Question 1
HSM Bakery Ltd. (HSM)
HSM Bakery Ltd. (HSM), a privately held company, produces baked goods (bread, cakes, and cookies), which are sold to shops.
In recent years, HSM has broadened its target market by producing a range of gluten-free cakes.
With reference to the stimulus and Herzberg's motivation-hygiene theory, discuss whether HSM should implement Option 1 or Option 2.
Davina's plan (Option 1) includes:
- a wage increase for all factory employees
- replacement of the heating and air conditioning systems in the factory
- a weekly 2 % performance-related pay (bonus) for attendance for all factory employees.
Davina's plan will only deal with one of the issues raised by employees, the extreme temperatures. Whilst the replacement of the heating and air conditioning systems is a positive move, it will resolve an issue that is causing demotivation amongst factory employees as Herzberg sees working conditions as a hygiene factor - if such factors are not met then employees are demotivated but meeting these does not motivate employees.
A pay increase for factory employees is also unlikely to have much impact as HSM employees are already paid above the industry average and Herzberg again believes that wages/salaries are a hygiene factor rather than a motivator. However, the pay increase might help attract applicants for the 12 unfilled vacancies.
The idea of a weekly attendance bonus has some merit in that HSM is facing a growing problem with absenteeism, which has increased in the last 1 8 months. However, set at 2% it may be too low to have any impact. Again, Herzberg believes that this is a hygiene factor and will not motivate employees.
Lesli's plan (Option 2) is to:
- increase internal promotion opportunities for all factory employees
- introduce an Employee of the Month award
- have monthly meetings between the factory manager and employees to discuss problems.
Lesli's plan has more merit in terms of motivating employees according to Herzberg.
Promotion opportunities are seen by Herzberg as motivators. Her suggestion to have an employee of the month would also be seen as motivators in Herzberg's two factor theory. The proposal for monthly meetings looks good on paper as it may enable employees to raise issues. However, unless Davina changes their leadership style then these meetings are unlikely to be productive and may well become a source of demotivation. Lesli's plan fails, though, to deal with an important potential demotivation issue - the need for new heating and air conditioning systems.
Overall, Lesli's plan is more likely to motivate employees, and Davina's is more likely to solve some of the problems that lead to demotivation. Lesli's plan would be stronger if it included the idea of a new heating / air conditioning system.
Additional data that would have been useful:
- % of faulty cakes (some customers have complained about the quality of some batches of cakes)
- what level of pay increase is being proposed by Davina
- how many employees actually left HSM last year
Marks should be allocated according to the markbands on page 3.
If a candidate shows an accurate understanding of just one factor (eg hygiene factors) from the two factor theory award a maximum of [5].
If a candidate shows an understanding of both factors, but makes errors (eg classifies pay rises as a motivating factor, or the employee of the month award as a hygiene factor) then award a maximum of [5].
Vague references to hygiene on their own cannot be credited.
Do not credit references to other theorists eg Taylor, Maslow.