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CMA Foundation · Fundamentals of Business Economics and Management · Leadership and Motivation - Concepts and Theories

A Chennai textile company introduced a scheme of recognition, job enrichment and participation in decisions. After a year, absenteeism fell from 8% to 5% and labour turnover fell from 20% to 12%. Which importance of motivation does this MOST directly illustrate?

The case illustrates that motivation reduces absenteeism and labour turnover and so builds a stable workforce. Absenteeism fell from 8% to 5% and turnover from 20% to 12%. It does not guarantee profits or remove the need for planning or supervision.

  1. AMotivation reduces absenteeism and labour turnover, helping retain a stable workforceCorrect
  2. BMotivation eliminates the need for planning
  3. CMotivation guarantees that the firm will earn higher profits irrespective of market conditions
  4. DMotivation replaces the need for supervision completely

Explanation

The data show falling absenteeism (8% to 5%) and turnover (20% to 12%), which are standard benefits of motivation. Claims of guaranteed profits, no planning or no supervision are overstatements not supported by the case.

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