Motivating Axis Manufacturing employees through pay and incentive plans

Employee Motivation Study Proposal

Axis manufacturing is a 5000 employee facility that specializes in the manufacture of aircraft components for the U.S. military. Recently, orders have increased to the point where management is hard-pressed to meet production quotas. They must find a way to motivate employees to meet new production expectations. To compound problems, there has been a rash of low morale among line workers that has also affected the quality of parts produced. This proposal outlines research to determine which of three new proposed pay and incentive plans will boost morale and production so that the company can meet expectations.

Problem and Purpose of the Proposed Study

Axis Manufacturing is a 5000 employee sub-contractor that produces aircraft components for the U.S. Military. Recently, Axis supervisors have noticed a considerable drop in employee motivation among line staff. The factory is a 24 X 7 operation with three working shifts. The standard working day is 8 hours. Due to the War on Terrorism, production demands have increased and workers must meet much higher quotas then before the war began.

The 24 X 7 model works from a financial standpoint, as it reduces the need for overtime, but the workers must now move at a faster pace to produce more during their shift. This has been good in terms of revenue, but it has taken a toll on the employees. The mean age of the employees is 35 years. They have been with the company for 7 years. This translates into a group of workers that are experienced and efficient with their jobs.

However, the turnover rate has doubled in past six months. In experienced employees have been blamed for increases in rejected parts by QC. This has had the net effect of decreasing total production. If this scenario continues, it could place the government contract in jeopardy. If this happens, it could have devastating effects on the ability to continue operations. Human resources must work with management to find a way to motivate employees and reduce turnover rates.

This has failed to motivate employees to the higher production levels needed to fulfill the demands of the new contract. This study will explore three different pay scenarios to determine which would be the most effect in motivating employees to the needed production levels. The purpose of this study will be to determine which pay scenario should be implemented in order to achieve company goals.

Sampling Design

The company employs 5000 workers with an equal distribution of males and females. The average pay for hourly employees is $45,000 before tax. The average employee has been with the company for an average of 7 years. The purpose of this study is to examine the pay method that would be likely to produce an increase in productivity. There are certain categories that will be excluded from the study, as they do not represent hourly employees with the chance of increasing production. The study will exclude salaried employees, office, personnel, managers, and those that are not working directly on the lines to produce parts. This leaves a sample pool of 5000 employees.

The goal of the sampling technique is to maximize the precision per unit cost, while still representing a wide area of the sample population. This project will utilize simple random sampling protocol as the preferred method for this study. This method is easily achievable in this setting as there is a list of research candidates available through human resources. Simple Random Sampling Method is the most accurate for statistical purposes. However, it has a key disadvantage in that the researcher cannot control for biases that may be present in the sample population. It will be much more difficult to detect skewness with this sampling technique. However, a sufficient sample size should eliminate these problems sufficiently.

It is the goal of the study to gain as accurate picture as possible of the opinions of the worker population. The sample population must be representative of the employee population of concern. Simple Random Sampling Method will be the best method for achieving a population that represents the sentiments of the entire hourly employee population. It is important to get enough information to represent the entire population, without adding undue additional expense to the project budget. The goal of the project will be to sample 20% of the hourly employee population. This would mean a sample population of 1000 employees. This is considered to be an adequate sample population, without causing undue expense.

Research Design

The sample population can be divided into males and females. There may be differences in opinion that are gender based that may effect the results of the study. A two-group posttest-only randomized experimental design will be used to measure the distributions of these two study groups. It will examine the statistical difference between the two groups in relation to the distribution of the entire sample population. This will help the research to distinguish differences between these two sub-groups in the sample population. One-way Analysis of Variance (ANOVA) will be used to examine the differences between the groups.

In this study, as survey will be administered to a select group of randomly selected hourly employees. In theory, the best design for this type of study would be to divide the group into three groups and then study their productivity. However, employee laws and Union labor laws will not permit the company to randomly differentiate payscales between different groups of employees, therefore the survey method chosen will represent the next best method.

