Solved

Wegmans Wegmans, a Supermarket Chained Based in the Northeast United States

question 13

Multiple Choice

Wegmans
Wegmans, a supermarket chained based in the northeast United States, has been in business since 1915. Its founder believes that if the company could survive the Great Depression, it can survive the intense competition of today's grocery industry, fueled, of course, by WalMart. The grocery business has margins between 2 and 4 percent. Plus, because of low pay, long hours, and, frankly, a mundane industry that doesn't attract and keep top notch talent, employee turnover averages 100 percent per year. In fact, turnover costs are so high and profit margins are so low (because of intense competition) that over the last 13 years, 13,500 individual grocery stores, 17 percent in all, have closed because they weren't profitable. Wegmans plans to beat those odds by differentiating itself through service. Providing great service requires a highly educated, motivated work force, and accomplishing that won't be easy.
The first step in Wegmans' plan to recruit a highly motivated work force is to offer workers excellent medical, dental, and life insurance as well as long-term disability coverage. Everyone who makes less than $55,000 a year receives complete medical insurance and a 401(k) retirement plan in which every employee dollar is matched by 50 cents from Wegmans. In addition to benefits for full-time workers, part-time workers such as cashiers and baggers, most of whom are high-school students, can earn a scholarship bonus (for good grades) of $6,000 over their four years of high school. In fact, Wegmans has given 17,500 full- and part-time employees $54 million for college scholarships over the last 20 years. Wegmans also pays some of the highest salaries in the grocery industry, which, combined with the company's benefits package, keeps Wegmans' turnover rate at an astronomically low 6%! Wegmans also invests in its employees through training. Employees must pass 30- to 55-hour long training classes before they can work in the meat or fish departments. And some are sent to Italy to learn about cheeses or to France to work in patisseries (pasty shops) . Produce employees might be sent to California to learn from strawberry growers.
At Wegmans, the motto is "Employees first, customers second." But because Wegmans' employees are so satisfied with their work and because the company invests so heavily in them, they are glad to deliver what Wegmans calls "telepathic levels of customer service." In pursuit of "telepathic" customer service, employees are allowed, even encouraged, to do anything they need to do to satisfy customers - and that's without getting approval from their managers. In fact, Wegman chefs have gone to customers' homes to fix incorrect food orders. When a customer purchased a Thanksgiving turkey too large for her oven, a Wegmans' employee cooked it for her in the large ovens at the store. Bill Gamer, a parttime employee in a meat department, said, "They let me do whatever comes into my head, which is kind of scary sometimes." Jack DePeters, head of company operations concurs, saying, "We're a $3 billion company run by 16yearold cashiers."
-Refer to Wegmans. The goal at Wegmans is to create "telepathic customer service." Employees are allowed, even encouraged, to do anything they need to do to satisfy customers In fact, chefs at Wegmans have gone to customers' homes to fix incorrect food orders. In terms of goalsetting theory, these chefs had exceptional________ .

Definitions:

Marginal Product

The additional output produced as a result of adding one more unit of a particular input, keeping other inputs constant.

Average Product

The ratio of total product to the amount of input used, determined by dividing the overall output by the input quantity.

Average Product

The average amount of output produced per unit of a specific input, like labor or capital, over a certain period.