cps project 2 final (formatted draft 1)

RETAINING HIGH QUALITY EMPLOYEES THROUGH GAIN SHARING 1

INPUTS THAT DETERMINE OUTPUTS:

RETAINING HIGH QUALITY EMPLOYEES THROUGH GAIN SHARING

Group 3

Brandon Wilson

Kyle Weitzel

David J. Williams

Dr. Margaret Lucero

MGMT 4340

March 30, 2014


Introduction: Background

Getting optimal output from employees can be a formidable challenge. The opportunity

for employees to maximize their skills and abilities can often be an abstract, nebulous endeavor

that doesn't translate within a job description, leaving the employee to reduce their job to simply

being a function that meets their material needs. There are methods, however, that exist to bring

out the most in employees, giving them a sense of purpose greater than that of meeting their

immediate material needs.

Central to these methods is providing incentive - giving employees a reason - to reach

their full performance potential. Coffee Waves, a local coffee shop which sells high end coffee,

hand -made gelato, pastries and sandwiches, is one such company dealing with these issues.

Founded in 2008 with three locations in Corpus Christi and one in Port Aransas, the typical

employee is a student in their 20's who embodies the custom coffee boutique experience. As

such, David Bendett, the owner of Coffee Waves Port Aransas, has been able to capitalize upon

the local employment resources available to be functionally operational to serve his growing

clientele of locals, snowbirds (people from up north who winter in the area), as well as the

swelling tourist populace during peak season.

As we found recently during our interview of Bendett, his greatest problem was not

attracting employees who are able to develop the skills necessary to fulfill the mission of Coffee

Waves, but rather retaining those in whom he has invested and come to rely upon. Our research

involved numerous employee and management surveys, interviews with the owner and

managers, as well as articles to meet this challenge.


I. Integrative Model of Motivation Enhancement

1. Goals/Expectations

Table

Motivation Survey: Coffee Waves Employees

Source: Coffee Waves Staff – Location: Port Aransas

The above questions were asked to gauge how well the employees understood their

manager's expectations and the degree of fairness they viewed their duties to be. We asked these

questions to generate responses in order to gauge how well management is communicating goals

or task assignments. The mean of means of 4.29 out of 5 indicates that there is good

communication from management to employee about what is expected of them.

This is interesting because the employees do not have defined job descriptions, and

conducts themselves according to a list of shift duties that must be completed while on shift.

Lindsay, the manager, is the only person that has a clearly defined job description. Some curious

responses were generated on Survey 5 for questions 2 and 6. This employee is likely frustrated in

the lack of communication of job tasks and feels that some aspects of his shift duties are

unreasonable.

1 My supervisor and I agree on the quality of my performance. 4.57 5 4 4.57

2 I understand my boss's expectations and generally feel they are realistic. 4.43 5 3 4.43

3 I believe my boss's expectations are unclear and unrealistic. 1.71 2 1 R 4.29

4 I believe that feedback on my performance us usually fair. 4.29 5 3 4.29

5 My job is sometimes hard. 4.00 5 2 4.00

6 Some aspects of my job are unreasonable. 1.86 3 1 R 4.14

Goals/Expectations 4.29


2. Ability

Table



Path/Goal Theory is the importance of fitting the right job to the right person and

providing the necessary resources and training. These factors must be combined with effective

goal setting if increased effort is to result in increase performance. The role of the supervisor is

played in offering resources and training, while removing the obstacles of success. We authored

these questions to generate responses on how well the employees are prepared to complete their

task assignments.

Their apparent ability level is good, since this section reported a strong mean of 4.45 out

of 5. Because of this high score, it has led us to believe that since the shift duties is the basis of

the employee expectations, and since Bendett trains each employee personally to ensure quality

training as well as orientation, the employees feel prepared and able to meet the supervisor's

expectations of completing their shift duties.

The only outlier in this section was again on Survey 5. On Survey 5 Question 3, the

employee expressed a neutrality on the basis of having adequate resources to do his job well. If

1 I feel I have adequate training to perform my current job assignments. 4.71 5 4 4.71

2 I believe that my native skills and abilities are matched very well with my job responsibilities. 4.86 5 4 4.86

3 I believe that I have adequate resoures and supplies to do my job well. 4.00 5 3 4.00

4 I could do a much better job if I had more training. 1.86 3 1 R 4.14

5 I believe that my job is too difficult for my ability level. 1.14 2 1 R 4.86

6 I believe that my job performance is hindered by a lack of supplies, resources, or training. 1.86 3 1 R 4.14

4.45Ability


this is the case and he is neutral about being prepared to do his job, there could be a possible

barrier to this employee's success in achieving the goals and expectations set before them.

3. Reinforcement

Table



Behavior with positive consequences tends to be repeated, while behavior with negative

consequences tends not to be repeated. This section has a surprisingly low mean of 3.79 out of 5.

In this section, we asked questions to generate responses about how well good and bad

behavior/performance are addressed. In Question 1, Surveys 5, 6, and 7 responded negatively to

how reasonable the rewards are. This could be the basis of both reinforcement or salience.

Survey 5 generated a response that indicates that this employee feels the supervisor plays

favorites when doling out rewards. They also do not feel that the rewards are worth extra effort

and that corrections to their performance are not well communicated. Corrections on poor

performance and reprimands seem to not be well communicated, generating a mean score of 3.7.

