5.19 Case Study: Great Mattress Company
Mini Case: Recruiting at the Great Mattress Company
Objectives
- Describe how to use low data for HR planning.
- Articulate how an HR problem can be solved efficiently by using data.
Part A. Individual Analysis
Read the following background data on the Great Mattress Company. Using the information provided, think about the implications of this information for future recruitment at the company.
The Great Mattress Company is a leading bed-in-a-box mattress company in Canada. The concept of mattress-in-a-box has revolutionized the industry by allowing customers to go online to research, select, and buy a mattress. With no showrooms and in-home 120+ night sleep trials, Canadians are waking up to the reality that it is possible to buy a better mattress at a better price.
The company is very successful and sales have risen sharply in the past few years. This has generated a need for more customer service representatives. The advertisement for a customer service representative contains the following qualification:
- Ability to type 40 words per minute
- Must be available to work occasional nights, holidays, and weekends
- Experience in customer contact
The job involves answering the telephone, referring customer calls to a supervisor, and some selling of additional services. The salary is $14.50 an hour for a 30-hour workweek. Customer service “reps”, as they are called, work 4 days of 7-hour shifts per week. They do not receive any fringe benefits.
The majority of the workday is spent talking with customers on the telephone regarding account or delivery problems with their mattresses. Billing errors consume about 50 percent of the reps’ time. Most of the remaining time is spent responding to customer complaints such as late or improper delivery, or non-delivery. Examples of these complaints are: “my mattress was supposed to be delivered today, but it did not arrive”, “I want to return my mattress but the box is no longer usable”, “my mattress is the wrong colour”. Most of the subscribers who call to register complaints are not friendly.
While the company has been able to successfully recruit new customer service reps, turnover in the position is very high. The Director of Human Resources has prepared recruitment data (below). The data shows that 200 applicants from all recruiting sources had to be screened to produce 40 who accepted a job offer. Within 6 months of hiring, over half of the new hires had resigned from the company. Exit interviews with departing customer service reps revealed many reasons for their dissatisfaction with the job:
- All customer service reps are required to work one Saturday and one Sunday a month.
- Seventy-five percent of calling customers are irate about things for which the customer service reps have no control.
- Customer service reps must sit for long periods of time, talking with customers on the phone. Physical movement is restricted.
- Customer service reps have little contact with other people in the company.
- The work environment is hectic and noisy.
- Customer service reps have not been trained to respond to billing complaints.
- Supervisors monitor a sample of calls taken each day and often contradict what the customers service rep say to customers.
The director of Human Resources has asked you to analyze the recruitment and selection process and the related data, and to make specific recommendations. Enter the yield ratios (i.e., percentage of people from the previous step who made it to the subsequent one) for each step in the recruitment and selection process based on the data presented. Think about the implications of these data for future recruitment at the company, and answer the questions on the form.
Part B. Group analysis
In groups, members should review each other’s forms and then attempt to reach a consensus on the questions. Analyze the recommendations in the context of the turnover problem, the potential effects on other HR programs, and the cost of implementation. Justify specific recommendations with relevant research.
Data Collected by the HR Department
| Recruitment Source | Number of applicants | Potentially qualified | Interviewed | Qualified and offered the job | Accepted job | 6-month survival | Recruitment cost per offer |
|---|---|---|---|---|---|---|---|
| Newspaper ads | 120 | 100 | 50 | 38 | 23 | 5 | $500 |
| Walk-in applicants | 40 | 20 | 19 | 8 | 7 | 5 | $250 |
| Public employment agency | 40 | 30 | 19 | 13 | 10 | 5 | $300 |
| Total | 200a | 150b | 88c | 59d | 40e | 15f |
| a. 95 males, 105 females | d. 39 males, 20 females |
| b. 72 males, 78 females | e. 25 males, 15 females |
| c. 42 males, 46 females | f. 14 males, 1 females |
Questions
- What conclusions can you draw from the recruiting data?
- What strategies should the Great Mattress Company consider to reduce the high turnover rate?
- What additional studies should be done based on this data?
“5.19 Case Study: Great Mattress Company” from Human Resources Management – 3rd Edition by Debra Patterson is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.
