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1.

Do Exhibits 1, 2, and 3 suggest any problems that might explain or be related to the profit
declines?

Without proper insight and full 360 knowledge of the company’s weaknesses and problem areas, it is
difficult to jump to conclusion, however the profit decline could possibly be result of ripple effect
starting from the faltering productivity, and the rise of absenteeism and turnover rate. All these may
have reduced the efficiency of the company’s overall performance.

Furthermore from the case study, it can be seen that productivity has significantly decreased over the
past two years, coinciding with the decline of profit, showing a possible co-relation. Given that it had
been mentioned that key to Clinton’s success had been high productivity that in turn lowered the unit
cost production.

2. Given the discussion of motivation theory in this chapter, do the data in Exhibit 4
suggest that productivity declines may be due to motivation problems? What other
human resource management explanations are plausible?

Even though the data in Exhibit-4 may not give the accurate depiction of productivity declines caused
by motivation problem but it is evident that there is quite a lack of motivation in Clinton for the
employees. In Exhibit-4 we see that employees are satisfied with Clinton’s incentives such as annual
raise, life insurance, pension, job security and etc. However they fall short when providing feedback
about performance, which employees think of highly for their personal growth. At the same time
employees are dissatisfied with opportunity for advancement and to develop new skills, which they
deem as important. From here it can be seen that, although Clinton had been fulfilling one of the
factors of the Two Factor Theory, which is hygiene factor that prevents employees from being
demotivated. However they are not giving much attention to motivating their employees to improve
their skills with proper feedback and opportunity to develop their skills that may have translated into
their low productivity, as performance feedback having effective metrics and reporting processes
reinforces both team and individual goals and result in continuous improvement.

In addition to that, they do not have a good profit sharing plan that employees consider as very
important and something that is closely dependent on their performance. It may have been a factor
that hindered the productivity of the employees and taking away from teamwork culture in the
organisation.

Lack of motivation could be one of the many reasons why the productivity had been staggering at
Clinton. Nonetheless many other factors could possibly contribute to the low productivity that has not
been mentioned in Exhibit-4 such as, lack of delegation, giving employees the space to learn new
things and experiment with innovation or poor communication with employees leading to their
personal goals not being aligned with the organizational goals. Absence of impactful resource
allocation could also be a reason of diminishing productivity as setting clear priorities helps to
ensure that time and resources are allocated to the most important and impactful tasks.