Garbage . . . Not Just The Work But The Outcomes, Too
In an effort to cut costs, Albuquerque city officials decided to stop paying their garbage collectors for working overtime. This decision had a noticeable impact on the quality of their performance. This exercise is important because managers must consider how decisions about the financial health of a company can impact the quality of performance among its employees.
The goal of this exercise is to draw the connection between consequences and performance outcomes.
Read the case about trash collection crews in Albuquerque getting paid for only eight hours of work, then using the 3-step problem-solving approach, answer the questions that follow.
City officials in Albuquerque, New Mexico, needed to cut costs. Among the targets they identified was overtime pay of trash collectors. The officials decided to pay trash collection crews for eight hours of work no matter how long it actually took them to finish their routes. The hope was that the crews would work more efficiently and quickly, given that they could then go home early and still get paid for eight hours of work.
This PM practice seemed like a success, and overtime costs dropped significantly. However, unintended consequences emerged. Crews overloaded their trucks to reduce the time they spent going to the dump, but strict weight limits resulted in fines when they arrived. So they drove faster, which resulted in more tickets and accidents. Sometimes they skipped trash pickups and truck maintenance, which generated customer complaints and more frequent vehicle breakdowns.1
Apply the 3-Step Problem Solving Approach
Step 1: Define the problem city officials wanted to fix.
Step 2: Identify the potential causes of this problem. (Consider also the common reasons rewards fail to motivate.)
Step 3: Make your recommendations.
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