Due beginning of class Monday, May 5
112 marks
IB Business and Management Test 9
Communication, Leadership, Management, and Motivation (Units 2.3 – 2.5)
A. The first four questions are based on the case study. Be sure that you have it
with you.
1. Complete the first sixteen definitions of the glossary assignment
(16 marks)
See key terms
2. Examine the difference between the leadership styles of Susan Chapman and
Martin Kimathi. (6 marks)
Susan – autocratic; prefers to make all decisions and does not delegate to staff; little
empathy for employees – dismissed Guthoni; likes formal accountability, bureaucracy,
and clear chain of command; scientific in decision-making process
Martin Kimathi on the other hand is very laissez faire and likes to let supervisors
handle problem solving even though Martin could quickly do it himself; wants to
empower staff; feels that threat of strike could actually be empowering for employees
and beneficial to the Imperial in the long run by providing them with a common goal
and the ability to be more in control of the future of the hotel.
Styles are very different; Susan’s style is not very motivational at all for anyone that
has concern for the organization and is motivated by more than just money. Only
works for…
Martin’s style can be very motivating to the employee who… may not work for …
OFF TOPIC BUT IMPORTANT
**Modern leaders/managers must be able to adapt to ever changing business environments to be
successful**
Situational leadership/contingency management is based on the belief that there is not one unique
approach that will work for all organizations in all situations. Although effective managers and leaders
may have a natural or preferred style, they must be able to adapt to different situations. Factors must be
considered in each situation include:




Personality and traits of the leader
Level of skills, experience, motivation, and confidence of workers
Time frame (must decision be made immediately? If so, autocratic is best)
Importance of decision
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 Difficulty of tasks to be accomplished

EXAMPLE :
A crisis within the workplace may require a leader who can perform under pressure and make
immediate decisions; an autocratic leadership style would be best suited.
3. Discuss the evidence of communication issues at the Imperial and then
improvements that could be made to increase effective communication.
(4 marks)
Through informal channels of communication, gossip regarding Susan’s leadership
style spread quickly. Susan did not have good communication with her
subordinates; it was entirely one way – from top to bottom with no feedback. There
also appears to be poor attitudes held by both sender (Susan) and receivers.
Another specific example of poor communication exists in the relationship between
Susan and Gothani. Gothani was dismissed by Susan for excessive absenteeism
while Susan was completely unaware of Gothani’s health issues. The conflict in
leadership styles between Susan and Martin can also act as a barrier to good
communication; Susan is able to avoid discussing her autocratic leadership style in
appraisal meetings with Martin because of his laissez faire approach.
Communication could be improved through the use of written, oral, and electronic
methods. If Susan and Martin both developed more democratic leadership styles,
formal meetings may be more productive; employees would be able to state their
opinions and suggestions, but the final decisions would be made by the manager(s).
This would be motivating to the employees as they would feel that their input was
truly valued.
Implications for the Imperial if communication is improved
Improvements in communication could lead to a more motivated and productive
staff. Employees who are motivated should be more productive on the job and help
portray better corporate image, increase revenue, and lead to success of
organization as a whole.
See 4 below for more info
4. Using at least one content theory of motivation, examine the factors that affect the
level of motivation at The Imperial. (7 marks)
According to Herzberg, hygiene factors must be present at the workplace so that
workers are not dissatisfied. Hygiene factors such as job security, good working
conditions, fair rules and regulations, and satisfactory relationships with management
may be lacking in the minds of some workers. Housekeeping staff feel that Guthoni
was unfairly dismissed and that they have a poor working relationship with Susan.
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These workers are not feeling motivated to work, but to join together in solidarity to
threaten a strike action. This is a sign of a poorly motivated staff.
According to McGregor, Susan is a Theory X manager. Theory X managers see
employees as being lazy and wanting to avoid work. Workers must be given specific
instructions and supervision to be sure that the work is done correctly. These
managers may adopt Taylor’s scientific management approach and feel that workers
are motivated only by money.
… Martin is Theory Y
Theory Y managers believe that workers are motivated intrinsically and not just by
financial rewards. These managers are more trusting and believe that employees
should be challenged with responsibilities; although it is stated that many workers feel
Martin is too westernized, supervisors who work for him may be appreciative of and
motivated by the fact that he empowers them to make their own decisions.
According to McGregor, this should lead to increased productivity and benefits
associated with it.
REMAINING QUESTIONS ARE NOT RELATED TO CASE STUDY
B. Answer the individual questions below (Marks as shown)
1.
Explain the difference between an employee being dismissed
and an employee being made redundant (Use complete
sentences – 4 marks)
An employee is dismissed (fired) due to incompetence or misconduct on the job. This
would mean that he employee did not possess the skills or knowledge to carry out the
necessary daily activities OR that the employee committed some form of inappropriate,
immoral, or illegal act at the workplace. An employee is made redundant when the
company can no longer afford to pay him/her and/or his job ceases to exist (employee
is no longer needed due to no fault of their own). See p. 189
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2.
