Jinjian Garment Factory

1. At this time the piecework system seems to be the most appropriate earnings system for the employees in the region. There are over 1000 garment factories in the province that use this system as the norm. If Mr. Lou were to be the first to change this system, it could cause backlash and loss of the already rare and qualified employees.

2. Pros of the piecework system in Shenzhen:

The piece work system can be cost effective for management since the company is only paying for work completed. It is easy to operate and explain to employees. The system is designed to allocate work to employees with specified skills and qualification, also the more skilled the worker becomes the more money he/she can earn. This should give the employees the drive to perfect their skill in order to increase the amount of take home pay.

Cons of the piece work system in Shenzhen:

The factory is made up of several self contained work units called production teams. These teams were made up of 10 to 15 employees with a team manager that has complete authority to assign piecework as he/she sees fit. This caused problems amongst the employees because often times the team manager ignored skills and qualifications and assigned the highest cost piecework to favored employees.

Also often times there are conflict between factory owners and employees on the prices allocated for piecework. Employees complain it is to low and management says it’s too high; this is a never ending cycle. It can be more difficult to control output when employees are given the freedom to work at their own rate of production, this can also be a cause for poor quality products since employees are more concerned with quantity instead of quality.

3. Piece work can be suitable for companies that turn out large amount of items on a daily basis such as factories using assembly lines. Service companies could also benefit such as a telemarketer that is paid per call, and the trucking industry where the driver is paid by the miles driven.

4. You may combat this problem by training skilled workers to do other tasks needed to be done during the off season, perhaps machine maintenance, learning quality control procedures, and training for future management responsibility. If you can give an employee an incentive to stay around and be a loyal worker to your business you have the opportunity to turn out quality products and have less employee turnover.

5. I don’t agree with the severe quality punishment policy in Shenzhen, this system cannot ensure quality products are made. When management does find out about pieces that are unsatisfactory, employees just deny who done it. You also run the risk of having docked the wrong persons pay, which may cause more chaos when reprimanding employees.

This may cause employees to lose face with management and co-workers, which can lead to employee dissatisfaction and cause for a high turnover rate. A suitable alternative may be to decrease the hours for employees that are turning out unsatisfactory products, while maintaining a tighter grip on quality control management.

6. I would create an employee incentive program, perhaps for every 20 pieces of clothing turned out by a production team on time and of acceptable quality, those worker may get a small cash incentive. However as a manager we must remember cash incentives can only go so far, we cannot guarantee an employee will work harder or better. There should also be an incentive for employees to gain recognition, a promotion or extra benefits not offered to underachievers, but those who maintain a high degree of loyalty and care about the job they are completing.

Works Cited
frost, S. (n.d.). Houston Chronicle. Retrieved 2 25, 2013, from Chron: http://smallbusiness.chron.com/piece-rate-pay-advantage-disadvantages-11737.html Lantz, B. (1992, October 1). Piecework:Theory and applications of the Motor Carrier Industry. pp. 8-10. Levine, G. (2013). Profitable Alternatives