TEAM ASSIGNMENT #1: Case Study – Astral Marketing 42.211 B
EXECUTIVE SUMMARY: The main problem Astral Marketing is experiencing is a low level of productivity, mainly due to employee dissatisfaction and low levels of employee motivation. Employees are currently unhappy with wages and incentives, as well as general working conditions at the company. As a result, employees are becoming unmotivated. Issues such as poor communication skills, lack of employee empowerment, high turnover, and too low or too high mental stimulation also have a direct impact on the low level of productivity (Robbins & Langton 2001) The four potential solutions to Astral Marketing’s low productivity include: the formation of a union, team building training, communication skills training, and increased or more equitable incentives. Although the team building and communication skills training appear to have the most benefits and the greatest issue resolution, they are potentially very costly for the company. Increased incentives solve fewer issues than the training, and are also quite costly. On the other hand, unions have little direct monetary cost and can increase both job satisfaction and motivation directly and indirectly (See Appendices for full assessment). Thus, a union is the most viable solution to Astral Marketing’s low productivity level. The implementation of a union would require employee support and certification in the short-term. In the medium-term, specific goals as to increases in wages and incentives must be set and achieved. In the long-term, productivity and profitability must be reassessed, as well as employee satisfaction (http://www.bcfed.com/organize/organize.htm). This process should ensure that a union is successful in increasing the productivity of employees at Astral Marketing.
PROBLEM STATEMENT: Astral Marketing is encountering low productivity, mainly due to job dissatisfaction and low motivational levels among employees. The company is experiencing “downward trends in the number of calls and the number of sales/referrals each employee (is) generating” (Schweitzer, p.2). Thus, Astral Marketing is both ineffective and inefficient in its operations (Robbins & Langton 2001). Employees are generally dissatisfied with their current working conditions, and as a result are becoming unmotivated (Schweitzer 2002). These two factors, among others, contribute largely to the low productivity of Astral Marketing. IDENTIFICATION AND ANALYSIS OF ISSUES: The major issue affecting the company’s low productivity is general job dissatisfaction. A poor attitude toward a particular job has a direct impact on productivity (Robbins & Langton 2001). Since “satisfied employees are more productive than dissatisfied employees”, job dissatisfaction affects numerous other issues contributing to productivity such as turnover and poor attitudes (Robbins & Langton 2001, p.15). Employees at Astral Marketing are generally unhappy with rewards and general working conditions (Schweitzer 2001). Low motivation levels also contribute to low productivity because employees’ “intensity, direction, and persistence of effort toward obtaining a goal” are less than satisfactory (Robbins & Langton 2001, p.138). These low levels can be explained through expectancy theory where actions depend on the desirability of their outcome (Robbins & Langton 2001, p.144). At Astral Marketing, employees do not perceive the awards system as attractive, and thus are not motivated to increase productivity (Schweitzer 2002).
The inequitable wages, incentives, and bonuses offered by Astral Marketing also directly impact the productivity of employees. The company offers minimum wage and a $20 bonus per twenty sales or referrals gained in a five-hour shift (Schweitzer 2002). The rewards can be viewed as inequitable (assuming the company remains profitable despite declining productivity) according to distributive justice – the “perceived fairness of the amount and allocation...
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