AUGUST SEMESTER 2011

END OF SEMESTER EXAMINATION

BUS 326 A: INDUSTRIAL PSYCHOLOGY
Instructions
Indicate ONLY your Student Number on the Answer Sheet.
Question 1 Compulsory
Study the case then answer the questions that follow
Motivation and Work Behavior
Peter England is a chain of mens retail clothing stores located throughout Asia. Two years ago, the
company introduced new incentive systems for both store managers and sales employees. Store
managers receive a salary with annual merit increases based on sales above targeted goals, store
appearance, store inventory management, customer complaints and several other performance
measures. Some of this information (eg. store appearance) is gathered during visits by senior
management, while other information is based on company records (eg. sales volume). Sales
employees are paid a fixed salary plus a commission based on the percentage of sales credited to
that employee over the pay period. The commission represents 30 percent of a typical paycheck and
is intended to encourage employees to actively serve customers and to increase sales volume.
Because returned merchandise is discounted from commission, sales staffs are discouraged from
selling products that customers do not really want.

Soon after the new incentive systems were introduced, senior management began to receive
complaints from store managers regarding the performance of their sales staff. They observed that
sales employees tended to stand near the store entrance waiting for customers and would
occasionally argue over the ownership of the customer. Managers were concerned that this
aggressive behavior intimidated some customers. It also tended to leave some parts of the store
unattended by staff. Many managers were also concerned about inventory duties. Previously, sales
staff would share responsibility for restocking inventory and completing inventory reorder forms.
Under the new compensation system, however, few employees were willing to do these essential
tasks. On several occasions, stores experienced stock shortages because merchandise was not
stocked or reorder forms were not completed in a timely manner. Potential sales suffered from
empty shelves when plenty of merchandise was available in the back storeroom or at the
warehouse. The companys new automatic inventory system could reduce some of these problems,
but employees must still stock shelves and assist in other aspects of inventory management.

Store managers tried to correct the inventory problem by assigning employees to inventory duty,
but this has created resentment among the employees selected. Other managers threatened sales
staff with dismissals if they did not do their share of inventory management. This strategy has been
somewhat effective when the manager is in the store, but staff members sneak back onto the floor
when the manager is away. It has also hurt staff morale, particularly relations with the store
manager. To reduce the tendency of sales staff to hoard customers at the store entrance, some
managers assigned employees to specific areas of the store. This also created some resentment
among employees stationed in areas with less traffic or lower priced merchandise. Some staff

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openly complained of lower paychecks because they were assigned to a slow area of the store or
were given more than their share of inventory duties.

QUESTIONS
a) You have been approached by the management as an external consultant to help the
Organization solve the problems. What symptoms exist in this case to suggest that
something has terribly gone wrong in Peter England? (10marks)

b) In your analysis, what are the root causes that may have led to these symptoms and the
associated work behavior? ( 10 marks )

c) What actions would you advice the organization to take to correct these problems and at the
same time motivate the employees? (10 marks)

Answer any two questions

Question 2
a) You dont see a persons personality but you see behaviors that reflect these personalities. In the
work place personality represents persons most dominant characteristics. Describe the Big five
personality factors? (10 marks)
b) Job analysis is the foundation of almost all human resources activities. Discuss the importance
of job analysis? (5 marks)
Question 3
a) Job design involves conscious efforts to organize tasks, duties and responsibilities into a unit of
work to achieve certain objectives. Discuss five techniques of job design? (10 marks)
b) Differentiate between placement and orientation and discuss the main purposes of orientation
programs? (5 marks)

Question 4
a) Discuss the programs and techniques that need to be implemented in organizations to increase
employee satisfaction and commitment? (10 marks)

b) As a manager in an organization, what strategies would you employ to help in the management
of stress for self and others in the work place? (5 marks)

Question 5
a) Although change is a necessary way of life, individuals resist change when it is unfavorable to
them. What strategies would you use to manage change effectively in your organization?
(10 marks)
b) Organizational culture is the pattern of values, norms, beliefs, attitudes and assumptions that
may not have been articulated but shape the ways in which people behave and things get done
Describe the ways in which the values and norms are formed (5 marks)