Chang Koh Metal Ptd. Ltd., in China

The system was not effective for a number of reasons. It did not link pay to performance. Workers were paid a fixed salary based on the number of hours worked. This system does not take productivity into account as workers are paid the same amount per day regardless of the quantity produced. There is no incentive to reward workers for higher productivity and quality under this payment system.

OMBO program in the plant. Do you think it would improve productivity and solve some of the problems?

6) Are there any conditions under which the piece-rate system might have been more effective?

7) What are some alternative ways to use pay to motivate the workers at the plant? Are there alternatives to the piece-rate system and how effective are they likely to be? What does this case say about using money as a motivator?

8) What should Andrew do now? What would you do?

Answers

Question 1:

The system was not effective for a number of reasons. It did not link pay to performance. Workers were paid a fixed salary based on the number of hours worked. This system does not take productivity into account as workers are paid the same amount per day regardless of the quantity produced. There is no incentive to reward workers for higher productivity and quality under this payment system.

Another reason why the fixed salary system did not work was that it did not take cultural

Comment on the fixed salary system that Andrew adopted from his former employer. Why was this system not effective for motivating the plant workers?

2) Do you think that scrapping the fixed salary system and replacing it with the piece rate system was a good idea? What are some of the strengths and weaknesses of the piece rate system?

3) Why was Andrew unsuccessful in his efforts to improve product quality? Do you think that a system of demerit points and wage deductions of the quality control workers would have been effective? Will more supervisors in the quality control department and shipping products to Singapore for final inspection solve the problem? What do you think would be an effective way to improve product quality?

4) Were cross-cultural differences a factor on the effectiveness of the salary system? How effective do you think each system would have been if the plant was located in North America?

5) Discuss the potential effects of implementing and

MBO program in the plant. Do you think it would improve productivity and solve some of the problems?

6) Are there any conditions under which the piece-rate system might have been more effective?

7) What are some alternative