Question

Describe how Chaparral uses participation and empowerment to motivate its workers.

Employee Participation at Chaparral Steel Although few many have heard of Chaparral Steel, the company enjoys a stellar reputation as one of the most effective firms in the steel industry. Chaparral was founded in 1973 in a small town of Dallas and today enjoys annual sales of almost $500 million. In earlier times, most steel companies were large, bureaucratic operations like U.S. steel (now USX) and Bethlehem Steel. However, increased competition from low-cost foreign steel firms—especially in japan and Korea—has caused major problems for these manufactures with their high overhead costs and inflexible modes of operation. These competitive pressures, in turn, have also led to the formation of so-called minimills like Chaparral. These minimills are consciously designed to be much smaller and more flexible than the traditional steel giants. Because of their size, technology, and flexibility, these firms are able to maintain much lower production costs and to respond more quickly to customer requests. Today, Chaparral is recognized as one of the best of this new breed of steel companies. For example, whereas most mills produce one ton of steel with an average of 3 to 5 hours of labor, Chaparral produces a ton with fewer than 1.2 hours of labor. Chaparral has also successfully avoided all efforts to unionize its employees. Since its inception, chaparral has been led by Gordon Forward. Forward knew that if Chaparral was going to succeed with what was then a new strategic orientation in the industry, it would also need to be managed in new and different ways. One of the first things he decided to do as a part of his new approach was to systematically avoid the traditional barriers that tend to be created between management and labor, especially in older industries like steel. For example, he mandated that there would be neither reserved parking spaces in the parking lot nor a separate dining area inside the plant for managers. Today everyone dresses casually at the work site, and people throughout the firm are on first name basis with one another. Workers take their lunch and coffee breaks whenever they choose, and coffee is provided free for everyone. Forward also insisted that all employees be paid on a salary basis—no time clocks or time sheets for anyone, form the president down to the custodians. Workers are organized into teams, and each team selects its own “leader”. The teams also interview and select new members as needed and are responsible for planning their own work, setting their own work schedules, and even allocating vacation days among themselves. And teams are also responsible for implementing and disciplinary actions that need to be taken toward a member. Finally, one has specific and narrowly defined job that must be routinely performed on a continuous and monotonous basis. That is, each team has an array of tasks and functions for which it is responsible; the teams themselves are encouraged to ensure that everyone on the team knows how to perform all of its assigned task and functions and to rotate people regularly across them. Forward clearly believes in trusting everyone in the organization. For example, when the firm recently needed a new rolling mill lathe, it budgeted $1 million for its purchase, then put the purchase decision in the hands of an operating machinist. This machinist, in turn, investigated various options, visited other mills in Japan and Europe, and then recommended an alternative piece of machinery costing less than half of the budgeted amount. Forward also helped pioneer an innovative concept called “open-book management”—any employee at Chaparral can see any document, record, or the other piece on information at any time and for any reason. Chaparral also recognizes the importance of investing in and rewarding people. Continuous education is an integral part of the firm’s culture, with a variety of classes being offered all the time. For example, one recent slate of classes include metallurgy, electronics, finance, and English. The classes are intended to be of value to both individual workers and to the organization as a whole. The classes are scheduled onsite and in the evening. Some include community college credit (there are tuition charges for these classes, although the company pays for half the costs) while others are noncredit only (there are no charges for these classes). Forward has a goal that at any given time at least 85 percent of Chaparral’s employees will be enrolled in at least one class. Everyone also participates in the good—and the bad—times at Chaparral. For example, all workers have a guaranteed based salary that is adequate but which, by itself, is below the standard market rate. However, in addition to their base pay, employees get pay-for-performance bonuses based on individual achievements. Finally, there are also companywide bonuses paid to everyone on a quarterly basis. These bonuses are tied to overall company performance. The typical bonuses increase and employee’s total compensation to a level well above the standard market rate. Thus, hard work and dedication on everyone’s part means that everyone can benefit. “Not only does Chaparral conduct a comprehensive screening of prospective applicants, but it [also] gives current employees and opportunity to talk with them.” – U.S. Department of Labor, which selected Chaparral Steel as one of its “best practices” firms

Answer 1

SOLLUTION:-

1. Describe how managers at Chaparral steel appear to be implementing various need- and process-based theories of motivation.

The managers at Chaparral motivate the employees by satisfying the basic needs of the employees and providing a good work environment for the employees. The management considers each employee equally and everyone is treated in same manner. According to Maslow’s Hierarchy of needs the employees have different needs that need to be satisfied. They are Psychological, safety, social, esteem and self actualization needs. The psychological needs include the basic needs and the management satisfies those needs by providing salary to all the employees. Also the employees are allowed to have their food at any time which is one of the basic needs of a human being. Also they provide coffee for everyone at free of cost. The employees are provided with a basic guaranteed salary which provides safety. The social needs are satisfied by creating a work environment with equal treatment to all the employees including managers and the teams in work group are given with the right to interview and select new team members, set the work schedule and even allocating vacation days among themselves. The esteem needs are satisfied by providing rewards to the employees. To meet the self actualization needs company has arranged continuous education program with variety of classes including metallurgy, electronics, finance and English.

The process based theories of motivation are implemented by showing fair treatment towards the employees. The equity theory is implemented by providing payment on salary basis and bonus to everyone on quarterly basis. The education opportunities given to the employees motivate the employees to do better for the organization. Management trusts the employees and asks for suggestions from employees on critical decisions. This also motivates the employees. The reward systems and pay per performance bonuses are implemented to meet the process based theory of expectancy and motivate the employees to perform better.

2.Discuss the apparent role and nature of job design at Chaparral Steel.

The employees in Chaparral are provided with salary including President Level.

The work is divided into groups and each group has a leader selected by the group.

The teams can interview and select new team members, plan their work, set the work schedules and allocate vocation days among themselves.

Each group need to perform specific tasks functions.

Teams are responsible for implementing and disciplinary actions that need to be taken toward a member.

There are continuous education programs available for the employees in various subjects.

Employees are rewarded for high performance.

Pay for performance bonuses are paid to employees on individual performance.

Company bonus is paid to all the employees on quarterly basis based on overall company performance.

3. Describe how Chaparral uses participation and empowerment to motivate its workers.

In Chaparral workers are organized into teams and the teams are given power to interview and select new team members, set the work schedule and even allocating vacation days among themselves. And teams are also responsible for implementing and disciplinary actions that need to be taken toward a member. Each team is responsible for particular tasks. These methods of employee participation motivate the employees and encourage them to make sure that everyone is performing well. Also they have a concept called Open book which allows the employees to access any document at any time. Chaparral trust employees and when there is problem with decision making they take the employee opinions and the participation in decision making process motivates the employees.