Define labor turnover (staff turnover) and explain how it can
be used to measure the effectiveness of human resource
management (Use complete sentences in your explanation
and the formula for calculating turnover – 4 marks)
Labor turnover refers to the number of workers leaving a firm in a given period of time
divided by the total number of workers employed during that same time period
[(# of workers leaving / total # of workers) x 100]. High labor turnover rates will lead to
higher costs of recruitment and training and may indicate that the workers are not
satisfied with their jobs (thus indicating poor human resource management).
3.
Define absenteeism and explain how it can be used to
measure the effectiveness of human resource management
(Use complete sentences in your explanation – 4 marks)
Absenteeism measures the percentage of workers absent on a given day or over a
specific time period [(# of absent workers / total # of workers) x 100]. The higher the
absenteeism rate, the less productive the firm’s human resources are. High
absenteeism levels may indicate that employees are avoiding coming to work (as a
result of poor management or low motivation).
4.
Draw an organizational chart for Managing Director responsible to CEO
and has Production, Marketing, and Finance Directors responsible to
him. Marketing Dept is further broken down into Sales and Advertising
(5 marks)
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5.
Looking at the char below, what is the chain of command for the
Records Staff? (4 marks)
Board of Directors (Orie Williams, Chairman) President (Aaron Schutt)
Sr VP, Administration (Geri Simon) VP HR & SHR (Robin Renfroe)
Records Staff
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C. Read the passage below and answer both a and b (Marks as shown)
“In 1996, The Hong Kong Football Association offered a HK$100,000 ($12,850) bonus
for each goal scored in the match between local club Instant-Diet and European
football giant AC Milan”.
1. Define “performance-related pay” as it relates to this situation (3 marks)
Performance related pay involves paying employees a financial reward based on
personal or group performance when certain targets are met. Monetary rewards are
given to those employees who meet targets or goals that may be related to sales or
production levels, competence on the job, completion of a project, or other factors
agreed upon by managers and employees. The purpose of PRP is to provide an
incentive for people to perform better at work. In this case, a $12,850 bonus will be
paid each time the target performance of scoring a goal is achieved.
2. Explain possible problems involved with paying staff who work as a team, such
as professional football (soccer) players, using performance-related pay (4
marks)
PRP can work quite well when individuals work toward a goal that they feel has been
fairly set for them and a system must be in place to fairly measure performance . It
may not work well in a team situation when PRP is not awarded equally to team
members. ie - Who gets paid when a goal is scored? This may actually discourage
teamwork if only the goal scorer is rewarded. Why should a forward cross the ball?
Team members could end up resenting each other if PRP does not seem to be fair.
Added pressure is placed on team members to perform and management must decide
how/if substitutes will be rewarded. In addition, non-financial motivators (like teamwork
and a sense of belonging) may be ignored or undervalued.
D. Word process a memo to me on a separate page explaining five methods of
financial payment to employees as well as the use of fringe benefits. It must be
properly set up (see sample memo in folder) and free of errors. (20 marks)
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TO:
Dr. Marburger
FROM:
Your Name
DATE:
Current Date
SUBJECT:
METHODS OF FINANCIAL PAYMENT
There are several methods of financial payment available for employers to pay their
employees. I will explain five of them below:
Salary/Flat rate –A set amount of money is agreed upon by employer and employee to
be paid weekly, monthly, or yearly. This amount of money is independent of number of
hours worked or quality of performance. Example: An office assistant may earn a
starting salary of $35,000 per year.
Piece rate –A set rate is paid for each “piece” that is produced. Pay is calculated by
multiplying this rate by the number of pieces. Example: A patio door installer may be
paid $125 for each door he installs.
Time/Hourly rate – Hourly rate – Employees are paid a set rate per hour. Pay is
calculated by multiplying this rate by the number of hours worked. Often, overtime pay
(usually 1 ½ times the regular hourly rate) is involved if the employee works more than
40 hours. Example: A worker at McDonalds may make $7.25 per hour.
Bonus –A bonus is incentive pay awarded in addition to regular pay. It may be given in
recognition of an employee’s contribution to the company or in the form of a holiday
bonus at the end of the year.
Commission –Commission pay is based on $ value of products sold or on number of
products sold. Often commissioned employees receive a low base salary with the
intent that it will be supplemented with commission income. Simple commission is
often calculated as a % of total $ value sold Example: A salesperson may receive 3%
commission on his/her total monthly sales.
Performance-related pay – An employee (often a manager) may be paid more money
in addition to salary based on personal performance or the performance of his/her
department/unit.
