2- Case Study Analysis

Assignment 4: Case Study Analysis
Instructions
Read the case below in the context of compensation and rewards. Prepare a case study analysis of approximately 1,500 words (excluding references) that addresses the following items:
Part 1: Identify and discuss the main issues in this case. What is Webster doing wrong, and what problems is this approach causing? What management style is currently in place?
Part 2: Using the “Road Map to Effective Compensation” provided in Chapter 1 of the textbook, provide recommendations to help Webster succeed.
The purpose of this assignment is to demonstrate that you understand and can apply the concepts and techniques introduced in the course. Ensure your assignment contains evidence of your knowledge and abilities. Answer both parts as completely as possible, and please pay attention to the rubric used for grading.
As cases never can provide complete information, you may make reasonable assumptions as needed; however, be sure to clearly state them.
It is your responsibility to ensure that your submitted work adheres to principles of academic integrity. Provide a reference page and use APA or MLA style to cite the sources of any materials you paraphrase or directly quote, including the textbook.
Grading Rubric
Grade A (80–100%) B (70–79%) C or lower (69% or below)
Part 1 Student correctly identifies all issues present in the case.

Student’s explanation demonstrates a high level of understanding of the issues identified in the case. Student identifies most of the issues present in the case.

Student’s explanation demonstrates an acceptable level of understanding of the issues identified in the case. Student identifies only a small portion of the issues present in the case.

Student’s explanation does not demonstrate a good understanding of the issues present in the case.

Part 2 Student uses the Roadmap correctly and creates effective recommendations for all issues identified.

Student demonstrates a high level of concept application using what they’ve learned, providing short- and long-term solutions that are logical and appropriate. Student uses the Roadmap correctly and creates some effective recommendations.

Student presents solutions that will sufficiently impact the outcome. Student does not use the Roadmap effectively.

Student does not provide sufficient or appropriate recommendations to solve this case.
Case: Dealership Needs Help
Webster owns an automobile dealership in Alberta and has been in the business for over 25 years. He has been quite successful, and now that he’s 56 years old he would like to spend the winters in Florida golfing with his pals. However, he is deeply concerned about leaving his business for months at a time to be managed by anyone who does not care about it as much as he does. After all, it’s his investment, his future, his sweat equity, and his reputation that is on the line. He does have a son and daughter who are learning his business, but they’re quite young and not ready to take it over.
Currently, he has three distinct groups of employees: managers, mechanics, and administrators.
Managers
All management positions are held by men who are paid salaries that vary by responsibility. Webster determined their rate of pay when he hired them. He doesn’t believe in job descriptions as he finds them limiting in what he has his managers do on a day-to-day basis. He wants the freedom to add or take away responsibility ad hoc. He keeps his managers on a short rope and gives them little to no autonomy. When he doesn’t like a manager, he just asks them to leave without giving any reason or explanation.
Webster thinks that his managers lack loyalty. He fears that if one of his many competitors offered them a little more money, they’d be gone! Managers are eligible for bonuses, but he has found that once they receive their bonus they start looking for another job.
He does have a “right-hand man,” Derrick, who has a good business mind. Webster trusts Derrick to make good decisions, but still requires that Derrick check with him before taking any action. He’d like Derrick to stay but is worried that another dealership might lure him away while Webster is in Florida.
Mechanics
All mechanic jobs are held by young men and they are paid on a job-by-job basis. For example, when they perform expensive jobs such as replacing a transmission, both the dealership and the mechanic make a lot of money. Only the manager of this department is eligible for health benefits.
Webster set up this pay arrangement thinking that he would save money by not paying mechanics while they’re not working. He was not concerned about turnover because there were plenty of mechanics looking for work. It seemed to be working initially, but now the mechanics are creating larger, and sometimes unnecessary, service jobs. This is a big problem—customers are losing trust in the business and not returning for service or sales. He has since realized that moving to the job-by-job pay offered only a short-term solution, and he is now reconsidering the arrangement. He wants the mechanics to value their work, respect the customers, and be loyal to the dealership, as be believes this will generate more revenue over the long term.
 
Administrators
Administrator positions are mostly held by young, single women. These “gals,” as Webster and most managers refer to them, are all paid $18.00/hr with no benefits. Turnover is high but he has found it quite easy to fill these positions. Administrator roles require little education as they are trained on the job.

