At Camden Manufacturing Company, production workers in the Painting Department are paid on the basis of productivity. The labor time standard for a unit of production is established through periodic time studies conducted by the Lowery Management Department. In a time study, the actual time required to complete a specific task by a worker is observed. Allowances are then made for preparation time, rest periods, and clean-up time. Ron Orlano is one of several veterans in the Painting Department.
Ron is informed by Lowery Management that he will be used in the time study for the painting of a new product. The findings will be the basis for establishing the labor time standard for the next 6 months. During the test, Ron deliberately slows his normal work pace in an effort to obtain a labor time standard that will be easy to meet. Because it is a new product, the Lowery Management representative who conducted the test is unaware that Ron did not give the test his best effort.

Instructions
(a) Who was benefited and who was harmed by Ron’s actions?
(b) Was Ron ethical in the way he performed the time study test?
(c) What measure(s) might the company take to obtain valid data for setting the labor time standard?

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September 20, 2011

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