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Gillette Metal Fabrication Case Solution

Solution Id Length Case Author Case Publisher
2310 522 Words (3 Pages) Jack Brittain
This solution includes: A Word File A Word File

Gillette metal fabrication had been underperforming for several years now, and Walt Gillette was wondering whether there was any point in keeping the company going. Japanese producers were able to outperform his company and offer bid rates that were lower than Gillette’s production costs. The major reason for the underperformance was due to workers goldbricking. They were extremely lazy and did not work half the time.

Following questions are answered in this case study solution

  1. Why did workers goldbrick?

  2. Why did the culture impose output limits? Who did it help/hurt?

  3. Better compensation scheme that works for all parties

Case Analysis for Gillette Metal Fabrication

1. Why did workers goldbrick?

The company was offering piece rate system for its workers as an incentive to earn more by producing more. In addition to the piece rate, there was a guaranteed day rate of $12 an hour, but workers can earn more than the guaranteed rate by producing more goods and earning bonuses. The main reason for the gold bricking was the quota restriction set by the workers at $20 an hour. Goods produced in excess of the quota would only earn them the day rate of $12 per hour and not in excess of $20 an hour. Even with the gold bricking, the workers were easily making $15 per hour and were not putting in more effort to earn more because they could only earn up to $20 per hour and that too with gravy jobs only. They decided to keep on gold bricking because they see more benefits in the lazy work rather than increasing production efficiency.

2. Why did the culture impose output limits? Who did it help/hurt?

The company was losing money and production because of the worker’s goldbrick, and it was estimated that if the workers manage to produce more and be 50% more productive, the company can once again be competitive in the market.

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