Assignment 19-02
In-Class Discussion
Background Story
Express Automotive, an automobile megadealearship with over 600 employees that
represents 22 brands, has just received a very discouraging set of survey results.
It seems customer satisfaction scores have fallen for the ninth straight quarter.
Customer complaints include:
1. It was hard to get prompt feedback from mechanics by phone
2. Salespeople often did not return phone calls
3. The finance people seemed “pushy”
4. New cars were often not properly cleaned or had minor items that needed
immediate repair or adjustment
5. Cars often had to be returned to have repair work redone
Express Compensation System
Team
1. Sales Force
Responsibility
Persuade buyer to purchase
a car
2. Finance Office
Help close the sale,
persuade customer to us
company finance plan
Inspect cars delivered from
factory, clean & make
minor adjustments
Provide factory warranty
service, maintenance, and
repair
3. Detailing
4. Mechanics
5.Receptionists
Primary liaison between
customer & sales force,
finance, and mechanics
Current Compensation Method
Very small salary (minimum wage)
with commissions. Commissions rate
increases with every 20 cars sold per
month.
Salary, plus bonus for each $10,000
financed with the company.
Piecework paid on the number of cars
detailed per day.
Small hourly wage, plus bonus based
on number of cars completed per day
and finishing each car faster than the
standard estimated time to repair.
Minimum wage.
Divide the class into groups of 4-6 students. Assign one or more groups to each of the 5
teams in column one.
Each group should analyze the compensation package for its team. Each group should be
able to identify the ways in which the current compensation plan,
1. helps company performance and/or
2. impedes company performance
Once the groups have completed their analysis, each group should discuss the following
questions and then as a class:
1. In what ways might your team’s compensation plan contribute to the customer
service problems ?
2. Would you recommend a team incentive plan within each of the five teams and an
incentive plan based on the overall customer service of Express Automotive ? If
so, how would you structure the two different incentive plans ?
3. What recommendations would you make to improve the compensation system in
a way that would likely improve customer satisfaction ?