This could possibly mean that either there is no poor performance (unlikely), or that management

is not very assertive when it comes to correction or reprimanding employees.

1 I believe that rewards (pay raises, affirmation, days off, prefered shifts) are reasonable. 3.29 4 2 3.29

2 My boss plays favorites when dealing out rewards. 2.00 5 1 R 4.00

3 The rewards to good performance are worth extra effort. 3.43 5 1 3.43

4 I am usually not corrected in a timely manner if I am doing something incorrectly. 2.14 4 1 R 3.86

5 I have good job security. 4.43 5 3 4.43

6 Corrections to my performance are well communicated. 3.71 5 2 3.71

3.79Reinforcement


After reviewing Reinforcement Theory and how it applies to these employees, we feel

like there is an Outcomes Issue, based upon extrinsic and intrinsic elements. Extrinsic outcomes

are reinforcers like pay, promotions, or praise, given to an individual employee from either

management or coworkers, affirming the employee's efforts and performance. If an employee

gets a compliment on how well they made a drink or how well they cleaned the coffee shop

during or after their shift, this boosts the confidence of the employee and fosters a sense of self-

worth in their work.

This leads us to the intrinsic outcomes. Intrinsic outcomes are what the individual feels

about themselves as a direct result of how well they performed; the employee's feelings of

accomplishment, self-esteem, and the personal development they experience as a byproduct of

their good performance. Our surveys have identified a disconnect between the extrinsic and

intrinsic outcomes, suggesting that management is very good at verbal reinforcement while

rarely ever reprimanding the employees. This, coupled with the lack of significant reward or

advancement opportunity diminishes the value of the affirmation and praise the management

team gives the employees. As such, the lower-level employee positions are viewed as mundane,

monotonous, and unfulfilling.

These surveys show that the employees feel they have maximized their input, and as

such, the seeming reward is hardly worth the effort. The lack of tangible reward leads

employees to become complacent, which ultimately diminishes their overall performance.


4. Equity

Table



This section reported a mean 2.79 out of 5. This poor equity perception would appear to

stem from reinforcement issues between management and employees. For example, in Survey 5,

since they marked neutral and disagree on some questions from the Reinforcement section, it is

likely that they feel they are underappreciated in the business. The Survey 5 responses on

questions 2, 3, 4, and 5 lead us to believe that this employee is having an equity issue.

An interesting response came from Survey 5, 6, and 7 on question 5, stating they strongly

agree with the statement that they are worth more than what they are getting paid. These same

employees all strongly agreed that they work harder than some of their other coworkers. This is

telling since Survey 6 answered that they strongly agree that promotions and pay raises are fair.

This is likely one of the managers who feel they fairly earned their promotion or pay raise.

1 My supervisor indicates that I am not performing as well as I should, but I disagree. 1.29 2 1 R 4.71

2 Rewards are distributed fairly, based on performance. 3.71 5 3 3.71

3 I feel I'm worth as much to the business as someone who out-performs me. 2.71 4 1 R 3.29

4 Are promotions and pay raises fair? 3.43 5 1 3.43

5 I believe I am worth more than what I am getting paid for what my job is. 3.43 5 1 3.43

6 I work harder than some of my other coworkers. 4.14 5 3 4.14

3.79Equity


5. Salience

Table



To examine Salience, we built questions around whether or not rewards are meeting the

needs of the employee and would act as sufficient reinforcement. If the rewards are not appealing

to the employees, they are likely to reject or undervalue some reinforcement rewards, leaving

them under-motivated.

First, we examine Murray's Manifest Needs Model. In this, Murray proposes that

individuals can be classified according to the strengths of their various needs. Murray proposes

dozens of needs, but only three are relevant in the workplace, including the needs for

achievement, affiliation, and power. This section recorded a mean of a mere 3.48 out of 5. This

likely indicates that the reinforces are either not matching the equity needs of the employees or

are not matching what each individual's needs.

The need for achievement is defined as "behavior toward completion with a standard of

excellence…" Questions that relate to the need for achievement are questions 3 and 5. These

1 I do not find the rewards and opportunities available to high performers very appealing. 2.43 4 1 R 3.57

2 The rewards that are offered to me for high performance meet my needs. 3.00 4 2 3.00

3 The rewards that I receive make me want to work harder. 3.43 5 1 3.43

4 The rewards that are available to me are attractive to me personally. 3.43 5 2 3.43

5 All rewards are the same, no matter what the performance. 2.71 5 1 R 3.29

6 I experience personal growth working in my position. 4.14 5 3 4.14

3.48Salience


received moderate responses, likely because the achievement of the goals is simple, with all

employees being able to achieve them, thus rewarded the same.

Next, the need for affiliation involves "attractions to other individuals in order to feel

reassured and acceptable." The question related to this need is number 6, which generally

received a good response. Experiencing personal growth in their position makes the employees

reassured about their surroundings as well as makes them feel accepted when working partner

shifts.

The last need is the need for power. This need represents a desire to influence others and

be controlling. If a person's need for power is high, their need for rewards other than verbal is

likely higher. Since they desire power, they are likely to respond well to monetary rewards

instead of reassurance. In other words, money is power, and when they are being rewarded with

more power or money, they have a higher salience. Questions 1, 2, and 4 deal with the monetary

aspect of salience and how appealing those rewards are.

