The Challenges of Call Centre Restructuring - Essay Example

?The Challenges of Call Centre Restructuring Introduction The recent decade has witnessed a sharp increase in call centres across the globe. It is clear that call centres are being formed and transferred to every corner of the world. Because of this development, call centres have experienced restructuring. Tengo Ltd., an online supplier of notebook computers, established a customer contact centre to deal with customer complaints and inquiries about the company’s products. Recently, the company decided to restructure because the HR director discovered that there is an overstaffing problem at the call centre. This decision has resulted in job losses. This essay analyses the wisdom of the restructuring of the call centre, taking into account the external factor of the labour market and job competition, as well as the components of change management, performance management, effective leadership, and employee motivation. Restructuring the Call Centre Companies are restructuring and job designs are being streamlined. The labour force and production processes have been restructured to cut down expenses, helping companies successfully reduce expenses in reaction to growing competition. The external labour market of call centres is in fact large, composed of a large pool of white-collar workers. The external labour market of call centres is global, national, and local (Butler, 2004, p. 168). Hence, restructuring of the call centre harms many employees. It is essential to be knowledgeable of the external labour market because of the differences in employee characteristics. Different work groups express different beliefs on career growth and motivation. For instance, white-collar employees have a tendency to expand their career outside the limits of a particular company (Liao, Martocchio, & Joshi, 2010, p. 94). This is what happened to Tengo Ltd. It suffered a high rate of turnover because its professionals in the customer department were not satisfied with their jobs anymore. The turnover is primarily caused by the restructuring. Corporate decisions to restructure or initiate change in its internal labour markets are strongly influenced by external labour markets. The external labour markets decide what arrangements of retention, expertise, and wage rate are appropriate for an organisation (Sharma, 2006, p. 59). Companies, like Tengo Ltd., choose to restructure because they confronted new circumstances or external pressures. The HR director who found out the problem in retaining call centre workers with a profitable nearby call centre was certainly dealing with the new situations of the external labour market. Therefore, organisational processes are mainly determined by the relationship between managerial approach and external labour markets. External labour markets significantly restrict the capacity of strategy. As stated by a manager, “If you’re not going to be the highest-paying wage base in the area, you will have high turnover” (Kumar, 2010, p. 292). For example, Tengo Ltd, after restructuring, gives the best reward package to Level 3 employees. Hence, it experienced increase in labour turnover among Level 1 and Level 2 employees who handle customer complaints. In terms of job competition, call centres have replaced human labour with automated processes. Technology carries with it the possibility of new and easier ways of doing things, while carrying as well the ability to eliminate human labour and separate the worker from his/her fruits of labour. Tengo Ltd., through rationalisation, invested more in new automated computer system to improve response time and quality of customer service. However, along with this investment is an increase in labour turnover because the company tried to reduce its expenses in the training and development of new employees. However, the poor outcomes of the restructuring attempt of Tengo Ltd. cannot be entirely attributed to the external labour markets and job competition. Other factors are involved such as the psychological and sociological responses of employees to restructuring, the effectiveness of change management, leadership approaches, and methods of motivating employees. To meet demand for quality service and manage growing competition, numerous companies have decided to depend on the method of restructuring. Yet, the success of this approach relies, partly, on its effect on employee performance and job satisfaction. Most studies reported that restructuring caused deteriorating commitment to organisational goals, intent to leave their jobs, feelings of insecurity, and disappearance of dedication and trust (Daft, Murphy, & Wilmott, 2010, p. 377). Among these effects of restructuring, intent to leave their jobs creates the greatest risk to the success of the restructuring attempt because if uncontrolled it results in voluntary turnover of professionals or skilled employees. In Tengo Ltd, even the long-serving advisors, who provide technical expertise for the company, decided to abandon their jobs due to the restructuring. This highlights the importance of a well-planned and socially sensitive organisational strategy of managing negative responses of employees to restructuring. The theory of stress of Larzarus and Folkman (1984 as cited in Liao et al., 2010, p. 149) provides conceptual framework that illustrates responses of employees to restructuring. It categorises responses into two: destructive or constructive. It also explains how these responses are shaped by job redesign, empowerment, and trust. According to the theory, job redesign and empowerment affect minor evaluation and encourage constructive reactions because they improve employees’ appraisals of their ability to successfully deal with the issues that restructuring bring about. If this theory is accurate, job redesign and empowerment would be associated with emotional labour or organisational loyalty, described as the intent of the employee to stay with the organisation and strive towards the realisation of its objective (Liao et al., 2010, pp. 149-150). On the contrary, intent to leave the