Solved Case Study Motivation at Whirlpool

1. Yes, gains sharing programmes are considered motivators for workers as individuals. According to the ‘Incentive Theory’ presenting rewards in the form of gains (tangible or intangible) after the occurrence of a certain action will cause the behaviour to occur again. The theory is based on the fact that the employees mind will associate a positive meaning to the behaviour (Maslow A.,1970). If this cycle of action–reward is repeated it is possible to convert that action into a habit (Goldthorpe, J.H. and others, 1968).

At Whirlpool Cooperation, as mentioned in the case study above, the gains sharing programme under which all the employees received a bonus on their base pay proportionate to the savings achieved by the plant helped in improving the productivity by 19% to 110.6 units per worker as against 92.8 parts per worker prior to this programme. The number of defective parts has also reduced to 10 per million from 837 per million. In return the salary of workers has increased by 12%. The programme has further motivated the workers to look for more ways of cost cutting like finding ways to recycle the oil used to cool & lubricate the machines.

2. Yes the management should invest in upgrading the technology of production as an improved facility would further motivate the employees. According to one of the Herberg’s two factors, employees seek healthy working conditions. A technologically improved facility will enable workers to work with more precision and achieve higher level of efficiency in their work and further reducing the cost of production.

3. The management should prepare individual report cards of employees in which the contribution made by the particular worker will be recorded and marked by the supervisor on a weekly basis. This will help in keeping a record of employees who contribute in cost cutting and increasing the productivity and separate them from the unproductive set of workers. Based on this report card all the employees should be rewarded and their share should vary as per their contribution. For example on a scale of ‘10’ if a worker is rated ‘9’, then he should receive the amount proportionate to the total savings.

The worker rated ‘8’ should receive 90% of what the worker with score ‘9’ got, worker with score ‘7’ should get 80% and so on. This process would satisfy the workers who are productive and unhappy to share their hard earned incentive with other non-productive workers. This system is in accordance with the Adam’s Equity Theory, wherein the employees seek to maintain equity between inputs that they bring to a job and the outcomes that they receive from it against the perceived inputs and outputs of others. This method will also help in motivating the unproductive employees as now they will realise that only a productive input would generate the desired output in the form of bonus (Expectancy Theory).