6. Timelines

Table



1 Feedback on how I am performing comes often. 3.71 5 2 3.71

2 I receive performance feedback that helps me do my job better. 4.43 5 4 4.43

3 Raises and other performance rewards don't come often enough. 2.29 3 2 R 3.71

4 My supervisor is easily accessable to talk about my performance. 4.14 5 3 4.14

5 Management is too busy to care about the employees. 1.29 2 1 R 4.71

6 Opportunity for advancement is available if I work hard enough. 3.71 5 2 3.71

4.07Timeliness


Timeliness is all about providing expeditious rewards and accurate feedback. Until now,

we have examined that the goals and expectations must be clearly communicated: the employees

must have the ability/training/resources to complete those goals and expectations, while rewards

and corrections must be administered to reinforce the performance in completing the goals and

expectations. The rewards and corrections must then be justified and dealt on a fair basis, and

that the rewards and feedback must meet the personal needs of the employee.

Now, we examine how these elements must exist and be introduced on a timely basis in

order to ensure that the reinforcers are producing desirable behaviors. The importance of

timeliness becomes prevalent when dealing rewards. If the reinforcers are not dealt on a timely

basis, they could be taken for granted or be critically undervalued. Questions 1 and 3 deal with

how often feedback and rewards come. Both of these sections scored low. This could mean that

management does not provide enough feedback or incentive to better performance.

Question 2 blatantly asks if there is any exchange of information on how well the

employee is performing. And finally, Questions 4, and 5 deal with the accessibility of the

management. Accessibility could act as a facilitator of feedback. It seems as though feedback is

accessible.

Motivation Analysis Summary

According to this Motivation Analysis, Coffee Waves is doing well in their feedback, but

not so well with rewards.

Since they do not have defined job descriptions, job positions tend to be seen by

employees as ambiguous.


The employees conduct themselves according to their shift duties and are regularly

verbally affirmed for their performance.

Solving disconnection between the Intrinsic and Extrinsic outcomes of their performance

is the main key to success.

To solve the intrinsic outcomes, management must fabricate job descriptions and must

implement regular employee evaluations to reinforce these job descriptions.

After employee evaluation, the employees must be given rewards for good performance

that are greater than mere affirmation and praise.

David Bendett is the kind of owner that will praise an employee at any given moment,

promising advancement and sometimes even monetary compensation, but has trouble following

through because of either a lack of opportunity, a lack of means, or a combination of both. This

is giving the employees a jaded perspective when accepting David’s praises.

In particular, one employee said in an interview, “Yeah, you tell me that I’m doing

awesome all the time, but you still pay me the same as when I started and wasn’t that awesome.”

This translates to low satisfaction among the employees who struggle with dealing with intrinsic

and extrinsic outcomes. This low satisfaction leads to low performance and complacency until

the employee, highly trained yet poorly motivated, finally starts looking for different or better

opportunities outside of Coffee Waves.

This seems to be where our problem lies. This model was very efficient in measuring the

different levels of motivation. Goals, ability, reinforcement, equity, salience, and timeliness play

enormous roles in employee job satisfaction. The measurement of each of these facets of

motivation proved very helpful in recognizing key management and ownership issues in the


business. With this information, we can move forward in addressing the Outcomes portion of this

model, where Coffee Waves is lacking

II. Apply CPS material to describe the work environment and the susceptibility to a

creative solution

Figure

The Four Elements of Appraising

Source: Creative Approaches to Problem Solving, 3rd Edition

The Work Environment.

People involved. Coffee Waves is a locally based boutique coffee shop catering to

students, and coffee gourmands offering high end coffee blends as well as handmade gelato,

pastries, and sandwiches. The brand is comprised of three stores in Corpus Christi and one in

Port Aransas. Coffee Waves is a partnership endeavor between three owners, one being David

Bendett, a local pastor who owns the Port Aransas store and is negotiation to purchase another

Corpus Christi location.

CONTENTUnderstanding

the Desired Results

CONTEXTUnderstanding the situation

METHODUnderstanding

the process

options

PEOPLEUniderstanding

the people involved

The four elements of Appraising Tasks


Coffee Waves relies upon a young, energetic base of employees who embody the coffee

shop culture; about 70% are college students and nearly all are in their 20's. The clientele is a

diverse mix consisting of those who appreciate high end coffee as well as the high end coffee

shop atmosphere.

Content. The business model of Coffee Waves takes direct aim at Starbucks and seeks to

replicate that success on the local level. As such, David Bendett relies upon his pool of

employees to personify this consistent, high level of service as well as production of Coffee

Waves products on a daily basis.

Context. Since its inception in 2008, Coffee Waves has seen consistent 20% growth.

Coffee Waves has done a very good job of finding and exploiting its niche; it is the only place in

the area where one can find handmade gelato. It has a steady and consistent following among its

client base and has done very well building upon the coffee house culture patrons seek; it's a

quirky-creative environment with a sense of familiarity that is inviting and welcoming. On one

level, Coffee Waves has done a good job of developing a culture among its employees, however

not to the level, on an operational side, that they can compete with a national franchise.

Method. We used Critical Problem Solving tools including interviews, and surveys,

while further evaluating our data to make determinations about the process.


Applying CPS to Work Environment

Table 6.1

Factors to Consider when Planning your Approach

Importance Need of new innovative ways to retain high quality employees

Kind and degree of ownership

The people of interest are the owner, upper

management, employees, customers, local community.

