Problems and Issues at OzBank - Essay Example

Business Report This Business Report will identify and analyze the problems and issues pertaining to this situation and will identify possible solutions to the problems. You will also find short, medium, and long term recommendations that will help improve the employee situation at OzBank. Whenever there have been problems, solutions to them are presented to make the best out of the worst. It has already been stated that OzBank has been having problems concerning the poor customer services rendered to their clients and the uncaring approach that they have had towards their employees. OzBank has also shown an under-performance in the previous two financial years. For the past two decades, for example, the UK retail banks have felt the competitive pressures, leading banks to consolidate their positions; mergers and adoption of technology completed, and rising consumer demands with the objective of improving services. These efforts, however, failed to satisfy customers.¹ OzBank is not alone concerning these issues. Due to these problems several measures have been taken into consideration to alleviate this past performance of financial difficulties, 1. Anita Chakrabarty, “Barking Up the Wrong Tree – Factors Influencing Customer Satisfaction in Retail Banking in the UK,” International Journal of Applied Marketing 1, no. 1 (2004-2008). these are: focusing on customer service, streamlining processes, reducing jobs and developing the employees´ skills. These measures are backed up by management, CEO, Paul Kelly. OzBank is committing around $1200 million in several key areas, such as: staff training, systems upgrades, process simplification, and new and improved technology. One of the problems that OzBank has is that out of 40,000 full time staff, it is to reduce approximately 4,000 between January 2007 and January 2009. Almost half of the reduction has already taken place. This is part of the cost-reduction strategy. Ozbank had already reduced approximately 1500 jobs in the 2006-2007 financial year and 600 employees were retrenched in July 2007. The 4000 job loses is part of the scheme to cut $600 million in costs. The first reduction strategy is the personnel versus equipment/overhead. ConMan is a management consulting company with outstanding results on staff and customers that has been hired to help with the restructure of OzBank. ConMan had advised the bank beforehand of the new strategy´s announcement however, they neglected to talk to the staff during this time. This may have been seen by the personnel and the union as intruders arriving into the workplace and making decisions about employees, making decisions of where the employee will end up, and making decisions without the inclusion in the decision-making process. Ms. Alex Faulkner, OzBank director of Human Resources claimed that the staff had been abreast of the restructuring strategy. The union claimed that the new strategy was destroying the employee morale. It may be extrapolated that the employees had not been taken into consideration to include them in the process of where they will end up. Both the Federal Employment Minister and the union agreed that OzBank´s decision to reduce jobs would be counterproductive to the banks in general. The union spokesperson described the OzBank strategy as “visionless and lacking credibility”. Although OzBank claimed that the new strategy was customer focused, others wondered how cutting on personnel would increase employee and customer satisfaction and improve service levels. There was an effort to improve information technology and internal business processes, this was thought to lead to employee job satisfaction and having them deliver better quality service to customers, however, since there had been almost no training in the new system and processes and staff were left on their own to fetch for themselves as best they knew how, this did not work. In this new day and age of state of the art technology and trying to automate everything, much of the personal touch is lacking. Some of the prompts in these automated services leave little to desire and in most cases the customers may be lost, poor quality in the service is rendered, and a taste of bad customer satisfaction remains. The computer hardware may be state of the art, the computer software may be the latest updated version, but somewhere along the line the computer programmer did not deliver the best program and you find flaws that are upsetting to all. This leading to the union to, “…launch a campaign to gather employee support for industrial action against OzBank.” An analyst warned management that these changes would result on management and staff losing the market share in housing and small to medium business finance. OzBank had been less successful than other banks in obtaining gains from the restructuring process. An initiative in the information technology to help banks so they may differentiate their brand and increase market share and profitability will help banks deploy solutions and can change the customer, employee, and operations experience. This is, to make mission-critical applications easier, at a lower cost of ownership. This responds quicker to the changing market needs and competitive pressures, and it increases employee satisfaction and productivity. This will help transform the banking experience. It is user-friendly, employees take less time searching for information, and the employees spend more time with the customer.² 2. Microsoft, “Microsoft Helps Banks Change the Customer, Employee And Operations Experience; experience Banking Initiative Is Unveiled at BAI,” (2004) http://www.microsoft.com/presspass/press/2004/nov04/11-16ExperienceBankingBAIPR.mspx. Mr. Kelly asserted that the customers would not be affected negatively while a consumer advocate claimed that indeed the ordinary customers would get the short end of the stick. The advocate also asserted that although OzBank had over 100 million customers, it and other large banks were losing customers to smaller financial institutions. It may be inferred that these smaller financial institutions due to their size, would render better customer service, one-on-one, one way of increasing customers due to customer service and satisfaction. The consumer advocate also questioned the fact that OzBank would not reduce its 1000 network branches. There was also criticism a week after the announced new strategy, that Paul Kelly, CEO, would receive a 5% increase in his base pay and a 13% increase in his annual bonus. The union members may see this as a devastating action. Jobs are lost, expenditures are lowered, low employee morale is present, low customer satisfaction levels are identified and the CEO is not only receiving a salary pay increase but an annual bonus increase as well. OzBank is doing very badly for everyone else except from the CEO´s perspective. Mr. Kelly was considered “obsolete” after 12 years as a CEO and was thought by some analysts that he should move along so that the new strategy would succeed. On the other hand Mr. Kelly thought that the new strategy was a success due to the share price, the bank´s culture, and customer service improvement. This might have been a misconception from his part since it was thought that he should be relieved from his duties. U.S. Bank on their webpage boasts about having five star service guarantees during every business transaction, by every employee, and each single day of the year. This meaning that each service rendered to the customers has its own measuring instrument.