This is a response to Sean Qi’s Blog on the managerial efficiency of Costco. He clearly states that Costco has a differential advantage when it comes to management. Costco uses the reward system mentioned in “On the folly of rewarding A, while hoping for B” by Steven Kerr. However, the main unfavorable circumstance of this system is that managers often reward an undesirable behavior. Costco solves this problem by altering the traditional reward system: instead of offering a reward after an ideal action has been done, “Costco offers competitive wages, a benefits plan, and other bonuses” (Sean Qi, 2014). Instead of selecting a major few to offer these benefits to, Costco ensures that all its employees receive the same conditions equally (depending on the workers’ positions).
I must agree with Sean when he says that “this particular type of reward system makes it easier for Costco to successfully set expectations for its entire workforce” (Sean Qi, 2014). I believe that a worker can become attached to their job when they believe in the kind of work that they do, which can increase production level in both quality and quantity. Many people say that products that are “made in China” are most likely to be of terrible quality and easily breakable. This might be because it is common in China for employees to work in unethical working conditions or to get paid an unfair wage. The lack of motivation could be a reasonable explanation for the low-quality products that come from manufacturers in China. However, I think we can all agree that Costco is consistent in delivering its promises on quality service and products. Costco’s management strategy can be a prime example of how proper motivation can result in a more efficient work force within a company.
Work Cited
Qi, Sean. “Costco: A New Approach To Performance Management.” Sean Qi’s Blog. Sean Qi, 2 Nov. 2014. Web. 3 Nov. 2014.