Introduction
Even over tiny tangible periods, managing a company is becoming increasingly complex. More and more new management tools and technologies are systematically developed. The most complex concepts explaining the fundamental principles of economics and management are regularly created. It would seem that the continuous acquisition of new information should have simplified the management of the modern company as much as possible and provided a clear and understandable methodology to overcome them. However, the apparent clarity of theoretical management models ends where their practical implementation begins, and new, much larger ones replace some questions and problems (Jayawardena, 2021).
The consequence of the evolution of society, economy, and management is the creation of more perfect systems and management methods and the constant complication of the environment in which modern organizations exist. This paper will examine the case of Webster’s Automotive Company and provide practical recommendations for improvement.
Management problems highlighted in the case
To begin with, I will look at the primary management problems that Webster faced. Webster’s main goals include creating loyalty, building trust, reducing turnover, and making the company perceived as an honest and fair organization. The system under which the company operates at this time is not conducive to building employee loyalty. Nor does it generally support the company’s goals or encourage the desired behavior of employees. In addition, the employee compensation system is not legally compliant and does not cost-effectively achieve the company’s goals. It can be clearly characterized as passive and poorly functioning.
One of the significant problems with the employee financial system is the inconsistency of rewards. Because of this, employees do not trust Webster, and their loyalty to the company decreases. Webster is afraid of losing employees yet is unwilling to provide them with decent and consistent rewards for their work. He is only willing to pay them for the time they do their jobs according to his rules. Webster also demonstrates that he does not trust his employees because everything they do requires approval.
I would like to look at each group of Webster’s employees and the problems associated with them. One of the main groups of employees is the managers. They lack loyalty to their workplace because Webster gives them no real responsibility. He keeps them on a short leash and does not allow them to make any independent decisions. Instead, they must always follow his recommendations with no approved job description.
Its absence further encourages managers to leave the company since few can work without standardized terms and conditions. This creates a huge turnover rate that greatly worries Webster. In addition, Webster also plans to hand over the company’s management to one of the managers for the time being. This, too, is not possible in the absence of loyalty because for someone to run the company, trust must be built in both directions. That is, Webster must have as much trust in the managers as they have in him.
The second group of workers in the company is the mechanics. Their main problem is dishonest work, which Webster himself encourages. The mechanics are not paid for their work hours but for their typology, which provokes them to do unnecessary but expensive work. Because of this, the trust of customers is lost, who receive unnecessary service at a high cost. On the other hand, mechanics do not value their work and vary it depending not on the service needed by the customer but on the remuneration. The third group of workers who need help is administrators. Their main problem is that only girls work as receptionists and do not get a decent remuneration. They are also not eligible for health insurance from the company. These factors create the high turnover and low employee loyalty that Webster is concerned about.
The classic management approach is currently being used to manage the company. Webster justified this by the need to combat employee laziness. The essence of this approach is to distinguish the main functions of management: product development, production, and marketing. The cycle begins with marketing and ends with production. This sequence requires the organization to know the changes that occur in the market and to be able to respond to these changes (Jayawardena, 2021). Additionally, the type of management structure of the company is linear. It is characterized by a transparent system of mutual relations and subdivisions. Within its framework, one leader concentrates on managing the whole totality of processes having a common goal.
Recommendations on how to improve the situation
Having broken down the main problems of company management, I would like to give some recommendations on improving the situation using the Road Map to Effective Compensation. A company’s financial system can be turned into an asset with a total rewards system that provides internal and external rewards. To solve the employee loyalty problem, we need to provoke membership-based behavior. First, we need to create job descriptions for each group of staff. By creating job descriptions for each position, Webster will be able to break down the overall tasks of the organization to ensure that every aspect of the job is taken care of. While developing position descriptions, Webster will make sure all the right people communicate with one another to ensure that tasks are accomplished.
Now, the problems of each group of employees need to be dealt with separately. A defined group of managers should be created to streamline management work and allow such work to be handed off during Webster’s absence. These employees will know the business inside and out. They will be able to make decisions for the company when Webster cannot do it himself. The rewards of knowledge, importance, and a salary commensurate with their knowledge and skills will engender trust and loyalty among managers. These employees will be paid much more for their comprehensive knowledge of the company.
However, the benefits of retaining these highly qualified employees in the company will outweigh the high monetary costs. The company is small, so it should not be difficult for a few managers to learn the roles of other managers. However, job rotation would be too costly for managers to swap positions with highly skilled mechanics. Thus, review, along with communication, would help streamline technical and managerial responsibilities.
In addition, Derrick, an essential person to the business, should be given the freedom to make decisions and adequate regular bonuses. This will help increase his loyalty and reduce the risk of switching to another company. Regarding mechanics, in order for them to appreciate their work adequately, they need a quality incentive. This requires the introduction of performance pay. Under such a system, if mechanics do their work less quickly but correctly, they may qualify for performance pay.
In addition, fixed pay and rewards for specific performance should be established. In this way, mechanics will not prescribe unnecessary and expensive work to their customers because it will not affect their productivity and, therefore, their wages. Likewise, mechanics should take advantage of flexible work schedules to recognize their high skill level and that their time is valuable. Mechanics can come to work and try to schedule clients closer together for more convenient workdays. This will allow mechanics to get paid only for the time they are in the store and work.
Regarding administrators, the first thing to do is to bring gender diversity into the team. To do this, not only women but also men should be hired for this position. This will help avoid accusing the company of gender bias and increase customer loyalty. In addition, base salaries should also be set for receptionists. For example, all employees will be paid $20/hour, and in addition, annual bonuses will be set at a fixed amount. This will help create cohesion and level out the competition in the team and make the company a more pleasant place to work, which will reduce staff turnover. The compensation system can include plaques showing how long an employee has been with the company to increase loyalty and compensation rewards.
Conclusion
In conclusion, several steps can be taken to address the problems Webster encountered. Create a cohesive atmosphere by establishing a fixed salary, job description, and bonus system. In addition, gender diversity should be introduced into the administrators’ and managers’ teams to beat the company’s involvement in gender scandals. Using the tips in this paper, Webster will be able to optimize his company’s performance and increase the loyalty of his customers.
Reference
Jayawardena, D. (2021). Critical human resource management: People management across the Global South and North. Routledge. Web.