Motivational aspects, benefits and pitfalls of a reward system in a small shop-floor business unit : A case study of a car-dealership service unit

Abstract: Introduction: Competition increases and companies need to adjust their business to stay competitive. Employees have gained an important for an or-ganisation and are often seen as the key to business success. Motiva-tion is important for increased performance. A reward system can, amongst other things, help an organisation to motivate, attract and retain their employees. Historically, rewards have concerned mostly senior management. We where interested in how a reward system could affect people further down in the hierarchy. How can a reward system influence motivation in small shop-floor business units? What are the benefits and possible pitfalls with a reward system for such a setting? Purpose: The purpose of this report is slightly wider than what the research questions suggest. By thoroughly investigating the motivating ele-ments we aim to create a frame of reference, which is thought to give insight into the important components of a reward system and the motivating factors. It is our aim that this frame will be applicable to other settings similar to the one which we will investigate. We also intend to look into what positive and negative aspects there are and how the disadvantages with a reward system can be minimized. Method: To fulfil our purpose we have chosen to perform a case study on the service unit of Hedin Göteborg Bil AB. In order to retrieve the necessary empirical data we have interviewed two managers and car-ried out a questionnaire amongst the thirteen service technicians. Results: In line with theory, we found that financial rewards it is not the prime source for motivation; there are many factors that play a lar-ger role. Some of the most motivating factors turned out to be col-leges, autonomy and responsibility, fun and rewarding work tasks. More interestingly, we saw a relation between many of these and the reward system, indicating that financial rewards enhance the motiva-tional effects of other factors. We found that there are several positive and negative aspects with any reward system. The case study presented solutions to many of the possible pitfalls and indicated that they benefited from their cur-rent reward system.