Moonka Auto: Recruiting Salespeople – Case Analysis

A report on the case “Moonka Auto: Recruiting Salespeople”

In partial fulfilment of the HRM Course

Submitted to: Ranjeet Nambudiri

By: Group 10, Section E, PGP 1 (2016-18)

Submitted By:

AKANKSHA SINGH – 2012IPM009

CHINMAYEE SAHOO – 2013IPM130

KHEDEKAR SHUBHAM PRAMOD – 2016PGP174

PRAMIT RAY - 2016PGP275

PRATEEK AGRAWAL - 2016PGP282

RAGHORTE SAGAR BABURAO – 2012PGP293

SADHANA P – 2016PGP329

SOUNAK KASYAPI - 2016PGP382

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Letter of Transmittal

To: Prof Ranjeet Nambudiri

From: Group 10, Section E, PGP 1 (2016-18) Date: 23-01-2017

Subj.: Submission of report on the case “Moonka Auto: Recruiting Salespeople”

This is to transmit the report on the case “Moonka Auto: Recruiting Salespeople” as requested by
you. Kindly consider the recommendations in the following report and let us know if there are any
concerns.

Regards,

Group 10

Section E

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Executive Summary

This report analyses the problem faced by Ashok Agarwal in respect to recruitment process for his
new showroom in TELCO area Jamshedpur. Ashok Agarwal has been unable to finalize the
recruitment for this dealership which is primarily focused as a sales location.

He has the options to invite applicants via Referral, Advertisement or use external consultants to
finalize a recruitment plan for him. The options were assessed on the basis of their coverage with
respect to job fit and attrition rate , duration of recruitment, cost to the company and structure and
ease of implementation of the process.

After Evaluation, It was found that “Referrals” might be the best option for Mr. Agarwal. Thus he
should encourage his three best employees (Kumar, Sharma and Prasad) to refer candidates and
further train them. Agarwal could incentivize and formalize this scheme to motivate the employees
to make referrals.

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Table of Contents

Situational Analysis.......................................................................................................................... 5

Problem Statement.......................................................................................................................... 5

Options Available............................................................................................................................. 5

Criteria of Evaluation....................................................................................................................... 6

Evaluation of Options....................................................................................................................... 6

Recommendations.......................................................................................................................... 7

Action Plan ....................................................................................................................................... 7

Contingency Plan ………………………………………………………………………………………………………………………… 7

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Situation Analysis

Mr Agarwal is a dealer of Honda Motorcycle and scooter India Private Limited (HMSI) who was about
to launch a second showroom for Moonka Automobiles. Moonka had 30% market share in the 2
wheeler markets of Jamshedpur. Mr. Agarwal required to recruit salespersons for his second
showroom, 10 kms. from Moonka Autos. Whereas Moonka Autos with its 4S setup (Sales, Service,
Spare Parts and Safety aspects) operated in a lavish space with an area of 25,000 square feet, the
new dealership was a modest space of 2500 feet with sales as its primary purpose. Agarwal has been
conducting interviews for the new dealership, which in his opinion can get by with just 5-6
salesperson as it would be a matter of time for a sustained growth in the new dealership.

Mr Agarwal wanted to recruit salespersons in a formal way unlike the informal procedure that he
used for recruiting people for his first showroom. He is trying to benchmark the procedure to his
well performing salespersons–Ramesh Prasad, Satish Kumar and Manoj Sharma in order to recruit
candidates with similar attributes. These included

 Friendly demeanour
 Good listening skills
 Good knowledge about not only Honda’s products but also the competitor’s products
 Good negotiation skills (Offering limited discounts)

He has interviewed many people, made offers to 3, out of which only 1 has accepted the offer. He is
trying to employ his existing Salesforce but the existing people are not willing to commute the
distance of 10 kms. and have threatened to quit their job. This has created an urgency for Mr.
Agarwal to recruit new Salesforce for the showroom as it is affecting sales of the existing showroom
and the new showroom as well.

Problem Statement:

Develop a recruitment procedure to ensure the right job-person fit for Moonka Automobiles keeping
cost and time constraints under consideration.

