What are some of the advantages of offering a piece rate plan to the workers at Metropolitan Furniture?
Jack Hopson has been making wood furniture for more than ten years. He recently joined Metropolitan Furniture and has some ideas for Sally Boston, the company’s CEO. Jack enjoys working for Sally because she is very open to employee suggestions and is serious about making the company a success. Metropolitan is currently paying Jack a competitive hourly wage for him to build tables and chairs. Jack thinks that n incentive plan might help him and his coworkers to put forth additional effort. At Jack’s previous employer, he was paid on a piece-rate plan. He was paid for each chair or table that he completed. Jack thought this plan helped him to work faster and smarter. Sally likes the idea, but she also feels that the workers must work as a team, and often times, this means pooling their strengths to complete an assignment together. She is concerned that a piece-rate plan might minimize the team concept she has incorporated into the organization. She has considered a team-based plan that provides a bonus payment when each set of furniture is completed on time. However, after speaking with Jack, she is unsure of which plan to take. Questions for review: 1. What are some of the advantages of offering a piece rate plan to the workers at Metropolitan Furniture? 2. What are some of the advantages of offering a team based plan to the workers? 3. If using a team based plan approach, how do you address underperforming workers so that the team incentive is balanced and fair? 4. If you were Sally, which approach would you take and why?
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