1. Which motivational theory provides the biggest justifi cation for employee data mining? Explain. Labor is probably the single largest expense of any business.102 According to some estimates, labor costs average about 60 percent of sales. In addition to salaries, labor costs include health insurance, paid time off, child-care benefi ts, tuition reimbursements, and any number of other programs designed to extrinsically motivate the work force.

Many companies offer the same types of benefi ts across their organizations without knowing whether the benefi ts really motivate employees at all. In other words, companies often don’t know what return they are getting on their labor investment. The same is true where you work.

As you head back to your desk from a meeting on cafeteria-

style benefi t plans, your boss intercepts you and says she wants to talk with you about cutting labor costs. As she plops into your side chair, she is already describing a new type of software that applies data-mining technology to employee information to determine what is the best motivator.

“We can get rid of one-size-fi ts-all benefi t programs and tailor the benefi ts to each employee. This software lets you slice and dice employee data, like age, seniority, education, commute time, residential ZIP code, even the age and condition of the person’s offi ce,” she says. “We could fi nd out if we could pay someone, say, 20 percent less if we gave a three-month sabbatical every couple of years. Or we could predict the reaction of certain employees if we cut our 401(k) match. Maybe that’s not as important to everyone as we think. We could fi nd out who would quit if we did that and who couldn’t care less. Basically, we could fi nd out what incentives would spike productivity the most with each employee, and that way we could cut costs without sabotaging morale. It would reduce the guesswork of rewarding our employees. Here is some literature on the various programs. I’d like your team to draft a recommendation to top management by next Monday. I’m really excited about this.” She leaves a small stack of brochures on your desk corner and leaves your offi ce.

All you can do is wonder, “What will the employees think of this idea?”