Howe 2 Ski Stores
1). Summarize and discuss the problem(s) of the case.
Howe 2 Ski Stores are facing a problem with poor quality service and customer care. As a result, the business risk to losing valuable customers. The problem has been caused by dissatisfaction amongst employees. The employees at the store feel that they are not well motivated to carry on with their duties. In an effort to correct the problem, Howe introduced a merit performance system for molders, as she believed they were the cause for the poor customer service. Unfortunately this did not seem to work. Howe discovered that all employees including clerks and accountants were not contented and contributed to poor service delivery to the ski equipment customers. The introduced merit performance system also worsened the situation as molders felt that they were not adequately appraised since their performance depended on other employees in the stores. Besides, other employees did not take this positively as they felt left out, which led to low employee morale, poor customer service and service delivery which affected sales and profits significantly.
2). Consider implementing individual pay-for-performance plans such as merit plans, bonuses, or commissions for this organization? Which one(s) – why or why not give the strengths and weaknesses to the plans?
Since merit plans have been tried and proved to be a failure in Howe 2 Ski Stores, individual bonuses can be awarded to employees who have good ratings from customers. A system can be established to help customers to rate employees such as molders in the store, clerks and other staff, and commended individuals can be awarded a bonus. Bonuses can improve employees` performance and enhance customer service. However, some employees` efforts may not be identified hence they can feel left out unfairly for the bonuses.
3). Consider implementing group or organization-wide plans such as gain sharing, profit sharing, team bonus, or ESOPs for this organization? Why or why not?
Profit sharing is also a good pay for performance plan for Howe 2 Ski Stores to adopt. Since the overall customer experience depends on the efforts of all employees starting with molders, clerks, store operators as well as delivery team, it is only fair to ensure that each and every employee reaps from the improvements in profits brought about by improved performance of the entire Howe 2 Ski Stores Team. This will encourage employees to improve performance and more importantly embrace team work rather than individualism. Team work is likely to produce better performance for the entire organization. In addition, non cash team based plans such taking team members such as delivery team or molders for luxurious trips can be of great help, not only in motivating employees, but also bringing them together as a Howe 2 Ski family. Here they can build stronger teams that can result to enhanced performance.
4). Would you consider any other plans such as skill-based plans?
There is no need for other payment plans besides pay for performance plans discussed above. This is because all employees at Howe 2 Ski Stores have some knowledge in skiing, which is one of the identifiable components in the stores.
5). What is your final solution? Explain why you chose this solution-your solution can be one or multiple plans.
Considering that customers at the store have been complaining about poor service delivery including being ignored by sales clerks and late delivery of skiing equipment, the best option is to introduce a commission based performance payment. This would encourage sales clerks and other staff to concentrate on attending to customers` needs as quickly as possible and with utmost care so that the same customers can come to them next time for help in the store, thus attract a commission. Merit plans should be done away with in the stores as they have only caused more damage than good, with some employees complaining that they have been left out. This may attract inequality related lawsuits.