Profit sharing – Employees receive a share of the company’s profit each year. This
encourages all to work hard to earn a greater profit.
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In addition to the types of wages paid above, fringe benefits are becoming increasingly
more important to both employers and employees. Fringe benefits such as medical
insurance, use of a company car, health club memberships, subsidized housing and
meals, use of cell phones and other devices, and many others are used to lure desired
employees and keep them. When considering a new position, employees consider the
total benefits package rather than just the wages/salary they will earn.
Please feel free to contact me with any questions you may have.
E. Read the passage and the answer question below (FROM OLD EXAM)
…recent changes have caused some anxiety among the production workers at
Gladrags Ltd. and labor turnover is increasing as a result. The appointment of
Stephen as production manager with a responsibility for cutting costs has created
suspicion that the workforce will be downsized. Production staff has learned that there
is talk of moving production overseas and that has led to conflict between the
management and production staff. Motivation has worsened leading to failing
productivity.
Use motivation theory of Herzberg and Maslow to discuss the anxiety among the
production workers (8 marks)
Workers may feel that job security is uncertain. According to Maslow, workers may be
anxious because physiological and safety needs are challenged. There is definitely no
sense of belonging if workers are afraid of losing their jobs. At this point, the
satisfaction of esteem and self-actualization needs cannot be considered.
According to Herzberg, employees are dissatisfied because certain hygiene factors
such as relationships with management, working conditions, and company policy are
not acceptable. These hygiene factors must be present to prevent dissatisfaction
before motivators such as job enrichment, job enlargement, and empowerment can be
considered.
F. Read the passage below (FROM OLD EXAM) and answer questions on the next
page:
Natalia Artusa works for a mail order company, Stylish, who sells furniture for houses.
In 2002 the company was restructured and customer service staff encouraged to
work from home rather than in a central office. Natalia's team consists of eight
telephonists whose job is to answer customers' calls and e-mails and process their
orders. Members of the team now work independently from home, and send
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information through the internet to the distribution department who process the orders
for customers and arrange payments.
Complaints have been received from customers about difficulty in speaking to
customer service staff. Natalia is finding it difficult to maintain quality within the team
and arrange training to ensure an efficient service is offered.
Currently the teams wages are based on a flat monthly payment regardless of the
number of orders processed but Stylish is considering changing the system so that
wages are based on the number of orders placed each day and targets set by Natalia
monthly. The more orders processed and targets reached, the higher the wages
received by the staff. However, Natalia is concerned that the quality of products may
deteriorate as staff may not spend as much time on each order.
1. Discuss the benefits to Stylish of restructuring the company to ensure that the
customer service team works from home, rather than from a central office. (8 marks]
Possible items for discussion
Motivated workers with balanced home/work life
Decreased absenteeism from the workplace
Increased productivity
Cost savings possible
Always have someone available for CS
Stylish will save overhead costs by not having a central office (electricity, rent,
telephone, etc). Productivity and quality of customer service could increase if
employees are motivated by the trust that the company has in them. This could lead to
greater sales and increased profit. Stylish may be able to recruit and retain highly
motivated workers based on their flexible working practices.
(not long answer, but covers it all)
3. Assess the communication barriers that might result from working at home rather
than working as a core team and suggest three ways in which Natalia could improve
communication. (6 marks)
Distance and time may be barriers to communication when the staff is working from
home rather than in a central office where they can meet face to face with Natalia and
each other. The staff members may not have a clear picture of what they are to be
doing or may be uncertain of deadlines or policies. Natalia may be lead to believe all is
fine when workers are actually confused. This could lead to poor company image
portrayed to customers or potential problems with the processing of orders. Eventually
production could be affected and profits could decline.
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Natalia could improve communication by setting a weekly or bi-weekly meeting time
when everyone could meet face to face to collaborate on ideas. Natalia could use
email to keep all staff informed and they could participate in telephone or
videoconferencing on a regular basis. Natalia could meet employees on an individual
basis in their homes to discuss productivity and any possible issues or concerns.
4. Evaluate the current and proposed methods of payment in terms of quality and
meeting targets. (6 marks)
The current method of payment is based on a monthly salary regardless of the number
of orders processed. No matter how hard staff members work, they will receive the
same pay. This may lead to a lack of motivation with no incentive to improve
productivity. However, workers are trusted to use their time wisely and remain
productive as they work from home so method of pay could actually be an important
incentive here.
The proposed method of payment is based on the number of orders placed per day
and meeting monthly targets set by Natalia. The more orders processed and targets
reached, the higher the amount of pay. This may cause motivated workers to work
harder in order to process more orders and meet the targets. On the other hand,
Natalia must be careful to ensure that customer service does not suffer as staff
members try to finish an order to move quickly on to the next. It is also possible that
employees will become frustrated if they have to work longer hours trying to reach the
targets set by Natalia.
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