Human Resources Homework Assignment

Human Resources Homework Assignment

Making a Job Offer

Clean Car Care (3Cs) is located within a western city of 175,000 people. The company owns and operates four full-service car washes in the city. The owner of 3Cs, Arlan Autospritz, has strategically cornered the car wash market, with his only competition being two coin-operated car washes on the outskirts of the city. The unemployment rate in the city and surrounding area is 3.8%, and it is expected to dip even lower.

Arlan has staffed 3Cs by hiring locally and paying wage premiums (above-market wages) to induce people to accept job offers and to remain with 3Cs. Hiring occurs at the entry level only, for the job of washer. If they remain with 3Cs, washers have the opportunity to progress upward through the ranks, going from washer to shift lead person to assistant manager to manager of one of the four car wash facilities. Until recently, this staffing system worked well for Arlan. He was able to hire high-quality people, and a combination of continued wage premiums and promotion opportunities meant he had relatively little turnover (under 30% annually). Every manager at 3Cs, past or present, had come up through the ranks. This is now changing with the sustained low unemployment and the new hires, who just naturally seem more turnover-prone. The internal promotion pipeline is thus drying up, since few new hires are staying with 3Cs long enough to begin climbing the ladder.

Arlan has a vacancy for the job of manager at the north-side facility. Unfortunately, he does not think any of his assistant managers are qualified for the job, and he reluctantly concluded that he has to fill the job externally.

A vigorous three-county recruitment campaign netted Arlan a total of five applicants. Initial assessments resulted in four of those being candidates, and two candidates became finalists. Jane Roberts is the number-one finalist, and the one to whom Arlan has decided to extend the offer. Jane is excited about the job and told Arlan she will accept an offer if the terms are right. Arlan is quite certain Jane will get a counteroffer from her company. Jane has excellent supervisory experience in fast-food stores and a light manufacturing plant. She is willing to relocate, a move of about 45 miles. She will not be able to start for 45 days, due to preparing for the move and the need to give adequate notice to her present employer. As a single parent, Jane wants to avoid working weekends. The number-two finalist is Betts Cook. Though she lacks the supervisory experience that Jane has, Arlan views her as superior to Jane in customer service skills. Jane told Arlan she needs to know quickly if she is going to get the offer, since she is in line for a promotion at her current company and she wants to begin at 3Cs before being offered and accepting the promotion.

Arlan is mulling over what kind of offer to make to Jane. His three managers make between $38,000 and $48,000, with annual raises based on a merit review conducted by Arlan. The managers receive one week of vacation the first year, two weeks of vacation for the next four years, and three weeks of vacation after that. They also receive health insurance (with a 20% employee co-pay on the premium). The managers work five days each week, with work on both Saturday and Sunday frequently occurring during peak times. Jane currently makes $40,500, receives health insurance with no employee co-pay, and has one week of vacation (she is due to receive two weeks shortly, after completing her second year with the company). She works Monday through Friday, with occasional work on the weekends. Betts earns $47,500, receives health insurance fully paid by her employer, and has one week of vacation (she is eligible for two weeks in another year). Occasional weekend work is acceptable to her.

Arlan is seeking input from you on how to proceed. Specifically, he wants you to:

1. Recommend whether Jane should receive a best-shot, market-matching, or lowball offer, and why.

1. Recommend other inducements beyond salary, health insurance, vacation, and schedule that might be addressed in the job offer, and why.

1. Draft a proposed job offer letter to Jane, incorporating your recommendations from items 1 and 2 above, as well as other desired features that should be part of a job offer letter.

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