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ASSIGNMENT COVER PAGE

Course and Module Information
Course Name

Masters of Business Administration

Module Name

Organizational Behavior

Module Code
Lecturer/
Name

MBA03
Tutor

Dr. Hussain Sunny Umar

Batch No.

MBA120-01

Assignment No.

Assignment
Title
Motivational Issues at Foxconn
(where applicable)
Total
number
of
pages including this
cover page
Due Date

10 January 2015

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Ali Moosa

CYX2344
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Ahmed Mausoom

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Arham Hussain

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Contents
Motivational Issues at Foxconn.................................................................................................... 1
1.

Introduction........................................................................................................................... 4

1.1 Company Introduction........................................................................................................... 5

2.

Analysis of Staff Motivational Issues within Foxconn factories in China................................6

2.1 Low wage rate compared to the living wage......................................................................6
2.2 Excessive Overtime Work................................................................................................... 7
2.3 Depressing Work Environment........................................................................................... 8
2.4

Inhuman punishment, inequality between workers and military style management......9

3.

Recommendation for adopting a motivation framework.....................................................11

4.

Conclusion.......................................................................................................................... 13

Assignment Soft Copy............................................................................................................... 14

Bibliography.............................................................................................................................. 15

1. Introduction
Workforce productivity is vital for the success of the business. A productive
workforce can be achieved with satisfied employees. Some organizations do not
realize the significance of job satisfaction and the benefit that they would have with
a satisfied workforce. De Jonge and Schaufeli states that if an organization compels
to make their employees satisfied with their jobs and their responsibilities then the
employees would be more committed to their projects and their employers. The
organization would also achieve a more productive and creative workforce (De
Jonge & Schaufeli, 1998).
Achieving a productive workforce is ensured through staff motivation. Many
researchers

and

scholars

who

have

been

speaking

about

organizational

productivity and productive workforce agree that motivation is the key component
that is required to enhance organizational performance. Jordan and Lawrence in
their study depicts that, individual employee performance is highly dependent on
how well he employees are being motivated (Jordan & Lawrence, 2009).
Deterioration of motivational factors would have a great impact on the organization
in terms of productivity and reputation.
This paper assesses the motivational issues that persisted in the global
electronic manufacturer Foxconn. Motivation theories brought by well-known
scholars is be used to identify the issues inside Foxconn company. The paper further
suggests a probable framework that would help the company to overcome the
current issues and establish a good mechanism to enhance employee satisfaction
and increase productivity.

1.1 Company Introduction

Foxconn

Technology

Group

is

Taiwanese

multinational

electronics

manufacturing company that assembles and manufactures the famous brands like
BlackBerry, iPad, iPhone, Kindle, PlayStation 4, Xbox One and Wii U. Foxconn is the
worlds largest electronic contract manufacturer who employees around 1.23 million
staff in different campuses around the globe.
During

the

history

of

its

successful

growth,

there

have

been

several

controversies related in how Foxconn manages its employees in China. During 2010
some of the laborers of Foxconn committed suicide and in 2012 about 150 Foxconn
employees threatened to commit mass-suicide in a protest (Johnson, 2011).
It has been believed that there were some employee management issues within
the Foxconn campuses based in China. These issues were mainly related to staff
motivation and unethical management methodology practiced by the Foxconn
factories in China.

2. Analysis of Staff Motivational Issues within Foxconn factories in China

Foxconn was focused on media headlines and Civil Society discussion not
because of its prestigious workforce or its profit growth rates. The attention caught
was mainly because of the unexpected suicides of the young workers during the
first half of 2010. Due to the sequential events occurred during 2010 implied that
Foxconn has been pressing down labor cost to maintain its competitiveness in the
industry (Tam & Mok, 2010).
Profit maximization being the main focus of the company made workers dignity
and well-being of no concern for Foxconn management. This has been proven by
the analysis of employee management principles applied within the company. The
issues that deteriorate the motivation of staff at Foxconn include;
2.1 Low wage rate compared to the living wage
Low wage issue is a persisting problem in Foxconn. Compared to the living
standard of China, the wage rate offered to the frontline workers are far below the
wage rate of monthly living. In spite of long working hours and access overtime the
basic wage was insufficient for the workers to maintain a decent living. This has
become one of the major issues why Foxconn has been experiencing a high
turnover rate of workers.
According to Maslow, humans hunger for satisfaction starts at the level of
physiological needs or the biological needs. These needs refer to food, water,
shelter etc. These needs are said to be fulfilled in order to make the staff or the
individual think of other higher needs (Montana & Charnov, 2008).
Similarly Herzberg in his two-factor theory proposes that hygiene factors and
motivators plays a significant role in determining job satisfaction and prevent
dissatisfaction. He further explains that hygiene factors needs to be present to
avoid dissatisfaction at work, where as motivators are placed to increase
satisfaction at job (managementstudyguide.com, 2012).

