management
Janine Gupta, the HR specialist for a restaurant chain with 5 locations, had been given the responsibility to teach a class on diversity. The class was being offered in response to ethnic-based harassment experienced by a number of immigrant workers, who reported being bullied, mocked, and excluded from social events within their restaurants. Janine went to each restaurant and delivered a two hour lecture about diversity and the need to treat all employees equally. The lecture content focused on why it is wrong to be prejudiced and how unfair and hurtful it is to experience discrimination. Discussion was avoided since management was concerned about finger-pointing and blame and they wanted to eliminate potential for confrontations. Immediately afterwards students were given a written test, which they all passed. 3 months after she completed her lecture circuit Janine was dismayed to find that nothing much has changed. Complaints about social exclusion and bullying continue just as before.
a)Why do you think Janine’s training did not result in any changes in behaviour? (6 marks)
b)What should Janine have done differently at each stage in the training process to ensure her efforts were more successful? Remember to address all 5 stages and to explain your reasoning (see slide 3 of the training lecture for the stages). (10 marks)
c)Moving beyond training, what other things can Janine do to better manage diversity in this organization? (5 marks)
d)Imagine that Janine has decided to start evaluating individual restaurant managers for the degree to which they foster a respectful, harassment-free working environment. How could she go about assessing, measuring, and rewarding this aspect of performance? (6 marks)
e)Should new hires undergoing initial orientation be warned about past problems with harassment within this workplace? Justify your answer. (2 marks