Management and Organizational Behavior

ABC Company

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.