The Harwood Manufacturing Company has a work force that is composed primarily (80 percent) of women, although there are very few women in supervisory or management positions. The company uses a piece-rate compensation program with employees receiving a bonus for each piece above the quota they produce. Employees are kept from falling beneath either the wage at which they hire in, or the wage after six months of work (22 percent more than the hiring-in wage). In this way, employees who produce less than 60 units per month receive their base pay, while employees who produce more than 60 units receive their base pay plus the bonus. The piece rate is paid on completed units rather than on the components that make up completed units.
Because the company sometimes finds it necessary to move workers to new positions, it has also instituted a transfer bonus so that workers do not receive less pay while they are relearning a new task. However, workers resent the transfers and many workers leave the company rather than continue in the new position. The company has also found that less than one-half of transferred workers return to the 60 unit quota after changing jobs, and that operators who come in from the outside learn their jobs faster than operators who are transferred from the inside.
The company has tried to create a work atmosphere which it considers worker-friendly. The cafeteria has been remodeled, and music is played for workers. There are also plans for an open house and an employee picnic for workers and their families. While these activities are useful in making Harwood a pleasant place to work, they do not address the more serious concerns of workers.
Workers who work on piece rates are being offered only one time of incentive: financial. While this is a strong motivator, using it as the prime motivator means that changes in the piece rate structure is likely to have serious ramifications for the company. A wo...