A loss-making state-owned airline has a reputation for poor customer service. Its Human Resources Director has suggested that ‘the best way to improve our situation is to pay our employees higher wages and introduce an end of year bonus’. Discuss this suggestion.
The suggestion made by the Human Resources Director to improve the situation of a loss-making state-owned airline by paying employees higher wages and introducing an end-of-year bonus warrants a discussion. Here are some points to consider:
1. Financial incentives and employee motivation: The HR Director's suggestion aligns with the belief that financial rewards, such as higher wages and bonuses, can motivate employees to perform better. According to the Taylor School of motivation, individuals are primarily driven by monetary incentives, assuming that increasing pay will lead to increased effort and improved performance.
2. Limitations of the Taylor approach: While financial incentives can be effective in certain situations, they have limitations. The Taylor approach assumes that employees are solely motivated by money, overlooking other factors that contribute to motivation and job satisfaction. It fails to consider the complexities of human behavior and the diverse range of motivators that can drive employee performance.
3. Non-financial rewards and motivation: It is essential to consider non-financial rewards as well when addressing motivation. Factors such as recognition, career development opportunities, a positive work environment, and employee involvement can also significantly impact employee motivation. A comprehensive approach to motivation should encompass both financial and non-financial elements to cater to the diverse needs and preferences of employees.
4. Motivational theories: Various motivational theories, such as Maslow's hierarchy of needs, Mayo's Hawthorne studies, Herzberg's two-factor theory, McClelland's achievement motivation theory, and Vroom's expectancy theory, provide additional perspectives on employee motivation. These theories emphasize the importance of intrinsic factors, personal growth, job satisfaction, and the alignment of individual goals with organizational objectives.
5. Identifying underlying problems: While addressing employee motivation is crucial, it is essential to evaluate whether poor customer service is solely a result of employee performance or if there are underlying issues contributing to the problem. Factors such as under-capitalization, outdated aircraft, technological limitations, poor management practices, or lack of clear objectives can significantly impact customer service and should be addressed alongside employee motivation.
6. Organizational culture and state-owned ownership: The state-owned nature of the airline and its organizational culture may also influence employee motivation and performance. Bureaucratic processes, lack of autonomy, limited flexibility, and unclear performance expectations can hinder employee engagement and limit the effectiveness of financial incentives alone. It is important to consider the broader organizational context and address systemic issues that may be impacting performance.
In evaluating the suggestion, it is crucial to critically assess the root causes of poor customer service and explore a comprehensive range of solutions beyond financial incentives. A holistic approach that addresses organizational culture, processes, technology, and employee development may be necessary to drive sustainable improvements in customer service and overall business performance.
CIE AS LEVEL October/November 2019
Answers may include: Knowledge and understanding • Knowledge and understanding of loss making/state owned/poor customer service/payment methods/possible performance improving methods. Application • Reference to business problems and the use of payment methods to solve them. Analysis The following points may be suggested in order to improve a business and/or be related specifically to solve the problem of poor customer service in a state- owned airline. • A consideration of non-financial rewards to motivate workers. • Reference to potential employee motivation factors including HR focus on remuneration methods. • Motivation theories may be used as vehicles to consider the suggestion in the question. • A recognition that the statement by the HRM Director is very much in line with the Taylor School of motivation. • A reference to the limitations of the Taylor approach. • A discussion of other motivation theorists, such as Maslow, Mayo, Herzberg, McClelland and Vroom. • Alternative solutions referring to motivational theorists may be suggested. • Level 3 Analysis needs to be in the context of a state-owned airline/state- owned business/airline. Evaluation • The context is a state-owned airline/state-owned business/airline. • and the suggestion is that this poor performance can be explained by its poor customer performance reputation. • Discerning answers may challenge the assumption that the problem of this airline is simply a people/motivation problem. • There may be more fundamental problems such as under-capitalisation/old aircraft/low technology on board/poor management of front-line staff/poor time keeping. • The state-owned ownership issue may also be important in that clear achievable/rewardable objectives may not be set. • A nationalised business may be over bureaucratic and there may be a lack of dynamism as compared with a private sector business. Accept any other valid response.