Proposal – change of employee car policy essay
The purpose of this memo is to address the company’s existing practice of using private cars of employees for work-related needs. The intention of this document is to review existing policies and to suggest another approach – providing corporate cars to employees instead of using their private cars. The strategy of using employee cars has a number of flaws: it limits the number of employees to those who own cars and are willing to use personal cars for work-related travels, it creates a need to track mileage and depreciation associated with work-related travels and might lead to insurance invalidation. Furthermore, some companies offer corporate car as additional benefit, therefore gaining an advantage in the process of hiring and retaining talented employees. These reasons indicate that there is a need to change the approach and offer company car to employees.
BACKGROUND
Cars are intensively used by the workers of our company both for private and corporate purposes. Current corporate policy is the following: employees need to have own car and they have to use this car to fulfill their work responsibilities. Currently the company reimburses the expenses on a per-mile basis, and in addition compensates car depreciation and car damage that happened while fulfilling work-related duties. While such strategy is relatively flexible and allows new employees to start quickly, it has a number of serious flaws that affect the company’s competitive position.
First of all, such strategy is discriminatory against those persons who do not own a car but have the necessary characteristics for doing the job successfully. In fact, the existing corporate strategy filters out those who are not willing to use personal car for work purposes or cannot do it on some reason along with people who currently do not have a car. In this way, the company might fail recruiting talented people simply because of ineffective car policy. Secondly, since the company’s employees sometimes have to carry goods in their cars, which is classified by insurance companies as “livery” and in most cases invalidates insurance coverage (Gitman and McDaniel 36).
It was also determined that some employees elevate depreciation expenses and/or travel expenses to get higher reimbursement and to finance own personal expenses. The company should either improve the process of tracking expenses or adopt a different approach to using cars. One more disadvantage of the current policy is the fact that it can hardly compete with corporate cars offered as benefits by competitors, so the company’s HR managers have fewer opportunities to attract talented people or retain them.
SCOPE
The analysis of the shortcomings of the current car policy shows that a new policy should be implemented. It is recommended to offer corporate cars to employees. This approach will help to resolve problems with depreciation and fuel expense tracking as all depreciation will be considered work-related as well as fuel expenses. Minor personal uses will be also covered. The company will be able to provide decent insurance and to take care of car maintenance and repairing in order to reduce the chances of work-related accidents or injuries (Cushway 56).
The new policy will be more attractive to people who currently do not have a car, who do not want to use a personal car for work purposes or who cannot do it on some reasons. Furthermore, the new policy will be more attractive for new employees since they might be able to minimize car-related expenses and maintenance efforts. Corporate car can be offered as an additional perk by the company’s HR managers (Armstrong and Murlis 464). This benefit might be used for motivating existing employees and for attracting new talents.
CONCLUSION
It is recommended to change the policy of personal car use by employees for work-related purposes to the policy of offering company cars to employees. In this way, the company will be able to attract more efficient employees, will optimize the costs of fuel and depreciation tracking, will manage the parks of car in a more efficient way and will have an additional benefit for recruiting new candidates.
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