The design of this study will be conducted in a fashion that is different from the typical survey design. This study will be examine the effects of each pay scenario independently from the others. Employees will self-assign themselves to a group based on their answer to a particular question in the survey, which is worded in such a way that they will have the perception that they are voting on a new pay method. They will be divided into groups based on which method they chose. Therefore, a nonequivalent group design will be used.

The sample population can be divided according to their preferred method of pay. In addition, it can be divided into groups according to gender. ANOVA and non-equivalent group design will be used to examine the differences between males and females and between the three study groups. It is important to understand the differences between these groups, as well as how they relate to the entire population.

Data Collection Instrument

The research instrument will be conducted using a survey. The survey will consist of 12 questions. The survey will contain an opening paragraph that will lead the employee to believe that they are being asked to "vote" on a new payscale and/or incentive plan. They will be under the impression that the choice they select could be enacted by the board. This choice will serve two purposes. The first will be to determine into which category the employee will be grouped. The second will be to determine which pay method receive the highest percentage of "votes."

The only demographic data that will be included will be whether the person is male or female. Pay cannot be based on demographic information, therefore gender will be collected for statistical purposes only. The employee will not be asked to make any identifying marks on the survey to assure that information cannot be used against them. This will help the researcher to obtain the most honest answers possible.

The remainder of the survey questions will help to determine the potential effectiveness of the chosen pay method. It will examine the amount of pay needed and/or incentives needed to produce the greatest boost in morale. It will measure the employee's amount of outside stress due to financial concerns. It will examine the potential effectiveness of other non-monetary incentives that could be added to the plan. The questions on the survey will provide a means to measure the other factors that will affect the ability of the plan to raise employee morale and productivity.

Survey for this study will consist of 20 Likert type responses, as well as other question formats that are easily analyzed using statistical methods. Likert-type responses are easily quantifiable will determine if hypothesis testing requirements have been met. However, they limit the respondent and there might be factors that were not anticipated by the researcher that affect the results.

The rationale for this data collection plan is based on the concept that employees will respond more truthfully if they believe that their choices could effect the outcome of their work environment. The study will not only address the hypotheses, but will provide an in-depth view of what the employees feel will make motivate them to higher production levels. It will also explore outside factors that will affect productivity as well. This survey will provide management with the tools that they need to boost worker morale and increase productivity. The results of this survey will produce actionable results.

Systematic Procedures for Conducting the Study

The conduct of this survey will require minimal assistance from the human resources department. The surveys will be printed and dropped off in the human resources department. The selected employees will be paged and told to report to the human resources department. They will be told that they have been randomly selected to participate in an opinion survey. They will be informed that they will receive a $10.00 bonus on their next paycheck for participating. Human resources personnel will them hand them the survey, which they will complete in the office and return it as soon as completed.

Data will be analyzed using ANOVA and the techniques described earlier. Reliability of the study will be determined by calculating Cronbach alpha reliability co-efficient for the study questions. Crohnbach's alpha coefficient will be used to validate the survey instrument. A critical value of 0.6 will be used as a limit to verify the reliability of the scale.

Frequency distribution will be used to compare results and determine the most prominent answer. Two-Tailed tests will be used as validity measures. Internal validity will be measured using paired analysis of the various groups. A p-value of.05 will be used for acceptance of the validity of these questions. A p-value of less than.05 could indicate that the survey contains internal bias.

The dependent variable in this research will be the choice preferred by the employee, as well as other factors, such as financial stabiliy and over all job satisfaction. The working environment and conditions pay scale at the plant will represent the independent variable. An examination of human resource policies will help to determine if these factors might account for differences between the working conditions of various departments.

Limitations of the Study

As with any research of this nature, it is possible the situations may exist that are beyond the control of the researcher that may limit the ability to draw conclusions. The research will use random sampling techniques, in most cases, this sampling technique produces results that are scattered randomly throughout the population. In this case, it will be necessary to gain a perspective from different lines and departments. However, because the researcher has no control over who is selected for the study, there may be a cluster of employees that are from one particular part of the plant. This could effect the results of the study, especially if these employees harbour strong feelings about their work environment.

