Galt Contracting

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Subject:Galt Contracting
1) What are the advantages and disadvantages of paying tree planters on a piece-rate system? On a flat-rate system?

Advantages of the piece rate system:
The tree planters’ work hard because they are paid a certain amount of money on each piece of tree planted. The experienced tree planter plants up to 1300 seedlings because they do not take a lunch break and keep on working in order to make good money. Each planter is assigned by a piece of land so that they work properly and do not socialize with one another and waste time. Planters usually plant in a 2.9 spacing so that they can cover much ground by planting trees and make more money. They put pressure on each other to do well so that their whole group should not suffer. In a piece rate system there is some friendly competition among the planters that can be productive therefore they plant more trees and earn more money.

Disadvantages of the piece rate system:
In order to make more money, planters sometimes plant too many trees on a piece of land poorly which does not meet the standard of the checker so they have to replant them which creates a loss of time and therefore a reduction in salary. The poorly planted trees die soon after being planted and become a big loss to Galt. On a piece rate system, planters are more concerned with quantity rather than quality since this makes them more money.

Advantages of the flat rate system:
In a flat rate system a planter would get a fixed amount of pay for each day’s work. This would mean the planter could take more time and care while planting. Now the planter is more concerned with planting the trees as compared to making more money as their pay is fixed.

Disadvantages of the flat rate system:
In a flat rate system, the planters are less interested in their work as they take more breaks and waste more time. There is no competition among the planters and they keep on doing their work steadily. Planters keep on socializing with each other and plant less trees. 2) Review the motivation theories in Chapter 9. What does each of those theories say (or imply) about Galt’s idea of dropping the piece-rate system and paying planters a flat rate for each day of work?

Galt’s current system for motivating his tree planters is the piece-rate system. In a piece-rate system workers are given cash incentives for productivity. This means that the more a tree planter can plant the more money he will earn. Although this system can be effective, Galt has been experiencing quality problems. Because of this, Galt is considering switching the means of motivation by introducing a flat rate system in hopes of improving the standard of planting.

Galt’s current piece-rate system follows a theory known as classical theory of motivation. Classical theory states that workers are motivated solely by money. If employers pay their workers more, then the workers will produce more. This theory suggests that if Galt switches his workers to a flat rate system then they will no longer be motivated, thus production will decrease. However, classical theory also reasons that if employers analyze the job and find ways to increase efficiency, then goods produced will cost less and profits will increase. The end result is increased pay for workers. If Galt changes his system to a flat rate he will need to analyze jobs to become more effective and efficient. This will boost motivation because a more effective job creates more profit and, eventually, more money in the worker’s pockets.

Galt sometimes follows tree planters while they work to ensure that quality standards are met. He follows a particular person if he suspects unproductive work. When Galt follows a worker, all the other workers know why. This may create tension for workers because the attention given to them is generally negative. This approach will likely maintain quality but quantity will decrease. The early behavioral theory says that workers’ will...
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