A. O. Smith Company Summary

Each employee will be paid based on their capabilities rather than on the characteristics of their job. This will provide an incentive for employees to develop their skills and move into other roles.

Contemporary motivational theory: - By considering the Expectancy theory, it is clearly discussed that if a definite salary is given to the workers, they will not give proper attention to their work because they know that they will receive the salary whatever the output is. Therefore, if Galt follows the piece-rate system, the productivity is somehow more as compared to the flat-rate system.

Ford Company faced the labor surplus because of its high cost structure and decreased in the demand of automobile. There was no work for all employees in the company but the ford paid salary and other benefit to all employee even there are not contributing and involving in the production. As there was decrease in sales of Ford automobile, they had surplus in their work force. Moreover they were unable to afford to keep all the employing paying their salary. They also had to bear financial loss. Hence they were eager to cut down their entire work force. (htt91)

Their whole objective was to produce output at a greater rate, cheaper. Schlosser explains that, “With innovative technology and the proper organization, a small number of workers can produce an enormous amount of goods cheaply” (69). The technological breakthroughs that were made were extremely beneficial to firms. They could now sell their product for even less. But the advancement of technology wasn’t beneficial for everyone. The breakthroughs decreased the demand for labor because firms simply no longer needed as much labor to produce great quantities of output anymore. With the decrease in demand for labor, there was a subsequent decrease in the price of labor. In a perfectly competitive wage market, the price of labor is set where the supply of labor intersects the demand of labor. This was seen in the 1900s in the fast food industry as the wages were set below the equilibrium price due to technological advancements. The wage market in the fast food industry was another place where economic principles were evident in the real

The first book, “Of the causes of improvement…,” talks about the division of labor and the wage of labors. According to Smith, there are three advantage of division of labor. First, it increases the employees’ dexterity; second it decreases the amount of time it consumes to make the product; and third reason is that because of the many inventions of machine, each employee can perform the work of many. Smith thought division of labor is important because labors can be more efficient if they are specialized in specific work.

Our solution to this ongoing problem that Engstrom Auto Mirror Plant is facing is firstly, clearly outlining their calculations for each individual’s yearly bonuses — ones that should specifically be a result of employees reaching a certain quota of production. This aids in eliminating distrust within the company to ensure employees that the company is fairly and regularly awarding bonuses for their individual work, which in turn will improve their productivity, according to the equity theory. Also, since they know that their efforts will certainly lead to a reward, they will be more motivated to work, according to the expectancy theory. In addition to this, employees who exceed the certain quotas of production or show significant improvements

Wayland Publishers, 12 Mar. 2010. Web. 07 Nov. 2016. ) By decreasing the amount workers in a business, workers experienced a pay increase that was substantial to their lifestyles.

3). When you pay workers better, they tend to become more loyal to the company and save the company money. Surowiecki also brings up the example with Henry Ford paying his workers much higher than usual workers at that time. Surowiecki begins to speak of an outside source on how he agrees with paying workers better benefits the company. The outside source is Zeynep Ton, a professor at M.I.T. Ton stated, “these companies end up with motivated, capable workers, better service, and increased sales” (Par. 4).

This may be overcome through supervision and better training to the lower skills employees. By implement these alternatives, material price can be controlled and reduced in future purchases and direct labour costs can be reduced by employed cheaper labour and provide better training to improve their work skills in order to efficient souring of materials and reduced hours per order

In the exchange off between expanded wages or preparing, given the money related imperative of an expanded the lowest pay permitted by law, Becker finds that organizations will be compelled to give less preparing. With lower human capital, workers will face diminished future profit in the work market. Acemoglu and Pischke offer a contradicting discovering, contending that organizations will keep on giving general preparing since they separate the advantage: expanded profitability. Representatives can then exchange that human funding to different firms and get higher profit. While the flight of these workers serves as a disincentive to giving at work preparing, the advantage got through expansion profitability amid their season of business at that firm exceeds the negligible expense of essentially broad preparing. On the off chance that a lowest pay permitted by law expand prompts diminished future profit, this outcome could be clarified by Becker's hypothesis. Be that as it may, on the off chance that it prompts expanded future profit, Acemoglu and Pischke's decisions would in any case remain

Three advantages of offering a piece-rate pay plan for Metropolitan Furniture is employee motivation, cost effectiveness, and quantity produced. Paying employees on a piece rate plan allows the employee to determine how hard they will work on a daily basis. If the employee know that their pay will be directly affected by how hard they work then they are more likely to always give a hundred and ten percent. Niemesh explains “others value a high income over leisure time and are willing to work more hours to achieve it (Niemesh, 2006). “More than three-quarters of employers (76%) say pay helps to motivate staff, according to the exclusive Employee Benefits/Lorica 100 Club research, published in June 2014 (Bettelley, 2014)”. The incentive of making

A&W is a fast food restaurant that is world famous not only for its food product, but mainly for its original beverage; the A&W root beer.

In 1911 the engineer Frederick Taylor published one of the earliest motivational theories. According to Taylor’s research, people worked purely for money. In the early years of the car assembly industry, work on a production line was based on producing quantity and was repetitive. Workers were paid ‘piece rate’, that

To meet delivery promises to customers, MG+BW needed to run a more efficient operation so that the company instituted an incentive-based pay structure at its Taylorville, North Carolina factory. Most production is done by hand, so instead of hourly wages, factory employees get paid for each piece they complete. When they work faster, everybody wins. Quality assurance meetings involving representatives from the factory floor are held regularly to identify process improvements.

From time immemorial, organizations were established to accomplish certain objectives. The functions of manager in the attainment of set goals cannot be underestimated with the increased complexity of the society and increasing size of organizations, manger’s decision can have a far reaching impact on the society.