Activity 3

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School

Polytechnic University of Puerto Rico *

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Course

1000

Subject

Industrial Engineering

Date

Jan 9, 2024

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docx

Pages

2

Uploaded by BailiffRhinoceros2255

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Rafael Calderon IE1000 What went wrong with Levi’s move to teams in their plants? Levi's move to teams in their plants faced several challenges that led to negative outcomes: 1. Pay Reduction for Top Performers: The shift from piecework to team-based pay led to reduced earnings for top-performing workers. Since teams were paid based on the overall output, individual high performers had their compensation reduced when they were working alongside slower or less skilled colleagues. 2. Internal Conflict and Morale Issues: The new team-based system created internal conflicts and damaged morale. Skilled workers were frustrated by having to compensate for the slower output of their teammates. This led to resentment and infighting within the teams, which further undermined the collaborative spirit. 3. Inequity Perceptions: The unequal distribution of workload and the need to cover for underperforming team members caused feelings of inequity among the high-performing workers. They felt that they were shouldering a disproportionate burden of the work without fair compensation. 4. Lack of Effective Supervision: The introduction of teams brought limited supervision from coaches, which meant that teams had to handle most workflow and interpersonal issues themselves. This lack of clear guidance and leadership exacerbated the internal conflicts and problems within the teams. 5. Nature of Work: Levi's factories had tasks that required varying levels of skill and speed. Unlike assembly lines for products with standardized components, garment-making required individual workers to perform specific tasks that could differ in terms of complexity and speed. What could Levi’s have done differently to avert the problems? To avert the problems associated with the team-based approach, Levi's could have taken several different measures: 1. Balanced Pay Structure: Instead of solely tying pay to overall team output, Levi's could have implemented a hybrid pay structure. This structure could include both team-based rewards and individual performance incentives, ensuring that high-performing workers are adequately compensated. 2. Clear Role Definition: Defining roles and responsibilities within teams would help allocate tasks more fairly. It would also set clear expectations for each team member's contribution and avoid potential resentment caused by uneven workload distribution. 3. Enhanced Training: Levi's could have invested more in training programs to help workers develop the necessary skills for different tasks. This would have reduced the performance gap between team members and mitigated conflicts arising from varying skill levels.
4. Effective Conflict Resolution: Implementing a system for effective conflict resolution and mediation within teams could have helped address issues before they escalated and damaged morale. 5. Gradual Transition: Levi's could have phased in the team-based approach more gradually, allowing workers and management to adapt to the new system over time and identify and address challenges as they arose. Team Incentive Plan: A potential team incentive plan could be a combination of group rewards and individual bonuses. For example, Levi's could allocate a portion of the team's bonus based on the overall team output, promoting collaboration. Additionally, individual workers could receive performance bonuses based on their personal contributions, skills, and the quality of their work. This approach would encourage both teamwork and individual excellence. Could Levi’s have averted the need to move jeans production offshore and avoid increasing labor costs? The need to move jeans production offshore might not have been entirely inevitable if Levi's had effectively addressed the challenges of their team-based approach and found ways to improve productivity and control labor costs. One way to tie worker performance to incentive pay to avoid increasing labor costs could be: Skill-based Pay: Implement a pay system that rewards workers based on their skill levels and efficiency. Workers who consistently produce high-quality work at a faster pace would receive higher pay rates. This approach aligns with the nature of garment-making, where skill and speed play a significant role in productivity. By establishing skill-based pay, Levi's could have encouraged workers to improve their proficiency, reduce repetitive-stress injuries, and enhance overall productivity. This approach would have provided a clear path for workers to earn more while maintaining or increasing the quality of their output. It might have minimized the need for offshoring by improving competitiveness and reducing labor costs through increased efficiency.
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