Encik Aidid has just been appointed as the financial controller at Kejuruteraan Rintis that has three different departments. During the first week of his work, Encik Aidid was visited by the managing director who saying; I am so happy to have you. Now, we can arrange our new profit-sharing plan. I want all staffs in all department to share our satisfactory financial performance reward. Starting from next quarter, 5 percent of the quarters profit will be pooled and at the end of the financial year, it will be distributed to the staffs in proportion to their basic salary. This will definitely motivate the staffs to work harder!

Required:

a) Write a memo to the managing director, outlining the advantages and disadvantages of the suggested reward system. (6 Marks)

b) Compare the Hertzberg and Expectance motivation theories. Discuss how the Expectance theory can assist Encik Aidid in designing the reward system suitable for the company. (6 Marks)