On the golf course one day, Webster’s friends were teasing him about all the young, pretty, and single girls that worked at his dealership. One friend said, “Looks like you hire women for the pink jobs and men for the blue jobs. Don’t let the human rights people catch wind of that.” As his friends laughed and lit cigars, Webster started to think about it and found that what they were saying was true. He wondered, “How could this have happened? The jobs with computers and phones are held by women who are young, beautiful, and single and none of them has ever advanced to a more senior position. My mechanics are all young men. My managers are all men. My employees keep leaving me. I really need to figure out how to fix all these issues. How will I ever be able to leave for several months each year if these things keep happening?”
What Webster would ultimately like is to be able to trust his employees, for them to be loyal to him and his business, to reduce turnover, and that his company be viewed as a fair and equitable organization.
I emailed my instructor for further clarification, this was the email:
Do I need to create a job description for each of the positions? There is not enough data in the assignment to create one, can I use external resources on these positions and create job descriptions using that data? Do I need to create actual values for the compensation? Do I need to do market research on what the average salary/wages are for local dealerships? Are charts required on compensable factors and their degrees and ratings? Please advise.
The response was:
Regarding Assignment #4, you want to begin by first clearly identifying all the issues in the case.
Once you have identified all the issues, you will use the “roadmap to compensation” as a framework to make recommendations for solving the issues you’ve identified.
Yes, your recommendations should be specific, practical and detailed – they should be step-by-step in that the manager should be able to take your ideas and “run with them” or implement them easily based on your direction.
Please use sub-headings to organize thoughts, and remember that as a memo – it needs to be succinct, well-organized and clear.

Compensation Strategy Template
Jobs Covered:
Total Compensation Level: Match? _____ OR Lead?_____% OR Lag? _____%

Compensation Component Projected Proportion of Total Compensation

1. Base Pay
%

a. Job Evaluation
%

b. Market Pricing
%

c. Pay for Knowledge
%

2. Performance Pay
%

a. Individual Performance Pay
%

i. Piece Rates
%

ii. Commissions
%

iii. Merit Bonuses
%

iv. Special Incentives
%

b. Group Performance Pay
%

i. Gain Sharing
%

ii. Goal Sharing
%

iii. Other Group Pay
%

c. Organization Performance Pay
%

i. Profit Sharing
%

ii. Stock Plan
%

iii. Other Organization Pay
%

3. Indirect Pay
%

i. Mandatory Benefits
%

ii. Pension Plan
%

iii. Health & Life Insurance
%

iv. Paid Time Off
%

v. Employee Services
%

vi. Other Benefits
%

This is the outline of the assignment. Please follow this.
Introduction
Compensation is a great tool for Webster to achieve his goals of creating loyalty, building trust, reducing turn over, and the company being viewed as a fair and equitable organization. Currently the rewards systems in place do not promote employee achievements, support Websters goals for the company, retain qualified individuals, promote desired employee behavior, complies with the law, and does not achieve company goals cost-effectively. Webster’s compensation system is a liability. Let’s change it into an asset with a total rewards system that provides both intrinsic and extrinsic rewards.
Step 1: Know your Company
Webster believes he is providing extrinsic rewards. He is, but very minimally. His employees do not trust him because he is showing them, they are disposable. He is only willing to pay them for the time they are doing their work, his way. Webster is also demonstrating he does not trust his employees as everything they do needs approval. We want membership behavior. Creating job descriptions will also be a good place to start.
By creating job descriptions for each position, Webster will be able to divide the total tasks of the organization into the required fields to ensure every aspect of the job is taken care of, ultimately creating a job design. When job designing, Webster can ensure the correct people communicate with each other for the tasks to be completed seamlessly. A full on-submersion into each job may not be necessary, but coordinating tasks will be essential for the overall success.
Job Descriptions
CHAPTER 7
Job descriptions: Summary of duties and responsibilities and reporting relationships
Job specifications
• Knowledge
• Skills
• Abilities
• Other characteristics necessary for job performance
Job analysis: observation, interviews, questionnaires, fictional job analysis

7.1 Job description
1. Job title: Managers, Reporting relationships, Date
2. Purpose:
3. Major duties:
4. Responsibilities and results, tools equipment, consequences of poor performance, extent of supervision
5. Mental and physical effort demanded by job
6. Conditions work is performed in including hazards

Mechanic
Manager
Administrators
Step 2: Formulate your reward and compensation strategy

Compensation strategy (do one of these charts for each job)
Job Family:
Total Compensation level: Match Lead Lag

