OT employed 46 people in production and the average pay was about 5550 per hour Turnover was very low, and 31 of the ees had been given gifts of employ stock in the firm. This stock amounted to 10 percent of all the outstanding shares. also had a very good benefit program. The production operation was man- aged by John Davis who had worked for OT since mid-1964. John had worked in all phases of plant operations and knew the production operation and cle of the business as well as anyone. Although turnover was very low, produc- tion efficiency was also low. sales had been declining since 1987(see Exhibit 1). and on days when orders were low. employees not on piecework were in the habit of staying at work and on the payroll although not doing any work.