Galt Contracting

1720 Words Feb 5th, 2012 7 Pages
Subject: Galt Contracting
1) What are the advantages and disadvantages of paying tree planters on a piece-rate system? On a flat-rate system?

Advantages of the piece rate system:
The tree planters’ work hard because they are paid a certain amount of money on each piece of tree planted. The experienced tree planter plants up to 1300 seedlings because they do not take a lunch break and keep on working in order to make good money. Each planter is assigned by a piece of land so that they work properly and do not socialize with one another and waste time.
Planters usually plant in a 2.9 spacing so that they can cover much ground by planting trees and make more money. They put pressure on each other to do well so that their whole group should
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A flat rate alone simply will not succeed. Though, if Galt keeps the piece-rate system, early behavioral theory says this is okay providing encouragement and special attention are given to employees.

Early behavioral theory also describes a hierarchy of needs of workers to entice motivation. There are five levels: physiological, security, social, esteem, self-actualization. It states that if a lower need (physiological needs) such as food, water, shelter is not met, the worker will not be focused on a higher need such as sociability (the social needs). The worker will be motivated to increase his wage so to buy more food. Galt’s current piece-rate does not allow for a socializing environment. If his workers want to socialize and cannot, then their motivational drive will not be focused on a self-actualization need but on a social need. Changing the system to flat rate will allow for social needs of workers to be met. Once social needs are met, early behavioral theory states esteem needs and self-actualization needs will follow.

More modernized theories have been developed to explain motivation in the workplace. These theories are quite useful and strongly support Galt’s decision to pursue a flat rate system and are used to support our recommendation to Galt.

3) Devise a payment system for tree planters that minimizes negative consequences.
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