The Kenright and Moores is facing some very serious problems. Respected CEO and Deputy CEO, as per your request we are presenting you some of the problems identified. It is best for all of us and the company as whole that these problems are looked into as soon as possible.
Sir, as you may know that innovation is an integral factor for all firms to survive. The world out there has become more competitive with insurance companies cropping out everywhere. Plus we have also observed that the rate of disaster and crime all over the world has increased including our continent and the Union as a whole. We can expect more people coming in with interests in buying our insurance. With the increased environmental dynamics and the flexibility of it, we observed that our company needs a serious focus towards new ideas. Without it, our previous products are rendering losses since our competitors are now resetting their whole policies to suit to today’s need.
The overall performance of the company is lower than what was expected. In fact we are noticing that the performance is showing a decline for the past few years especially due to the drawbacks in the “endowment policies” and the “Credit Crunch” traded in the 1980s. The result of this is a serious damage to our brand. There is also noteworthy that some of the environment policies are “giving away too much”. With the given increase of natural disaster the company totally goes in the loss with the people asking for remunerations. It is obliged for us to provide people with the best of our services, but we nearly go bankrupt with the increased disaster, be it man made or natural.
One problem I would like to point out is the absence of Mr. Walter Smith, our ex-Chairman and CEO. He was a reputable man in our company and many of our customers use to come up at our offices because of Mr. Smith. Mr Smith took a very imperative measure of the 15% headcount reduction that really gave a boost to the company even though many of the other investors talked on the contrary. We can see the effects of it once Mr. Smith left because the shareholders and the other related stakeholders have shown grave concerns of his departure and they are surely not optimistic about the current situation. Mr. Smith thought on a shorter term for sure but he was surely breaking his longer term notions into smaller, much simpler ones. Clearly there is no better replacement for smith and our chairman.
Our current CEO, David Moyes is a new personality with vigor, energy and a long term vision to take the company to a new height. But the problem is that his vision should be translated into actions. Currently the company motivation is in pathos condition.
There are also some cases of gender discrimination. Women in the company are under represented because of which they face many problems like those of sexual harassment which still looms over head under the name of Employment Tribunal. There also is a hue and cry over the payment system. Our company focuses on the bonuses rather than the basic salary. Bonuses are usually classed into the three quarters and they are allocated as some fraction plus the basic. It is observed that the upper quarter of people’s total is around thrice that of those in the lower quarter which contains women in majority. This means that most of the senior positions are allotted to male employees only. There have also been complaints that men having the same qualification, type and time of service and age receive almost 25% more salaries than women. This goes to show that even highest earning women in the company still does not win a position in the top 50 earners. There is either a clear violation of the rule that all employees should be respected, should have their own voice and treated equally as individuals. Even the Human Rights (1998), Article 3 clearly says that any treatment of torture, disrespect or dishonor of the rights and safety of humans are worth severe punishment. The simplest effect we see from this is a high turnover especially among women.
Not only are many of the female employees dissatisfied but also there is an increasing turnover among men too. The strict and bureaucratic structure is not advocated by the employees at all. They like a much more flatter organizational hierarchy where each have the power to decide to how well they can benefit the company and themselves(Hamel & Breen 2007). People do not approve of an all time check and balance over them, they require some space. Recent graduates hailing from the Generation Y and beyond require a flexible and free environment where they can feel free to adjust themselves and then better talk to their customers. We are seeing a higher turnover, sickness rates (due to pressurized environment, peer pressure and increasing work stress), absenteeism and lack of organizational citizenship behavior. There is clearly low productivity and the quality of work is decreasing.
The job satisfaction level is really low. There are several reasons for it. First of all, people are not accommodative to the strict policies and the dogmatic structure of the management. They want to be more empowered in their decisions. It is also observed that the physical location of most of the dependent employees in the basement which is clearly an inappropriate place for a large number of employees. We have observed that the basement is almost always crowded with people thus making the room hot and suffocating. The room lacks proper ventilation and opening for even the sun light to enter the room. People lack a sense of pride of owning their cabins or even tables thus making them think they are in many ways inferior to their seniors. The staff also sees their task as monotonous.
