Question 1: Describe the impact of different types of standards on motivations, and

specifically, the likely effect on motivation of adopting the labor standard recommended for
Geeta & Company by the engineering firm.

Answer: Different standards have different impact on motivation. In the given case, where the
labor standard recommended by the engineering firm is adopted by Geeta & company, thesixmonth operation period showed a decline in production and an unfavourable quantity variance
for each of the six months in the said period. In the other case where the management used the
internally set labour standard, there was a favourable quantity variance for the first three
months ; thereby implying that the actual production was more than the standard producton. In
the fourth month, there was no variance in production and in the fifth and sixth month, there was
an unfavourable variance, thereby implying that the actual production was less than standard
production.Thus, we see that the standard recommended by the engineering firm had a negative
impact on motivation as it was less than the standard production. But, in the case of internally set
standards, there was a positive impact on motivation for first three months; neutral in the fourth
month; and negative impact in fifth and sixth month

Question 2: Please advise the company in reviewing the standards.

Answer: The labour standard recommended by the consulting firm should not be used as a
motivational device as it is having a negative impact, The cost standard used for reporting had a
positive or neutral impact for greater part of the period and a negative impact for two months.
Therefore, the company should try and adopt labour standards similar to those ones.