Choosing what to reward During the late 1970s, Harley-Davidson, the motorcycle manufacturer, was losing money and was very close to bankruptcy. Management believed that one of the problems was low productivity and, as a result, asked middle managers to speed up production. The employees who made the motorcycles were told that the priority was to get the motorcycles made and shipped on schedule, which was usually very tight. Middle managers were judged by their ability to meet shipment schedules.
(a) What is the rationale that would lead to a desire to speed production in the face of increasing costs and declining productivity?
(b) What type of behavior do you think this performance measurement system would create in the sense of the priorities that middle management would establish for the production process?
(c) What type of problems would this performance measurement system create?
(d) How, if at all, would you modify this system?