People see their jobs as straight forward. Their productivity due to lethargy and boredom is low. They cannot focus on their customers, because of which they have been involved in objectionable activities and even those relating to selling incorrect policies. The results are evident. We have less customer base now, we are loosing our loyalties and our customer is totally dissatisfied. Change management will be a difficult from this point forward. Another problem that might lead to low productivity is the bonus. People do not only work for money and it has been observed that bonuses are not the only thing that can motivate people in anyway. Proper working condition, sense of ownership of the work, freedom and empowerment, sense of accomplishment, growth and security are some of the factors lacking in the employees especially the support staff (Podmoroff 2005).
We also mentioned employee empowerment. There is almost no employee consultation before a decision is made. Employees cannot argue, provide a feedback and there is no participation from their side. Some our forced to keep quiet and some do it voluntarily. Because of this many of the employees cannot cope up with the change and thus think of “letting their tables go”. People want to learn in their lives. Majority of our employees especially the new graduates are interested and eager to learn. We have no such skill development session or training programs of any kind. They dynamic market requires a continuous updation of knowledge and skill which thus render many of the text books useless especially in the practical life. The poor communication system, the lack of employee grapevine and a rigid structure does not allow interaction among employees. Learn under what circumstances should a company's management team give serious consideration
There is also a concept of “McDonaldisation” creeping into the organizational environment making people feel more restricted. The seniors are expecting the juniors to make fewer mistakes. Clearly this is against the rules for learning. Albeit the concept, there has been no standards set for the employees, and there is no Balance Scorecard for them to compare their outputs from. Decisions are only irrationally rationalized with no set redundancy policy and no condition for selection or rejection of decisions.
There are also problems at the call center. Call center is focusing on how much time is the employee giving to the calls rather than to see how well they are serving the callers. The rewards are thus being given on the time spent rather than the quality because of which the reward system is seeing as unjust. The employees especially the juniors feel that they are always been watched over and the rules are much too strict. This leads them to being irritated and they display acts of misconduct and disrespect for rule and seniors. Even the head of the call center, Mr. Grant Nitchell is seen as stiff, introvert, skeptical and an unfriendly person because of which many of the employees don’t feel like coming at times leading to high turnover and more absenteeism. Plus there is no support from the supervisor especially in psychological, mental and emotional set backs. There are also extreme cases of racial and ethnic harassment in the office. Expatriates are unequally represented because of which they face many problems.
Equally problematic is the short term management. Due to the problems and their effects such as high turnover described above, the management has to spend extraneous time over rehiring. The problem of turnover is due to both voluntary and dismissal or firing reasons. More than 30% of the people are being fired which is surely very alarming especially for people in the Call Center. The management seemed rather volatile and the young managers are having a hard time controlling the situations in their domains. The problem of freedom to decide and the whole sense of development lacks at the Call center.
Q2. Potential Risks
There are a number of risks associated with the problems we have described above. These risks pose great danger to the company as a whole. We have our market share and reputation at stake. One of the main risks is that of loosing a golden chance of earning. We may become a subject of late overbid. We have described before that we have a lack of proper infrastructure of communication. We are not always updated with the market standing especially due to the lack of interaction and open discussion among the fellow employees. People are reluctant to discuss their problems or any “hot” news. On the other hand many feel threatened of loosing their credibility and their jobs (at worst) if they presented news which may in anyway be unfavorable to the company. The employees are lethargic and feel bored at their work. The risk of overbid seems even more plausible given that some have also sold wrong policies.
The current economic situation of the UK and the world as a whole is not favorable and the risk of case trading going down increases too. The current price hikes of almost everything especially of food and fuel pose some danger to our business since people will have fewer saving for insurances. With lack of updated system at our offices we help that danger to devour our business. The lack of innovative material and new packages, stern management, lack of marketing and a negative attitude of the employees and the lack of motivation and commitment to work also holds danger for us.
