Categories of employees’ complaints
(What are the specific things the employees are unhappy about? If you were to group their specific complaints together, how might you summarize the kinds of complaints the employees have? You are welcome to create the categories, describe the categories and then list the examples from the video.)
The most specific things the employees are unhappy about are low wages, poor working conditions, lack of interaction and communication with management, lack of investment in employees, lack of pleasant and enjoyable work environment, lack of feedback from managers concerning ideas and suggestions, etc. These complaints may be summarized in several groups which are listed below:
Low wages and incentives
Wage and additional remunerations in the form of performance bonuses or incentive payments are considered crucial for increasing employees’ performance, whereas low wages and incentives tend to reduce workers' motivation and undermine their productivity.
With regards to the complaints about the low wages and incentives, there are a couple of examples in the video where the employees feel unhappy with the pay for the hard work they do. Their comments reveal their job dissatisfaction and the feeling that their work and efforts are not being appreciated. In overall, the employees feel that the company seems more interested in the bottom line and profits than its employees.
Poor working conditions
Lack of good and healthy work environment can lead to low performance and adds to the dissatisfaction of employees at work. Poor working conditions may significantly affect the long-term health of employees.
Lack of investment in efficient air conditioning system, as well as cost-cutting in amenities are the examples of complains the employees of the company from the video make. The almost unbearable high temperature at the workplace and the practice of suspending free beverages was questioned by two of the featured employees.
Lack of communication and feedback
Lack of communication and feedback can lead to frustrated and unmotivated employees, and a negative corporate culture as well. Feedback allows employees to voice their opinion, creating a healthy corporate environment which leads to greater productivity and motivation.
Employees who are not given the opportunity to communicate with management and who do not receive any feedback feel unappreciated and, unimportant.
There are a couple of examples in the video of employees complaining about poor communication and lack of feedback from the management concerning ideas and suggestions made by the employees. One of the employees openly states her frustration of not having her business ideas listened to, while another employee complains about the lack of communication and about the feeling that the employees of the company feel unappreciated.
Advantages and disadvantages of the pay system
(What kind of pay system do they use? What are the advantages and disadvantages of this system based on what you saw in the video?)
The company presented in the video uses a base rate, as well as a bonus payment system. Under a basic rate system, the employee is given pay related to a specific time period of work, and usually, this pay represents a general sum that is given to all employees that belong to a certain category. However, in many cases there are scales of increment which can be applied if specific conditions such as level of experience gained or new skills are acquired. Bonus payment generally includes all methods of payment by which employees are encouraged to produce more than a specified number of items or perform more than a specified amount of work in each shift or other designated working period.
One of the advantages of the bonus system is incentive and motivation. The payment of bonus is a good representation of an incentive, and it can be used in many cases, particularly in situations where the employees have dedicated goals, as are sales targets for example. Another advantage is appreciation. This type of payment maybe useful for demonstrating the appreciation of the effort made by the employee throughout a certain time period, and can be given as reward at the end of the year for example, or after the completion of a specific project.
Whereas, the disadvantages of the bonus system are that it is costly for the company and that it may cause issues of fairness or jealousy. A company should make careful calculations as to whether the use of bonus payments, yearly or project rewards, special holiday bonuses or incentives are something it can afford. It should also take into account that these payments may vary due to the different ways of their calculation (achieving goals, meet performance objectives, or sharing a profit at the end of the year, for example). Hence, the amounts that the same employees receive may also differ significantly.
The principle of investing in people
(What principles are taught in this class is this company violating? Be sure to briefly describe the principle and to justify each principle choice using examples from the video. What are the consequences of this?)
Having in mind the examples from the video, it may be stated that the company is violating one of the most important principles, the principle of investing into people as a means of securing stronger individual and organizational performance, as well as means for acquiring many benefits such as increased productivity and reduced turnover of employees. The business sphere generally agrees upon one thing and that is the fact that employees represent the one asset that is most valuable within any company or organization. The employees are the one factor that can set the difference between a successful and an unsuccessful business. Companies that are successful understand the importance that employee morale has for the company, and are continuously working on improving it. This is understandable, especially when taking into consideration that most successful companies heavily rely on the confidence, spirit and motivation of their employees, which are all indicators of high morale of the employees. Many studies can be found in literature that state that the reasons for which people are staying at a company and don't seek out new jobs are primarily related to the existence of an environment that is pleasant to work in, and to the existence of relationships between the employees and the supervisors this rated at are based on understanding and respect. A work that is challenging and evidence of continuous interest displayed by the managers are also important factors, while salaries and payments are something that is rated much lower than the other factors mentioned above.
