1.0Company BackgroundMagic Hand Car Wash is a carwash with a café which was started in 1994 by Tony Roda with the motive of providing the best quality wash and high standard of customer service.
Hand car wash facilities, where the vehicle is washed by employees. This idea quickly leads to a partnership with an existing carwash operator, and so Magic Hand Carwash was born. Their first carwash café opened at Collingwood and second car wash opened in North Melbourne, and by 1999. The company has grown to become the true market leader in the franchise carwash sector that’s showed the dedication and hard work that today nearly 47 franchisee stores are in Australia and alone 40 stores in Victoria, 3 in Perth, 3 in and 1 in Adelaide.In their every store they are highly motivated to maintain their quality and service. Magic Hand Car Wash is a private limited company.
The business provides service for 365 days. Within a couple of years, they built the business up to more than 200 cars every weekend, and was turning over $1.0 million a year. As a trusted brand they wash over 620,000 cars a year. This makes Magic Hand Car Wash the No.
1 choice for customers who decide to trust them with what is usually their second most valuable asset. This trust is what has helped Magic become the industry leader and the preferred car wash choice in the country. Magic hand carwash is designed to make washing your car an affordable leisure experience for the whole family while they do their shopping. Magic Hand Car Wash has a range of products from a basic carwash through to detailing and minor paint rectification. (Magic Hand Car Wash, 2012)2.
0Problem at Magic Hand Car Wash From last few years, according to the information of a Hoppers crossing Magic Hand Car Wash, they are facing some problem due to that they have drop in sale by approximately 30 precent from last year to this year and rise in customer complaint by 15 precent but the main root of these problems is significantly the high staff turnover rate at Magic Hand Car Wash from last few years but it has increased more this year. At car wash the employee turnover has increased from 15% to 25% from 2010 to 2013 which is not good for established company like Magic Hand Car Wash. (Magic Hand Car Wash, 2012)Employee turnover refers to the movement of employees in and out of a business. A high employee turnover rate implies that a company's employees leave their jobs at a relatively high rate. Employee turnover rates can increase for a variety of reasons, and turnover includes both employees who quit their jobs and those who are asked to leave.
Though, the term is commonly used to refer only to wastage or the number of employees leaving. High labour turnover causes problems for business. It is costly, lowers productivity and morale and tends to get worse if not dealt with. ( Riley, 2012). However, there are few more factors on staff turnover in Magic Hand Car Wash which increases when employees feel they are not treated with respect and where there is a lack of teamwork, or where management is viewed as random and overly demanding.
According to the report of a task force on job-hopping in Singapore, more than two-thirds of the organizations indicated that they had suffered a productivity loss of greater than 10% as a result of the high employee turnover (National Productivity Board, Singapore, 1988). Two main causes were identified of this problem through the discussion which is unplanned recruitment ; selection and low employee remuneration. As mentioned by Stone (2012), providing and monitoring a better recruitment and remuneration within an organisation are the primary duties of HR managers, the HR manager of this car wash agreed that he was failed in performing those tasks.3.0 Causes for the problem of High turn over 3.
1 Unplanned Recruitment and Selection Recruitment means to estimate the available vacancies and to make suitable arrangements for their selection and appointment. Recruitment is understood as the process of searching for and obtaining applicants for the jobs, from among whom the right people can be selected. (Gatewood et al., 2008). In most of the organization recruitment and selection process is not systematic. Instead of using proper channel or electronic medium for recruitment they are giving first priority to the person, who is referred by their old existing staffs.
Recruitment and selection is a very important task which HR has to fulfil. Get it right and everyone benefits.Get it wrong and consequences are ominous. In Magic Hand Car Wash unsystematic recruitment process exists. They are hiring employees in the reference of old existing employees. Although reliance on employee referrals may be regarded as discriminatory or disruptive of EEO goals if it tends to maintain the present employee mix by nationality, race, religion, sex or some other criterion.
Magic Hand Car Wash is not that much concerned whether the new staffs they are hiring, will be skilled or not. They are not giving adequate time for recruiting skilled and capable staffs, rather they are wasting their time in training them, and as a result existing staffs have to take the responsibility of them. They have to teach them how to work (Stone, 2012).When any organisation appoint any new staffs they supposed to give more responsibility or promotion to their old existing staff compare to new staffs, but existing staffs are not getting this working environment, is the main reason behind staffs leaving organization.
When any existing staffs leave their job again company need to hire new one and they have to spend money and time in giving them training. As well as the new recruited staffs have been not getting proper training so that they are not performing their work properly and sometimes they left the organisation because of not getting proper training.3.2 Low Employee Remuneration As we know that staffs are the assets of the organization which lends company towards long run business. In organization employees can be one of the biggest obstruct in the growth of the organization if they are not happy and not well paid.