Since the company graphs are going down it may require some very extreme measures at the end to save the company; measures that may even have to break all rules and regulation of the investment and insurance industry. This is a risk clearly evident and it is for the best interest of the company that we should do something before drastic times such as this confronts us. Plus the trading of wrong policies and the negative perception, attitude and vision about the company shows that the employees are highly likely disregard the financial service regulations. With the increasing number of employees and the changing environment, noncompliance of the regulation is a grave risk until proper learning and development sessions take place within the organization. This poses risk to our brand as well. Till now K&N have had a good reputation in market with people coming from long distances to buy our packages. There is a loosing that loyalty.
We have already seen cases of sexual harassment, racial and ethnic discrimination and stereotype mentality within the organization and this is not healthy at all. Many of the expatriates require work and life recognition. Our employees are our assets and many of the immigrant workers are actually performing way better than some of the locals. It was also noted that after our acquisition of the German company we have people working from there as well are actually performing up to the mark. It is also seen that some of the women are actually performing way better than their male counterparts. The risk lies due to the misrepresentation of the two groups mentioned: women and expatriates. They require equal voice, power and opportunity. The risk of loosing some of our best people is great. Plus the recruitment technique is also objectionable since many of the employees had to leave in the middle of crucial projects thus causing us grave loss of time, energy and resources. There are also a group of young people working with us who are full of new ideas and energy. Even the Human Rights Act (1998), Article 10 speaks volume of the freedom to expression of ideas. We have a risk of loosing both and a lot more if their suggestions and requirements are not given proper hearing. There is thus a great risk of high employee turnover, lack of motivation and job satisfaction, total loss of interest learning, development and growth and the sense of achievement.
As the point mentioned above regarding the noncompliance of the financial institution regulations, we may run into a cycle of risks. We are already suffering losses. Breaking rules may mean additional expenses on lawsuits and fines. Our company cannot take that much pressure. We run a risk of coming near to bankruptcy. We also mentioned that we lack proper training session for our employee which is very mandatory for the company like us. This lack of training is not only keeping the employee outdated but discourages them to learn otherwise. They tend to make even more mistakes and they sell obsolete policies. Plus it is also a requirement by law that employees are given training periodically. We run a risk of displeasing the regulators and people from the board who may charge us heavily for this.
We did mention before that employees are not allowed free environment to interact with each other. But it is a must that they be given some leverage otherwise the risk of trade unions increases. If not formal, but an informal way to communicate is necessary otherwise employees form unions outside the walls of the organization where no rules apply and then they pose a great danger to the business.
Q3. Proposed Solutions
The problems and risk we mentioned above need practical, effective and efficient solutions. Some of the proposed solutions mentioned are well thought out keeping the budget in mind and the company management should think of this as an investment for survival rather than as expenses. A careful and detail analysis of the Political, Economical, Sociological, Technical, Legal and Environmental (PESTLE) analysis is required before the company decides on its any future stances for growth and prosperity. The visions of the senior people especially those of CEO and Deputy CEO should be translated into words so that it is open for discussion for a better action. A complete overhaul of management structure is required. It is one of the mandatory steps that can motivate the employees. Employee participation is vital in every aspect of the business because in the end it is the employee implementing those rules and regulations. Employees should be free to interact. They should be allowed to make mistakes which will allow them to at least try something new and then mould it into a correct form. Employee development programs should now be one of the top priorities of the management if they want to improve their company’s status.
Another possible solution maybe through innovation, which means that we should (after competitor analysis) compare our products. We can gather information about the market demand keeping the macro environment and economic in mind, look for the niche and develop and offer a totally differentiated product not yet offered by any other of our competitors. This may also mean that we may be able to reduce to our costs instead of wasting our precious resources on outdated products. We can also enhance the quality of our product and go for a diversity strategy. We can make it easy for the customer to apply for our products. The Mission and Values of the company should be redefined and made more achievable. The challenges are mostly taken up by the senior people leaving the less enthusiastic tasks for the support staff. The senior managers then have difficulty explaining the real goals to the people. This system should be replaced by those missions that are challenging but achievable. The values of each human being should be respected (Human Rights ACT Article3 1998) be them of any race, gender, ethnicity, color or age (Human Rights Act Article 9 1998). They should be allowed to practice their religion as long as they are not hurting anyone or anything in any way. The Human Rights Act (1998), Article 9 expresses this view that individual have the freedom to think, ponder over problems and to choose their conscience and religion.
