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Experiential Exercise: Starbucks

Human Resource Management

Submitted To: Submitted By:


Dr. Anindita Rao Chatterjee Mehak Bhatia-034
Amanpreet-002
Jyoti-026
Jigyasa-096
Vishal Kakkar-018
Vishal Bhati-042
Suvendu-010
About the case:
• Express auto, an automobile mega-dealership operating with more than 600 employees,
received a discouraging set of survey results from their customers.
• Customer satisfaction scores have fallen.
• Various complaints by the customer:
– It was hard to get prompt feedback from mechanics by phone.
– Salesperson often did not return phone calls.
– The finance people seemed “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.
Problems and recommendations
 Sales Force
o Problem
 The obvious problem with sales force team is the minimum wage they
are getting.
 Also the commission rates increases after every 20 cars sold per month
which is too big of a target to get a good commission to compensate with
their salary.
 These factors prove to be demotivating for the sales force team to work
hence the customer’s complaints.
o Recommendation
 Apart from a slight increment as a motivation they should also make
changes to the criteria with which the commission rate increases.
 The criteria that is set is quite high they should reduce it to 10 cars per
month rather than 20 so that the employees feel motivated to do the work
more efficiently.
 Another thing that should be done for customer satisfaction is that the
sales force employees should do follow ups with the employees and be
available for any customer query.
 Finance Office
o Problem
 Finance people seemed too pushy to the customers.
 The reason behind this can be that apart from the salary they are also
getting the high bonus for every car financed with the company.
o Recommendation
 The best way to keep them from being too pushy is to reduce this bonus
amount or to limit this bonus amount.
 The company can set the criteria for $10000 bonus on every 3 cars
financed with the company.
 And also to keep them in check a regular feedback must be taken from
their managers for their sub-ordinated and customers as well.
 Detailing
o Problem
 The employees are piecework paid on the number of cars so they the
think faster they complete detailing one car the more they will be able
to do.
 But in this this process the compromise with their quality of work which
leads to various complaints from customers regarding the detailing and
minor adjustments.
o Recommendation
 The employees should be paid on hourly basis rather than the number of
cars detailed.
 Another suggestion is that the employees are trained to detail more
number of cars in lesser time without compromising with the quality of
work.
 A little bonus should also be provided if any kind of mile stone is
achieved.
 Mechanics
o Problem
 The main problem that customer faced from mechanics department that
they faced difficulty in getting feedback from the mechanics over the
phone.
 This problem might be because of the miscommunication from the
receptionists or may be because the mechanics are so focused in earning
the bonus they do not respond to customers in detail about their query.
o Recommendation
 Current compensation method for mechanic is good but for getting
bonus a third criteria should also be added i.e., the quality of their should
be up to a certain standard if it falls below it they should not get the
bonus.
 A person should always be available at mechanics end who is able to
give feedback to the customer.
 Reception/ Phone Personnel
o Problem
 The salary they are getting is not a motivating factor for them at all
which results in lack of interest.
 Their lacking interest has an impact on all other departments as the
information from customers to the relating department is not passed
efficiently leading to mismanagement of work.
 This ultimately effects customer satisfaction.
o Recommendation
 Some additional benefits should be provided like health insurance,
bonuses, childcare, etc. to keep them motivated for their work.

 Permanent receptionists should be trained to enhance their skills (like


interpersonal skills) and be more effective in their job.

 The customer feedback is necessary for this job as these employees are
the front of the firm that customer initially comes across.