OB Case Study Background
The second policy that was put in place was setting a limit on the umber of students could be in a lesson. Prior to this policy if the pro could get 8 clients on the court for the hour, he would get a large bonus because of the volume of students. However the new policy stated that the limit for a lesson was 4 to 1; this turned any lesson of 5 or more into a clinic, which took a significant amount away from the pro but into the business’s pocket. These policies were put in place to funnel students into the programming, the more lucrative of the two types of programming for the club.
These initial policies were met with a lot of negativity room the tennis staff. John, in particular, was very vocal about his displeasure with the new policies.
The majority of John’s book of business was lessons, so these policies took a significant amount of money out of his pockets. Tensions between John and Sebastian escalate. In an effort to appease John, Sebastian raises John’s prices $5 per hour. This put his lessons higher than the rest of the pros, but still less that Sebastian. However, Sebastian left John’s commission percentage the same.
John viewed this price hike in his rates as a disincentive for students to take lessons from IM, as the tennis industry is rather price elastic.
This only further increased the tensions between John and Sebastian. John disengaged from many of his off court responsibilities as an act of protest to these policies. He also started getting a little lax with his timetables, showing up a few minutes late for lessons and keeping them late which in turn through other pros off their schedule. 2013 – PRESENT In fall of 2013 amid growing tensions between the pro staff and Sebastian as well as a decrease in tennis revenue, Sebastian was let go.
In order to try to recoup these sees and reunify the tennis staff Matt Trebles, the son of the owner and general manager, and well-liked tennis pro was chosen to take Sebastian spot. Mat’s first steps as director of tennis were to remove the restricted lesson time and lesson cap policies.
By removing these policies much of the tension between the tennis staff and management was alleviated. However the second task he has was to try to increase the tennis program profits. Matt chose to realign the composition plan to a strictly hourly basis, meaning that the only salaried employees on the tennis staff ere those doing work off the court.
As such John’s salary and quarterly clothing allowance was removed. John was hit particularly hard by this policy shift as his salary and allowance accounted as roughly a $12,000 annual loss from his paycheck.
Wendell tensions are alleviate Walt most AT ten tennis star, Join still remains D about a large chunk of his paycheck being taken from him. As such he withdraws from work, showing up late to, or even no-showing lessons. He also has completely abandoned all of this off court duties. As such John starts teaching fewer and fewer lessons.
In 2010 he was billing out roughly 30 hours a week in lessons, presently John is billing out less than 15 hours a week.
Management is frustrated with him as his no-showing of lessons as well as late arrivals have caused a number of scheduling conflicts with the other pros and the clinics. The Problem According to the financial statements for 2013 tennis revenue is down 7% from 2012. However revenue from lessons are down almost 20% from 2012. Much of the revenue lost in lessons is from John teaching less and less. How can WHARF reengage John and make him into a strong, valuable member of the team again?