The Objectives of the company is deemed relatively more achievable if they were quantified. The process that translates raw material into a product should be monitored and improved. The system of recruitment should be changed and fair consideration should be given for a candidate and they should be hired for a long time period.
The skilled workforce should be respected be him having any background. The freshmen should be heard and their suggestion taken into account and even implemented if deemed feasible. A continuous training program is necessary as apart of development program. There should be some flexibility in the environment and the communication should all be open. Free movement of ideas is a sign of progressiveness (Human Rights Act Article 10 1998). The employees should be given a free hand in dealing with their customer. The workplace should be a made a less stressful whereby people shall look forward to coming back to their offices every next morning. Award system should be horizontally enhanced to include more than just monetary benefits. Individual appraisal and recognition is very necessary. People should be praised and rewarded for their good work and a constructive punishment should be for the law breakers. Especial consultation and freedom booth should be developed in the offices where people can pitch in their own ideas (Human Rights Act Article 10 1998). A different culture should be developed which encourages people to make their decisions, make their own mistakes, correct them and then learn from them.
The point we are trying to express here is that measures such as mentioned will bring people together. We have a common goal now, to safe the company. People should be made to realize that their wants and needs can only be fulfilled if they worked for the betterment of the company and that they should be given a free chance to deliver as much as they can. They should be given the freedom to decide how well and in what way they can serve the company.
Human Resource Management Strategy
We should encourage employees to read more upon the market research. Flow of information can guarantee information. The easy way is to provide people with the internet source, newspapers, magazines and any other reading materials. Besides that some motivational technique is very necessary. Besides the pay increase some of the effective way may include recognition of their work, training, development and learning sessions, consultation and employee help desk, improved physical environment, job rotation and expansion, some p of control, lesser rigid attitudes of seniors, rotating leadership roles, encouragement of team and group work, increased use of grapevine and encourage more communication channels, arrangements for social gathering, paid leaf and vacations and stress and anger management sessions. Employees should be encouraged to suggest ways to improve the setbacks and give ideas about how the company can get the competitive advantage in the market (Bolton 1986).
Since we are already facing many losses, we have to devise ways to reduce our costs even though we are looking forward for some innovation. But some of the area where we can expect some sort of cost reduction may include:
· Repetitive and predictable tasks, which means that tasks that are either repetitive can be either assigned to a new system or may be rotated among all the employees. It is a big cause of lethargy and boredom, thus less output if one person does a monotonous task all day long.
· Shorter term focus which requires that your end focus should be the long term. The long term goals should be broken into short term focuses that are achievable and predictable thus wasting less of resource.
· Moderate concern for quality but high concern for quantity of output. Since we are a service industry and out main revenue comes from the number of policies sold, this means that we can move our focus on what is most important. The best quality of service can be provided when we have a good office environment, employees are receptive and friendly to each other and to the customers and our also ready to do more than is expected of them. Quality can also be improved if we have a long term focus on our goals. It is also vital that some focus is also given to the processes applications go through. Quality can also be improved if the process management is improved.
· Low risk taking. We cannot afford to face another loss due to any unknown reason. This time calls for a steady play and then when we have gathered enough trust of our employees and customer can we take risks to enter a more advanced market.
Some innovative ideas is required and some of the ways through which we can give it a start is first of all lessen the constraints over the people and encourage them to have a high degree of creative behavior. We believe that if people are motivated, skillful and given the opportunity can come up with excellent novel ideas. Their thinking should be more long term and they should work in away that will not only benefit the company and them now but also for the years to come. They should be provided an open and unorthodox environment which encourages cooperation between all employees regardless of gender, age, race, color, ethnicity or religious differences (Human Rights Act Article 9 1998). Other ways to encourage innovation is allowing people to take some risks and managers should display behavior of tolerance toward ambiguity. Innovative ideas are possible if there are lesser constraints on the minds of the people. If moderate focus on quality and quantity is given then we can hope for something new to come up soon. If deemed feasible, practical and beneficial then it can be implemented on a larger scale.
