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Business · Lesson

Trace motivation through productivity without certainty

Output rose after the new bonus, and it is tempting to write that the bonus caused it.

On this page
  1. How do you follow the chain?
  2. Worked example
  3. The mistake to watch for
  4. Check yourself
  5. Where this leads next

The usual chain is: incentive, then motivation, then effort, then productivity (output per worker or per hour), then cost per unit and profit. Each link can break. A strong answer follows the chain and states where it is uncertain, which is the skill tested in motivation at work.

How do you follow the chain?

  1. Start with the incentive and who receives it.
  2. Say how it might change effort. Use “may” because motivation cannot be measured directly.
  3. Measure the output change. Productivity = output ÷ number of workers (or hours).
  4. List other changes that could also explain the output.
  5. Follow output to money. Extra units help only if they are sold and the quality holds.
  6. Write a limited conclusion. Say what the case supports and what it does not.

The ratios tool is useful for practising productivity and cost-per-unit as clear calculations with stated limits.

Worked example

Kilang Biskut Mawar is a biscuit factory in Muar with 20 packing workers making 4,000 packs a day.

The owner introduces RM0.05 for every pack above 4,000 a day. After a month, output is 4,600 packs a day with the same 20 workers.

In the same month a new sealing machine was installed, and the supplier says it should add about 200 packs a day by itself. Each pack sells for RM2.50 and costs RM1.80 to make, before any bonus.

Step 1, productivity before. 4,000 ÷ 20 = 200 packs per worker.

Step 2, productivity after. 4,600 ÷ 20 = 230 packs per worker.

Step 3, the change. 230 − 200 = 30 packs, and 30 ÷ 200 = 15% rise.

Step 4, the other cause. The machine may explain about 200 of the extra 600 packs. That leaves about 400 that the bonus, extra effort or something else may explain. Both figures are estimates.

Step 5, follow it to money. Profit per pack before bonus is RM2.50 − RM1.80 = RM0.70. The bonus bill is 600 × RM0.05 = RM30 a day. If 400 extra packs came from the scheme and all are sold, extra profit is 400 × RM0.70 = RM280, so net RM250 a day. If those packs are not sold, the bonus is a cost with no return.

Step 6, conclusion. The scheme may have helped, and the gain is probable but not proven. To check, the owner could compare weeks with and without the bonus after the machine has settled in, and look at unsold stock.

The mistake to watch for

A common slip is to turn a correlation into a certainty.

Mistaken answer: “Output rose by 15%, so the bonus motivated the workers and caused the rise.”

The case also says a new machine arrived. The answer ignores it and treats timing as proof.

The correction is to write “may have contributed”, name the machine, and say what extra evidence would help.

Check yourself

1. A workshop has 15 workers and makes 3,000 units a week. After a change it makes 3,450 units with the same workers. Calculate the productivity before and after, and the percentage rise.

Show answer

Before: 3,000 ÷ 15 = 200 units per worker. After: 3,450 ÷ 15 = 230 units per worker. Rise: 30 ÷ 200 = 15%.

2. In the workshop above, staff also received new tools that month. Can the owner say a bonus caused the rise? Explain.

Show answer

Not with certainty. The tools may explain part of the rise. The owner can say the bonus may have contributed and should compare results with other evidence, such as output before the tools arrived.

3. Give two reasons why higher output may not lead to higher profit.

Show answer

The extra units may stay unsold, so no revenue arrives. Quality may fall so more units are rejected or returned. The bonus cost may also be larger than the extra profit per unit.

Where this leads next

Now bring every skill together in evaluating a fictional policy with stated criteria. The cash versus profit bridge shows why extra profit and extra cash are not always the same.

Writing a limit without losing the argument is a skill our teachers can practise with you in online one-to-one Business tuition.

Questions people ask

How do I calculate productivity?

Divide output by the number of workers, or by the hours worked. For example, 4,000 packs made by 20 workers is 4,000 ÷ 20 = 200 packs per worker. Use the same measure before and after a change so the comparison is fair, and state the unit.

Why can't I say the incentive caused the rise?

Other things may have changed at the same time, such as a new machine, extra training or a busy season. A case rarely proves one cause. Write that the incentive may have contributed, name the other changes and say what evidence would help.

Does higher productivity always mean higher profit?

No. The extra output must be sold at a price above the extra cost, and quality must hold. If packs pile up unsold, or more are rejected, the gain shrinks. A good answer follows the output through to sales and costs.

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Your next step

If your evaluations sound too sure of themselves, a one-to-one teacher can show you how to keep the chain of reasoning and still write the careful limit that earns credit.

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