The following case concerns FreshRoute, a grocery-delivery business. Research interviews with its delivery employees showed that many wanted predictable rot...
Question 1 Report
The following case concerns FreshRoute, a grocery-delivery business. Research interviews with its delivery employees showed that many wanted predictable rotas, while others preferred a monthly bonus for receiving positive customer ratings. FreshRoute operates in several towns and uses a smartphone app to allocate jobs. Its managers want to choose a reward method before expanding into a new market.
The business expects that a monthly bonus would cost £9,000. Managers estimate that better ratings could increase monthly sales revenue by £18,000. However, they are concerned that employees may ask customers for high ratings rather than focus on safe deliveries. Predictable rotas would have little direct cash cost but could make it harder to cover last-minute orders.
(a) Define a bonus in the context of FreshRoute. [2]
(b) State one benefit to an employee of a predictable rota. [2]
(c) Calculate the estimated monthly net gain if the bonus leads to the forecast increase in sales revenue. Show your working. [3]
(d) Discuss whether FreshRoute should use the customer-rating bonus. [5]
Answer Details
(a) A bonus is an extra payment made to a FreshRoute employee for achieving a target, such as receiving positive customer ratings. [2]
(b) A predictable rota helps an employee plan childcare, travel and other commitments. This can improve work-life balance. [2]
(c) The forecast additional sales revenue is £18,000 and the bonus costs £9,000.
\[£18{,}000-£9{,}000=£9{,}000\]
The estimated monthly net gain is £9,000. [3]
(d) A customer-rating bonus gives delivery employees a clear financial reason to provide polite, helpful service. Better ratings could attract customers in the new market. If the forecast is achieved, the £9,000 net gain suggests that profit could rise.
However, ratings may be affected by factors outside a driver's control, such as missing stock. Employees might also pressure customers to give high ratings rather than concentrate on safe deliveries. FreshRoute should use the bonus only with quality and safety checks. If its main priority is retaining employees through better work-life balance, predictable rotas may be more appropriate. [5]
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