Explain two benefits to ES of higher productivity.

Mark scheme

Marking points from the official mark scheme (May/June 2020). The mark or mark type is shown in brackets.

1. Award 1 mark for each relevant benefit (maximum 2).
2. Relevant benefits might include:
3. Lower unit costs – increasing gross profit margin - higher profit
4. Lower prices – as each scooter costs less to produce – prices are more competitive with other manufacturers - increased sales
5. Increased output – more scooters available to export - increased revenue
6. Output per worker higher – able to increase wages/offer financial rewards - which could increase motivation – lower labour turnover
7. Award a maximum of 3 additional marks for each explanation of the benefits of higher productivity – one of which must be applied to this context.
8. For example:
9. Output per worker is higher (1) so ES may be able to offer financial rewards than just time wage rate payments (app) which can result in more highly motivated production workers (1) making them less likely to leave and consequently ES will have lower recruitment costs. (1)
10. Level Description Marks
11. 3 Sound application of knowledge and understanding of relevant business concepts using appropriate terminology.
12. Detailed discussion of two or more methods.
13. Well-justified conclusion.
14. Candidates discussing three methods in detail, in context and with well-justified conclusion including why the alternative methods were rejected should be rewarded with the top marks in the band.
15. 2 Sound application of knowledge and understanding of relevant business concepts using appropriate terminology.
16. Detailed discussion of at least one method.
17. Judgement with some justification/some evaluation of choice made.
18. Candidates discussing two or more methods in detail and applying it to the case should be rewarded with the top marks in the band.
19. 1 Limited application of knowledge and understanding of relevant business concepts.
20. Limited ability to discuss the methods with little/no explanation.
21. Simple judgement with limited justification/limited evaluation of choice made.
22. Candidates outlining three methods in context should be rewarded with the top marks in the band.
23. 0 No creditable response.
24. Relevant points might include:
25. Job rotation – moves workers around the production line to carry out different tasks so makes the job less boring – but the actual tasks may still be monotonous.
26. Job enlargement – adds tasks to the job and therefore the job becomes more interesting – worker may feel more important as trained to carry out additional tasks -but worker may not feel able to carry out the additional task - may not want extra responsibility.
27. Increased wage rates – even higher than the legal minimum wage than they are at present - Taylor states that increased wages will increase motivation as 'money is the main motivator' – however, Herzberg would argue it is only a temporary motivator and increased motivation will not last.
28. Introduce piece rate - wages paid will increase the higher the output, so workers will be motivated to increase their output – however, if work is rushed quality might suffer leading to a poor reputation for the company.
29. Pay a bonus – may be paid individually or as a team – higher pay if the production team increase output – may cause disagreements if only some of the team are working hard – may be seen as unfair.
30. Judgement might include:
31. Higher pay will only motivate production workers for a short time as the job is still boring on the flow production line. It might be better to use job enlargement to add tasks to the job the job of making scooters to make it more interesting and maintain increased motivation for a longer period of time. It may also cost less as may only need additional training and not higher wages to be paid