Companies should be aware that investment in their employees needs to be not only money, but time, patience and perseverance. Even spending a little time in a meaningful way on a regular basis with each employee can cause the management and the business to receive a great return on their investment. Investment in the employees improves loyalty and job satisfaction. It has been generally accepted that if a company shows an interest in its employees, they will do the same for the management and the company. They will also feel like they have a vested interest in the company and to its success and that can only mean great things for the business. Investment in the employees also covers professional development and training which can contribute to the long-term viability of the business. Hence, compliance with this principle can ensure that the company employees are well-trained, engaged and committed to doing a good job.
As it can be seen from the video, the employees complain about poor interaction and communication with the management, lack of feedback, lack of interest in the needs of the employees and lack appreciation for their work and efforts.
Accordingly, there are many consequences of violating the principle of investment in employees, the most specific ones being dissatisfied and unmotivated employees, low productivity, large turnover of employees, lower profit margin, dissatisfied customers, etc.
Good business practices
If you were a consultant what would you suggest the company do (beyond the things the owner decided to do for the company - you can include them - and the 4 employees; there are many things they could have done and didn’t)? Please be sure to explain why these would be good practices by relating your answer back to principles from the book (again briefly describe the principles you are using and tie them back to your recommendations).
In a situation where the company’s inability to provide good working conditions and motivation is being one of the biggest concerns, it is highly recommended to ensure good and healthy work environment for the employees by investing sufficiently in proper air conditioning system and providing basic amenities (such as drinking water or sports drinks).
Concerning the base and bonus pay, it is advisable to increase the base pay appropriately, as well as to ensure a much more generous bonus plan. It may incur additional costs to the company, but it will ultimately lead to increased productivity benefit.
Regarding the communication and feedback, the managers are recommended to review all submitted ideas at board meetings and to discuss their potential. The submitter should be given some feedback, and a new innovation program may also be tried, to reward employees who submit ideas.
All previously mentioned recommendations are considered good business practices that ensure compliance with the principle of investing in people as a means of ensuring stronger individual and organizational performance.
Balancing budget issues and employee needs
(How do companies balance budget issues the owner talked about and employee needs?)
The process of balancing budget issues and employee needs, i.e. keeping the business sustainable and employees motivated and engaged, is considered crucial for any company, especially during difficult economic times. When faced with certain financial problems, companies usually tend to drastically cut costs through outsourcing, layoffs, reducing benefits, reducing amenities, etc., but they should at the same time keep in mind the needs of their employees. Placing higher value on meeting their needs prevents increased labor turnover, reduction in efficiency and productivity, and preserves profit margins as well.
During difficult economic times, many executives and management personnel tend to avoid dealing with profit losses and confrontations with employees. Instead, leaders should do the opposite and focus on their own leadership effectiveness, which will result in increased employee satisfaction and commitment, thereby increasing productivity and profitability, even in difficult times.
Employee satisfaction is considered essential for the company when facing budget issues. However, few managers think of the impact that employee satisfaction has on their customers and the company profits. Happier, more productive employees make more sales, treat customers better, and ultimately make more money for the company.
Being a manager
(What have you learned about being a manager from this video? When you are a manager, how will you make sure you don’t make the mistakes with your employees that this company is making with their employees?)
Being a manager means being involved in making a profit (for the owners/shareholders), creating valued products at a reasonable cost (for customers) and providing rewarding employment opportunities (for employees). A good manager must develop great values, deep self-awareness, emotional maturity, and must be able to exercise wise judgment. Being a manager means ensuring good working environment, interacting and communicating with employees, being responsive and effective, providing feedback to employees concerning their requests or suggestions, and, at the same time, contributing to revenue generation for the company. It is widely accepted that “if a manager takes care of his/her employees, they will take care of him/her, the customers and the business as well”.
It is the managers that have the most influence on the employees, and they are very often considered the primary reason the employees leave their jobs. A good manager is expected to attract people to work with him/her, while a bad manager may lead to reduced productivity and high labor turnover.
As the owner of the company in the video stated at a point, managers should rethink when making budget cuts. They need to make sure they are investing sufficiently in their employees. It is important that managers spend more time out among the employees, listen to them and show more appreciation for their work.
In order to avoid mistakes with the employees like the ones that the company from the video is making, it is recommended that managers should not overlook the most important business investment, the investment in their employees. They should constantly strive towards providing good working conditions and positive and healthy work environment for the employees, as well as ensuring interaction and communication with the employees.
Oreintal trading, 2012. Undercover Boss- Full episode. Youtube. Available at http://www.youtube.com/watch?v=fNOljFAFQ2k