Ambiguity Unclear objectives for employees;

Management centralized with owner

Complexity The task is made up of 2 to 3 components based on projected desires. It is very

simple, but may require managerial change.

Novelty

The idea of running operations consistent with other Coffee Waves to reduce costs; The process would definitely cost the

company but we feel in the long run by retaining management, this would reduce

costs

Timeline Can be implemented over a period of time.

History

We evaluated employees and managers of Coffee Waves assessing their motivation, ability, and salience. We minded key issues

and contrasts between management, employees and the owner’s vision.

Through identifying these we discovered a need for retention of quality employees, postulated needs and expectations and are

currently focusing on implementation

Involvement of others This is a decision to be solely implemented

by the owner.

Vision of desired future Management will most likely accept and

welcome the ideas. The issue really lies with the owner and budgetary constraints.

The real question is does David have the money and resources to take on such a project. If so, how would he implement or

foresee such change and progress in his


company?

Source – Creative Approaches to Problem Solving , 3rd Edition

It is important to view many different perspectives before gathering these factors, and to

be sure you are fully aware of the details of the four elements of appraising tasks to successfully

introduce these factors in your analysis. The group experienced that the factors are just an

introduction and the very beginning of appraising tasks. We had to really focus on comparing

and coordinating the factor and the four elements in order to successfully move on to the next

step.

By focusing on the factors, this helped the group become more flexible in our

conclusions and gave us the ability to adapt a susceptible environment as we move along through

stimulants and obstacles.

Table

Stimulants and Obstacles to a Creative Environment

Stimulants Obstacles

Restructure compensation package Budget limitations

Clearly defined job description Open style management

Nonmonetary compensation Owner willingness


Promotions Owner willingness/ narrow market for growth

Install a General Manager Contrasting views between staff

Employee input Change in processes and resources

Source – Creative Approaches to Problem Solving. 3rd Addition

When exploring stimulants and obstacles we asked, “What is hindering a creative

employee environment at Coffee Waves?” From there, we focused on both extrinsic and

intrinsic elements. One stimulant would be restructuring the compensation package, however

budgetary limitations could be an obstacle. Another stimulant could be clearly defining the job

description of employees. An obstacle to this is that the set management style is highly informal

and may be difficult to change. A third stimulant would be to incorporate nonmonetary

compensation, but the obstacle would be willingness by the owner.

The opportunity for promotions into management could also serve as a stimulant,

however the willingness of the owner as well as the narrow market for growth could serve as an

obstacle. A fifth potential stimulant would be to install a General Manager, but an uneasy

reception by current managers and employees could be an obstacle. Last, if the employees were

allowed to offer input into the environment that may serve as a stimulant. However, an obstacle

to this could be the change in processes and resources.


Evolutionary Change

Revolutionary Change

Level of Change Required

Evolutionary vs. Revolutionary. During our research, what we found is that change at

Coffee Waves is evolutionary; very slow and methodical. This is evident with our interview of

the owner as well as interviews and surveys with management and employees. At this point,

from the ownership perspective, he's wanting steady, consistent growth in sales as well as overall

production and operations. However to achieve this, according to our study, there are

revolutionary changes he needs to incorporate to give employees the incentive to want to effect

his long-term goals.

Figure 9.2

A Spectrum of Change

Evolutionary Change Revolutionary Change

Detailed job descriptions Hire a General Manager

Expanding Coffee Waves brand Paid Vacation

New product offerings Matching 401k

Hiring p/t retirees Gain sharing

Source – Creative Approaches to problem solving, 3rd Edition Pg. 202-203


During our research, what we found is that change at Coffee Waves is evolutionary; very

slow and methodical. This is evident with our interview of the owner as well as interviews and

surveys with management and employees. At this point, from the ownership perspective, he's

wanting steady, consistent growth in sales as well as overall production and operations. However

to achieve this, according to our study, there are revolutionary changes he needs to incorporate to

give employees the incentive to want to effect his long-term goals.

Figure 9.5

A Model to Help You Identify the Best Leverage Points

Source – Creative Approaches to problem solving, 3rd Edition Pg. 207

The Level of Capability Matrix is a tool that helps us realize where certain business

practices and ideas fall in reconciling activities in the ability to implement it and how important

Distractions

•Mobile Vending Trailer

•Catering

Opportunities

•Create a General Manager Position

•Staff Meetings

Black Holes

•Expanding product line

Challenges

•Merging all 4 locations

•Cultural Consistency

Hi

Hi Lo

Level of Importance

Level of Capability


it is.If a task is of low importance and the business is of high capability, it falls in the

'Distractions' category. Items in this category could distract management from more pressing

matters and can potentially be harmful to the business. Though the tasks we listed are viable

business ventures, we felt the focus must be on the physical coffee shop instead of outside

business ventures that could potentially divide staff and divert attention.

Coffee Waves only had one apparent item that falls under the 'Black Hole' category,

which is both of low importance and low capability, and that is expanding product lines. Coffee

Waves offers an enormous variety of products and the shop is literally running out of space to

store the ingredients and parts of these products. We felt that focusing on expanding product

lines even further would be of low importance because they offer so much already, and of low

capability due to spatial constraints.

