The production workers at ABC Inc. were getting better at their jobs as they gained more experience with the new technology that had recently been installed. The company knew that significant savings would result if they continued to be able to produce the same number of units of product in less time. To motivate the workers to do so, ABC Inc. should consider using
A)stock options.
B)bonuses.
C)gainsharing.
D)piece-rate wages.
E)intrinsic rewards.

Question

Quizplus · Accepted Answer

ABC Inc. should consider using gainsharing to motivate its production workers. Gainsharing is a form of incentive compensation that rewards employees for improving efficiency and reducing costs. It is particularly effective in situations where workers have a direct impact on the quality and quantity of production, as is the case with the production workers at ABC Inc.  By sharing in the savings or increased profits resulting from improved productivity, these workers will have a strong motivation to continue to improve their performance. This type of incentive is likely to be more effective than individual bonuses or piece-rate wages, which may create competition among workers rather than teamwork, and may not foster a long-term commitment to productivity improvements. Stock options and intrinsic rewards may also be effective incentives in some contexts, but are less appropriate in a production setting where gains are likely to be more directly attributable to worker performance.

The Production Workers at ABC Inc