at a management luncheon two managers were overheard arguing about the following statement a manager should never hire another worker if the new person causes diminishing returns. is this statement correct? if so why? if not explain why not.
The statement "a manager should never hire another worker if the new person causes diminishing returns" could be considered correct in certain contexts, but it is not universally true.
Diminishing returns refers to a situation where the marginal output or productivity of an additional worker decreases as more workers are added. In such cases, hiring another worker may not be beneficial and can even result in a decrease in overall productivity.
However, there are several factors to consider before concluding that a new worker will cause diminishing returns. These factors include:
1. Workload: If the existing workers are already overloaded with tasks and struggling to meet deadlines, adding another worker could help distribute the workload and improve overall productivity.
2. Skillset: If the new worker possesses unique skills or expertise that complement the existing team's capabilities, their addition may enhance productivity and overall performance.
3. Efficiency: Hiring a new worker can lead to improved efficiency, especially if they bring fresh perspectives, innovative ideas, or specialized knowledge that can streamline processes and increase productivity.
4. Team dynamics: It is crucial to consider the compatibility and cohesion within the existing team. Hiring a worker who disrupts team harmony or causes conflicts can indeed lead to diminishing returns. However, if the new worker fits well with the team, it can lead to increased productivity, collaboration, and synergy.
Ultimately, the decision to hire a new worker should be based on a careful evaluation of these factors, among others, rather than solely on the potential for diminishing returns.
To determine whether the statement "a manager should never hire another worker if the new person causes diminishing returns" is correct or not, we need to understand the concept of diminishing returns and how it relates to hiring additional workers.
Diminishing returns refers to a situation where the marginal product or output generated by each additional unit of input (in this case, each additional worker) decreases. In simple terms, it means that after a certain point, adding more workers does not lead to a proportional increase in productivity.
Now, let's address the statement itself. The statement suggests that if hiring a new worker leads to diminishing returns, then the manager should not hire that worker. Here is an analysis of both perspectives:
Arguments supporting the statement:
1. Cost-effectiveness: Hiring a new worker should ideally be a cost-effective decision. If the marginal productivity (output per additional worker) decreases, it may lead to increased costs without generating substantial benefits. Thus, it can be argued that it is not economically viable to hire additional workers if they cause diminishing returns.
Arguments against the statement:
1. Optimal Resource Allocation: The statement does not take into account the level of output or productivity before hiring the new worker. If the productivity increases initially and then starts to diminish, it may still be beneficial to hire the worker, as the earlier gains may outweigh the diminishing returns.
2. Capacity Utilization: Hiring new workers may still be necessary to utilize the available capacity fully. Even if the productivity per worker decreases after a certain point, it might ensure that the existing resources are utilized to their fullest potential.
In conclusion, whether the statement is correct or not largely depends on the specific circumstances of the organization and the analysis of the situation. A manager should consider factors such as cost-effectiveness, resource allocation, capacity utilization, and the overall objectives of the organization before making a decision on hiring additional workers.