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CHAPTER 7 Motivating and Leading Employees 235

piece-rate system, where employees are paid on the basis of the number of units piece-rate system A compensation
they produce. This system is used even today in several sectors of economies world- method where employees are paid on
the basis of the number of units they
wide, like apparel and shoe production. Under Taylor’s piece-rate system, all factory
produce
workers are paid a specific amount to produce a certain minimum number of units
of goods. However, if the worker exceeds the target output, the worker is paid at a
higher rate for all the units produced.
Taylor’s pioneering work has had profound global impact, as countries all over
the world adopted key elements of his time-and-motion studies (industrial engi- time-and-motion studies Studies that
neering techniques used to determine the best approach to perform jobs effi- measure the time taken to conduct each
subactivity of a job in order to determine
ciently) to increase production efficiency, specialization of labor, and assembly line
the best approach to performing the
production techniques. Taylor’s scientific management theory is used today in total job efficiently
industries such as automobile assembly and meatpacking to maximize efficiency
by carefully studying the best and least-cost approach of delivering quality prod-
ucts to customers. Although Taylor’s scientific management techniques have revo-
lutionized production management, his assumption that increased pay would lead
to rising worker motivation is relatively simplistic and not universally held. Taylor’s
ideas may be valid especially in developing countries of Asia, Africa, and Latin
America that have low income levels and young populations, but they may not hold
in affluent countries of Europe, East Asia, and North America, where the motiva-
tion-productivity relationship is more complex.
reality How would you feel about being compensated using a piece-rate
CH ECK system?

LEARNING OBJECTIVE 3
Compare the behavioral studies of Elton Mayo with Maslow’s hierarchy of needs,
and explain which theory is more meaningful today.

Behavior Theory: The Hawthorne Studies

The classical era of management, which emphasized personal economic needs as
what provides job satisfaction and motivates individuals to increase productivity,
was followed by the human relations era, which focused on the relationship
between the effects of the physical and operational work environment on employee
job satisfaction and productivity. In 1925, a group of engineers from the Hawthorne
plant of Western Electric Company in Chicago conducted a study to determine the
impact of changing light intensity on worker productivity. Their findings were inter-
esting but inconclusive: They found that when light intensity in the plant was either
lowered or raised, output increased. To explain this effect, the Hawthorne engineers
requested Harvard professor Elton Mayo and a team of his colleagues to examine
the findings. Between 1927 and 1932, Mayo and his colleagues conducted two stud-
ies. The first study was to evaluate the Hawthorne Studies, and the second was to Hawthorne Studies Studies conducted
determine the effect of elements of the work environment, such as job redesign, by a group of engineers at the
Hawthorne plant of Western Electric
length of workday or workweek, length of break time, and the piece-rate system, on
Company in Chicago in 1925 to
increasing the output of groups of workers. The results of the studies were aston- determine the impact of changing light
ishing, since they indicated that productivity increases were closely related to intensity on worker productivity
employee feelings. In both the lighting case and the job redesign case, employees
felt that special attention was being given to them, and this encouraged them to Hawthorne effect The principle that
perform better and to increase productivity. In cases where employees were given when employees are given autonomy to
greater autonomy to control their work environment, they became even more control their work environment, they
become more motivated, and this has a
motivated. These findings led to the development of the Hawthorne effect, which
positive impact on employee morale, job
recognizes the important role that the work environment plays in job satisfaction, satisfaction, and productivity

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