The employees of Blue Diamond Company faced a cloudy future in 2001. The company which manufactures paper egg cartons was encountering stiff competition from several firms producing Styrofoam containers. In addition, the economic recession was biting into profits and employees were generally jittery about their jobs. Relations between management and labour were strained. In order to improve internal working, the Chief Executive devised a system of productivity incentive called the 100 Club. Under this programme, employees were allocated points for above-average performance. Any employee who worked a full year without having an industrial accident was awarded twenty points. 100% attendance was worth twenty-five points, and so on. Every year, on the programme's anniversary date, the points would be added up, and a record would be maintained. Upon reaching 100 points, the worker received a nylon jacket emblazoned with the company logo and a patch signifying membership of the 100 Club. Each of the plant's 325 employees eventually earned a jacket.
Those who continued to accumulate points above 100 received additional gifts. For example, with 500 points, employees could choose such items as a blender, Corning Ware, a wall clock, or a pine cribbage board. Even though none of these was beyond the purchasing power of the workers, the response was impressive.
After two years, productivity at the plant was up 16.5 percent and quality-related errors were down 40 percent. Workers' grievances had decreased 72 percent and lost time due to industrial accidents was reduced by 43.7 percent. Beyond these improvements, relations between labour and management had never been better. Labour leaders credited the 100 Club with keeping the company afloat and fostering a new atmosphere of cooperation.
Questions -
(i) Identify the problem in the above case.
(ii) What reinforcers did the company use and what were the results?