Challenges presented very diverse answers, but the most prevalent were the merging of

all 4 local locations and keeping a consistent culture between the 4. Currently, the Port Aransas

store is removed from the three Corpus Christi locations, both staff and monetarily. Bendett is

the sole owner of the Port Aransas location and partial owner of the Corpus Christi locations. In

order to attain greater fluidity, the operational disconnect between these location must be

corrected.

'Opportunities' was a very easy section to write. Coffee Waves is highly capable of many

important things that would help them flourish. Of these, we felt that hiring a General Manager

and holding staff meetings would be the most beneficial if Bendett is wanting to foster a

consistent culture between his four coffee shops. This model proved to be very useful in

identifying the tasks and items that are prevalent and important for Coffee Waves to accomplish

or avoid or put off until a later time.


Environmental Summary

Plainly put, Coffee Waves is a unique venture where owner David Bendett seeks to invest

into his employees in order to establish grounds for culture expansion. His successes have been

consistent and bountiful. Coffee Waves is thriving because of the employees he develops.

David's ownership and management style is very vocal and full of praise and affirmation, but this

could lead to possible extrinsic and intrinsic outcomes.

To measure these, we explored various tools that measure stimulants and obstacles, and

we explored the data we collected. After this, we developed alternatives and solutions in order to

expand on the data. This environment was very open and conducive to the CPS process. Because

the ownership is so involved in the personal development of the employees, we feel that Bendett

would be very open to discuss the problem statements and solutions that we have developed in

this process.

III. Develop a Problem Statement using CPS techniques

Exploring Data.

Exploring data is a method of generating data by asking the 5 W’s. The group generated

this data by effectively coordinating these questions in interviews, Q And A’s, and employee

motivational evaluations. Through these methods we discovered that Coffee Waves is a

respected local business that values quality consistency and customer loyalty.

In the past Coffee waves has experienced customer tendencies towards expecting Coffee

Waves to be more like Starbucks. This is not the case, Coffee Waves values “quality over

quantity,” and this is instilled in their employees.


David is very vocal, which leads to discrepancies in how management view and

understand his vision. However, job descriptions are very ambiguous, which often lead to

confrontation and contrasting opinions between staff. Overall, employees are satisfied with the

quality of work, but expressed their desire for David to honor promise for raises and promotion.

Figure 3.10

Question for Exploring Data

Who? What? Where? When? Why? How?

Information David

Bendett

How to

retain high

quality

employees

Port

Aransas,

Corpus

Christi

Off season;

most

employees and

customers are

during peak

season

High turnover

and low

product

quality, out of

keeping with

company

goals

Interviews with

Owner and

managers,

evaluations and

survey of

employees

Impressions Prominent

local

company

with growth

potential

Common

problem -

high

turnover

Regional

problem

affecting

similar

companies

Year round;

peak as well as

off season

Typically, a

coffee shop

doesn't have

high career

potential

Observation,

survey,

interview, tacit

knowledge

Observations Owner,

Management,

employees,

customers

They need

to develop a

consistent

product

Coffee

Waves,

Port

Aransas

Anytime

they're open

Product

consistency

affects

customer

retention

Visit and

observe

Feelings Owner, loyal

customers

Frustrated Frontline

employees

and their

pay.

Ambiguous

employee job

description

Balancing

compensation

and sense of

worth

N/A

Questions David

Bendett

How to

reconcile

wages with

company

goals

Coffee

waves

Port

Arnasas

At any time. Obstacles to

the solution

How does CW

plan to

accomplish

long term

goals?

Source – Creative Approaches to problem solving, 3rd Edition Pg. 67


Opportunity Statement

a. Wouldn't it be nice if…

o Coffee Waves had an insurance plan?

o Coffee Waves could find more quality employees?

o Coffee Waves had a larger labor pool in Port Aransas?

o Coffee Waves had a General Manager?

o Coffee Waves could expand beyond coffee and gelato?

b. Wouldn't it be awful if…

o Coffee Waves never expanded beyond their current position?

o Coffee Waves didn't have enough employees?

o The espresso machine broke during peak season?

o Coffee Waves had to solely rely on high school students?

o The employees never earned beyond minimum wage?

The opportunity statement exercise was used to construct a decent start for a problem

statement. Based upon the knowledge obtained from the 5WH, we identified challenging issues,

or concerns within the organization and formulated statements with starters such as “wouldn’t it

be nice/ awful if…”

The exercise is considered a generating tool because we tried to come up with as many

possibilities, whether outrageous or foreseeable. Constructing opportunity statements helped lead

us to framing the problem in the Ladder of Abstraction, focusing and prioritizing, then making

comparisons through highlights in the effort to narrow down to a potential problem statement


Why? Why else?

H2 make quality

and vision

consistent.

H2 Stablize

workforce/lo

w turnover.

Why?

More consistance

in quality and

vision.

Initial Statement:

WIBNI Coffee Waves offered incentives to retain quality employees?

How?

Encourage

longevity in

managers & high

quality staff.

H2 offer career

oriented

incentives?

H2 distribute

non-

monetary

benefits?

How? How else?

Ladder of Abstraction

Why else?

H2 decrease

contrast between

owner's vision &

How else?

H2 attract high

quality employees?

Figure 3.18

The Ladder of Abstraction

What the Ladder of Abstract did was allow us to focus our thinking by developing a

framework to view the issues facing Coffee Waves from a broader perspective. By constantly

asking the questions "How?" and "Why?," we were able to work from very broadly defined to

issues and produce more narrowly framed statements.


