FREE ESSAY ON BUSINESS MANAGEMENT

BUSINESS MANAGEMENT

Task: Choose a company and identify all motivational (employee-centered) programs that the
company has in place. Then ascertain the significance and objectives of these programs.
Next provide a critique of these programs. Finally, recommend changes that will improve
on the programs and/or new programs that will better meet the objectives articulated
above.
Overview: The company that I have chosen as the subject of my research is the AAA Travel
Agency. More specifically, I have interviewed several travel agents from the Reno,
Pennsylvania location, which serves patrons from Western Pennsylvania as well as West
Virginia. The bulk of the information for my analysis has come directly from the
in-office interviews with Ms. Tiffany Pacior, the senior travel agent for the Reno
office. She has provided me with information directly out of the AAA employee handbook as
well as personal information covering the positive and negative effects she has
experienced from the programs I will be discussing.
There can be little doubt that the backbone of every successful business or company is
its staff of employees. Employees are the vital parts of the business machine that can
aid in its success or contribute to its failure. It is for this reason that it is
imperative to possess the ability to acquire and maintain effective employees. The chief
method by which a business or company can accomplish this task is through
employee-centered motivational programs. The goal of these programs is to encourage
employees to maximize their performance by targeting three specific motivational stimuli.
These include morale, satisfaction, and rewards. After researching their policies and
interviewing employees, I have came to the conclusion that AAA of Reno, Pennsylvania has
adopted Fredrick Taylor's approach to motivating their employees. In this paper I will
demonstrate how AAA applies Taylor's scientific management approach to target the three
motivational stimuli stated above. I will also provide some insight from the employee's
perspective as to how effective the programs are at what they are designed to achieve.
The scientific management approach to motivation evolved from the work of Frederick
Taylor. He believed that when highly productive people discover they are being
compensated basically the same as less productive people, then the output of highly
productive people will decrease. Consequently, the scientific management approach to
motivation is based on the assumption that money is the primary motivator. This seems to
be the ideology that AAA has adopted to produce high morale, achieve satisfaction, and
reward their employees.
Morale, as it applies here, may be defined as the overall feeling of the members of an
organization. Generally speaking, a company with a high morale among its employees enjoys
above average performance and a lower than average employee termination rate. AAA has
several programs in practice, which support the scientific management approach to
motivation to produce high morale. First, it is not uncommon for a travel agent to work
beyond the scheduled forty-hour workday to complete the tasks of a heavy business day. It
was for this reason that the company offers overtime compensation for the dedication of
their employees. The company pays one and a half times their regular hourly rate of pay
when an agent works more than their scheduled hours per week. Also, for those individual
days when an agent works more than ten hours per day, they are entitled to overtime
dinner pay. The employees stressed that this is a worthwhile program because it allows
overtime workers to order dinner from local delivery shops. The objective here is simple,
no one likes to work on an empty stomach and so why not use a little give and take to
make the employees feel like they are not being taken advantage of. It has proven to be
effective from the opinions of the employees I interviewed. The final program I was made
aware of designed to bolster company morale is the "paid time off" program. This allows
employees to take time off from their work for various reasons and to be regularly paid
as if they were working for that period of time. Acceptable reasons for this privilege
cover a wide spectrum including personal vacation, minor illness, funeral leave, jury
duty, holidays, military leave, and marriage. Ms. Pacior explained that although these
programs are not abundantly used, when needed they are greatly appreciated by the
employees and help to curb what would be a falling morale. Everyone needs time off from
work from time to time but a company is certainly not expected to pay the employee while
he or she is not working. In my opinion, AAA has gone above and beyond their
responsibility in an effort to keep the company's morale as high as possible. Keeping
morale high, however, isn't the only means by which AAA motivates their employees. They
also aspire to keep their employees satisfied.
Satisfaction is defined as the sum total of feelings a person has about the factors in
the workplace. Although there is little in the form of specific programs, AAA does in
fact show a respectable effort to keep the factors within the workplace desirable. For
example, the office environment itself is well maintained. It is equipped with new
computers, plenty of space and climate control. All employees are given personal parking
spaces, offices, and their own desktop computers, which cannot be said for similar travel
agencies in the area. The employees I interviewed all agreed that they are satisfied with
the factors in their workplace and added that their favorite relating policy is the
"dress down Fridays" policy. This permits the employees to dress more casually than they
do during the rest of the week. A company must keep their employees satisfied if they
wish to gain the most out of their performance. It stands to reason that an unsatisfied
employee would not feel compelled to put forth their best effort if they feel as if their
wants and needs are not important factors to the management. They also agreed that of the
three ways to motivate employees this was probably the one that least applied for their
particular company, and the one that worked the best was rewards.
Rewards, Taylor would agree, are the most effective way to motivate employees. They can
come in the form of monetary bonuses, individual perks, or various forms of recognition.
AAA makes use of all three of these by implementing several reward programs. First, the
company offers several rewards in the form of monetary bonuses. The company's individual
incentive plan compares the agent's goal commission with their actual commission and pays
thirty-two percent of the excess on top of their regular salary. For example if an agent
earns $1,000 over what their goal was set at, the agent earns a $320 bonus at the end of
the year. Employees can also earn office bonuses when the office as a whole exceeds the
projected goal. When this happens, 5% of the excess is divided amongst the employees and
added to their salary as a bonus. This obviously motivates them to make as many sales as
possible individually as well as a group. The objective of these programs is to give a
sort of pat on the back that says "good job people!" As one could imagine these are the
most popular programs in the company. Perks, which make up another large part of the
reward program, come in a close second in the popularity contest.
