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You Get What You Pay For: Roofing Teams and Motivation

Case

Author: Katherine Breward

Online Pub Date: January 04, 2021 | Original Pub. Date: 2021

Subject: Compensation Management, Health & Safety Management, Small Business Management

Level: | Type: Experience case | Length: 1639

Organization: fictional/disguised | Organization size: Small

Region: Northern America | State:

Industry: Construction of buildings| Specialized construction activities

Originally Published in:

Publisher: SAGE Publications: SAGE Business Cases Originals

DOI: http://dx.doi.org/10.4135/9781529743371 | Online ISBN: 9781529743371

This case was prepared for inclusion in SAGE Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes. 2021 SAGE Publications Ltd. All Rights Reserved.

The case studies on SAGE Business Cases are designed and optimized for online learning. Please refer to the online version of this case to fully experience any video, data embeds, spreadsheets, slides, or other resources that may be included.

This content may only be distributed for use within Texas A. http://dx.doi.org/10.4135/9781529743371

SAGE © Katherine Breward 2021

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Page 2 of 5 You Get What You Pay For: Roofing Teams and Motivation

Abstract

Okwaho runs a roofing company that has seen a dramatic increase in workplace accidents and injuries. In the same timeframe he introduced team-based bonuses based on timely project completion. He considers the role that his newly designed compensation system may play in motivating safety behavior. Okwaho further considers how to balance his profitability and productivity targets with community needs and socially and legally responsible management practice.

Case Learning Objectives

By the end of this case, students should be able to:

• apply the expectancy and equity theories of motivation in order to assess the relative merits of an incentive system;

• evaluate the link between incentive system design and safety behaviors; • design incentive systems to balance productivity and safety-based priorities; • assess the benefits and drawbacks associated with temporary project teams.

Blood, Tears, Questions, and Other Unfortunate Developments

Okwaho walked up the path to a small, tidy home on his First Nations urban reserve and reluctantly knocked on the door. Chances were the community had already relayed the bad news while he’d been at the hospital with Joseph, but regardless he felt a moral obligation to face Joseph’s mother directly and explain the accident. Joseph was a 19-year-old who worked for Okwaho as a roofer. He had been hired three months previously. It had been his first fulltime job. Now, after Joseph’s terrible fall today, resulting in a badly broken arm, it was unclear whether he would ever regain enough mobility to be able to work as a roofer again.

Okwaho did not have to wait long on the porch. Within moments Joseph’s mother answered and Okwaho’s heart fell. He could see by her red-rimmed eyes and wet face that she had been crying. She knew about the accident already. Other family members quickly crowded around her supportively, looking at him. Okwaho had trouble meeting their eyes. He felt like he’d failed them, his new employee, and their entire community. “May I come in?” he asked gently, despite his trepidation. The door opened further and he went into the warm home, trying to find some way to explain what had happened.

Later, at the office, Okwaho looked over this latest accident report and sighed to himself. He knew it looked bad, especially given the company’s other recent safety issues. People might think he was an irresponsible business owner, but Okwaho had provided detailed safety training and the needed harnesses and other personal protective equipment were always available on job sites. He just couldn’t understand it. Joseph was a good kid who paid close attention to instructions. Why hadn’t he been harnessed in properly? Okwaho felt terrible for Joseph and his family, but he was also worried about his ability to staff upcoming jobs. The injured worker would be away for an indefinite period. This was the third significant accident in five months, and it was simply unacceptable. Something was going very wrong with his roofing work teams. He would need to fix it before more people got hurt, but how?

Data 1. Occupational Injury Rate for Construction Workers, 2015–Present

Click here to view the online version of this case for optimal experience of interactive data embeds.

Okwaho’s Team Strategy

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Page 3 of 5 You Get What You Pay For: Roofing Teams and Motivation

Okwaho owned and managed a small roofing company. He had 19 fulltime workers, 16 of whom did roofing work and three of whom were involved in activities such as sales, marketing, scheduling, bookkeeping, and administration. Among the roofers, five people had more than five years of experience each and were highly skilled and able to lead teams. The remaining 11 were less experienced. They took instructions from the senior members of the team on each project. Of those 11, four were extremely new, having worked in roofing for less than a year. Okwaho considered that group of four, none of whom were over age 21, to be “the kids.”

When he received a new job, Okwaho would select the employees with the right skills (some roofing jobs were more difficult or technically complex than others), and then he would create a self-managed project team. The team, which could have anywhere from three to eight people, would work together until the project was complete and then they would move on to the next one. Okwaho tried to balance the teams such that they had adequate supervision and the “kids” were well placed to learn from others with more experience, but he also considered individual personalities and personal preferences for commercial versus residential work. Even with those considerations, the team composition varied tremendously from one project to the next so people wouldn’t work with exactly the same colleagues from one day or week to the next.

