Question

(a) Najmi is a production operator at Cameleon Apparel Sdn. Bhd. which produced clothing for kids. Najmi is paid a fixed salary of RM15 per day. In addition, he is entitled for productivity incentive which is calculated based on the number of clothes he managed to cut at a flat rate of RM3.00 per piece, regardless of the number of clothes he cut. Due to the flat rate, the motivation is low among workers including Najmi who felt that he deserved a higher piece rate if he works extra hours and produce more.

i. Identify and describe the type of incentive that Najmi is given.

ii. Suggest one other type of incentive Najmi shall be given to motivate him to cut more clothes per day. Justify your suggestion.

(b) Azmeer works as an Auditor at Rich Bank in Damansara. For the past 15 years, the bank would share the company’s profit in the form of ‘one-time bonus’ to reward employees’ hard-works. On-top of its profit sharing program, Rich Bank is considering to offer stock ownership for its executive staff including Azmeer. Prior to implementing the plan, all executive staff are given the option to choose between ‘stock options’ or ‘employee stock ownership plans (ESOP)’. Assuming that you are Azmeer, which option would you prefer and why?

Answer 1

Answer a i= The only incentive that is given in the case of productivity incentive that is a kind of incentives given to the employees so that they can improve their output and contribute to the profitability of the organization

Answer a ii= In my opinion, the company shall provide a per-piece incentive to the employees in which each piece produced by the employee will get some sort of incentive. This will help the employee to produce more number of products as the greater the number of piece produced, greater will be the incentive received.

Answer b= In my opinion, Azmeer should go for employee stock ownership plans as it is the plan that can facilitate unique rewards to the employees. The employees can obtain significant retirement benefits with almost no monetary payouts. In the case of ESOP, the contribution is made by the employer from its own stock so it has better benefits