Group 2 Case Study - Muffler Magic.

Case Title: Muffler Magic
Introduction:
Muffler Magic is a fast growing chain of 25 automobile service center located in

Nevada. Ronald Brown who started with a single store 20 years ago which eventually
grew into a chain of repair shops and expanded their services from muffler
replacement to oil changes, brake jobs and engine repairs.
Being a service oriented company; the shop owner was basically dependent
upon the quality of the service of people he or she hires or retain. It’s also a business in
which productivity is very important. Quality was a persistent problem as well and it
resulted to diminish the profitability of the company and ruining Muffler Magic’s word of
mouth reputation.
Muffler Magic employs about 300 employees and Ron runs his company with
eight managers including himself as president, a controller, a purchasing director, a
marketing director and the human resource manager. He also has three regional
managers to whom the eight or nine service center managers in each area of Nevada
report.
The company had only the most basic HR system in place. Training is entirely
on-the-job. Muffler Magic expects the experienced technicians that it hires to come to
the job fully trained; to that end, the center service managers generally ask candidates
for these jobs basic behavioral questions. However, most of the other technicians hired
to do jobs like rotating tires, fixing brake pads, and replacing mufflers are untrained and
inexperienced. They are to be trained by either the center manager or by more
experienced technicians on-the-job.
Ron Brown faces several HR-type problems. One, when it comes to hiring
employees. Although its fine to say that he should be carefully screening each
employee and checking their references and work ethic. Employee safety is also a
problem, but there are some basic things that a service manager can do to ensure
more safety.
With Muffler Magic profits going down instead of up, HR manager scheduled a
meeting with himself, Ron Brown, and a professor of business who teaches
compensation management at a local university. The professor was asked to spend
about a week looking at each of the service centers, analyzing the situation and
coming up with a compensation plan that will address Muffler Magic quality and
productivity problems. She came up with the following recommendations. 1. Paid sick
leave 2. Skill -for- pay plan 3. Setting up a labor efficiency goals.
Muffler Magic Case 1|Page

I. Viewpoint:
Mr. Ron Brown, owner of the Muffler Magic.
II. Time Context:

After the expansion of the service center to various locations and services
provided to clients. (specific date was not mentioned in the case)

III. Statement of the problem:
How Mr. Ronald Brown could address the productivity and quality of work
(rework) issues?
IV. Statement of objective:

To decrease at least 70% of “rework” and increase productivity of the
employees.
V. Areas of Consideration: (SWOT Analysis)
Internal Environment External Environment
Strength Opportunity
- Service centers has skilled - Customer satisfaction of Muffler

technicians that could help in skill Magic for easy access service
development of other technicians centers after the company expansion
around Nevada and expansion of the
services offer
Weakness Threats
- Training is entirely on the job - Competitor offers a high pay for

- HR manager has only the most technicians
basic HR system - Customers are charged based on
standardized rates
VI. Alternative Course of Action:
A. Recruitment and Selection

Review the existing process and establish a better
recruitment approach for hiring technicians and select best
candidates for the position that will be hired to help in achieving
business goals.
B. Training
Needs of the company should be assessed for designing the
training program for all the employees that will helps them to gain a
specific skill to improve their current performance and contribute in
achieving goals of the company.
C. Compensation
Execute the professor recommendations for the
compensation package of all the employees of muffler magic:
 Provide pay 3 sick leave per year
 Skilled based pay
 Incentive pay
VII. Analysis
Criteria:
Criteria A B C
Effectiveness 1 2 3
Timeliness 2 1 3
Cost Efficiency 1 3 2
Total 4 6 8
Legend:
1. Good
2. Better
3. Best
Define the criteria:
Effectiveness- The quality of work provided by the technicians should be

improved.
Timeliness- Implementation shall not affect the operations of the service centers
and will only take a short period of time to see the results.

Cost Efficiency- The ability to use less resources to achieve the objectives
VII. Conclusion
Therefore, after analyzing the criteria mention in our analysis, ACA “C”
has been selected to be implemented since the result showed that not only the
organization as a whole will be benefited in the recommendation but also every
employee will gain monetary benefits that can motivate them to be more effective
and become an asset of the organization.
VII. Plan of Action
Objective Activity Responsible Time Budget

To establish - Gather all relevant HR One week None.
employee information of the
database from employees:
the existing -Employee Name
personal data -Present Salaries and
files wages
-Position
-Duties and
Responsibilities
-Education attainment/
Trainings
-Years in service
-Previous performance
rating

To assess the - Schedule meeting with HR, Ten days P 10,000.00
current regional managers and Managers, within one for
salaries of directors Regional month miscellaneous
each - Present the new Directors, and depends on expenses
employees established employee Consultant availability (snacks and
database of all drinks).
- Review the present concerned
compensation offered to personnel
the employees to assess if
the current salary matches
the employees’ skills and
performance
- Prepare proposal for
Salary and benefits
adjustment; with pros and
cons of the adjustment
To present the - Schedule meeting with HR, One day P 2,000.00

proposals to Mr. Brown, Regional Managers, for
the owner directors and other Regional miscellaneous
Managers Directors, expenses
- Presentation of the Consultant, (snacks and
proposal and Mr. drinks).
- Discuss pros and cons of Brown
the proposal
To review and - Review the proposal for Mr. Brown One week None.
assess the salary and benefits
proposals adjustment
- Assess the effect of the
proposals to the company
To discuss -Discuss with the HR, One day P 2,000.00

changes in the management the additional Managers, for
proposals inputs or any changes in Regional miscellaneous
the proposals Directors expenses
Consultant, (snacks and
and drinks).
Mr. Brown

To prepare the - Final drafting of the HR One day None.
final draft of proposals
the proposals
To approve - Approval of the proposals Mr. Brown One day None.
the final

proposals
To execute - Make the necessary HR One week Approximately
the proposals adjustments in the salaries half of the
and benefits of the existing salary
employees. expense.
Estimated
increase in
Salaries
Expense is
P 2,000,000.00

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Case Title: Muffler Magic

Muffler Magic is a fast growing chain of 25 automobile service center located in

Muffler Magic Case 1|Page

II. Time Context:

IV. Statement of objective:

V. Areas of Consideration: (SWOT Analysis)

Internal Environment External Environment

- Service centers has skilled - Customer satisfaction of Muffler

- Training is entirely on the job - Competitor offers a high pay for

VI. Alternative Course of Action:

A. Recruitment and Selection

Muffler Magic Case 2|Page

Define the criteria:

Effectiveness- The quality of work provided by the technicians should be

Muffler Magic Case 3|Page

VII. Plan of Action

Objective Activity Responsible Time Budget

Objective Activity Responsible Time Budget

Muffler Magic Case 4|Page

To present the - Schedule meeting with HR, One day P 2,000.00

To discuss -Discuss with the HR, One day P 2,000.00

Objective Activity Responsible Time Budget

Muffler Magic Case 5|Page

Muffler Magic Case 6|Page

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