This organization can be turned more effective if it was one of the learning organizations for such an organization encourages sharing of all knowledge, ideas, resources (tangible or intangible) and also likes to share their experiences. People seemed to have learnt more through personal endeavors and stories rather than through books. A learning organization works for a single goal. To make the organization more focused and effective, it is required that individual and corporate goals become one. People should be motivated enough to own their work, to take responsibility and are accountable for their actions.
The organizational structure, the management hierarchy becomes flat and less bureaucratic. The organic organization is more democratic supporting participation from its elements be them of any seniority. Rules and regulations are equal for all and they should all abide by it. The rules are those that have flexibility and everyone can mould it within a set limit. The organization works with certain Balanced Scorecard to compare their performance in all aspects. Mutual trust and an amiable environment should be supported and should be enforced upon all and any element working against it (for example spreading stereotypical ideas should be dealt accordingly). People should be supportive and cooperative with each other.
Conflicts should be dealt in a proper way. Healthy conflicts should be escalated and then properly channeled. This is a sign of growth if people have different point of views. Proper nominal discussion and brain storming session should be conducted (Cowan 2003). Negative conflicts should be dealt as quickly as possible before they become anyway near destructive. Floors should be open to discuss conflicting views and the energy should be put in a positive, more constructive directions. Methods such as negotiation, distributive bargaining and integrative bargaining can be used or we can make use of mediators, arbitrators, conciliators and consultants (Cowan 2003).
Appropriate leadership style is to be used. We can either have a more work or task oriented leadership style or employee oriented leadership style. Since we are talking about a more natural environment, the latter style of leadership is more human and enables the leader to understand the problems and issues of all. This in return helps to build some mutual trust where there is more honesty, loyalty and faith in each other. Many times when people are working with zeal, there are some psychological contracts and some unspoken rules that emotionally bounds people to stay with the organization thus checking on the rate of turnover. There is mutual understanding and respect for all. There is mental relaxation and there is less stress of work on people’s mind since they talk to other fellow beings and get their problems over with. Basic motivational tools as were mentioned above should be used as soon as possible to make sure people work for themselves and for their organization.
The work life is to be made more pleasant. It is believed that people like to get more involved in things they consider as fun and a source of growth rather than things that are termed as “work”. The job requirement and design should be clarified beforehand but flexibility should be allowed. Plus the job design should be kept as less possible because people do not like monotony in their work. Work should be made challenging and those involving decision-taking. Besides the professional life, personal life should also be developed. This requires that employers and fellow employees should discuss each other’s problems and fears. They should help each other in anyway possible. Helping someone in their work should be praised and acknowledged and even encouraged. People should be allowed to learn from each other about their personal experiences and how they came out as a better person.
Discrimination should be discouraged at all costs (Human Rights Act Article 3 1998). In fact, since we are talking about people from all over the world, ideas should be extracted from them. They should be encouraged to think in their original ways. This will allow the company to understand a broader aspect of the market since we are living in the age of Globalization.
One more important factor to increase motivation levels and cut back on the absenteeism and sick leaves and increase output and productivity level is to teach and encourage employees to balance their work and personal life. In fact the Human Rights Act (1998), Article 8 reiterates that people should respect private and family life of their fellow beings and they should not in any way damage their lives or property. People should be encouraged to leave work if they are not feeling good. This way, not only will the employees benefit but also do the employers. No extra costs are borne by the company on employees getting really ill due to the pressure of work that can cause many physical and mental problems besides stress. People can obviously not give their best performance if they are preoccupied with some of their personal problems. People are able to work alright when they balance their both lives properly. Sometimes it is necessary for the employers and the employees to understand each other problems (Human Rights Act Article 8 1998) and develop a workable solution on which both can agree so that the work is done on time and the customer is not disappointed. The policies should be developed so that almost everyone is able to accommodate in it. It should be fair and consistence in both the Headquarters and the Call center. The work of employees should be commended and acknowledged which will provide them a passion to work even further but in a more improved way. They should be extolled for their contributions to the organization (as a greater good) rather than on their pattern of work. People should be encouraged to monitor themselves. Evaluation should be done on a regular basis to honor the hardworking and help those who are facing any problem.