Figure 3.22

Highlighting

Highlighting HITS

1. HM Coffee Waves instill vision in employees? 2. H2 establish long term employees? 3. IWWM Coffee Waves broaden their rewards for employees? 4. IWWM we change the culture at Coffee Waves? 5. H2 improve long term employee satisfaction? 6. H2 develop broader compensation package? 7. IWWM we identify career minded employees?

Relationship between Hits CLUSTER 1 2. H2 establish long term employees? 5. H2 improve long term employee satisfaction? 7. IWWM we identify career minded employees? CLUSTER 2 6. H2 develop a broader compensation package 3. IWWM Coffee Waves broaden their rewards for employees

HOT SPOTS

CLUSTER 1: Developing long term employees CLUSTER 2: Adjusting compensation

Restatement of Hot Spots Cluster 1: How can we retain long term employees? Cluster 2: How can we provide career-like rewards?


The next tool we used was Highlights, which allowed us to categorize our options. As we

developed these categories, we began to see a common theme develop in within these categories

which led us to further group these themes into sub-categories. (Mind you - we had to work

through Highlighting several times before we finally arrived at a viable solution.) Once we

worked through our Highlights, this led us to our problem statement.

Problem Statement: What incentives can Coffee Waves offer to retain high quality employees?

IV. Apply CPS to generate alternatives

Brainwriting

Brainwriting Problem Statement: How can Coffee Waves retain high performing employees

by offering incentives?

After performing Highlighting and developing our Problem Statement, we were able to

use the Brainwriting tool to develop ideas for possible solutions. We started with three options

and developed them through four stages to see which option was the most viable. Our options of

gain sharing, commission based compensation, and conducting performance evaluations all

helped start the conversation of solving the Intrinsic and Extrinsic issues we were having in our

Motivational Model, where we developed our Problem Statement from.

Each solution was monetary-based, either in terms of raises or commission based upon

longevity or performance. In the end, we developed Option A in most detail. After

mathematically working out what a gain sharing plan would look like, we decided to continue to

further develop and expand our options. The Brainwriting model allowed us to share collective

ideas in a space that was beneficial to the problem solving process. From there, we were able to


develop alternatives and do an evaluation matrix on how well these options would work for a

solution.

Table

Brainwriting

ROW OPTION A OPTION B OPTION C

1 Gain

sharing

(starting at 7%)

Commission

based

compensation

Performance evaluations

2

Employees at 6 months

- straight

bonus of $200

Percentage of shift volume

Focus on cultural climate rather than compensation

3

Gain sharing every 6

months long term

employees and

managers

Quarterly bonus on revenues

based on longevity.

(gain sharing)

Steady, seasonal pool of potential employees

4 Increments of 0.05% of wages

gained in quarterly

bonus.

Pay higher hourly wage

Gain sharing


SCAMPER

The next tool we incorporated was 'SCAMPER', which allowed us to organize six

concepts: Substitute, Combine, Adapt, Modify, Put to other uses, Eliminate, Rearrange, thus

stimulating more options. As a result, we developed the following:

Figure

SCAMPER

SCAMPER

Problem Statement: How can Coffee Waves retain high quality employees by offering incentives?

Substitute? How can Coffee Waves attract (instead of retain) high quality employees?

Combine? Retain the high quality employees, and have them train/mentor the moderate employees.

Adapt? Introduce performance evaluations to mete bonuses.

Magnify? The use of an incentives package.

Put others to use? Offer management internships to university students?

Eliminate? Perception of a "dead end" job.

Rearrange? The objectives of the organization to promote longevity.

This tool helped us not only generate more ideas, but also to search in new directions.

However, we needed to evaluate our ideas by using focusing tools. Focusing tools helped us

analyze and select those ideas that are more likely to be used as possible solutions to our problem


statement. The focusing tools we used were the Evaluation Matrix along with Advantages,

Limitations, Unique qualities, and Overcoming Limitations (ALUo).

The Evaluation Matrix helped us structure different approaches to evaluate options

against specific criteria. The options and criteria we selected for our Evaluation Matrix are

shown in the following table:

Table

Evaluation Matrix

Criteria

Options Viable Already doing

something similar?

Cost effective? Easy to

implement?

Benefits

package

4 1 2 3

Commission based

compensation

2 1 1 1

Gain-sharing 5 2 5 5

Foster a sense of culture.

5 4 5 4

Clearly defined

job descriptions

5 2 5 5

Rating Scale: 5 - positive; 3 - Neutral; 1- Negative


The options were based on the best selection of the ideas we obtained from the generation

of ideas section. Based on the options, we came with the best criteria, so that our options would

be evaluated carefully.

For the criteria 'Viable,' the option 'Benefits Package' was rated a 4 because recent

legislation has nearly forced business owners to offer such benefits as healthcare. The option of

offering commission based compensation was rated a 2 because Coffee Waves sees a seasonal

fluctuation in clientele, which could greatly diminish the income of employees.

For the option of 'Gain sharing', we listed that as a 5 in viability because the notion of a

quarterly, biannual, or annual payout for solid performance would highly contribute as an

incentive for employees. The option 'Foster a sense of culture' was given a 5 for viability because

it's the most easy, non-monetary incentive to offer, while the option of 'Clearly defining job

descriptions' was also listed as a 5.