Relating these theories on the scenario of Foxconn, as Maslow explains that low
wage rate will have a major impact on individuals job satisfaction. Herzberg in his
framework also portrays that pay is a hygiene factor that needs to be present in
order to minimize or avoid dissatisfaction of employee on the job. The ultimate
conclusion draw by both the theories indicates that pay or staff wage has a
significant impact on staff motivation.
2.2 Excessive Overtime Work
During 2008 it was reported that monthly overtime working hours amounted to
120 during the peak production time. One of the workers who were working for
Shenzhen campus at China said that, We produced the first generation iPad. We
were busy throughout a 6-month period and had to work on Sundays. We only had a
rest day every 13 days. And there was no overtime premium for weekends. Working
for 12 hours a day really made me exhausted. (SACOM research findings, 2009)
A former worker of Foxconn also reported that overtime work in a month was 140
hours and during they do not have a rest day at all. (SACOM research findings,
2009).
Although the practice of making the frontline workers to work excessively, there
has been a company policy that says that workers do not have the right to reject
overtime work. Workers joining Foxconn requires to sign a voluntary Overtime
Pledge that leaves the worker with no choice to avoid or disobey the work principles
of Foxconn. Even during the suicides the practice of excessive overtime remained
prevalent (SACOM research findings, 2009).
It was also reported that, at some factories the overtime worked by employees
are not recorded which ultimately goes as unpaid. Similarly at some campuses of
Foxconn China has also deducted the overtime premium and has applied
comprehensive method to calculate working hour system (big5.xinhuanet.com,
2010).

Victor Vroom (1964) proposed Expectancy theory mainly focused on the

outcomes of the motivation rather than the factors affecting it. Unlike Maslow and
Herzberg, Vroom Expectancy theory is more concern with extrinsic and intrinsic
factors where the expected outcome people believe they would get by the strong
effort that they put forth at work.
Lunenburg explains that Expectancy theory is a cognitive process that is based
on the expectation of the people in relation with the effort, performance and the
rewards they achieve in return. Further explaining he stated that if people believe
that their effortful performance leads to high reward and recognition, they will be
motivated to give their maximum to get the expected achievement (Lunenburg,
2011).
There are four main assumptions in this theory which Vroom has highlighted.
The first assumption is that people join the organization with the faith that they
would be able to give in their maximum depending on the availability of the
resources, skill, support, etc. The second assumption is that, this faith is the
expectations the employee has had to perform his job. Thirdly the employee
believes that with this right effort and the right resources to perform the job at his
best would lead to good outcome. This valid outcome is known as instrumentality.
The fourth assumption is that depending on the outcome of the job performance
the employee would be expecting a considerable reward for the task attained
(Managementstudyguide.com, 2012).
Employees have great expectation and have the motive to perform the job with
all their effort. At these instances the employees who performed well should be
recognized and rewarded. As Vroom in his framework explains that as the workers
perform foreseeing that the effort would be attached with some sort of reward.
The failing consequence in the Foxconn situation was that management did not
see that overtime as an extra effort which the workers apply to meet the deadlines.
Since their focus of Foxconn was to keep the costs minimized while making the

employees work like robots which is again an unethical issue. This unethical
behavior and cutting down the rewards for the efforts applied by the workers create
motivational issues at Foxconn.
2.3 Depressing Work Environment
Work environment has always been a key issue at Foxconn. It vital that all
workers at Foxconn needs to highly focus on their work. They

