Productivity improvement is a primary goal for the new owners of a plastic pipe extrusion plant. The CEO decided to undertake, on a trial basis, a series of actions directed toward improving em­ployee morale as a first step toward productivity-increasing programs. Six separate strategies were implemented, such as increased employee auton­omy, flexible work schedules, improved training, company picnics, and better work environment. Periodically, the company surveyed the employ­ees to measure the change in morale. The measure of effectiveness is the difference between the number of employees who rate their job satisfac­tion as “very high” and those who rate it “very low.” The per-employee cost of each strategy (identified as A through F) and the resultant mea­surement score are

Question

shown below for the six programs. The CEO has set aside $60 per employee to spend on the permanent implementation of as many of the strategies as are justified from both the effectiveness and economical viewpoints. Deter­mine which strategies are the best to implement. Use hand or spreadsheet solution, as instructed.

Answer 1

Strategies are independent; calculate CER values, rank in increasing order and select those to not exceed $60/employee.
CERA = 5.20/50 = 0.10
CERB = 23.40/182 = 0.13
CERC = 3.75/40 = 0.09
CERD = 10.80/75 = 0.14
CERE = 8.65/53 = 0.16 (0.163)
CERF = 15.10/96 = 0.16 (0.157)

Select strategies C, A, B, D and F to not exceed $60 per employee. Parts of E may be a
possibility to use the remainder of the $60.