Safelite Auto Glass Pay-For-Performance Plan When Safelite Auto Glass was founded, it had “about 500 stores across the country, and more than 3,000 employees, including 1,000 installers” (Hall, Lazear, & Madigan, 2001). In 1991, Garen Staglin and John Barlow, CEO and COO played a crucial role in company. When they came into the company, they took control of a program called the Total Claims Solution (TCS). This program utilized telephone and data transfer technology to process claims more efficiently. This made a significant change on productivity levels of employees. This system is a key player and importance to this case because once this system was in place, “individual technicians were installing an average of only 2.5 glass units a …show more content…
Garen Staglin is a well-educated in the insurance industry and received an MBA from Stanford. However, John Barlow has expertise in operations. In addition, “he started his career selling tires at Sears, and developed his philosophy about compensation from trying to motivate his own employees” (Hall, Lazear, & Madigan, 2001). They both originated from two diverse backgrounds, but had constructed a pay-for-performance plan for employees. Furthermore, “now, when a customer called the insurance company to inquire about coverage, the phone call was directly routed to one of Safelite’s national call centers” (Hall, Lazear, & Madigan, 2001). This played a vital role in Safelite becoming a third-party administrator of claims. The shop had less duties on their plate, leading employees to having more time on their hands. This advanced technology is important to the lack of productivity it created. This lead to a change in the incentive plan to raise …show more content…
The first pay plan offers salary-only plans and the second would be salary-plus-commission plan. This allows the company to retain employees who are more motivated by a base amount each month, but also having the ability to completely control one’s income can make a difference. A recommendation is adding both pay plans to keep two different type of people engaged. Based on the amount a person sells and tenue with the company, they can earn a salary only. This may be beneficial for new employees who are learning how to sell. This could provide financial security until they learn how to grow their income based off commission. In addition, it could be a tact for attracting employees. Moreover, “from the employees’ perspective, salary-only plan is relatively risk-free because they can expect a certain amount of income” (Martocchio, 2016). The second pay plan is designed for seasoned employees. A salary-plus-commission plan would provide the employee with a base pay and commission based off output. “The commission component serves as the employees’ share in the gains they generated for the company” (Martocchio, 2016). This could promote empowerment among employees and a