Progress Rail Services inspects railcars at Terminal Island in the port of Los Angeles where cargo is unloaded from ships and moved across the country. Over 10,000 railcars each month are found in the port and most are inspected by Progress Rail Services. When Progress Rail Services employees find problems they repair the railcars and charge the owners. The workers, known as car men, are paid between 515 and 529 per hour. The job includes late night work quickly, spending about two minutes looking at each rail car. Some car men have smashed brake parts with hammers, gouged wheels, and used chains to tear off handles to make repairs necessary. Also, car men make 'green repairs." which means replacing parts that are not broken and hiding the old parts or throwing them in the ocean so that company auditors cannot find them.

Progress Rail Services, a subsidiary of Caterpillar Inc.. is being investigated by a federal prosecutor for criminal charges stemming from allegation of unnecessary repair work. Caterpillar is cooperating with the investigation, which it considers serious because it suggests employees have not behaved in a way consistent with company values. Workers blame their managers who say that they would lose their jobs and be replaced if they didn't produce sufficient repair revenue. Employees who identify large numbers of parts to replace don't receive extra pay but their supervisors tend to treat them more favorably and they often receive employee-of-the-month recognition.

Question

Consider the different performance management approaches discussed in the chapter. Which approach do you recommend for ensuring only correct repairs are made in the future? Explain the reasons for the approach you recommend.