Behavioural Aspects of Management Accounting Consider the following quotation from a factory worker: “I’m on...

Behavioural Aspects of Management Accounting

Consider the following quotation from a factory worker:

“I’m on a piece rate. I get $4.20 on top of my hourly pay for every 100 mouldings I press. Normally I do about 1000 a day-it’s a good bonus. But the work is easy. I could do 2000. If I did, though, I know what would happen. Firstly, management would decide that the rate for the job was too generous, and would cut it. And secondly, if we all increased our production like that, half of us would soon be out of a job. So- take it easy, that’s my motto”.
from Elkin & Inkson (2000, p.109)

Required: (a) What is extrinsic and intrinsic motivation?

(b) What are the intrinsic and extrinsic motivating factors that are involved in the situation above?

(c) What is goal congruence and is it being achieved in the above situation?

(d) Suggest two ways in which the factory worker could be encouraged to increase production?

Expert Solution

a. Intrinsic motivation - When someone is intrinsically motivated it means that his/ her behaviour is motivated by internal desire to do something for its own benefit like for the enjoyment of an activity, to do something to learn a skill.

Extrinsic motivation - When someone is extrinsically motivated it means that his/ her behaviour is motivated by external factors that pushes him to do something to earn a reward.

b. Extrinsic motivation - To get a bonus at $4.20

Intrinsic motivation - In the above situation the factory worker can do complete more mouldings to earn a better bonus.

c. The management offered the bonus to acheive a higher production by creating a positive thoughts in the minds of the labors however the goals of the management is not achieved because the production has not been increased due to a fear that if the production increases the management could cut down the bonus rate or can reduce the labor force.

d. 1. By increasing the bonus rate

2. By providing a job security to the workers so that increasing their efficiency would be a result of the intrinsic motivation.

ekkarill92 answered 2 years ago

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