Case Study: REDESIGN OR RELOCATE?

During the past five years, productivity and worker satisfaction at the Jackson Toy Company have been declining. Productivity is now so low that Dr. Helen Jackson, the company's founder and president, is considering closing the plant and moving south, although she wants to retain the company. When Jackson, a mechanical engineer, started the company in 1980, she installed an assembly line so that workers could become specialized at their jobs and, hence, become very productive. The employees were quiet productive during the first ten years of operation. The several younger newly hired employees began complaining about the repetitive boring nature of the work. About that time, Jackson began to notice a decline in productivity. Her response was to assume that pay was too low. Whereas many of the original employees were essentialy "second-income earners", the newly hired employees were younger, and were "moonlighting"(working outside regular employment hours, taking 12 or more additional hours per week) in order to earn more money, and they were coming to work too tired to work efficiently. Consequently, she increased everyone's salary by 20 percent. Since she had seventy-five employees, this represented a substantial increase in payroll expense. Nevertheless, she was concerned about productivity, as well as the "plight" of the workers. About two months after the salary increase, Jackson noted that the level of productivity had not increased. In fact, it had actually declined slightly. Jackson called the local University. Professor Erin Brief, a specialist in job redesign, suggested that Jackson either completely redesigned the jobs for the employees or implement a job rotation programme. Although it would be more costly to complete redesign the jobs, Professor Bried recommended that alternative. Jackson wondered if it would be more trouble than it was worth.

Questions: 1. On what basis would Professor Brief recommended job redesign? 2. What would you recommend to Jackson? Why? 3. Was increasing salaries by 20% a valid way for Jackson to test her assumption about the cause of the productivity problems? What would you have done?