Cost/Benefit Analysis ✓ Solved

Cost-benefit analysis refers to the systemic procedure of comparing and calculating the costs and benefits related to a project. It quantifies, finds, and adds all the optimistic aspects, while it quantifies, identifies, and subtracts all project-related costs. As the manager of "Alpha," I need to increase employee motivation because the employees in the organization are highly demotivated. It is essential to motivate the staff members as it leads to an increase in their productivity. Various methods will be utilized for increasing the staff member motivation level, including employee recognition and rewarding employees, as well as training. The purpose of cost-benefit analysis is to compare the costs and benefits of these methods to choose the most cost-effective approach.

Discussion

There are several benefits to training employees, alongside associated costs. In Alpha organization, when training methods are applied, they help employees understand job requirements, objectives, and the purpose of the business. When workers realize how their roles play a vital part in the organization, it positively influences motivation levels. This leads to improvements in the profitability of Alpha Company, with estimated profits of $3,500. On the other hand, the costs related to training include procurement, designers, and different media such as handouts, gifts, prizes, props, computers, and audiovisuals. Moreover, there are additional costs such as trainer's salary, fees, facility rental, and other session costs. The total estimated cost of training would be around $2,000, while the estimated benefit of using the training program is $1,500.

The second method involves recognizing and rewarding employees. The benefits of employee recognition include increased productivity, as employees tend to work better in an environment where they feel recognized by their leaders. This positively affects employee satisfaction, teamwork, loyalty, and reduced turnover, stress, and absenteeism. On the contrary, the costs associated with employee recognition include time spent implementing and designing the program. Despite the low costs, the benefits linked to recognition are extensive; they enhance productivity and employee engagement, contributing to a pleasing working environment that enhances retention. The estimated costs incurred through a recognition program would amount to approximately $2,000, while the total benefits would reach $15,900 through heightened productivity in production and sales.

The most effective method appears to be recognition and rewarding, with an estimated benefit of $4,400, compared to training methods which yield a benefit of $1,500. Therefore, Alpha Productions Company should prioritize the rewarding and recognition method, as it significantly boosts employee motivation, satisfaction, engagement, and productivity, leading to higher profitability.

Summary

To summarize, employees at Alpha Productions are significantly demotivated. As a manager, it is critical to employ methods that positively influence motivation levels. The two primary methods analyzed are training and rewarding & recognition. While both methods can elevate employee engagement, productivity, and satisfaction—thereby increasing company profitability—the recognition and rewarding method stands out for its cost-effectiveness and substantial benefits.

References

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