I. POINT OF VIEW
Carrington Inc., a company that employs over 15,000 people, produces and distributes pharmaceuticals, proprietary drugs, cosmetics and toiletries worldwide. The employees at its manufacturing and assembly operations are unionized and the company uses the time-saved bonus plan (Halsey 50-50) as its’ incentive system.
At Section 10, a section at its midsouth plant, where packages containing assortment of different products (called prepaks) were assembled, the management faced problems of low productivity, low employee morale and high unit costs.
Section 10 is situated in a large building where working conditions were outstanding --- very clean, well lighted and air conditioned work area and an attractive cafeteria. In spite of these and the potential extra pay thru the incentive plan, low productivity and increases in unit costs were noted. Discipline was also poor. In fact, a manager described it as “Section 10 had the pits of the workforce.”
Due to manufacturing and assembly operations expansion, Carrington, Inc. was pressed with severe space problem. After considering a number of alternatives, the management decided to transfer the operation of Section 10 to a warehouse, a leased facility at Patterson Street, 3 miles away from the main plant. Transfer to the new location costs Carrington, Inc. little money.
“Patterson Operation”, Section 10’s new identity, is housed in a building thought to be acceptable only for a warehouse. Contrary to the facility of Section 10, the building was dark, poorly ventilated, not air conditioned and inadequately heated. There was no cafeteria and the restrooms and break areas were poor. It is even located in a neighborhood of low income housing and other warehouse operations.
Patterson Operation has approximately 40 employees who were mostly African Americans with low seniority. The operation was supervised by Fred Hammond, also and African American and later on, May Allison. The situation, assembly line set-up and operating conditions at Patterson are entirely different from the main plant to the extent that certain company policies were violated.
There was a notable change in employee attitudes in Patterson; job satisfaction is evident, feeling of mutual cooperation prevailed, and productivity increased. However, absenteeism, tardiness and turnover are not better than in the main plant.
Nonetheless, the management was somewhat liberal towards the condition as the better productivity and high employee morale are pleasant surprises to them.
III. ANALYSIS OF THE CASE SITUATION
RELEVANT CASE FACTS:
Let us take a look at the individual characteristics of each operation:
|Components |Section 10 |Patterson Operation | |Goal |Produce prepaks, 24-480 per package for 10-1500 |Produce prepaks, 24-480 per package for 10-1500 units | | |units range |range | |Production / Process |People intensive (manual labor) |People intensive (manual labor) | |Structure |Employee works on different assemblies everyday |Employee works completes one particular job order | | |Mastery on the process is not developed due to |before moving to the other line | | |frequent movement from one line to another |Allows employee to develop speed | |Organization / |Work standards, company policies are imposed |Violation to work standards are allowed | |Management |Formal management |Some company policies are deviated with consent | | |...