Additional Case 11.2 Richland Manufacturing Uses an Individual-Based Pay-For-Performance Plan for Employees

question 15

Multiple Choice

Additional Case 11.2
Richland Manufacturing uses an individual-based pay-for-performance plan for employees.
Manager input in the form of performance evaluations primarily determines individual employee rewards. Performance appraisals at Richland are used for multiple purposes including compensation, training, and work planning. Since implementing the plan, many managers have noticed that employees tend to play it safe by setting modest rather than challenging goals for themselves. Employees have also been avoiding important tasks, such as satisfying the needs of customers and keeping work areas neat. In addition, most employees express disbelief that pay and performance are actually linked. As a result, Richland is considering making modifications to the system.
The HR Director wants a system that will reward all employees based on the entire company's performance because he wants to increase employee commitment. The VP of Operations wants to reward specific productivity and quality improvements with a simply structured system that considers labor costs as well as other production expenses. The VP of Operations also believes that labor and management should work together to allocate the rewards.
-Refer to Additional Case 11.2.The VP of Operations would most likely favor a:

• A) profit sharing plan.
• B) team-based plan.
• C) Scanlon plan.
• D) Rucker plan.

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Definitions:

Taiga

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Dense Coastal Fog

A type of fog formed when warm, moist air moves over a cooler coastal surface, leading to the air's cooling and condensation near the ground.

Temperate Rain Forest

A forest ecosystem found in temperate zones characterized by high rainfall, dense canopies, and a biodiverse set of plant and animal species.

Hooved Mammals

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