Chapter 3 - 1

Chapter 3

Inference Questions

01 Business

Improving Productivity

A key determinant of a company’s success is its level of productivity. Productivity measures the time it takes workers to produce a particular product.

Developing good employee attitudes and creating incentives for employees improve a business’s productivity and effectiveness.

A well-managed company encourages behavior in its employees that causes an increase in productivity.

Many characteristics are associated with well-directed companies.

These include having high expectations for employees’ work performance, trusting employees, and treating them with respect.

These characteristics improve a worker’s attitude.

It goes without saying that satisfied workers tend to be more productive.

Companies that show great organizational skills also try to engage employees in the workplace.

They do this in the hopes that the employee will work hard to make the company, more efficient and competitive in the market.

A company may, for example, engage its employees by challenging them to be creative team players in the company.

Allowing creativity and teamwork can make employees feel successful in their job.

This leads to improvements in productivity.

Good attitudes also arise when well-managed companies motivate workers to do well in their jobs.

The motivation employees receive from a company makes them feel useful and appreciated, which increases productivity.

This motivation can come in the form of goals.

Interestingly, goals do not have to be set particularly high.

As an illustration, the computer company IBM wanted to increase productivity and decided to motivate its workers.

The company intentionally set its sales quota low.

This was done to assure that a majority of its salespeople could attain the quota.

When the salespeople reached it, they felt useful and needed.

The computer company’s motivation strategies improved the quality and efficiency of its employees’ work.

In turn, the company improved its sales.

Many companies offer financial incentives and merchandise rewards to their employees.

Financial incentives can be in the form of retirement plans or stocks.

These incentives increase productivity by engaging employees in the workplace.

They also motivate them to strive toward making the company successful and profitable.

In 2004, the well-known food company Hormel provided the largest financial incentive package in their history.

The company provided its employees with over 14.6 million dollars in financial rewards.

These incentives enabled Hormel to reward employees for their dedication to improving the company’s productivity in the challenging food industry market.

Other financial incentives include giving bonuses and increasing salaries.

Some companies offer prospective employees bonus packages to encourage productivity.

Others offer merchandise rewards to their, employees.

These include stereos and vacation packages.

For instance, the tool company Stanley offered merchandise incentives to employees who provided ideas on how to improve productivity.

These incentives engaged workers in coming up with ideas.

They developed more than 18,000 ideas that would increase the tool company’s productivity.