Edu-link is a software company that sells learning management systems (e.g., Blackboard, Coursera, Moodle) to colleges and universities that provide online courses to students. Cindy Newton is the founder and CEO of the company, which she created in 2004 during the initial years of online education, when relatively few competitors serviced online schools. During these first few years, Cindy’s company did very well, and established several ongoing contracts with large universities.
More recently, however, Cindy has noticed that her profits have stagnated, likely due to the increasing competition in the industry. Cindy has been hearing and reading about team-based organizations, and thinks this may be just what her company needs to take it to the “next level” of performance and profitability. Cindy decided to start the process of restructuring her company by testing this projected change on her IT department. This is a critically important department due to the technical nature of this company. IT members are responsible for responding to bugs/issues found within the software by customers, and then figuring out ways to fix the bugs through developing new computer code.
Over the weekend, Cindy sends out a notification to all 140 members of this department letting them know that they will no longer be working on debugging in isolation and will now be working together in teams of eight. She also has each employee fill out a Big-5 personality inventory, which she then uses to sort individual employees into teams. She decides to create teams of people with identical personality profiles based on this personality inventory in hopes that this will help them to get along and promote teamwork..
Cindy is also mindful of a growing problem in her organization of tensions between the younger “millennials” and the older, often more experienced “gen-Xers”. She believes that she can help to fix this issue by structuring teams such that half of the members of each team will be over the age of 40 and the other half will be under the age of 40. She informs the new teams of this decision in her email.
After establishing this change, employees immediately begin working together within these structured teams to finish the tasks that they had previously been working on individually. Teams are informed that they are going to be evaluated as a unit, and the members of the top performing teams—those that fix the most “bugs” by the end of each month—will be rewarded with a bonus of shares in the company.
Several months after implementation, Cindy finds that this change has substantially reduced the performance of the IT department. Overall, fewer bugs are being found each month, and customers are becoming upset with the increasing delays in addressing issues within the software. Furthermore, it seems as though the climate of age discrimination is getting worse, with several employees complaining about age-related interpersonal discrimination from other employees. Lastly, teams are not communicating well with one another, and many employees are reverting to doing work on their own along with disengaging from group decision-making processes altogether. Many employees seem to be less motivated, and Cindy noted that several employees had begun to visibly “slack off” while at work.
Describe two ways in which Cindy could use rewards to help curtail these motivational declines. Be sure to briefly describe how each of these two approaches would increase motivation and which type of motivation would be impacted.