HRM at DingDong Ltd (June 2022)
Exemplar coursework section for Unit 6 Principles of Management (June 2022 exam)
Recruitment Methods
When DingDong diversified into Parcel Delivery, they used internal recruitment to recruit drivers from their existing team of taxi drivers. The drivers felt they could fit the parcel deliveries around their taxi driving work.
A benefit of internal recruitment is the faster hiring process. DingDong Limited had been struggling in the private hire taxi market with increased competition and the market for parcel delivery was growing quickly at 35% in the past 10 years. These conditions created a crisis that DingDong Limited needed to respond to quickly. By hiring internally, they were able to save time in the hiring and induction process and bring their new service to the market faster increasing their opportunity to gain a competitive advantage.
A drawback of internal recruitment is the skill gaps that can emerge. Despite the primary roles of taxi drivers and delivery drivers being very similar, the introduction of the delivery service required skills related to warehouse management of over 1500 parcels each day. This led to complaints about missing parcels that could have been avoided if warehouse management skills were brought in with externally recruited staff.
Financial Motivators
DingDong Ltd are using piece-rate pay with their delivery drivers as they are paid a fixed rate per successful delivery.
A benefit of using piece-rate pay is the flexibility it provides. The delivery drivers are recruited from the existing staff who can complete the deliveries around their commitments as taxi drivers. This allowed DingDong Ltd to quickly recruit staff from their existing workforce allowing them to become productive more quickly with 248,750 parcels being delivered in 2020 and 700,000 in 2021.
Another benefit of piece rate pay is cost control as businesses do not have to pay employees for any time they are not spending being productive for them. In this case, drivers are only paid for each successful delivery. From Jul - Dec 2021, only 76% of parcels were delivered on time meaning the drivers would not have been paid for 24%. This reduces unnecessary labour costs and increases profit margins.
A drawback of piece rate pay is quality control as workers may rush their work to generate output and make mistakes affecting quality. In the case of DingDong, many parcels were lost or damaged (12% in Jul - Dec 2021) leading to complaints from customers. This could lead to a negative brand image reducing future sales.
Another drawback of piece rate pay is the inconsistent income for drivers. As employee pay is dependent on output, drivers are subject to financial insecurity which can be stressful. Some of DingDong’s drivers have applied for more secure positions in the warehouse with a fixed hourly rate and staff turnover rates are high. This is potentially due to rival firms like BOXIT offering more desirable remuneration packages such as guaranteed 150 days a year work.
Non-Financial Motivators
A non-financial method of motivation used at DingDong Ltd is job enlargement. This is by providing an opportunity for the existing taxi drivers to take on extra roles as delivery drivers. This adds more variety to their role but at a similar level of difficulty. .
One benefit of job enlargement is improved job satisfaction. By adding different tasks such as collecting parcels from the warehouse and dealing with different staff, variety is added to the drivers’ roles which should reduce monotony and make their jobs more interesting. By making the details of an employee’s role more interesting, morale can improve.
Another benefit of job enlargement is improved team cohesion. The taxi drivers would previously have worked in isolation but adding the delivery role would have created a central point of contact at the warehouse. This would allow them to connect with the warehouse staff and other drivers collecting parcels. This could help to satisfy their social needs, a key motivator and support team cohesion.
A drawback of job enlargement is resistance to change as employees feel the new tasks may increase workload and become overwhelming. At DingDong Ltd, several drivers resigned immediately when Masoor emailed the drivers with the new procedures regarding route tracking. When additional tasks are added without proper management and communication, it can have a negative impact on morale, in this case leading to resignations.
Another drawback of job enlargement is the lack of specialisation benefits. As drivers are switching between roles or taxi drivers and delivery drivers, they are not working full time in their role of delivery driver. This limits the opportunity for them to repeat tasks related to their new role and become more proficient in them. The large numbers of parcels that are not arriving on time could be due to a lack of familiarity the drivers have with the delivery routes and technology. Should this be the case, training would be more appropriate than threats to end contracts.
