In a case study provided by NZIE, Dr. Lock, amechanical engineer who worked as the CEO and founder of a boatbuilding firm, noticeda decline in employee productivity within their organization over a five-yearperiod.
She reasoned that the decline was due to the employees’ need for moremoney as she discovered that most of them had other jobs to compound theirincome. This seem to explain why they were coming to work very tired and werenot achieving the expected results. She decided to increase their salariesbecause she assumed that the low salary was the reason. After reading, studying and analysingthe case study provided by NZIE and according to the articles and journals thatcame up with good researches it is very clear that the increase in salary inDr.
Lock’s company did not have the desired effect because she did not take intoaccount many other important variables before making her decision, that is, shebelieved that increasing the employees’ salary by 20% would solve all herchallenges and thus increaseproductivity, but she did not consider other factors mentioned in theresearches that have been used to answer the questions in this case study. Therefore,some important points will be discussed below: · Dr. Lock did not take into account the positiveeffects that the environment in the workplace can have on productivity. Hence,referring to that Leblebici (2012), states that one of the most relevantfactors for increasing and/or maintaining a good productivity is therelationship among managers and employees and the team as a whole. · Dr. Lock also failed to take into accountaspects related to intrinsic motivation. In Reference to that, on the otherhand, Stringer, Didham, and Theivananthampillai (2011) argue that goodperformance and productivity are more related to intrinsic motivation.
Likewise, these authors also claim that pay is very related to intrinsic motivationas well. Furthermore, they affirm that pay fairness play an important role infirms that use the pay-for-performance systems. · Possibly because she did not have much knowledgeabout management since her training was in the engineering area, Dr Lock haddifficulty understanding and applying a more effective solution to prevent thedecline of productivity. According to Rynes, Gerhart, and Minette (2004), thereare some contradictions on what people say about pay and what people reallythink of it.
The same authors postulate that in most cases people do not feelcomfortable declaring their real thought on that subject, and yet Rynes at al.,(2004), clarify that in the long run pay is not either the first nor the onlymotivator for increasing productivity or job satisfaction, but it really has abig impact on many employees performances as a motivator. Thus, it is evidentthat pay is an important factor to be considered, but it is not the only one. DrLock intuitively assumed that the problem was on the bottom line without doingany further analysis, without consulting managers or other supervisors whocould help her to better understand the facts.·