AAA offers a variety of perks that would certainly motivate employees to want to stay
with the company. First, all employees receive a free AAA plus membership for themselves
as well as one additional adult residing at the same address after the completion of six
consecutive months with the company. This membership can add up to thousands of dollars
per year when used for discounts at a multitude of hotels, resorts, restaurants, as well
as many other establishments. Second, employees may elect to enroll in the AAA savings
plan. This plan deducts a certain percentage of their basic earnings from each pay that
is then matched by the company and put into savings for the future. This plan has proven
to be a successful program for both the company as well as the employees. It motivates
the employee to give long term service to gain a substantial savings, which generally
benefits the company as well. A third perk that employees may enjoy is the insurance
coverage offered by the company. AAA offers a variety of coverage including medical,
dental assistance, life and long-term disability, and travel accident coverage. For
several of the employees in this office, the insurance benefits initially attracted them
to the company and are what motivate them to keep their employment with AAA. The fourth
type of perk enjoyed by many AAA employees including Ms. Pacior is the educational
assistance plan. Under this program, an employee is entitled to reimbursement for tuition
and educational material costs up to a maximum of $2,000 per calendar year. Classes which
deal with subjects that are related to an employee's current position or to work
performed at AAA, are eligible for reimbursement. The courses, however, must be taken
through an accredited university, college, business, or technical school. Also, they must
have a letter grade of "C" or better or "Pass" if the course is pass/fail. To receive the
reimbursement, employees must submit a written grade report and receipt for tuition paid
and materials expenses. Ms. Pacior is currently working towards her bachelor's degree in
business and hopes to finish next semester. This will strengthen her chances for
advancement in the company. The final perk I found that the company offers (which was
also mentioned as being part of morale motivation) is the vacation time program.
Employees are entitled to a specified number of vacation days depending on how long they
have been with the company. The chart below outlines the qualifications necessary to earn
vacation time.
Employment Service Full Time Part-Time
1st year, hired before June 1 1 day per month employed between January 1 and May 31
Average hours worked daily times the number of months employed between January 1 and May
31
1st year, hired after June 1 0 0
2nd year - 5th year 2 weeks Double weekly hours worked
6th year - 14th year 3 weeks Triple weekly hours worked
15th year - 24th year 4 weeks 4 times weekly hours worked
25th year + 5 weeks 5 times weekly hours worked
As mentioned before, in addition to the time off of work employees are paid their full
wage as if they were there in the office working. This program had no opposition from
those agents who have taken advantage of it and it is not difficult to see why. The
objective of this program is not so much to motivate as it is to encumber job burnout.
Unfortunately employees may become overwhelmed with some of the monotonous tasks of
everyday work and need time to relax and unwind so as not to become unmotivated. Vacation
time has proven to be an effective antidote for this problem.
The third and final type of reward that AAA utilizes is recognition. The only formal
program dedicated to giving employees recognition in their employment is the service
recognition award banquet. This banquet is held to honor employees for a variety of
reasons including those who achieved five-year milestones, top sales for the year,
friendliest employee (as voted by patrons of the company) and also those employees who
have exhibited vast improvement from the previous year. These awards, especially those
which are accompanied by a cash bonus, clearly motivate and encourage employees to strive
to perform to their potential. The employees of AAA clearly value these awards by
displaying them on and around their offices for all to see and admire.
It is difficult to recommend changes to these AAA's motivational programs mostly because
of the fact that they have been in existence for decades. They have refined them time
after time in an effort to reach optimal motivation among the employees. Besides some
small cosmetic changes, there was one program in particular that I would suggest to AAA
that I believe would assist management in achieving this goal. I have noticed that there
is what I believe to be an oversight in the way the individual bonuses are distributed.
AAA sets a goal and expects all agents to achieve that goal. The problem with this
program is that some areas such as large cities provide travel agents with much more
business from which to earn commissions than that of offices the size of the Reno office.
These large offices may have more than ten times the clientele than that of the smaller.
The result is that the smaller offices rarely have a chance to make any significant
bonuses while the large city offices are making arguably too high of a bonus. This has
been devastating to the motivation of the smaller offices. Why should we try so hard when
we know we won't make the goal, says Ms. Pacior. She makes a good point. Perhaps the
corporate office could make goals based on individual offices or at the very least
districts so agents perceive themselves as having the distinct opportunity to earn
bonuses at the end of each year. This would undoubtedly produce motivation and
consequently earn more income for AAA. As I stated this is one problem I found during my
analysis of AAA, yet I do not hold that it is the sole problem the company faces. A
broader study of the company may reveal deeper problems that my informational sources
have allowed.
Collectively, AAA does an outstanding job of motivating their employees, a task that many
companies that are larger and older have not yet mastered. The Frederick Taylor method
has proven, at least in this situation, to be an effective manner in which to retain high
morale, satisfy, and reward the employees of the American Automobile Association.