Problems Caused by Webster’s Management Style in Every Role

Instructions

Read the case below in the context of compensation and rewards. Prepare a case study analysis of approximately 1,500 words (excluding references) that addresses the following items:

Part 1: Identify and discuss the main issues in this case. What is Webster doing wrong, and what problems is this approach causing? What management style is currently in place?

Part 2: Using the “Road Map to Effective Compensation” provided in Chapter 1 of the textbook, provide recommendations to help Webster succeed.

The purpose of this assignment is to demonstrate that you understand and can apply the concepts and techniques introduced in the course. Ensure your assignment contains evidence of your knowledge and abilities. Answer both parts as completely as possible, and please pay attention to the rubric used for grading.

As cases never can provide complete information, you may make reasonable assumptions as needed; however, be sure to clearly state them.

It is your responsibility to ensure that your submitted work adheres to principles of academic integrity. Provide a reference page and use APA or MLA style to cite the sources of any materials you paraphrase or directly quote, including the textbook.

Grading Rubric

Case: Dealership Needs Help

Webster owns an automobile dealership in Alberta and has been in the business for over 25 years. He has been quite successful, and now that he’s 56 years old he would like to spend the winters in Florida golfing with his pals. However, he is deeply concerned about leaving his business for months at a time to be managed by anyone who does not care about it as much as he does. After all, it’s his investment, his future, his sweat equity, and his reputation that is on the line. He does have a son and daughter who are learning his business, but they’re quite young and not ready to take it over.

Currently, he has three distinct groups of employees: managers, mechanics, and administrators.

Managers

All management positions are held by men who are paid salaries that vary by responsibility. Webster determined their rate of pay when he hired them. He doesn’t believe in job descriptions as he finds them limiting in what he has his managers do on a day-to-day basis. He wants the freedom to add or take away responsibility ad hoc. He keeps his managers on a short rope and gives them little to no autonomy. When he doesn’t like a manager, he just asks them to leave without giving any reason or explanation.

Webster thinks that his managers lack loyalty. He fears that if one of his many competitors offered them a little more money, they’d be gone! Managers are eligible for bonuses, but he has found that once they receive their bonus they start looking for another job.

He does have a “right-hand man,” Derrick, who has a good business mind. Webster trusts Derrick to make good decisions, but still requires that Derrick check with him before taking any action. He’d like Derrick to stay but is worried that another dealership might lure him away while Webster is in Florida.

Mechanics

All mechanic jobs are held by young men and they are paid on a job-by-job basis. For example, when they perform expensive jobs such as replacing a transmission, both the dealership and the mechanic make a lot of money. Only the manager of this department is eligible for health benefits.

Webster set up this pay arrangement thinking that he would save money by not paying mechanics while they’re not working. He was not concerned about turnover because there were plenty of mechanics looking for work. It seemed to be working initially, but now the mechanics are creating larger, and sometimes unnecessary, service jobs. This is a big problem—customers are losing trust in the business and not returning for service or sales. He has since realized that moving to the job-by-job pay offered only a short-term solution, and he is now reconsidering the arrangement. He wants the mechanics to value their work, respect the customers, and be loyal to the dealership, as be believes this will generate more revenue over the long term.

Administrator positions are mostly held by young, single women. These “gals,” as Webster and most managers refer to them, are all paid $18.00/hr with no benefits. Turnover is high but he has found it quite easy to fill these positions. Administrator roles require little education as they are trained on the job.

On the golf course one day, Webster’s friends were teasing him about all the young, pretty, and single girls that worked at his dealership. One friend said, “Looks like you hire women for the pink jobs and men for the blue jobs. Don’t let the human rights people catch wind of that.” As his friends laughed and lit cigars, Webster started to think about it and found that what they were saying was true. He wondered, “How could this have happened? The jobs with computers and phones are held by women who are young, beautiful, and single and none of them has ever advanced to a more senior position. My mechanics are all young men. My managers are all men. My employees keep leaving me. I really need to figure out how to fix all these issues. How will I ever be able to leave for several months each year if these things keep happening?”

What Webster would ultimately like is to be able to trust his employees, for them to be loyal to him and his business, to reduce turnover, and that his company be viewed as a fair and equitable organization.