For the criteria 'Already Doing Something Similar,' the option 'Benefits Package' was

listed as a 1 because Coffee Waves has nothing like this currently in place, and from our

interview with the owner, this isn't even on the radar. For the option 'Commission based

compensation', we rated that a 1, because they are currently paying employees hourly.

We rated the option 'Gain sharing' a 2 because though there are bonuses based on

performance, it's not on this scale. For the option 'Foster a Sense of Culture, we rated that a 4

because Bendett has done a very good job of doing this, and further alterations with the culture

of Coffee Waves would be simple to introduce. 'Clearly Defined Job Descriptions' is a 2 as an

option because as a rule, Bendett has kept job descriptions vague on purpose.


For the criteria "Cost Effectiveness', the 'Benefits Package' option was rated a 2, as it will

be very costly out of pocket for the owner. The option of 'Commission Based Compensation',

was rated a 1 due to the seasonal nature of the business. 'Gain sharing' as an option is extremely

cost effective to implement and was rated a 5, as was the option of 'Fostering a Sense of Culture'

and 'Clearly Defining Job Descriptions.'

For the criteria "Easy to Implement', 'Benefits Package' was rated a 3, as it will soon not

be an option, 'Commission Based Compensation' was rated 1, and 'Gain sharing' was rated a 5

because there's no upfront cost associated with its implementation. 'Fostering a Sense of Culture'

was rated a 4 for ease of implementation, while 'Clearly Defining Job Descriptions' was rated a

5.

Based upon an analysis of each option given against each criteria, the options which

received the highest scores are 'Clearly Defining Job Descriptions', 'Fostering a Sense of

Culture', and 'Gain sharing'. Though having clearly defined job descriptions and fostering a

greater sense of culture within the company may lead to better performance, that's not say that

those will be incentives which motivate better performance. The only criteria we evaluated that

singularly meets that need is gain sharing.


V. Apply CPS to Focus toward a solution

Table

ALUo for the Gain sharing

Advantages 1) Meets Employee Needs 2) Promotes Longevity

3) Builds a sense of 'career' as opposed to a 'job'

Limitations 1) Budgetary constraints 2) Additional Administrative Duties

3) Equitable distribution

Unique Qualities Matches national brand competitor's offerings at a local level

Overcoming Limitations 1) Institute employee performance evaluations 2) Create a General Manager position

3)

This analysis measured the various Advantages, Limitations, Unique Qualities, and offers

options for Overcoming Limitations. We identified the 'Advantage' of gain sharing to meet

employee needs and promote longevity by offering more and more to the employee, the longer

they stayed. The longer they stay employed with Coffee Waves, the more often they work, and

their good performance translates directly to a monetary compensation. This fosters a sense of a

career as opposed to a job.

Essentially, the employee’s earnings are uncapped depending on how much effort they

put forth. There are limitations as budgetary constraints and additional need for administrative

duties, running the risk of the perception of inequitable distribution if an employee was denied

their quarterly percentage increase if the failed meet performance qualifications.

The 'Unique Qualities' that gain sharing offers is that it matches the offerings of the

national brand coffee shop chains at a local level. Offering a corporate compensation strategy in

a small local business is revolutionary. To overcome limitations and make this solution


successful, Coffee Waves must institute fair and balanced employee evaluations and must create

a General Manager position to provide the administrative support for this compensation strategy.

With the ALUo, we identified the key elements that would make this plan successful.

From here, we can do a Cost-Benefit Analysis to see if this plan is feasible to institute

within the current budgetary constraints.

Table

Cost/Benefit Analysis

Cost Benefit Analysis

Gain sharing (starting at 7%)

Employees at 6 months - straight bonus of $200

Gain sharing every 3 months long term employees and managers.

Gain sharing of .5% on a quarterly basis.

We chose Gain sharing as an incentive because we needed to find an Extrinsic reward

that would promote both Salience and Equity. Gain sharing is essentially a bonus structure that

increases the bonus based on longevity and performance. The model we drew up starts the

employee at an hourly wage of $8.00, with bonus payout on a quarterly basis. After six months

of employment, the employee will have an employee evaluation, and based upon a good

performance review, the employee will receive a straight $200.00 bonus.

From six months forward, the employee will receive a bonus based upon wages, with the

initial bonus at seven percent of the employees’ wages for that quarter. For each good


performance evaluation, the employee will receive an increase of their bonus in 0.5%

increments. Essentially, each year, their bonus has the potential to increase 2% if they are

performing well.

Along with this increase, the owner has the discretion to raise the employee’s wage so

that the employee will have a higher hourly pay as well as a higher bonus. The bonus structure

will be capped at 15% of the employee’s salary, which will take at least 5 years for the employee

to accrue, depending upon how well the employee performs. This system would be a

revolutionary change that would contractually obligate the management and ownership to make

good on their promises of advancement and pay raises.

Direct Costs: We figure that the average employee works 32 hours per week. There are

13 weeks in each quarter, so each employee will work on average 375-425 hours per quarter. If

the employees earn $8 per hour, this extends out to an average of $3,000 to $3,400. The initial

bonus would be $200, which equates to a $0.50 raise on the 6 month mark. After that, the

employee will accrue an average of $0.45 hourly wage raise each quarter due to the bonus

structure.