job and the following voluntary turnover are signs of a weakening emotional loyalty among employees. Hence, basically, emotional loyalty is a determinant of intent to leave the job and voluntary turnover. Apparently, the restructuring efforts of Tengo Ltd failed because its employees do not have an emotional commitment to the organisation. Executing organisational change is usually challenging and tricky. Organisational change is usually viewed by the people in an organisation as threatening and is likely to be contested or resisted, necessitating thorough implementation to conquer feelings of threat caused by negative ideas. Therefore, ideas about the nature of and necessity to change, how this change has been executed and the results, will affect the responses of employees (Brock, 2012, p. 17). The restructuring process at Tengo Ltd had been stressful and, as a result, weakened the motivation of its employees. The changes may have been inadequately communicated. Professionals or highly skilled employees usually quit if the change is disorganised or if their career prospects with the organisation is vague. After restructuring, the remaining employees may experience greater intent to leave, reduced commitment, and stress. Organisations, like Tengo Ltd and other call centres, can apply different change management strategies to make sure that the changes they want to initiate will be successful. John Kotter argued that basic to strategies like restructuring is the goal of “making fundamental changes in how business is conducted in order to cope with a new, more challenging market environment” (Sharma, 2006, p. 132). He explained that the process of change undergoes a sequence of stages that involve a significant duration of time. Kotter outlined eight stages that organisations could use in executing important changes. According to Kotter, the stages should be followed in order. These stages are (Pasmore, Woodman, & Shani, 2010, p. 280): (1) establishing a sense of urgency, (2) forming a powerful guiding coalition, (3) creating a vision, (4) communicating the vision, (5) empowering others to act on the vision, (6) planning for and creating short-term wins, (7) consolidating improvements and producing still more change, and (8) institutionalising new approaches. Another change management strategy that call centres can use to meet the demands for customer service quality is the framework developed by Judson (1991) where the implementation of change is composed of five stages, namely, (1) analysing and planning the change, (2) communicating the change, (3) gaining acceptance of new behaviours, (4) changing from the status quo to a desired state, and (5) consolidating and institutionalising the new state (as cited in Pasmore et al., 2010, p. 280). Judson (1991) also supported the exercise of persuasion, bargaining, reward systems, and the media as effective tools to address negative responses (Pasmore et al., 2010, p. 280). However, these change management strategies will definitely require effective leadership. Successful change management necessitates effective leadership approaches in order to execute change efficiently. Yet, at times organisations lack the important expertises or skills required to manage change. Leaders should not merely deal with opposition to change. When the people and the organisation are fully informed about the change and are able to relate to that change, then change will progress smoothly. Managers with effective leadership abilities have open and effective communication with their people. Prevailing over resistance and feelings of threat or fear, which were previously responses to the term change, can be transformed by good leadership skills which can transform an ‘opponent’ of change into a supporter of change (Carlaw et al., 2002, p. 19). This is the ideal or the best outcome for an organisation. There are in fact two perspectives of change, namely, the bottom-up employee perspective and the top-down executive perspective. These two perspectives raise two different challenges for leading change, namely, individual change management and organisational change management. These two are the capabilities that leaders nowadays require in order to be successful (Cashen, 2011, p. 1). Individual change management is managing change from the employees’ point of view. They are the individuals who should execute the change. The objective of individual change management is to assist or support the people of the organisation through change. Managers should perform the training and teaching needed to help employees their part in the process of change. On the other hand, organisational change management is the point of view of business leadership. The objective is to improve change management capabilities that will allow the organisation to appreciate, promote, and identify with the required organisational change (Cashen, 2011, pp. 1-2). The focus is on the general organisational culture and communication system. However, from a systems point of view, almost all organisations are truly concerned about the employees’ performance at work. In an individual sense, job performance is mainly an outcome of the motivation and skill of employees. A lack of ability should be pinpointed in the performance management procedure and dealt with properly through coaching (Brock, 2012, p. 18). Motivation is the deliberate use of a certain skill to perform a task. And motivation is one of the most important prerequisites for a successful change management. The employees of Tengo Ltd clearly lack this essential motivation which was manifested in the low customer satisfaction. The duty of the manager, as a leader, is to identify those aspects that are interesting from a motivational point of view and begin by developing them. For instance, occupations that require troubleshooting technical problems, communicating with customers, working on a team, repairing things, or are mentally stimulating usually build motivation. Although managers are merely accountable to the performance of their people, managers should have a certain extent of knowledge about the thoughts