During a time of increasing sales and production, the Sample Fabrication Company CEO hired additional workers to handle the increased production. At the end of the first quarter after hiring these new workers, the CEO discovered that productivity had declined with each new worker hired. The CEO was upset and demanded that the production manager determine whether they had hired lazy workers who should be fired or whether the supervisor was ineffective at managing the new workers or both. Whatever the explanation, the CEO insisted that a solution be found to bring productivity levels of the new employees up to the previous levels.
Using production theory as a basis, is the CEO correct in his assumption that lazy workers or ineffective supervisors are to blame for the decline in productivity? What other explanations might be possible? If the CEO is incorrect, what changes would be necessary to increase productivity?