Options Available:

1. Referrals Programme – Mr. Agarwal can ask his existing employees to recommend or refer
people best suited to this job. This will ease Mr. Agarwal job of screening people on the basis
of necessary qualifications
Referrals (incentivized) – Interview (Conducted by Mr. Agarwal) – Final Selection

2. Agency hiring – Mr. Agarwal can take the help of agencies to get the right kind of people for
recruitment. He can include bond options that might reduce attrition
Option a) - Recruitment Agency (fixed fee/ performance interlinked fee) –
Recommendations – Final Selection (by Mr. Agarwal)
Option b) - Recruitment Agency (fixed fee/ performance interlinked fee) - Final Selection

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 3. Advertisement – Mr. Agarwal can give newspaper advertisements like the previous
recruitment to get the pool of salespeople.
Option a) Advertisement – Screen Applications (self-screening by Mr. Agarwal) – Final
Interview
Option b) Advertisement – Screen Applications (Telephonic Interview/ MCQ) – Preliminary
Interview (by panel of highly rated salesmen) – Final Interview (by Mr. Agarwal)

Criteria for Evaluation:

1. Fit and low attrition – The process should be effective enough to ensure the most suitable
candidate is selected. The process should also include elements to check the long term plan
for the candidate.
2. Time - The plan adopted should be easy to implement and execute in as less time as
possible.
3. Cost – The plan should be feasible and most efficient when measured monetarily.
4. Structured and Easy – The assessment should be structured so as to ensure system
maturation for future purposes and also for other functions. It should also be easy so as to
be used by any other person in case the original interviewer cannot be present.

Evaluation of Options:

Fit and low Structured

Time Cost
attrition and Easy
Low -
Referral Option a) High High Moderate
Moderate
Moderate - Moderate -
Option a) Moderate - High Moderate
High High
Agency Hiring
Moderate -
Option b) Moderate Moderate High
High
Low - Moderate - Low -
Option a) Moderate
Moderate High Moderate
Advertisement
Low - Moderate –
Option b) Moderate - High Moderate
Moderate High

Referral

As experienced earlier, acquiring referral through the existing employees is the most cost effective
and efficient way. An incentivized referral scheme may increase the cost but also introduce
motivation for greater number of referrals and lower time frame for the recruitment process. This
process is a lengthy process if referrals are not made quickly.

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Agency Hiring

This option although, ensures ease of implementation and timely decision, previous encounters
reflect a high probability of attrition. This process can be structured and modified for other
functional recruitments but the external agency may not be the lowest cost process and will not help
develop in house capabilities which can be a great advantage In the future for the company.

Advertisement

Advertisement is the most commonly used method. It increases the pool of the candidate making
the recruitment more complex but developing a right procedure may make it easier.

 It may or may not attract the right set of skills. According to Agarwal, he found himself lucky
the first time when Sharma applied.
 However it might be the most cost effective, since fees of advertisement is now a sunk cost
and also it may help in developing in house capabilities for recruitment.
 A proper screening mechanism followed by the right recruitment activities can result in low
attrition but may lengthen the whole time frame.

Recommendation:

The first option “Referral programme” is the most effective plan to be implemented in the short run
as it is the most cost effective and shortest of all processes with the least amount of effort required
by Mr. Agarwal. Past experiences with referral have been fruitful and further formalization of this
scheme may help the organization. One of its main advantages is that the company might not have
to conduct a lengthy recruitment process. But in the long run, the organization should develop a
proper section mechanism where they are able to clearly define the job description and the proper
selection process sequence so that the company is not fully depended on referrals for the
recruitment process.

Action Plan & Implementation:

1. Agarwal should encourage his employees, (Specially Sharma, Kumar and Prasad) to refer
candidates for the job.
2. He should make a formal mechanism for referrals where each referral would carry an
incentive for the referee and also linked to the performance of the person referred and his
duration of employment with the firm. This would negate the effects of duplicitous referring.
3. The referred person to be put under the mentorship of the person who has referred him for
the duration of probation.

Contingency Plan:

In case Agarwal is unable to implement any of the above plans successfully, the contingency plan
should continue with Kumar and Sharma in the new showroom. He can increase their compensation
for their corporation for the time being. Meanwhile, he may recruit some younger people with the
new formal procedure that is the option b) using advertisements and two rounds of interviews. The
formal recruitment will help churn out some non-serious contenders of the race and save Mr.
Agarwal’s time.