The Power of Rewards at Industry International

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Table of Contents

Introduction
Strategic Organizational Communication
Organizational Structure of Industry International
Changes in the Rule-Reward System
Motivational Strategies Deployed
Conclusion
References

Introduction

The following paper provides a case study of the chapter “The Power of Rewards at Industry International” from the perspective of strategic organizational communication and how it applied in this instance (Conrad & Poole 2005). The case study provides a definition of strategic organizational communication and highlights the organizational structure that the company Industry International operated under.

The case study also delineates the changes in the rule–reward system that triggered resistance in the workforce, and details the strategies that the employees deployed to minimize resistance and add value to the rule–reward system. Finally, the case study lists the strategies used to motivate the employees, and concludes with insight as to why the employees changed.

Strategic Organizational Communication

Strategic organizational communication means that communication within an organization will have a focused agenda whereby policies are set, rules are enforced, modes of reward are defined and methods of attaining higher status within the organization are communicated formally and informally (Conrad & Poole 2005).

Within an organization such as Industry International for example, strategic organizational communication changes radically according to the stability of the bonus system, which is directly dependent on the economic health of the organization (Conrad & Poole 2005). Informal strategic organizational communication therefore will be subtle, often non-verbal cues which communicate what behaviors the employees should adopt in order to sustain and grow their bonuses (Conrad & Poole 2005).

Organizational Structure of Industry International

The organizational structure of Industry International is centralized; decisions that affect the entire organization are made by the top tier of management, and there is a pronounced division between management and workers (Conrad & Poole 2005).

The centralized nature of Industry International appears most readily in the area of bonuses, namely, how the year-end bonuses are allotted, and how much money the year-end bonuses consist of – both of these decisions are arbitrary and utterly dependent on a system created and maintained by the management chain of command (Conrad & Poole 2005). According to Conrad and Poole (2005), the bonus system at Industry International operates on a system of merit points that is not standardized and remains highly susceptible to personal politics and interpretation (Conrad & Poole 2005). “Merit points are based on output, quality, dependability, and personal characteristics.

The first two can be quantified, leading employees to “work like dogs” until they are dangerously exhausted by long hours and difficult working conditions; the latter two cannot, creating a highly political atmosphere in the plant. Most echoed one worker’s conclusion that “if you don’t go along with the system [managers], you could be the hardest worker in the world… and you would still be way short [on the bonus] because you have not gone with the flow and you would be blackballed, and they give you what they want to give you” (Conrad & Poole 2005).

Changes in the Rule-Reward System

In the case study, changes in the rule–reward system that caused resistance occurred in the lowering of the annual bonuses, an action which was attributed to the recession (Conrad and Poole 2005) “Many workers lost their homes and cars because they were relying on large bonuses to pay mortgages and loans. Workers attributed the decline to many things, but primarily to management greed and incompetence—a “fat managerial level and more men at the top,” embezzlement, and mismanagement of overseas accounts” (Conrad and Poole 2005).

The strategies that the workers considered to lesson resistance or add value to the rule–reward system included labor strikes, forming a union and in extreme cases workers threatened management with physical violence (Conrad and Poole 2005).The workers had grown accustomed to receiving the bonus from year to year and so many did not manage their money as strategically as they might have, assuming that the year-end bonuses would always come to bail out whatever expenses they had accrued over the course of the year (Conrad and Poole 2005).

Motivational Strategies Deployed

Initially the strategies deployed to motivate the Industry International workers were financial incentives (Conrad and Poole 2005). Industry International workers derived the bulk of their income from a year-end bonus; with this bonus, the workers earned “three times the average salary for U.S. manufacturing employees [though they were] not unionized…had no paid vacations, and…worked 45–50 hours per week…

From 1943 to 1994 the bonus percentage ranged from 55 percent to 104 percent; in 1994 it was 61 percent” (Conrad and Poole 2005).Other indirect motivational strategies occurred as a result of the financial motivation that the large bonuses created; these included elevated social status within the community, as evidenced by the following quotes from Industry International employees: “As soon as…friends and neighbors…find out you work [at Industry International], they think you have money coming out of your ears…

They think I’m the richest SOB in the world…Years ago we made more money than professional football players” (Conrad and Poole 2005).

Conclusion

The motivational strategies changed as a result of the recession; with less money coming in, Industry International’s bonuses shrank considerably. Thereafter, the employees became aware of the limited options available to them based on their age, their level of education, and the fact that “high-paying manufacturing jobs are becoming very rare in the United States” (Conrad and Poole 2005).

References

Conrad, C., & Poole, M. (2005). Strategic organizational communication in a global economy (6th ed.), Belmond, CA: Wadsworth. 66-107.

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