Base Pay

Performance Pay
individual

Group

Organizational

Indirect Pay

Compensation strategy formulation process
1. Define the required behaviour
a. Membership behaviour: cost of turnover is low for admin and higher for mechanics
b. Task behaviour: admin tasks are simple and mechanic tasks are complex. Is supervision required? High performance levels are required for mechanics
c. citizenship behaviour: The three different departments cooperate to make daily business functions run. Good customer service in all departments can enhance business
2. Define the role of compensation
3. Determine the compensation mix
4. Determine the compensation level
5. Evaluate the proposed strategy
Goal Indicator
Membership Behaviour
Increase retention in admin Reduced turnover rate
Increase attraction of mechanics Increase in qualified applicants
Increase manager retention
Task Behaviour
Increase productivity Increase sales volume and total sales
Reduction of hours spent on small repairs
Improve quality control Inspection checks
Increased customer support Customer surveys submitted
Citizenship Behaviour
Increase flow of cooperation Quartey surveys in all dept

Compensable Factors and the degrees.
(8 factors that apply to all with a few degrees)
compensable factors
Job title education experience mental demands physical demands consequences of errors accountability stress of multiple demands exposure to accident hazzard total points
Manager
Mechanic
Office Admin

Rating Chart for Point Method of Job Evaluation
Job Title: Degree Rating points allocated
Factor 1 2 3 4 5
skill
education
experience
effort
mental demands
physical demands
responsibility
consequences of errors
accountability
working conditions
stress of multiple demands
exposure to accident hazzard
Total Points for this Job :

point method:

compensable factors
Job title education experience mental demands physical demands consequences of errors accountability stress of multiple demands exposure to accident hazzard total points
Manager
Mechanic
Office Admin

Evaluating the Market
Market Research

Mechanics

Automotive Service Technicians
Journeyperson automotive service tech wage rat4es range 28-45 an hour plus benefits
Average wage: 34.11
Average Salary: 71754
Hrs per week 40.7
Minimum education: apprenticeship
Starting: $26.92
Overall: $34.11
Top: $41.89
Certification: provincially regulated

Alberta Alis. Occupations in Alberta. Automotive Service Technician. https://alis.alberta.ca/occinfo/occupations-in-alberta/occupation-profiles/automotive-service-technician/
Automotive service technician/ mechanic
range $25-$42, avg $34

payscale. Average Hourly Rate for Alberta Honda Employees in Canada. https://www.payscale.com/research/CA/Employer=Alberta_Honda/Hourly_Rate
Automotive Service Manager
73, 698 ave base salary
Base salary:
45k starting
127k top
Bonus: 2k-33k
Profit sharing 0-4k

Paysale. Average Service Manager Automotive Salary in Calgary, Alberta.
https://www.payscale.com/research/CA/Job=Service_Manager_Automotive/Salary/76fd9665/Calgary-AB

Managers

Auto Dealership Manager Salary in Alberta, Canada
Avg Salary: $155954
Avg hourly: $75/hr
Avg bonus: $20 508
Entry: ~$80
Senior: >~$200k

Economic Research institute. Auto Dealership Manager Salary in Alberta, Canada. https://www.erieri.com/salary/job/auto-dealership-manager/canada/alberta

AB auto parts manger
Avg $159K
Low $78,100K
High: $248k
AVG Salary with Education:
• high school $116k
• Certificate/diploma: $133k
• Bachelor’s degree: $179
• Master’s degree: $225k
34% receive bonus whereas 66% do not, avg bonus rate is 4% of annual salary

Salaryexplorer. Auto Parts Manager Average Salary in Alberta 2021. http://www.salaryexplorer.com/salary-survey.php?loc=134&loctype=2&job=6321&jobtype=3

Administrators

Receptionist at AutoCanada Inc. edmonton
Benefits dental and health benefits, emolpoyee pricing on cars,
Min education highschool diploma
https://ca.indeed.com/Dealership-Receptionist-jobs-in-Alberta?advn=7514549842971413&vjk=d248a6c684d6c346

administrative clerk rocky view ab
25-40 hr
https://ca.indeed.com/Car-Dealership-jobs-in-Alberta?vjk=67031821a48f2708

avg salary: $34,820
avg wage: &20.90/hr
starting: $18.44
Top: $23.45

Alberta alis. Receptionist. https://alis.alberta.ca/occinfo/occupations-in-alberta/occupation-profiles/receptionist/

Evaluating Individuals

Designing performance pay

Designing Indirect Pay Plans

Evaluation of the compensation system