The following graphic explains the structure of the proposed Gain sharing:

Hourly Wage $8.00

Average Hours 400

Hypothetical

Average

Quarterly

Earnings

3,200.00$

Quarter Bonus AmountGainsharing

Percentage

Years

Employed

Annual

Bonus

Amount

6 month mark 200.00$

Q3 224.00$ 7.0%

Q4 240.00$ 7.5%

Q1 256.00$ 8.0%

Q2 272.00$ 8.5%

Q3 288.00$ 9.0%

Q4 304.00$ 9.5%

Q1 320.00$ 10.0%

Q2 336.00$ 10.5%

Q3 352.00$ 11.0%

Q4 368.00$ 11.5%

Q1 384.00$ 12.0%

Q2 400.00$ 12.5%

Q3 416.00$ 13.0%

Q4 432.00$ 13.5%

Q1 448.00$ 14.0%

Q2 464.00$ 14.5%

Q3 480.00$ 15.0%

Q4 480.00$ 15.0%

Q1 480.00$ 15.0%

Q2 480.00$ 15.0%

Q3 480.00$ 15.0%

Q4 480.00$ 15.0%

Q1 480.00$ 15.0%

Q2 480.00$ 15.0%

Q3 480.00$ 15.0%

Q4 480.00$ 15.0%

Year 4

Year 5

Year 6

Year 7

664.00$

1,120.00$

1,376.00$

1,632.00$

1,872.00$

1,920.00$

1,920.00$

Year 1

Year 2

Year 3


Longevity and good performance is strongly encouraged by this plan. The above graphic

relates the gain sharing earned if the employee had consistent good performance evaluations and

the employee did not receive a wage increase. The annual cost for the average employee earning

an hourly wage of $8.00 essentially amounts to paying them an extra paycheck every quarter.

The consistency of this plan is more preferable to employees because they receive

documented and professional performance evaluations. When they receive direct monetary

extrinsic rewards based upon their employee performance evaluations, they are likely to perform

better and have more equity in the business. If management deems it necessary, they can increase

wages as they see fit. Each raise of $1 equates to a 5.6% increase of the amount of the

employee’s bonus structure. If Coffee Waves employs on average of 10 employees per quarter,

the annual costs would extend out to roughly $10,000 to $15,000.

This plan would be good to implement in the Fourth Quarter of a fiscal year when

business is slow in Port Aransas and working hours are cut. Employees earn their bonuses based

upon how many hours they work and how good their performance is.


Conclusion

By utilizing the theories of motivation as well as Creative Problem Solving techniques,

we were able to examine the outputs of the employees of Coffee Waves Port Aransas and then

make assessments as how to alter these outputs by adjusting the inputs. This included surveys,

interviews, and observations of the owner, management, and employees.

Further, we created a problem statement, generated alternatives by the use of focusing

tools to analyze the most feasible solution to address Coffee Waves' needs. After doing a

cost/benefit analysis of our solution, we concluded that offering periodic gain sharing would be

the best solution for our problem statement "What incentives can Coffee Waves offer to retain

high quality employees?"

Gain sharing would catapult Coffee Waves from being perceived as a job and more as a

career, and would provide performance based incentives to top employees. This would be easy to

implement because by making simple changes in pay structure, it would give stable employees a

sense of stability which would facilitate retention.


References

Cameron, K. S., & Whetten, D. A. (2013). Motivating Others. In S. R. Kursh, T. K. Lant, K. D.

Majeske, J. M. Olver, & R. Plant (Ed.), Business Resources (pp. 1-25). Boston, MA:

Pearson Learning Solutions.

(Cameron, 2013, p. xx-xx)

Isaksen, S. G., Stead-Dorval, K. B., & Treffinger, D. J. (2011). Creative approaches to problem

solving: A framework for innovation and change(3rd ed.). Los Angeles: SAGE.

(Isaksen, Stead-Dorval, & Treffinger, 2011, p.xx-xx)

Lazerow, R. (2012, May 17). The Advisory Board Company - Designing effective gainsharing

models. Retrieved 31, 2014, from http://www.advisory.com/Research/Health-Care-

Advisory-Board/Blogs/Toward-Accountable-Payment/2012/05/Designing-Effective-

Gainsharing-Models

(Lazerow, 2012, p. xx-xx)

Masternak & Associates (n.d.). Gainsharing Consulting: Gainsharing Versus Profit Sharing -

Masternak & Associates. Retrieved March 31, 2014, from

http://www.masternak.com/gainsharing-versus-profitsharing.asp

Root III, G. N., & Demand Media (2014). Incentive Pay for Job Performance | Chron.com.

Retrieved March 31, 2014, from http://smallbusiness.chron.com/incentive-pay-job-

performance-10859.html

In Text - (Root III & Demand Media, 2014, p. xx-xx)


Veronica, & LinkedIn Corporation © 2014RSS Feed (n.d.). Tips on how to handle resistance to

change in small businesses -part 1. Retrieved March 31, 2014, from

http://www.slideshare.net/VBroomes/managing-resistance-to-change-for-business-

success-15-tips-part-1

(Veronica & LinkedIn Corporation © 2014RSS Feed, n.d., p. xx-xx)

cps project 2 final (formatted draft 1)

Documents

coffee waves employees

mission of coffee waves

high quality employees

coffee waves staff location

high end coffee

local coffee shop

right job

job tasks