LINCOLN ELETRIC COMPANY
1. Based on the readings of quota restrictions & gold bricking it shows how employees banned together to battle against the firm by lowering their output and wasting time, causing the firm profits and production time.
Based on this payment system the slope is positive for low performance, but there is no gain for superior performance. The employees have no incentive to go beyond the required minimum. This pay system was a disadvantage to the workers if they went beyond the expected the firm would have changed the rates against them. They would have to work harder for an even lesser pay.
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”(Donald, p 436) Many workers realized that they would have to put forth very little effort without getting fired. The employees feel that they are being cheated with the pay, so in turn the lower their output.
3. Lincoln electric company has no problems with quota restrictions or gold bricking because they were using a piecework system which was completely fair to the workers, as opposed to Roy’s plant whose pay system was working against the workers. Roy’s plant would change the rates or machines because they had to pay for the amount of output and they didn’t want to pay over $10/a day. The Lincoln electric system didn’t cap off the possible earnings as Roy’s system did, or change their methods because workers were earning too much. There were no quote restrictions or gold bricking because the employees enjoyed working for the company and were treated equally.
4. Based on the readings the employees from the Lincoln electric company their employees have incentives to cooperate with the firm because they receive fair pay, they were guaranteed employment and had no restriction on how much they can earn in contrast to Roy’s plant. The worker were allowed to improve because the were given the freedom to challenge the price if they felt it was unfair, as opposed to Roy’s plant who had no option. The employees will produce high quality because they have the incentives to do so;...