People should feel free to discuss their commitment to work-life strategies to employees and their representatives. Communication channel should be open for all and should be less restrictive and less monitored. Communication can be either verbal or written Good leadership styles and performances can be used as examples for others to follow for to improve their results (Bolton 1986).
Work can be distributed in groups and they can be made as task, interest, command or friendship groups, which ever best suits the situation. The other method (and the recommended one) is to encourage team work and they may be problem solving, self managed work or cross functional. A team works for the high performance towards a single set goal.
Since we are talking about a more open, relaxed and free environment where there are less restriction and more empowerment of employees, one of the suggested ways to improve the condition of the organization is the use of the Advisory, Conciliation and Arbitration Service (ACAS) as specified by Selwyn (Selwyn 2006). This will help to remove many of the activities that prevail in and damage the organizational structure in corporate, social and economic terms. It asserts that the rule of law should be non discriminatory. That means that all the rules apply equally to all the human beings working in the organization, albeit any level of hierarchy. There should be no discrimination at all.
One more point with ACAS emphases that matters should be solved, issues should be resolved as soon as possible. It is correctly believed that matters carried over for a long time and not spoken about fire back with a much stronger force and prove to be more damaging. It is significant that just, fair and errorless solutions to problems should be provided without any undue delay. As indicated by the Human Rights Act (1998), Article 6 that all of the individuals have the right to a fair trial within a reasonable time period. It is also important that witness should be encouraged to discuss the problem confidentially without any hesitation. If not, a third, impartial party can be involved to resolve the matter and inquire the matters. It is important that detail all the proceedings is properly documented and preserved and kept a top security.
It is important that all the rules, regulation, rewards and punishments are clearly defined and communicated to the people. Sometimes we have seen very severe disciplinary issues in the organization. The case of sexual harassment of one of our female employees was damaging enough to the organization’s reputation. It is vital that all the necessary disciplinary actions should be indicated beforehand.
It is true that a flat organization is supposedly more responsible but it is mandatory that some sort of higher management is there to solve the problems and intervene during pressing times. Management is required to take the required to take the most of the disciplinary action and no individual should be granted the permission to give punishment to other people be them their immediate seniors. It is also very important that people should know where, when and how they have done damage to an individual or to the organization. It is important that individuals should be made to realize what they have done wrong. If they have caused a serious damage then a proper hearing is required. But it is also important that all the necessary proof should be given to the individual before the case is referred to the higher authority (Human Rights Act Article 6 1998). This way the individual could accept his mistake and the important time of the organization is not wasted and the problem is solved there and then. It is also vital, on the other hand that people should be allowed to present their cases as required before any decision is to be made (Human Rights Act Article 6 1998). It should be like hearing from both the parties before a decision is reached. It is necessary that no disciplinary action is taken unless the case is fully investigated inside out. It is also important that employees should be clarified of the reasons of penalties imposed upon them.
It is important that workers are provided with a constant helping hand like a secretary to a Vice President. He can either be voluntary or assigned by the company. It should also to be considered that individuals, especially in the subordinate positions can and should appeal to their managers and people senior to them about the problems they are facing so that they can be readily resolved. These individuals may also specify the procedure to be followed since they are closely related to the problematic event or the troublesome individual.
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3. Hamel, G. & Breen, B. (2007) The Future of Management. Harvard Business School Press.
4. Podmoroff, D. (2005) 365 Ways to Motivate and Reward Your Employees Every Day: With Little or No Money. Atlantic Publishing Company.
5. Selwyn, N. (2006) Selwyn's Law of Employment. Oxford University Press.