The Backlog and Incentives

Five months earlier Okwaho had noticed that many of the projects were taking longer than expected. This created scheduling problems as jobs got backlogged. Customers got upset, in particular those whose contracts involved temporarily removing entire sections of roof. Customers doing planned renovations were especially adamant about having all the work done before winter. Nobody wanted roof work performed once the snow began to fly! In fact, most of their winter business came as a result of emergency repairs on roofs damaged by winter storms.

In response to the backlogs, Okwaho decided to create a new incentive. Before deciding on a specific bonus, he read about expectancy theory and equity theory. These theories made intuitive sense to him. Expectancy theory simply stated that in order for people to be motivated certain conditions needed to be met. First, people needed to believe that their level of effort was positively related to their performance (basically, if they try harder, they will do better). Then, they needed to believe that effort would lead to rewards. Finally, they needed to believe that the rewards offered would be relevant and personally valuable to them.

Equity theory was similarly straightforward. It stated that people compare their own efforts and rewards to the efforts and rewards of others. In addition to comparing themselves to others they also compare their effort/ reward balance with prior jobs they have had and even their preconceived expectations. Inequity (such as another person needing to work much less hard to earn the same amount) makes people unhappy and prone to slacking off, leaving the organization, or distorting their perceptions of themselves or others. Perceived equity, by contrast, is motivating.

After much thought, Okwaho decided on a team bonus. He would provide each project team with a target completion date (as usual), but now if they met that deadline the entire team would get a cash bonus. If they did not meet the deadline for any reason other than weather delays, there was no bonus. If delays were caused by weather, they were given an extension that was equivalent to the missed time. The bonus depended on the project size and scope but ranged from USD 20 per team member for modest residential projects requiring only one or two days to USD 150 per person for extremely large corporate projects requiring weeks.

The bonus was generally well received, although several senior employees expressed surprise and dismay that the “kids” would get the same as they would. Regardless, the incentive seemed to accomplish its goals. Over the five-month period, the percentage of projects completed on time increased from 63% to 87%. Okwaho could understand why. Last time he had visited a job site he had noticed the senior roofers hurrying the new kids up to make sure the job got done in time for them all to get a bonus. The new kids had looked tired and harried but they had gotten it done! Unfortunately, they’d had to replace a few shingles during the quality inspection, because in their haste they hadn’t been placed quite properly, but it was still done on time.

Initially, Okwaho had been thrilled with the success of his team incentive. He couldn’t help but notice, however,

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Page 4 of 5 You Get What You Pay For: Roofing Teams and Motivation

that in the same five-month period three workers had been injured. One, Joseph, had fallen off a steep rooftop while trying to get a tool that was just out of reach. The fall should never have happened, but he had not been properly harnessed in with a tie-line. Okwaho did not understand how the others on the worksite could have missed that— they were supposed to take responsibility for watching out for the “kids.” Another worker, one with nine months of experience, had cut off two fingers after failing to install the safety guard on a cutting tool. A third worker had been hit in the head when a colleague decided to throw some excess materials off the roof to hasten clean-up. He hadn’t seen his coworker down below and the man had suffered a concussion. There had even been an unusual driveway incident. One of his employees had hit a parked, riderless child’s bicycle while rushing to deliver some roofing materials to the site. Nobody was hurt, and Okwaho had bought a new bike for the outraged parents of the owner, but it was oddly careless of the worker. All of these incidents were also strange because in the two years before that they had only had one significant accident. Okwaho wondered if there could be any connection between his incentive program and the recent poor safety record. After some consideration he realized that he needed to rethink things. He decided to …

Discussion Questions

• 1. Evaluate Okwaho’s existing bonus system through the lens of expectancy theory and equity theory. What are the strengths and weaknesses of the incentive plan when viewed through those lenses?

• 2. Do you think the new incentive plan is impacting the safety of this workplace? Explain your reasoning.

• 3. What types of team incentive would maximize both efficiency and safety while maintaining a respectful workplace? Explain why your strategy would be effective.

• 4. What are the benefits and drawbacks of Okwaho’s self-directed project team structure? Is it a good choice for his business? Explain your answer.

Further Reading Liccione, W. 2007. A framework for compensation plans with incentive value. Performance Improvement, 46(2), 16–21. Teo, E. , Ling, F. , & Chong, A. 2005. A framework for project managers to manage construction safety. International Journal of Project Management, 23(4), 329–341. http://dx.doi.org/10.4135/9781529743371

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