The HR manager must know how much they need to pay, to make staffs happy. In Magic Hand Car Wash, staffs are not getting good pay or any benefit. Normally in other same level of car wash, they pay $18+ per hour but in Magic Hand Car Wash they are only paying $14 per hour, as a result they are not loyal to the company, staffs stop giving their 100% effort to make costumer happy although good customer service is important for any organization.They just pretend like they are working and they try to avoid any responsibility, which they supposed to take (Stone, 2012). Job evaluation is a systematic method of determining the worth to the organisation of a job in relation to the worth of other jobs. It is concerned with ‘how big’ or ‘how small’ a job is the aim is to ensure that jobs of different sizes or relative worth attract the appropriate pay differentials.
In Magic Hand Car Wash there is no difference between the wages on new staffs and old existing staffs. Similarity in pay is making old existing staffs unhappy, and this sadness toward their pay is hampering their work life. They are getting careless toward their job.Their loyalty and efficiency toward their work is decreasing (Stone, 2012).
So the other reasonfor high labour turnover in Magic Hand Car wash is low employee remuneration. Employees leave the job because of they are not satisfied with their salary. They work in the idea "you get what you pay for," which is very harmful for those organisation who don’t pay good pay, bonus or incentive pay according to the staff’s performance, which make staffs less efficient and effective in every way. Staffs are losing their interest toward their work in the lack of good pay.
The main reason behind high turnover is the less efficient and effective staffs (Berwick, 2009).4.0Solutions to the problem In order to resolve the problem facing by the company, firstly we analysed the problem and its causes. We found out that the major cause for the high employee turnover is that the most of the employee are not happy with their pay and they are not recognized for their hard work. And the other reason is that the recruitment process of the company is not properly conducted.
There are many creative solutions that can improve staff turnover rates. A constant cycle of recruiting, training then recruiting and training again is not only frustrating, it can affect employee morale (Analoui, 2007). Finding solutions that keep staff happy can make a tremendous impact on work flow, efficiencies and general office climate. To overcome this problem we have decided to implement the following two solutions: I.
Conduct strategic recruitment processII.Pay for performance and provide benefits 4.1 Conduct strategic recruitment process We have realized that the first major cause of high turnover rate is the improper recruitment process. As the company has been hiring the employees through the existing staffs’ reference, who mostly turn out to be inexperienced and new in this industry so they can’t cope with the culture and environment of the company and leave the job.
Therefore, company need to adopt the strategic recruitment process which locates and attracts the right potential candidates to the right job openings within an organization.The strategic recruitment processes set the limits, and they identify changes. While embracing the strategic recruitment process, we considered about the employment branding as well that mean we would like our company to stand as one of the good employer to work with for the potential applicants. Strategic recruiting involves clearly outlining each job i.e. job analysis, sourcing, job description that describes the duties and responsibilities, authority and accountability and job specification that identifies the requirements of applicant’s experience, qualifications, skills, abilities and knowledge and personal qualities and special requirements (HRM Learning system, 2008).
Dr. John Sullivan states in his article that "strategic recruiting may sometimes need to go beyond just filling empty positions. It can focus on discovering talent before it is needed, capitalizing on windfall opportunities when there is an abundance of highly qualified people...
" (Sullivan, 2008)4.2Pay for performance and provide benefits Equity theory states that if an employee sees discrepancy between the outcomes they receive and their input, compared with those of other employees, that employee will be motivated to do more or less work (Stone, 2012). Therefore, our company has decided to promote the philosophy of pay for performance along with the appropriate benefits for those employees who are good at their job. As it increase the motivation level of employees and encourage their certain behaviour.
Car wash should be provide the Financial and Non-Financial benefits to the employees who are dedicated to their job and loyal to the company. This solution has the advantage for both of the sides: employees and employers. Employees get recognition for their hard work along with the benefits while the company retains the skilled and high morale employees. •Financial benefit:Company would provide the incentives and allowances to the employees on top of their base salary based on their performance rather than based on their position in the company. This makes feel the employees as a part of the company as their performance have been recognised and rewarded which motivates them to put more effort to do the best for the company (Analoui, 2007). Financial benefit includes bonuses and tips provided by customers.
Employees are allowed to keep their tips offered by the customers. An allowance includes overtime and shiftwork as it not only give motivation to the employee to work long but leads to increase company, car wash where the work hours are nearly 10 hours a day which is long for person to work.•Non-Financial Benefit: Magic Hand Car wash would also provide non-monetary benefit to its employees which enhance the attractiveness of the organization as a place to work. Some of the non-financial benefits are recognition, performance feedback, flexible work schedules, safe and healthy work environment (Stone, 2012). As the significant numbers of the employees working in the car wash are the University students, they tend to switch the job more often as per their benefit. To retain those employees who perform better than the standard and had been with the company for at least one year, the company can offer to pay 20% of their total tuition fees and the study leave as and when required.
Except these students, the other employees as car wash work is more physical and noisy some time management could organise some entertainment source for them to have a good relax and could spend a good social time likewise a pair of movie tickets every month or a dinner along with the flexible work schedules based on their performance. (Michalowicz, 2011)5.0Implementation of the solution There are some activities to implement benefit and recruitment. These activities aim to support the effectiveness and efficient implementation of the systematic recruitment and cash and noncash benefit which will tend to stand out as reward for the performance, enchaining their long term effect that can result in increased engagement of the organization goal.
