Wheelworks

Analysis
Compensation and Benefits Structure

Sharolyn Lung 8/15/2009

Analysis: Wheelworks
After interviewing Wheelworks employees and looking at the current commission structure, my view is that Wheelworks does a great job of motivating and rewarding its employees. There are two different prevailing theories of motivation and Wheelworks fulfills both of them quite satisfactorily. Abraham Maslow put one theory of needs hierarchy motivation forward called Maslows Hierarchy of Needs (Griffin, 2008, pp. 437-439). He suggested there are five levels of needs that motivate human behavior and that the bottom levels must be met before the upper levels can be motivators. The five levels are physiological, security, belongingness, esteem, and self-actualization needs. In workplace terms, physiological needs refer to the basics: a sufficient wage and a decent work environment. Security needs are covered by job security and an adequate benefits package. The belongingness need entails social interaction and is satisfied by friendships at work and teamwork on the job. Esteem needs are fulfilled both by external recognition in the form of titles and rewards, and by internal motivators such as challenging tasks and accomplishments. Finally, we have self-actualization needs, which must be met mainly by the employees themselves as they involve growth and development. A company can however provide the type of environment that fosters the meeting of this need level. Wheelworks meets its employees physiological needs by providing fair wages and a good environment to work in. Employees security needs are met by the excellent benefits package and the fact that the core group of employees is full-time and year round. Wheelworks meets the belongingness need by fostering an atmosphere where employees are not in direct competition for sales. Instead, they match the correct salesperson to the customer, which builds a team mentality as everyone is acting in the best interests of the customer. Esteem needs are met at Wheelworks by the opportunity for sales people to educate the public about cycling. Many are cycling enthusiasts and have a burning passion to share that with others new to the sport. Self-actualization needs are also covered quite well by the clinics that Wheelworks operates. These allow their salespeople to increase their knowledge about the products that Wheelworks sells.

Sharolyn Lung

August 15, 2009

Analysis: Wheelworks
An alternate theory of needs hierarchy motivation would be Herzbergs Two-Factor Theory of Motivation (Griffin, 2008, pp. 440-441). This theory states that there are two sets of factors tied to an employees sense of dissatisfaction and satisfaction with a job. Hygiene factors are those things that when they are met minimize an employees dissatisfaction. Examples of these would be working conditions, pay, benefits, and the quality of relationships with other employees. Motivating factors on the other hand are those that affect an employees satisfaction level. These include achievement, recognition, and growth. Wheelworks meet its employees hygiene factors by providing an adequate wage, benefits package, and a great environment to work in. Motivating factors are met by providing the opportunity to teach others about cycling, the satisfactions of helping people learn about the sport, and offering continuing education on the products. Many of Wheelworks employees stated it was their passion for cycling that was their greatest motivator. I do feel that this is often the strongest factor that motivates most people in their job but not always. Those who do have a passion for what they are doing are often able to overlook things that might cause some dissatisfaction however; there is a point where basic needs outweigh passion. It would not matter how much passion Wheelworks employees had if for example, the company stopped paying them a wage. In that case, the employees would be dissatisfied to the point where they would leave and find another job. Therefore, hygiene factors/lower-level needs must be met before motivating factors/higher-level needs are useful as motivators. Wheelworks compensates its employees through a basic wage plus benefits and bonuses system. Rather than commission per sale, employees earn a flat wage. They also receive benefits such as health insurance, vacation and sick pay, and 401K plans. Profit sharing and seasonal bonuses supplement earnings. A basic wage system gives employees the money to meet their basic physiological needs. Adding vacation/sick pay and benefits packages to that gives them a sense of security. These things all reduce an employees level of dissatisfaction with the job as per Herzbergs two-factor theory.

Sharolyn Lung

August 15, 2009

Analysis: Wheelworks
Once profit sharing and bonus plans are incorporated, compensation moves into the realm of being a motivator. At this point, an employees need for recognition and teamwork are met, thus increasing job satisfaction. Taken together, the entire package helps to minimize dissatisfaction with the job and increase satisfaction, leading to a motivated happy employee. Unlike many other retailers, Wheelworks does not have a commission-based pay structure, nor does it pay commission on top of wages for sales. The reasoning behind this is to be able to match the proper salesperson to the customer and to eliminate overselling or preferential selling for personal gain. I do feel that this is an appropriate strategy for the company as it results in better customer experiences, which translate to more customers through word of mouth advertising. It also results in salespeople who are motivated to sell the best-fit product to their customers rather than the one that is incentivized or pays the most commission. It fits in very well with the self-admission that many of the salespeople are with the company to educate others about the sport of cycling. The existing profit sharing and bonus plans are enough to ensure that everyone does their best to keep sales high. I would not advise changing anything about the current compensation plan at this time.

Sharolyn Lung

August 15, 2009

Analysis: Wheelworks

Bibliography
Griffin, R. W. (2008). Management. Boston: Houghton Mifflin Company.

Sharolyn Lung

August 15, 2009