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Case Study on Management

The ABC corporation manufactures plastic wastebaskets. There are 347 full-time employees who work directly with the manufacturing process. Hourly pay ranges from $12 for trainees to $22 supervisors. The average pay is $17 per hour. Full-time employees are guaranteed at least 35 hours per week and often have the opportunity to earn overtime. In addition, ABC pays 100% of employees’ health insurance premium, and 70% of their family members’ premiums. Each employee seven paid sick days and three paid personal business days per year. After one year of employment, employees also receive two weeks’ paid vacation.

ABC’s managers have found that, despite what they believe are generous vacation, sick day, and personal business leave policies, their employees are absent from work an average of 3.2 days per year (excluding vacations, sick leave, and personal business leave). Productivity analyses suggest that the absentee rate negatively affects production as defined by the number of wastebaskets manufactured and shipped to customers each day. The managers have determined that they can increase production by decreasing the average absentee rate to 1.5 days per year.

Unbeknownst to ABC’s managers, their counterparts at their largest competitor, the XYZ corporation, have also decided to attempt to increase production by reducing absenteeism (current average 3.1 days per year). Managers at both corporations hired psychologists who developed very different plans to help the companies meet their goals. ABC’s psychologist recommended paying a $100 quarterly bonus to each employee who missed no more than one day of work during the quarter. XYZ’s psychology recommended that the company institute a “wall of honor” to display photos of employees with zero absences for the past month along with lists of honored employees’ names in the company newsletter. Manager at both companies implemented the plans suggested by their respective psychologists.

After one year, both corporations analyzed the results of their plans. ABCs managers were surprised to find that absenteeism was unchanged despite their having paid out almost $60,000 in bonuses. XYZ’s managers were delighted to find that absenteeism dropped to 1.2 days, and the cost of the program was about $500 (photos, printing, labor cost of employees who posted the photos and provided the newsletter editor with the list of names each month).

Which type of psychologist did the two corporations probably hire?

Where in the e-book did you find the information needed to answer this question?

How would a psychologist explain the two plans from a behavioral perspective?

How would a psychologist explain the two plans from a humanistic perspective?

How would a psychologist explain the greater success of the ABC plan from a behavioral perspective?

How would a psychologist explain the greater success of the ABC plan from a humanistic perspective?

Is it valid to conclude that the differences in the two programs caused the difference in absentee rates after on year? Why or why not?

If the XYZ corporation drops their plan and replaces it with the ABC plan. Do you think they will achieve the same results? Why or why not?

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