are not allowed to

talk, giggle, stretch their bodies or even move around. A former female worker at
Foxconn exclaimed that, It is such a cold environment on the shop floor which
makes me feel depressed. As a new comer, I have not one to talk to. If I continue to
work at Foxconn, I may commit suicide too. (SACOM research findings, 2009)
It was also reported that during the work hours some of the workers have to
stand like soldiers for all day long. Those workers who can sit also have to sit in a
straight, so that their chairs are placed within the zebra line.
To justify the harsh work practice, Foxconn claims that all workers have 10
minutes break every 2 hours. But some do not agree with this statement of the
company. These workers say that they do not get break at their department at all.
In some depart who get break are not allowed to take a rest if they cannot meet the
production target. It was also reveal that the short break was merely a toilet break.
As explained in Herzberg two-factor theory, good working condition is a hygiene
factor which is a requirement for the workers to avoid dissatisfaction at work. When
applying the paradigm to the context of the organizations, many managers takes
the hygiene factors as a basis of motivation (Dartey-Baah, 2011).
Since working condition or provision of a decent working environment is a
predeterminant that measures the motivation level of employees, Foxconn sees
that working environment is not their concern there at all.

2.4

Inhuman punishment, inequality between workers and military

style management

Foxconn workers reported that employees who make a mistake or violate any rule
will receive dermits. Not only that, these workers will be insulted infront of other
workers by posting the cases on the notice board (big5.xinhuanet.com, 2010).
Some workers also agreed that distributing production bonus is also unfair at
Foxconn. Different amount of bonus will be received by different grade of workers at
the production level. Amount received by an employee depends on his or her personal
relationship with the management (south.cn.com, 2010).
According to Herzberg, company policies and job security are also key elements
that are required for staff motivation. In an organization, standard policy to reward and
penalize staff for their acts is required to ensure harmony within the work place. The
two-factor theory proposed by Herzberg includes these elements in the hygiene factor
category.
Speaking of having harmony within the work place also depends on maintaining
equality among all the workers specially those at the same level. To address the equity
issues within the organization John Stacey Adam came up with Equity Theory of
motivation. As per his perception all human beings will be motivated to work or to
carry out a task only if that person sees that the conditions put forward are fair. In
other words it means that the amount of effort put forth is equivalent to the benefits
received (Anderson, 2011), and this should be fair among all workers.
Motivation within Foxconn campuses at China are affected due to the norms they
have adopted in managing human resources. These norms need to be restructured or
new models needs to be adopted in order to reduce staff turnover and induce
motivation among the workers of Foxconn.

3. Recommendation for adopting a motivation framework

To alleviate the disrepute image of Foxconn, the management needs to adopt a

workable approach or a framework in order to motivate staff. As staff motivation is
crucial for a productive workforce and company success, it is important for the
management to undergo the transformation.
In the assessment of the current motivational issues present at Foxconn, the
appropriate framework to adopt is the two-factor Theory proposed by Herzberg. In this
theory there are two categories of factors that need to be present to achieve a
motivated and a satisfied workforce. These factors include hygiene factors that avoid
dissatisfaction and motivating factors that is said to increase satisfaction on the job
(managementstudyguide.com, 2012).
According to Dartey-Baah, both the hygiene and motivating factors needs to be
combined together to bring out effectiveness and efficiency in motivating employees.
If managers tend to consider one-side of the theory, it may not give the optimum
output in job satisfaction and job performance of the employees (Dartey-Baah, 2011).

Failed to provide most of the hygiene factors described in this theory resulted in
increased hatred for the management of Foxconn. To remove the hatred and
dissatisfaction prolonged within the Foxconn workers, management needs to bring in
these hygiene factors and ensure that these factors are present at their appropriate
state. Providing a decent environment to work, affordable pay and standardized
company policies are required for Foxconn to achieve a motivated workforce.

4. Conclusion
Foxconn being the worlds largest electronic manufacturer and the contract
manufacturer for the most famous electronic brands needs to be recognized as a well
reputed company across the globe. As a company that produces 40% of technological
products worldwide have faced a major crisis during 2010 due to some sequential
suicides of Foxconn workers at China. This became a far more concerning issue for the
Civil Society as well as the business world as a whole.
It was reported that there were lot of staff motivational issues due to pressing
workers to work for long hours without giving affordable pay. It was also said that
workers were performing at a stressful environment and the management policies
were very strict and harsh that lead some workers to commit suicide.
The issues present were assessed and approachable and a workable framework was
recommended to be adopted in order to motivate staff and remove the dissatisfaction
among the workers. Hence Herzbergs two factor theory was suggested to be applied
to ensure staff satisfaction and achieve a motivated workforce. Herzbergs theory of
motivation or two factor theory is very straight forward and quite simple to apply it to
the work environment and it is quite renowned and accepted by many organizations.

Assignment Soft Copy

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