rker knows that there is a guaranteed salary level regardless of the number of pieces produced. If this salary level is an acceptable rate, there is little incentive for the worker to exceed the quota. At the same time, achieving the 60 unit quota can take more than six months, at which point the worker has already received a salary increase. Working to exceed the quota at this point may seem an impossible task after not being able to reach it for more than six months.
This long initial training period may be why the company has problems in moving workers to different jobs. The only experience that workers have in judging how they will be paid in the new position is the experience they had when they joined the company. Since they went for a long period without a bonus, they may assume that it will take them an equally long time to learn the new job, not realizing that the skills they have already developed will help them learn the new job faster.
To solve the problems, management needs to revamp the bonus system. Having a guaranteed wage is a sound idea since it protects the workers during learning periods and while they are relearning jobs once they are transferred. However, having a piece rate program in which operators may not realize a bonus for more than six months may be a disincentive.
Since the company has established the quota in order to meet its sales objectives, and since the workers are a critical part of meeting the overall company objectives, a combination bonus program would likely be of greater benefit both to individual workers and also to the company as a whole. A piece rate bonus would remain in effect to reward workers who master their jobs and who produce high quantities of quality work on a regular basis (it is important that the piece rate bonus be tied to quality, not merely quantity). At the same time, a group bonus should be paid when one area of the company achieves its overall goals. This ...