Analysis of the effect of using labour from brokers on operational costs, efficiencies and employee morale : a case study.
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Date
2006
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Abstract
Low cost and high efficiencies are probably the most common of strategies used in large businesses
today. This requires, however, optimum levels of commitment and performance from the
employees coupled with an excellent taste for change. The transition from the use of Mondi
employees to labour broker employees is a change process that impacts on a company's most
valuable asset - their employees. It is with this in mind that the researcher conducted a case study
aimed at identifying the impact of using labour broker employees in the waste handling operations
on the morale of the affected employees. The researcher found it essential to evaluate the impact of
this change on operational costs and efficiencies of the section.
The three research questions that were outlined to meet the above aims were:
(1) Does the use of labour broker employees in the waste paper handling part of the recycling
operations impact positively or negatively on the morale of the Mondi waste paper handling
operators?
(2) Does the use of labour broker employees in the waste paper handling part of the recycling
operations reduce the operational costs in that section?
(3) Does the use of labour broker employees in the waste paper handling part of the recycling
operations decrease or increase the operational efficiencies in that section?
The initiative to use labour broker employees in the waste paper handling operations was not set up
as an experiment. It was already in motion and the researcher opted to study it. Direct observation
and unstructured interviews were used to answer research question (1). It was found that the
change had completely demotivated the Mondi waste handling operators. Their morale levels
dropped to particularly low levels as they felt disliked, not part of a team and unappreciated for their
efforts and past service. The impacts of this low morale were hidden due to the plant being under
utilised against its design capacity. They also had a prevailing sense of insecurity and uncertainty
regarding their jobs, which made them uneasy. Factors associated with operational costs and
efficiency was measured before (2004) and after the initiative (2005) to establish the impact of
using labour broker employees on them. Direct observations and a quantitative analysis of data
from the company's finance and technical departments were used to answer research questions (2)
and (3). It was noted that there was a decrease in the operational costs due to the lower rate of pay
of the labour broker employees and them doing overtime. The use of labour broker employees
resulted in no significant improvement on the operational efficiencies.
Description
Thesis (MBA)-University of KwaZulu-Natal, Westville, 2006.
Keywords
Labour contractors., Production management., Subcontracting., Theses--Business administration.