Essay Instructions: This week, you are assuming the role of a Human Resources consultant, hired by Wheel works, Inc. to analyze their compensation and benefits structure. You started this job by interviewing employees to get a feel for how they are currently motivated and compensated to sell bicycles.
Based on the interviews, prepare your report for Wheel works managers by answering the following questions:
1. In most organizations employee needs are used to motivate performance. Briefly explain Maslow's hierarchy of needs in your own words so that the Wheelworks managers will understand the theory. Then provide specific examples as to how Wheelworks meets each level of needs for their employees. (15 points)
2. Similarly, explain Herzberg’s Two Factor Theory so that Wheelworks’ managers will understand Herzberg’s concepts. Provide two or three specific examples of Motivation factors and a like number of Hygiene factors you were able to identify in the organization.
3. In your interviews, Wheel works employees and managers state that "passion for the sport of cycling" is their number one motivator. In general, do you agree that love of the work itself is the strongest motivator of people? Explain why or why not for the Wheel works executives reading your report. If you disagree, based on your experiences, explain what other factors might be stronger motivators.
4. Recap in your report the specific types of financial rewards and incentives are used at Wheel works. Explain thoroughly for managers how each might work to increase employee motivation.
5. You know from your research that Wheelworks does not pay commission to its sales staff. Recap the reasons why not. Based on what you know about the organization and motivational theory, do you believe this decision is appropriate for the firm, given its goals and strategies? Why or why not? As a consultant, what other types of compensation systems would you propose?
Transcript:
Part I
Male Speaker: Running a business like this is not like running a laundromat. It’s not like you show up at the end of the day and collect the quarters. The deal is, is that you’ve got to be on the premises all the time.
Male Speaker: At Wheelworks, customer service is really our lifeblood. They’ve chosen to do this because they have a passion for cycling.
Female Speaker: Cycling is something that I’ve always loved to do.
Male Speaker: I’m motivated to educate people about the sport of cycling.
Male Speaker: Myself and my primary partner, Peter Mooney, founded the company 24 years ago.
Male Speaker: Cycling has changed. It’s worked its way much more into the mainstream. You know, it’s at the point now where you see Lance Armstrong on, you know, Coca-Cola commercials. I mean this is quite something.
Male Speaker: We currently sell approximately 10,000 what we call units on an annual basis, units being wheeled goods, everything from tricycles to tandems. Our current revenue is in the $10.5 million range.
Male Speaker: The Bicycle Trade Organization voted Wheelworks “Best Bike Shop in the Nation.” We’ve been in the top ten list of Best Bike Shops in the Nation for well over a decade.
Male Speaker: We employ 45 people on a full-time, year-round basis, and supplement that with about 20 to 25 seasonal full-time employees and another 30 seasonal part-time employees.
Male Speaker: It’s unique to find a bike store this big, I mean even in Europe, where cycling is the number two sport, next to soccer. You don’t get bike stores this big, you know, or this specialized.
Male Speaker: We’re not selling internal combustion engines here. We’re selling things that allow people to transport themselves at very low energy costs and improve their health at the same time.
Male Speaker: My primary role is personnel selection on personnel encouragement. You know, I spend a lot of time serving as a coach or cheerleader.
Female Speaker: We are not a scripted sales pitch here. Everybody can really be themselves. And this is a rich environment for actually communicating with our customers. If I can get a scent about who our customer is, I can pick from our pool of salespeople and find somebody that can really speak their language, sometimes literally. You know, we have Spanish speakers. We have Chi –
Part II
Male Speaker: Most of them are making somewhat of a sacrifice to be in retail sales. A lot of them are relatively highly educated. They could be doing other things, but they’ve chosen to do this because they have a passion for cycling, and they want to share that passion with our customers.
Male Speaker: We want that customer to be fully instructed and fully motivated, so they go out and use the product, because the last thing that we want to see is that bicycle to go home and be something that they use for a month or six weeks, and then it sits in the garage or hangs in the basement.
Male Speaker: At Wheelworks, customer service is really our lifeblood. Frankly, our success in large, our growth in large is based on word of mouth. We’re relying on Joe, the office expert, having a positive experience at Wheelworks and then people in the office coming to Joe and they say, “Where do you get a bike?” and they say, “Wheelworks.”
Male Speaker: Mostly we rely on enthusiasm, enthusiastic leadership, enthusiasm about bikes, to go ahead and make the next sale, to go ahead and do the right job.