and feelings of their people to motivate them to accomplish tasks that advance the goal of the organisation (Daft et al., 2010, p. 57). Motivation theories have shaped management approaches in terms of performance management, particularly reward and reinforcement system. Reinforcement of aspects that motivate employees, whether that is money, recognition, or more leisure opportunities, is definitely a practice organisations should pursue and maintain. Organised reinforcement policies, such as quality incentives and performance reward, are present due to the early theories of reinforcement. Rewards like benefits, bonuses, salaries, etc, are examples of ‘extrinsic’ motivators (Selden & Sowa, 2011, p. 252). They definitely are needed for overall motivation; however, these extrinsic motivators are not always adequate to boost the motivation of an individual to perform additional tasks. ‘Intrinsic’ rewards are those that employees feel from accomplishing the task, like sense of fulfilment and pride (Selden & Sowa, 2011, p. 252). Basically, motivation is rooted in the outcome of performance management. Summary and Conclusions Organisations continuously change. Without change it is not possible for an organisation to survive. Call centres are organisations that are currently undergoing extensive changes due to the external labour markets and job competition. The increase in the number of white-collar workers reinforced job competition for call centre positions. Moreover, the transnational character of call centres further broadens its available labour pool. However, the job competition within call centres is not that intense due to the heightened focus on automation. Information and communication technologies (ICTs) effectively replaced human labour. In order to respond successfully to these pressures, organisations should formulate an effective change management. A perfect example of a poor attempt to implement change in an organisation is the Tengo Ltd. case. Instead of realising its desired outcomes, the company sustained major losses in people. The reason for the company’s decision to restructure is to make the organisation ‘leaner’ and more efficient by reducing the number of employees in ‘minor’ departments, particularly in the customer complaint and field enquiries department. By restructuring, the company basically changed its job design. It made a sharper distinction between entry-level and professional employees. The advisors, who handle technical support, receive the highest pay. However, these advisors did not feel any job satisfaction because of several least motivating employment terms. They have fewer vacation privileges and they work longer. Because of this imbalance between intrinsic and extrinsic motivators, the advisors eventually left their job. As regards entry-level employees, voluntary turnover also increased. Besides lower salary, there were only ten low-level employees who handle the complaints department. The job is obviously stressful, having to deal with angry and unreasonable customers. After the restructuring, some of these remaining ten employees also decided to leave their jobs. These voluntary turnovers greatly hurt the company. So why did the Tengo Ltd. restructuring effort fail? First, there is no definite change management plan. The HR manager hastily reacted to the problem he discovered, which was the overstaffing of the customer service department. The change, perhaps, even caught the employees off guard. There were no clear lines of communication, no effort to prepare the employees for the major transition, and so on. The organisation failed to inculcate within its workforce a sense of emotional loyalty, which is a very important condition for successful change management. The negative responses from the survivors of the restructuring reflect the lack of well-planned change management programme. Moreover, there was no effective leadership to guide the progress of change. The managers solely used a top-down executive perspective, and failed to consider the employees’ perspective. This is the main cause of the failure of the restructuring attempt. By ignoring the point of view of the employees, the management effectively disempowered them. Instead of creating an atmosphere of stability and security, the survivors of the restructuring felt a sense of threat, fear, and insecurity. Many of them felt that their future in the company was bleak. The managers not only failed in terms of change management, but also in terms of performance management. Instead of employing a reward system that would motivate their employees to perform their jobs well, the managers decided to suspend some of their employees. References Brock, W., 2012. Synthesising a Systems Perspective and Organisational Change: Principles of a Whole-Systems Metrics Model. Organisational Development Journal, 30(3), pp. 17+ Butler, D., 2004. Bottom-Line Call Centre Management: Creating a Culture of Accountability and Excellent Customer Service. London: Routledge. Carlaw, M. et al., 2002. Managing and Motivating Contact Centre Employees: Tools and Techniques for Inspiring Outstanding Performance from your Frontline Staff. New York: McGraw-Hill Companies, Inc. Cashen, L., 2011. Board Leadership Structure under Fire: CEO Duality in the Post-Restructuring Period. Academy of Strategic Management Journal, 10(S1), pp. 1+ Daft, R., Murphy, J., & Wilmott, H., 2010. Organisational Theory and Design. Mason, OH: Cengage Learning. Kumar, R., 2010. Human Resource Management: Strategic Analysis Text and Cases. New Delhi: I.K. International Pvt. Ltd. Liao, H., Martocchio, J., & Joshi, A., 2010. Research in Personnel and Human resources Management, Volume 29. UK: Emerald Group Publishing. Pasmore, W., Woodman, R., & Shani, A., 2010. Research in Organisational Change and Development, Volume 18. UK: Emerald Group Publishing. Selden, S. & Sowa, J., 2011. Performance Management and Appraisal in Human Service Organisations: Management and Staff Perspectives. Public Personnel Management, 40(3), pp. 251+ Sharma, R., 2006. Change Management. New York: McGraw-Hill Education. Read More