A loss-making state-owned airline has a reputation for poor customer service.
CAMBRIDGE
A level and AS level
Year Examined
October/November 2019
Topic
Business
👑Complete Model Essay
The Impact of Higher Wages and Bonuses on Employee Performance in a State-Owned Airline
The assertion that increasing wages and implementing an end-of-year bonus scheme will inherently improve the performance of a loss-making, state-owned airline with a reputation for poor customer service warrants careful consideration. While financial incentives can play a role in motivation, this approach may prove overly simplistic and potentially ineffective without addressing underlying systemic issues.
Financial Incentives and Motivation
The Human Resource Director's suggestion aligns with Frederick Taylor's scientific management theory, which posits that workers are primarily motivated by financial gain. Higher wages and bonuses could potentially incentivize employees to work harder and provide better customer service. This approach assumes a direct correlation between financial reward and performance.
However, contemporary motivational theories, such as those proposed by Abraham Maslow and Frederick Herzberg, suggest a more nuanced understanding of employee motivation. Maslow's hierarchy of needs highlights the importance of addressing higher-level needs, such as esteem and self-actualization, beyond basic financial security. Herzberg’s two-factor theory differentiates between hygiene factors (pay, working conditions) which prevent dissatisfaction, and motivators (recognition, achievement) which truly drive performance. Simply increasing wages might address hygiene factors but may not necessarily lead to improved customer service if other motivational factors are lacking.
Addressing Underlying Issues
It is crucial to recognize that poor customer service often stems from multifaceted issues that extend beyond employee motivation. In the context of a state-owned airline, bureaucratic structures, lack of competition, and political interference can contribute to inefficiencies and a lack of accountability. Furthermore, factors such as outdated aircraft, inadequate training programs, and inefficient operational processes can directly impact customer experience, regardless of employee effort.
Alternative Solutions
Instead of solely focusing on financial incentives, a more holistic approach is needed. Investing in comprehensive training programs that emphasize customer service skills, empowering employees to make decisions and take ownership of customer interactions, and fostering a positive and supportive work environment can contribute significantly to improving service quality.
Moreover, addressing systemic issues within the organization is paramount. This may involve streamlining operational processes, investing in technological upgrades, and fostering a culture of accountability and customer-centricity. Transparent communication and clear performance expectations, coupled with recognition and reward systems that go beyond monetary incentives, can contribute to a more motivated and engaged workforce.
Evaluation
While increasing wages and offering bonuses might seem like a straightforward solution to improve employee performance, this approach risks overlooking the complexities of motivation and the systemic issues often present in state-owned enterprises. A more effective and sustainable solution involves a multifaceted approach that addresses both employee motivation and underlying organizational challenges. By investing in training, empowering employees, and fostering a customer-centric culture, the airline can create a work environment that fosters genuine motivation and ultimately leads to improved customer service and overall performance.
A loss-making state-owned airline has a reputation for poor customer service.
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A-Level Business Studies Essay Guide: Improving Customer Service in a Loss-Making State-Owned Airline
This essay requires you to analyze the Human Resource Director's suggestion of increasing wages and offering bonuses to improve customer service in a loss-making state-owned airline. You should critically evaluate this suggestion, considering its potential benefits and limitations, and propose alternative solutions.
Understanding the Context
Before delving into the suggestion, it's crucial to understand the context. You need to consider:
- Loss-making: This implies financial constraints and a need for cost-effective solutions. Increasing wages and bonuses might be unsustainable.
- State-owned: This means the airline is subject to government regulations and political pressures, potentially affecting decision-making and resources.
- Poor customer service: This could stem from various factors like inadequate employee training, poor working conditions, and lack of motivation.
Evaluating the Human Resource Director's Suggestion
The suggestion aligns with the Taylorist approach to motivation, which emphasizes financial rewards as primary drivers. This approach might be effective in the short term, but it has limitations:
- Limited Impact on Customer Service: While higher wages and bonuses might improve employee satisfaction, they may not directly translate to better customer service. Other factors like training, empowerment, and company culture play a significant role.
- Short-term Solution: Increased pay might temporarily boost motivation, but employees may lose interest if other aspects of their work remain unsatisfactory.
- Financial Sustainability: For a loss-making airline, increasing wages and bonuses could worsen financial performance and hinder long-term sustainability.
Alternative Solutions
Consider exploring alternative motivational theories and solutions. Some suggestions include:
- Maslow's Hierarchy of Needs: Focus on fulfilling employee needs beyond basic financial needs. This might involve providing better working conditions, opportunities for growth, and a sense of belonging.
- Herzberg's Two-Factor Theory: Recognize that hygiene factors (pay, working conditions) are important but do not motivate. Focus on motivators like achievement, recognition, and responsibility to truly engage employees.
- Employee Empowerment and Training: Empower frontline employees to make decisions and resolve customer issues. Invest in comprehensive training programs to improve their skills and enhance their customer service abilities.
- Positive Company Culture: Foster a positive and supportive workplace culture where employees feel valued and motivated. This can be achieved through open communication, team-building activities, and employee recognition programs.
State-Owned Airline Considerations
Remember the specific context of a state-owned airline:
- Government Influence: Consider potential government constraints on budget allocation and salary increases.
- Accountability: The airline is accountable to taxpayers, so any financial decisions must be justifiable.
- Public Image: Improving customer service can enhance the airline's public image and build trust.
Evaluation and Conclusion
Your conclusion should:
- Evaluate the usefulness of the Human Resource Director's suggestion. Consider its strengths and weaknesses, particularly in the context of a loss-making state-owned airline.
- Recommend a comprehensive approach to improving customer service. Draw on motivational theories and practical solutions that address the unique challenges of the airline.
- Acknowledge the limitations of your recommendations. Explain that achieving sustainable improvement in customer service requires a multi-faceted and long-term approach.
Tips for Writing Your Essay
- Structure: Clearly divide your essay into introduction, body paragraphs, and conclusion. Each paragraph should focus on a specific point.
- Evidence: Support your arguments with relevant examples, statistics, and case studies.
- Critical Analysis: Go beyond simply stating facts. Analyze the implications of different solutions and weigh their pros and cons.
- Clarity and Style: Write in clear and concise language. Use appropriate academic vocabulary and sentence structure.
- Proofread: Carefully proofread your essay for any errors in grammar, spelling, and punctuation.
Extracts from Mark Schemes
A loss-making state-owned airline has a reputation for poor customer service. Its Human Resource Director suggested that: ‘the best way to improve this business is to pay our employees higher wages and give them an end of year bonus’. Discuss this suggestion. [20]
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.
Question Answer Marks
6 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 stateowned 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/stateowned 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.