There are several issues that may affect the internal validity of the study. It the results find that there are a significant number of employees from one particular department or line, then it could result in sample bias. If a subgroup is found in the population, then the results of this subgroup will be compared to the sample population as a whole using ANOVA. If no biases are detected then the sub-group will not be considered to have biased the results. However, if the results indicate sample bias, then the survey process will be repeated with another sample group.

It is assumed that the employees chosen will represent their true feelings and provide accurate information. They may be hesitant to reveal certain types of information that are considered sensitive in nature. The may fear retaliation if they feel that their answers represent themselves or reveal negative feelings about the company. However, steps have been taken in the survey design to help eliminate these potential sources of bias. Identifying information will be omitted, to eliminate sources of bias that stems from the participant themselves.

Another potential source of bias stems from the survey instrument itself. Some types of survey questions may be leading. For example, a question that begins, "do you have" a certain object may lead the participant to think that the research wants them to indicate a certain answer. However, questions of this type are difficult to avoid. It is assumed that the participants in the survey will see the necessity of answering the questions honestly.

Although there is some potential for breeches internal validity, it is felt that these potential sources of bias have been addressed adequately in the experimental design. The external validity of the research is expected to be satisfactory such that the results can be used to form company policy. The external validity of the study is closely connected to the ability to increase productivity. Sample bias plays a major role in the ability to generalized results across various departments and lines. It is felt that the issues that may effect the ability to do so have been addressed sufficiently as well. The results of this survey are expected to be valid, both internally and externally such that the results can be generalized to the population of the plant.

Alternative Empirical Research Studies

This research study will focus on pay incentives as a motivator. However, there are many other aspects of motivation that have not been addressed in the present research study. These other elements may provide a solid basis for further studies in future. Pay was selected as the first element of motivation to be studied, as this element was easily controllable from a managerial standpoint. In addition, it was the opinion of management that this research would be the most likely to produce fast, concrete results.

In addition to pay incentives, reward and recognition were also found to be important employee motivators (Hansen & Smith, 2002). These elements of motivation will be addressed in future research studies. However, it is felt that these types of motivators would produce results that are difficult to measure. The affects of these motivators would not be seen until sometime in the future. However, discovering the proper combination of motivators for sustained peak performance in the long-term future will be a major goal of the research team.

APPENDIX I.

Incentive Survey

Thank you for participating in the following survey. The aggregate answers to this survey will be presented to the Board of Directors for consideration in company wide proposed changes to the pay scale. No identifying information will be revealed and individual answers will be kept confidential. You answers to this survey will help to determine future company policy.

1. Are you Male ____ Female

2. Please vote for one of the proposed changes to payroll policy. Please choose the one that reflects your personal preference.

____ a. Everyone in the plant will receive an across the board rise in pay. This raise will be reflected in increased hourly rates for all hourly employees.

____B. Everyone will receive a small pay raise. In addition, an incentive plan will be developed that will give employees the chance to earn significant rewards for meeting production quotas, lack of absences, excellent quality and other good work.

____C.

Hourly employees will become salaried, at a higher pay scale.

Using the choice that you have selected in Question number 2, please respond to the following.

What was the primary basis for you above choice? (Please choose only 1)

____Financial Problems at home

____Want to put more in savings

____Want more retirement

____I need a new vehicle, major appliance, house repairs, or other major expense

____Vacation savings

____Want more disposable income

____Want more for investments

5. Would your choice make you feel better about your job?

Yes

No

Don't Know

6. How would you rate your level of stress outside of work?

Low

Moderate

High

7. What is your primary source of Stress at work?

____Not enough money

____Feeling rushed

____Afraid of being chastised or punished for lack of production

____Fear of losing my job

____Don't get along with other people

____Want a greater chance for advancement

____ Safety concerns

____ Other

8. How much would your selected choice help to alleviate stresses at work and at home?

None____ a Little____ Some Help

Everything is OK

9. How important to your job satisfaction are rewards and other incentives?

Not Important

Somewhat Important

Very Important