The situation is based on Charlie Chandler’s company Charlie’s Spot-Out Company which is involved in cleaning services of machine parts and used equipment for area manufacturers. However, the business owner Chandler is in dilemma in regards to how he should pay his employees: whether to pay them on an hourly basis or per piece. Upon reading the scenario, this paper will address the following; whether the new incentive (pay per piecework) should be extended to other stores and what convincing responses should be given to floor supervisors and customer service representatives regarding their own piece-rate plans. The paper will recommend paying parts washers on the new incentive of per item washed but maintain hourly pay for customer services representatives and floor supervisors.

Plan extension to other parts washers First, Chandler’s idea of paying William per item washed is great, especially considering William’s delayed attitude towards his work, or payment for that matter, and his sluggish nature of working on the parts washers. Chandler should implement the switch and implement the new incentive on William. The new incentive by Chandler can be extended to the other parts washers in the other remaining stores. This will be a successful situation for Mr. Chandler and many of his other employees who are likely to earn more than their current pay per hour. Chandler will enjoy less wear and tear on his boilers and pressure washers, save on water and fuel, and hence make higher profit margins. If the plan is extended to the other stores, then Mr. Chandler will save more on utility bills and hence make more profits which he can decide to distribute as a bonus among his most hardworking employees in other departments to motivate them. The extra profits can also be used to motivate William and fellow employees to improve the quality of their work in order to decrease the parts that need rewashing.

William and other fellow employees from the other stores could appreciate the new incentive as they have the capability to do more parts washers and hence earn more money and retire earlier while at the same time saving on the cost of running the equipment for Mr. Chandler. For a pay of 0.42 per unit washed, with William averaging about 26 items per hour, which is a total of $10.92 per hour which is actually higher than the $10 hourly wages that William is paid. William will also work fewer hours and will have more time to himself instead of spending more time washing the parts. If profits increase for Charlie’s company, he will probably then offer an increased pay per item washed. This is basically a win-win situation for Charlie, William, and his other employees in the seven stores.

Customer services representatives and floor supervisors

There is no reason for Mr. Chandler to put the other employees, customer services representatives, and floor supervisors on a similar plan as parts washers. For customer service representatives, it is not easy to predict when every other employee will complete their shift and their presence is needed all the time until every other employee is done with their shift ends. Further, for customer service representatives it is hard to put them on a similar plan like parts washers as they are supposed to be available throughout the time the other employees are working for the provision of any necessary services or assistance that may be needed like invoicing a complete task by other workers. Also, putting supervisors on the same plan may not work as their kind of job requires that they oversee employees’ progress. This implies that the supervisors must be on their job always and the idea of paying them per part washed may not work.

Alternative plan

Mr. Chandler can review other alternative incentive plans that can be extended to some of his employees like the customer services representatives and floor supervisors. Chandler can group some employees together to form teams that can compete for some compensatory bonuses and/or off days. Chandler can give the employees the option of choosing between cash bonuses and some days off. For customer service representatives, Mr. Chandler can motivate them through the kind of feedback he will receive by telephone or online on the quality of their services and reward them accordingly. For floor supervisors, Chandler can offer them the option of compensation for off days or give them cash bonuses to motivate them.

Conclusion

The SLP case represented above is always a tricky situation that most employers like Charlie Handler find themselves in whether to pay workers on an hourly basis or depending on the amount of work done. The type of plan to be adopted usually depends on the kind of work the employee does. For the case of William and the other parts washers, adopting a pay-per-item wash would be ideal both for the employee and the employer. William will be motivated to work more efficiently and probably earn more by the end of the day than if paid on an hourly basis and Mr. Chandler will benefit for less time used in doing the work and saving on fuel, water and thus reducing the overall expenses. Chandler will likely earn more profits from such a plan than the previous one. However, this plan cannot be used for customer service representatives and floor supervisors as they are supposed to work until the end of their shifts.

An article from the analyst of the Center for Applied Economic Research and scientist Quality-essay.com Christopher Cloos