Male Speaker: Most of the people attracted to the bike business are not attracted to it because they’re going to get rich quick, you know. They’re attracted to it because they, first and foremost, like the product, you know. It’s more so, “Well, gee, I really like bikes,” you know, “Where can I kind of spend a lot of time with bikes and telling people about bikes?” ‘cause I’m real excited about it.
Male Speaker: People are motivated by different things. If you interview Kurt, he’s a highly competitive person. He’s a professional bike racer.
Male Speaker: Kurt comes to us with a very strong cycling resume. Kurt was a Zimbabwe National Champion in the early ’90s, and was selected for their Olympic team that was scheduled to compete in Barcelona. He then raced in Europe for several seasons before relocating to the United States.
Male Speaker: He looks a lot of what people are doing in Europe, which we consider sort of the motherland of cycling, and he communicates that to his customer ____.
Male Speaker: On a piece of paper I fall under sales, but I prefer to look at myself as sales consultant. For me, I’m motivated to educate people about the sport of cycling, and it’s, I think, better to be seen as a teacher than to be seen as a salesperson.
Male Speaker: One of the things is he doesn’t want to be outsold. So it’s great to, you know – I hope Kurt doesn’t watch this, but it’s great for me to mention to Kurt about that great bike I sold the other day, right, and he’ll be, “Gosh, you know, I’m a little behind,” and he’ll actually go out and really close some sales.
Male Speaker: Juliana is a super-motivated salesperson. She’s a cycle enthusiast herself.
Female Speaker: Cycling is something that I’ve always loved to do, and had a number of people along the way who’ve inspired me, and I like to provide that information and inspiration for other women.
Male Speaker: She’s got that burn of enthusiasm that you can’t enough about bikes. You can’t talk enough about bikes. You can’t get people on bikes.
Female Speaker: My title is saleswoman, and I think I would I would emphasize the woman. I think my philosophy has a lot to do with the fact that I’m a woman here and this is a very male-dominated business. Sometimes a woman will come in with a question, feeling like they’d be embarrassed to ask a guy who knows so much about bikes, and they wouldn’t feel the same way talking to me about it.
Female Speaker: ____ that you feel like you’re leaning over too far and it’s still hurting your back.
Part III
Male Speaker: In terms of motivating sales staff financially, with the limited resources the retailers have, we try to pay the highest possible wages.
Male Speaker: There’s not a lot of margin in bikes, so there’s certainly a ceiling limit when it comes to sales, especially when you’re not working on commission.
Male Speaker: We also have a very strong benefit program for a mid-sized retailer, where we offer the traditional vacation, sick pay.
Male Speaker: 401ks, profit sharing, health plans that’s, you know, especially health plans, seeing as most of us ride our bikes to work and traffic is dodgy at the best of times.
Male Speaker: All these things are fairly unprecedented in the retail bicycle sales store.
Male Speaker: In addition to the 401k profit sharing plan, we do seasonal bonuses.
Male Speaker: Those things far outweigh the fact that you may not be paid the same as someone who works on commission at the store across town.
Male Speaker: So while they’re not tied specifically to their results on the floor, they know that their efforts are going to be rewarded.
Female Speaker: I love it that we don’t work on commission. I think it’s great, because when customers come in there’s not a sense of being preyed upon by someone who wants to make a sale. When we’re working with a customer, we’re not trying to sell them an expensive bike because we’re going to get a benefit from that. We’re trying to help them find the best bike for them.
Male Speaker: Being free of commission allows us to match the right salesperson with the a certain consumer, allows us to sell the best products and not going to, say, one that’s incentivized, ‘cause we’re long on it; it’s an unpopular color.
Male Speaker: If you work on commission, more often than not you tend to talk people up on product, and they end up walking away thinking you sold them up on a product to benefit your pocket.
Male Speaker: We want to give the sales force here the freedom to do the correct job, and commission complicates that message.
Male Speaker: The technology as far as servicing and maintaining is as invisible as possible.
Male Speaker: We do a lot of clinicking, clinics and to run three, four, sometimes five a month. Most of our staff is – because of their passion for cycling is thirsty for this type of product knowledge. So we find that by bringing in our manufacturers and having them focus on a particular category, a particular product, a particular manufacturer, they can get a little bit more in-depth knowledge.
Male Speaker: At the end of the day I go home satisfied that, you know, Mary Lou, who hasn’t ridden a bike in 15 years, came in and got a $400 hybrid and is all – is happier, because this year she’s going to go and do the carriage roads in Bar Harbor, Maine. She’s going to tell a friend, who’s going to come back to me and go, you know, “You fitted a friend of mine. She’s really happy. I know I’m in good hands.”
