Express automotive current compensation system

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Reference no: EM133043263

Express Automotive, an automobile mega-dealership with more than 600 employees that represent 22 brands, has just received a very discouraging set of survey results. It seems its customer satisfaction scores have fallen for the ninth straight quarter. Customer complaints included the following:

  • It was hard to get prompt feedback from mechanics by phone.
  • Salespeople often did not return phone calls.
  • The finance people were perceived as pushy.
  • New cars were often not properly cleaned or had minor items that needed immediate repair or adjustment.
  • Cars often had to be returned to have repair work redone.

The following table describes Express Automotive's current compensation system.

Team

Responsibility

Current Compensation Method

Sales force

Persuade buyers to purchase a car.

Very small salary (minimum wage) with commissions; commission rate increases with every 20 cars sold per month.

Finance office

Help close the sale; persuade customer to use company finance plan.

Salary (comparable to other dealerships), plus $500 bonus for each $10,000 financed with the company.

Detailing 

Inspect cars delivered from factory, clean them, and make minor adjustments.

Piecework paid on the number of cars detailed per day.

Mechanics

Provide factory warranty service, maintenance and repair.Small hourly wage, plus bonus based on

  1. Number of cars completed per day
  2. Finishing each car faster than the standard estimated time to repair

Receptionist/Phone service personnel

Act as a primary liaison between customer and sales force, finance, and mechanics.

Minimum wage

  1. Analyze the compensation package provided for each team and identify the ways in which the current compensation plan helps company performance or impedes company performance. What recommendations would you make to improve the compensation system in a way that would likely solve customer service problems and improve customer satisfaction?

Team

Which Compensation Methods

Helps Performance?

Which Compensation Methods Impede Performance?

Recommendations for Improvement?

Sales force

 

 

 

Finance office 

 

 

 

Detailing 

 

 

 

Mechanics 

 

 

 

Receptionist/Phone service personnel 

 

 

 

Reference no: EM133043263

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