# EDGCOMB METALS: THE TROY PLANT (A) Harvard Case Solution & Analysis

## EDGCOMB METALS: THE TROY PLANT (A) Case Study Solution

• Alternative 2: To set a monitoring system to track the drivers performances

Pros

It will benefit the company by tracking the driver’s performance much more accurately. It will also help in periodically comparing the performance of each driver to a standard which will be based on the number of miles driven and the stops made by each of the driver and sector in which the driver made its run.

Cons

This will affect the freedom of the employees to perform accordingly as previously being provided by the company to the employees. The company will have to incur some additional cost to incorporate the system into the company’s operation which will increase the total operating expense without any significant increase in the company’s profit.

 Spenser William Miles stops Hours Miles stops Hours Average 284 6.29 10,06 235.52 4.8 9.72 Standard deviation 88.63 2.69 1.99 87.48 2.34 1.84 Count 70 70 70 61 61 61

• Alternative 3: Equip the trucks with Tachographs.

Pros

The equipment will keep a track of miles per hour over the course of run and through such records the company will get complete information regarding the activities of the drivers and their whereabouts and would be better able to evaluate the performance of each driver.

Cons

The drivers will not prefer the idea of being tracked and watched and this might demotivate the employees as they enjoyed the freedom of being alone on the road. Installation of such devices in the trucks would affect the performance of the drivers as they will have a constant pressure of being watched and recorded. The company would be required to pay a significant fee i.e. \$ 75/ month leased cost for a Tachograph which is not even justified.

Monthly wage Vs. Tachograph lease cost

 Monthly wage of each employee ( excluding over time) Monthly Tachograph lease cost =\$9.50 * 8 hours = \$2280 per month =\$75 * 7 trucks = \$525 per month

• Alternative 4: Change the method on which drivers were being paid

Pros

The option to change the method on which drivers are being paid is so far the most reasonable option available. Through it the company will be able to resolve the issue being raised by the drivers without incurring any addition cost. It will further motivate the current employees to improve their performance as they will be paid on the basis of miles and the number of deliveries contributing towards the improvement in the overall efficiency of the process. Furthermore paying employees on the basis of work will remove any of the incentive to stretch-out a run in order to incur overtime.

Cons

The employees will restrict themselves form doing overtime as they will not be paid on the basis of hours they have been working on. The drivers who took more hours to complete the job will not perform effectively after the eight working hours as they will lose the willingness because of not getting paid for the extra hours they would work to complete the job.

Over time

 William (first six months) Spenser (first six months) Regular hours Overtime Regular hours Overtime 907 215 931 284

Recommendation

Amongst all the alternatives, the most suitable alternative available for the company is alternative 4 i.e. to change the method by which the drivers are being rewarded. As it will help in resolving the issue being raised by the drivers that is of the company rewarding the poor performer despite of appreciating the employees that complete the deliveries at a much faster pace. This shows that the drivers are not currently happy with reward system being adopted by the company that needs to be changed in order to keep the spirits of the driver high. This will also help in improving the efficiency of the employees that took more hours to do the task that could be completed within the time frame of eight hours as now they will be paid on the basis of  number of deliveries and miles driven rather than the number of hours. The company will not need any additional cost to implement this option and it will work in the favor of both the parties and will help in improving the performance of the drivers............

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