ABC Company operates a plant in Toronto, Ontario, Canada, to
produce crayons (color pencils). Their Crayola brand is familiar to almost all
preschoolers and elementary school children in North America and perhaps in
most other parts of the world.

In 2011, the production goals for the Toronto plant were
doubled, to 4 million 16-stick boxes of assorted-color crayons. Little more
than a year earlier, the plant produced about a quarter of that volume.
Somewhat surprisingly, employees have been very receptive to these much higher
productivity goals. These employees, most of whom have been with the company
for at least 10 years, indicate that they are more excited about their jobs and
more satisfied with their working lives than ever before.

Worker at ABC Company traditionally knew their own jobs
well, and many of these jobs were repetitive and unchallenging. For instance,
one job is to run the machine which glues labels to crayon sticks – 172 labels
per minute. The label-gluing machine operator was an expert at his job but knew
little about the other jobs in the plant. To get the increased production,
management redesigned the label-gluing machine operator’s job and almost
everybody else’s.

Workers in the Toronto plant now do their jobs in teams and
are encouraged to learn the jobs of everyone else on their team. Team members
regularly rotate jobs to increase their skills and reduce boredom. These teams
have taken on the responsibility for solving their work problems. And employees
in the plant now also have taken charge of tracking production, changing
layouts to solve quality problems, and conceiving and implementing
cost-reduction ideas like recycling waste.

Employees receive no financial or material rewards for
accepting these new changes. What they do get is increased recognition, the
opportunity to learn new tasks, and greater control over their work. The
results have been extremely encouraging for both employees and management.
Workers’ job satisfaction and self esteem have increased, and the plant more than
doubled its profit in the first year of these new changes. Additionally,
employees at Toronto plant now have greater job security than they had before
because the plant has eliminated the 15 to 25 percent cost disadvantage it
previously had compared to the company’s sister plants in the United States.

Required:

1. Discuss
ABC Company’s experience at Toronto plant in the context of satisfaction ? productivity relationship.

2. ABC
Company’s historical turnover rate has been very low. Shouldn’t a plant with
boring and repetitive jobs like gluing 172 labels a minute on crayon sticks
have high absenteeism and turnover?

3. Explain
why, in spite of tremendously high new production goals, ABC Company’s
employees seem more satisfied with their jobs than ever.