This case analysis is only for those who opted out of "Research Project $1."$ You will need materials in Ch$.11$ and $12$ to analyze the case. The deadline for the case analysis is Apr. $28,2024.$

Please read the following case and answer the three questions based on the case by Lepak & Gowen, $2017.$

"You've been hired by a relatively large local automobile dealership to design a new compensation and incentive system for several positions that make up the bulk of the firm's workforce. These positions are:

$10$ administrative positions: These positions involve the day$-$to$-$day operational facets of running the dealership$-$answering phones, working at the customer service desk, filing paperwork, pulling records on vehicles, and so forth. These employees are currently paid on an hourly The turnover rate is about $35\%$ for these positions. There have been several complaints about the lack of courtesy and helpfulness of employees occupying these positions. Currently, these employees receive annual bonuses of the dealership exceeds its goals and merit pay increases once each year.

$15$ sales positions: The employees occupying these positions are primarily focused on selling cars and are paid entirely on commission. The turnover among these employees is fairly high $($about $80\%$ leave

$17$ service positions $($mechanics$)$: The mechanics occupying these positions are paid on a standard hour plan $($i$.$e$.,$ their pay is based on how much time it should take to perform each repair$).$ These employees regularly repair cars in less time than allowed und$$r the standard hour Plan. The turnover among these employees is very low. As in any other dealership, there have been some complaints about the quality of the service the firm's mechanics have delivered. A number of customers have had to bring their vehicles in several limes before their auto problems were properly solved.

The goals of the dealership are primarily to make money on the sale of new and used cars,

but.jo realit. most of the money is made through the service department. There are several challenges you must consider before you make your recommendations:

The dealership's profitability is fundamentally influenced by the number of cars serviced and the quality of that service. In addition, the dealership's profitability is enhanced by $(1)$ repeat business and $(2)$ the company's reputation. Historically, repeat customers represent a sizable amount of business; the dealership gets to sell their used cars they traded in aod alse sells them new cars, as well as to continue providing service on their vehicles. Moreover, customer loyalty matters a lot because word$-$of$-$mouth advertising generates business.

Service quality in terms of the sales process, as well as in the service department $($mechanics$),$ is a critical component of customer satisfaction and affects the amount of repeat business.

The income salespeople earn is directly related to the profitability of each car they sell. The prices on the cars are somewhat negotiable. Under the current system, the sales staff and the dealership split the profits from every transaction $50-50."$

Question $1$: What should be this auto dealer compensation strategy for each of the three positions? Why?

Question $2$: Which motivation theory $($or theories$)$ may explain the high turnover rate for the sales positions? Please define the theory $($theories$)$ first and then apply the theory $($theories$)$ to explain the high tumover rate for the sales positions.

Question $3$: There have been some issues with each of the three positions, what changes in the compensation package for each position will help address the issues for each position?