For years, working for the George Uhe Co., a small chemicals broker in Paramus, New Jersey, made employees feel as if they were members of a big family. Unfortunately, this family was going broke because too few members were working hard enough t make money for it. Employees were happy, comfortable, complacentand lazy.

With sales dropping in the pharmaceutical and specialty-chemicals division, Uhe brought in management consultants to analyze the situation and make recommendations. The outsiders quickly identified a motivational problem affecting the sales force : Reps were paid a handsome salary and received automatic, year-end bonuses regardless of performance. They were also treated to bagels every Friday and regular group birthday lunches that cost as much as $200. Employees felt satisfied but had little incentive to work very hard. Eager t return to profitability, Uhes owners waited to hear the consultants recommendations.

1. Job satisfaction and morale. As part of a 77-year-old family-owned business, Uhe employees were happy and loyal, in part, because they were treated so well. Can high morale have a downside? How can it breed stagnation, and what can managers do to prevent stagnation from taking hold?

1. Theory X versus Theory Y. Although the behavior of these workers seems to make a case for Theory X, why is it difficult to draw this conclusion about a company that focuses more on satisfaction than on sales and profits?

1. Two-factor theory. Analyze the various ways in which improving such motivational factors as recognition, added responsibility, advancement, and growth might reduce the importance of hygiene factors, including pay and security.

2. Expectancy theory. Analyze the effect on productivity of redesigning the companys sales force compensation structurenamely, by paying lower base salaries while offering greater earnings potential through a sales-based incentive system. Why would linking performance with increased pay that is achievable through hard work motivate employees? Why would the threat of a job loss also motivate greater effort?

3. For Debate. What are other vital issues that the management consultants should also address? Think of changing internal management.