Performance Pay at Safelite Auto Glass

Case 3:Performance Pay at Safelite Auto Glass(A)

Q1. Why was the productivity of the Safelite installers so low? Does the proposed PPP plan address the low productivity problem?  or Why not?

Ans: There are many reasons causes the productivity of the Safelite installers so low,one of the reasons was that some workers simply did not try very hard, they spend too much time playing pinochle. In addition ,finding the correct location of the customer in a timely fashion was one of the main problems. Sometimes technicians can not find the customers because they were given a bad direction or the customer was not at the stated position or the technicians get lost. Another reason is that between 10 to 20% of time , the technicians would arrive and found that he had been provided the wrong part by the warehouse. Sometimes they would not check carefully and only discover the mistake when he had reached the customer. This led to costly rescheduling or even cause customer to cancel the order.

And in my opinion ,the proposed PPP plan cannot address the low productivity problem. As a change in the pay system is not easy as they think like money is the only motivation to increase the productivity.One of the greatest problem is that there are many factors affecting workers productivity like Inclement weather,scheduling errors or miscommunications and operational problems(not receiving the right number or type of glass units from the warehouse etc) and now the installer have to depend on others who were not on the PPP .By introducting the piece wage system may not increase the workers income but may cause a higher turnover rate , as the uncontrollable factor like weather will make the income of installer decrease and there are many technician with families to support ,this system make the income become unreliable and they may even think that we are finding a way to reduce their income. Worker will prefer a higher hour rate system in competitors company.The new decision will led to higher turnover rate.

Q2.What are the likely consequences(positives and negatives)of the proposed PPP plan for the product quality, recruitment ,and turnover of technicians(installers)?

Ans: For the product quality, I think there will be a negative consequence like the quality of the glass will be lower as the worker start focusing on the quantity instead of the quality control as to earn more income.Therefore,the company may need to spend more money on Quality Control and supervising them.

For the recruitment part ,there will be both good and bad consequences , for the positive side , there will be more experienced worker recruited in the factory as the PPP plan change the hour rate to piece rate,which is attractive to experienced worker as they can make many glass in an hour than other ,therefore the income of them will be higher when counting the result base on the piece rate .The recruitment can attract experienced workers in other company and increase our competitiveness.

However , for the negative side , the number of the worker employed will be decreased as most people is risk averse.The system of piece rate is resulting in unreliable income and worker are exposed in risk taking situation,for people focusing on hour rate and unexperienced worker will lose interest in working in our company.

For the turnover rate of worker ,I think the negative consequence is that the turnover rate of the company will increase since there are workers with families to support ,they don’t prefer unstable income .Also the competition among the industry is high and experienced workers is in shortage ,worker is easy to switch their work position to other factory.Therefore , with the new system ,there will be increasing number of turnover cases.