• Galt Contracting

1. What are the advantages and disadvantages of paying tree planters on a piece-rate system? On a flat-rate system?

• Piece-rate system
• Advantages
•             The advantages of using piece-rate system are that it generates competition among workers where they rate who can be most productive. The planters who are able to plant more trees have the advantage of making more money than others make. This friendly competition contributes to an increase in the number of trees planted daily.
• Disadvantages
•             Because of the competition that most of the workers engage in while planting the trees, most them perform a shoddy work in which many trees are improperly planted. This contributes to some of the companies in failing to give Galt the tender of planting the trees.
• Flat-rate system
  • Advantages
  •       The advantages of paying tree planters on a fixed rate system are that they would get a fixed amount of pay for each day’s work. The planters have the advantage of getting more time and care when planting each tree. This is because the workers will not worry about the amount of money they out to work for a specific day.
• Disadvantages
  •       One of the disadvantages of paying tree planters on a flat-rate system is that most of the planters tend to relax and they fail on working hard. Planters also take more time to take breaks and therefore they prefer this payment system.
    • Reinforcement/behavior modification theory
•             According to this theory, Galt motivates its workers in order to have a positive outcome at the end of every financial year. While paying the workers on a flat rate system, Galt will have an advantage be able to apply positive or negative reinforcement when employees exhibit certain behaviors when working.
• Goal setting theory
•             After dropping the piece-rate system, The Company will be able to achieve its set goals and objectives. The company will be able to perform this operation through making various check-ups to employs while they are on duty. Making of the check-up will contribute in making the workers work more hard in order to correspond with the company’s requirements.
• Participative management and empowerment
•             Galt will be able to make the employees feel that they are part of the company. This is because the workers will not have to worry about their salary as the company will take care of it. The workers will be able to keep the responsibility of making sure that their colleagues are always active in work in order to help them make achieve the required target.
• Team management
•             While employees work on various groups, they will have the opportunity to motivate each other and make decisions for narrow activities. For example, the workers are free to choose who to include in their group in order to offer more competition to the others.
• Job enrichment and job redesign
•             Galt will be able to establish a mechanism that will make all workers feel that there is a positive change in the working environment. When workers are satisfied with the rules and regulations of the company, they will be able to offer more productivity.
• Modified Work Schedules
•             The fact that Galt will be eligible to decide on the amount to pay on its employees will allow the management to modify its working schedules. Various modifications like work-share programs will help the company to increase more in production.  
  • Payment system- Bonus- system
  • The motivation levels of the planters
•             All the workers will have an opportunity to work harder in order to get set the bonus.
  • The activities of the quality control checkers
•             The quality control workers will have less activity because all the workers will be working hard in order to get the bonus.
  • The level of quality needed in tree planting
•             In order to get the bonus, all the workers will have to express quality work. This means that that there will be quality level of the trees required.
• The needs of the lumber companies
•             Considering that workers will be able to work more in order to get the bonus and they will also be in a position to provide quality work, the company will manage to meet all the necessary requirements of the lumber companies.
• Donald Galt’s need to run a profitable company
•             The company will be able to generate more profits from selling many and quality trees after introducing this payment system.
•             Donald Galt has the obligation of introducing the flat-rate payment system in order to comply with the requirements of lumber companies and generate more profits at the end of its financial year.

2. Look at the motivation theories in chapters 10. What does each of those theories say (or imply) about Galts’s idea of dropping the piece-rate system and paying planters a flat rate for each day of work?

3. Device a payment system for tree planters that minimizes negative consequences- Describe the impact of your proposal on each of the following factors:

4. What should Donald Galt do? Be specific.