Temps on the Team

Read the following case and answer all the questions that follow.

Temps on the Team

Techno Toys, located in Regina, Saskatchewan, produces electronic toys for children between the ages of 6 and 12. The toy industry is a cyclical business with peak demand for its products during the Christmas season. Management at Techno Toys anticipates a strong demand for its toys this Christmas season and has added 50 temporary toy assemblers for its four-month peak production period (September through December). Techno management chose to hire these workers through temporary employment agencies rather than directly recruit full-time workers. It did so for two important reasons. First, the temps can be easily dismissed after the four-month peak production season ends. Second, given the seasonal time constraints, it is difficult to locate and hire 50 full-time assemblers from the Regina labour market, which currently has a very low unemployment rate of only 3.5%

The 50 temporary toy assemblers were assigned to work side by side with the 50 full-time assemblers on self-managed work teams. Dave Smith, the plant manager, organized the assemblers into 10 teams. Each assembly team was assigned an equal number of temps and full-time employees. Each team must decide how to schedule its work, choose the appropriate methods and tools for assembling the toys, and control the quality of the toys that it produces.

After about a month of experience with the self-managed toy assembly teams, Dave Smith noticed a higher-than-acceptable rate of return from retailers with complaints about the toys’ reliability and quality. These problems could be traced to the assembly process. After investigating, Dave discovered the facts listed below.

    - The temporary employees were hired through two different temporary employment agencies, and each agency paid its temps a different rate. All the temps were paid lower wages than the full-time employees. The temps knew about these pay...