SAFELITE CASE STUDY
Background
Safelite had a large fleet of about 3000 trucks, over stores and over 3000 employees offering car shield change, wash and allied services and nearly all service centers provided a mobile service which by that time gave Safelite over 12% market-share.
The company pushed the motto of providing services at the customers door-step as a on demand solution. It even provided incentive of $1000 for each manager initiating to open a new store. Safelite required its employees to work atleast eight hours. On a comment Safelite CEO John Barlow observed that Safelite employees only worked for two and half hours maximum per day in fixing of wind-shields which reflected of employee disloyalty and intention of not putting complete …show more content…
At an average provided by the company where workers allegedly worked 2-2.5 hours a day it would mean a Straight Pay of maximum of 2.5 hours X 5 days = $48 per hour while the maximum earnings through Normal pay per hour: $600 / 5 (days) / 9 (hours) = $13 per hour. However in comparison a salesperson working on commission basis with $250 per service can achieve lot more for example even if the salesperson gets 1 service per day it would be $250 X 5 / 45 = $ 27.7. Given the fact that atleast 2 services (of 1 hour each) happen per employee per day it would mean 2 X $250 X 5 / 9 = $55. This clearly shows that commission based pay would anyways pay the salesperson more than what the normal pay would have given. Again, the commission pay system provides an uncomparable elasticity. For example a salesperson can work harder on sales skills to increase the sales any given week which could further increase the earnings. Even if some cannot do so can move to competitors and those doing a higher sales at competitor shops can be paid to join at this manager’s shop. This would equate the labor costs from salespersons who moved out and new incoming ones in the process removing unwanted talent and recruiting high performing …show more content…
R&R planning is not easy. Easy to gauge individual performance from the results or numbers derived. R&R can be equally planned easily.
Quality-Concerns
Difficult to maintain the quality and constant monitoring, training and establishing quality based value system is often required
Easy to train and maintain as quality is directly linked to the earnings of a salesperson since quality can directly impact
Background
Safelite had a large fleet of about 3000 trucks, over stores and over 3000 employees offering car shield change, wash and allied services and nearly all service centers provided a mobile service which by that time gave Safelite over 12% market-share.
The company pushed the motto of providing services at the customers door-step as a on demand solution. It even provided incentive of $1000 for each manager initiating to open a new store. Safelite required its employees to work atleast eight hours. On a comment Safelite CEO John Barlow observed that Safelite employees only worked for two and half hours maximum per day in fixing of wind-shields which reflected of employee disloyalty and intention of not putting complete …show more content…
At an average provided by the company where workers allegedly worked 2-2.5 hours a day it would mean a Straight Pay of maximum of 2.5 hours X 5 days = $48 per hour while the maximum earnings through Normal pay per hour: $600 / 5 (days) / 9 (hours) = $13 per hour. However in comparison a salesperson working on commission basis with $250 per service can achieve lot more for example even if the salesperson gets 1 service per day it would be $250 X 5 / 45 = $ 27.7. Given the fact that atleast 2 services (of 1 hour each) happen per employee per day it would mean 2 X $250 X 5 / 9 = $55. This clearly shows that commission based pay would anyways pay the salesperson more than what the normal pay would have given. Again, the commission pay system provides an uncomparable elasticity. For example a salesperson can work harder on sales skills to increase the sales any given week which could further increase the earnings. Even if some cannot do so can move to competitors and those doing a higher sales at competitor shops can be paid to join at this manager’s shop. This would equate the labor costs from salespersons who moved out and new incoming ones in the process removing unwanted talent and recruiting high performing …show more content…
R&R planning is not easy. Easy to gauge individual performance from the results or numbers derived. R&R can be equally planned easily.
Quality-Concerns
Difficult to maintain the quality and constant monitoring, training and establishing quality based value system is often required
Easy to train and maintain as quality is directly linked to the earnings of a salesperson since quality can directly impact