³ Notice that although this is an internet service the bank has not deleted the personal touch component. They also recognize and reward their employees for their outstanding efforts. This gives the employees the sense that their contributions were not taken for granted and were valued. Job characteristics influence the motivation of the job-holder having an effect on her/his performance and well-being. Good job performance on the part of the job–holder is seen by supervisors and others as evidence of competence and this encourages them to trust the job-holder. At the same time, good job performance is interpreted by the job-holder as evidence of his/her competence, and this encourages trust in the person.4 3. U.S. Bancorp, “Five Star Service Guarantee: Every business, every employee, every day,” (2008) http://www.usbank.com/cgi_w/cfm/about/fivestarservice.cfm?WT.mc_id=r3284. 4. Chris Clegg and Caroline Spencer, “A circular and dynamic model of the process of job design,” Journal of Occupational Psychology 80 (2007): 321-339. Employees are encouraged to report problems or issues on an exclusive telephone number they are able to call. They also include their customers in the process by soliciting valuable customer feedback. Customer service is seen more than a goal. It is a way of life. Some banks talk about great service, while other banks guarantee it.5 Finding the employees to match the employer´s requirements are critical issues and at times the recruitment process becomes difficult. To meet the challenge, companies ought to rethink how to hire, train, and reward their employees. Rather than addressing the problems separately they should be addressed with a unified plan. It is suggested, to make a talent plan that matches the business plan; the talent management is everyone´s job; global excellence needs local effectiveness; support matters; and to measure what matters.6 Customer satisfaction is profitability of retail banking in the UK and this implies retaining the customers for the long term, which is less expensive than attracting new ones.7 This is a venue OzBank should consider. 5. U.S. Bancorp, “Five Star Service Guarantee,” 6. Douglas A. Ready and Jay A. Conger, “How to Fill the Talent Gap,” The Wall Street Journal (2007) http://online.wsj.com/public/article_print/SB118841695428712511.html. 7. Anita Chakrabarty, “Barking Up the Wrong,” The following are recommendations to OzBank: Submit the employees to tests that will allow the employees to exploit their interests according to their job performances.8 Systematically train the employees according to their interests and by the changing needs of their customers.9 Improve the technology services for the employees and for the customers so that it is friendly user and it helps accelerate the performances of all.10 Lower the employee´s stress levels and augment the employee training and technical support.11 12 On a short term basis job design and redesign to redefine who does what.13 On a medium term basis allow the job-holder to acquire the necessary trust from supervisors and peers and from himself/herself to accomplish the tasks he/she was hired for.14 On a long term basis retain employees.15 Maintain flexibility to balance work and personal demands.16 Become better in recruiting and staffing.17 Use a variety of strategies to hire personnel.18 8. Clegg and Spencer, “A circular and dynamic,” 336. 9. Clegg and Spencer, “A circular and dynamic,” 338. 10. Messmer, “Four Keys to Improved Staff Retention,” Strategic Finance 88, no. 4 (2006): 14. 11. Messmer, “Four Keys to Improved,” 14. 12. David Pollitt, “HR strategy gives KONE a lift,” Human Resource Management International Digest 12, no. 5 (2004): 26-28. 13. Clegg and Spencer, “A circular and dynamic,” 338. 14. Clegg and Spencer, “A circular and dynamic,” 338. 15. Messmer, “Four Keys to Improved,” 14. 16. Messmer, “Four Keys to Improved,” 13. 17. Ann Marie Ryan and Nancy T. Tippins, “Attracting and Selecting: What Psychological Research Tells Us,” Human Resource Management 43, no. 4 (2004): 305. 18. Ryan and Tippins, “Attracting and Selecting,” 313. BIBLIOGRAPHY Buckley, M. Ronald, Amy Christine Norris, and Danielle S. Wiese. “A brief history of the selection interview: may the next 100 years be more fruitful.” Journal of Management History 6, no. 3 (2000): 113 Chakrabarty, Anita. “Barking Up the Wrong Tree – Factors Influencing Customer Satisfaction in Retail Banking in the UK.” International Journal of Applied Marketing 1, no. 1 (2004-2008). Clegg, Chris and Caroline Spencer. “A circular and dynamic model of the process of job design.” Journal of Occupational Psychology 80 (2007): 321-339. Kantor, Richard and Tina Kao. “Total Rewards”. WorldAtWork Journal 13, no.3 (2004). Messmer, Max. “Four Keys to Improved Staff Retention.” Strategic Finance 88, no. 4 (2006): 13-14. Microsoft. “Microsoft Helps Banks Change the Customer, Employee And Operations Experience; experience Banking Initiative Is Unveiled at BAI,” (2004) http://www.microsoft.com/presspass/press/2004/nov04/11- 16ExperienceBankingBAIPR.mspx. Peters, Douglas, “The Performance Equation: The Formula for Dramatic and Sustainable Performance.” Performance Improvement 43, no. 10 (2004): 5-8. Pollitt, David. “HR strategy gives KONE a lift.” Human Resource Management International Digest 12, no. 5 (2004): 26-28. Ready, Douglas A. and Jay A. Conger. “How to Fill the Talent Gap.” The Wall Street Journal (2007) http://online.wsj.com/public/article_print/SB118841695428712511.html. Ryan, Ann Marie and Nancy T. Tippins. “Attracting and Selecting: What Psychological Research Tells Us.” Human Resource Management 43, no. 4 (2004): 305-318. Stiffler, Mark A. “Move from Managing to Driving Performance.” Performance Improvement 45, no. 9 (2006): 17-19. U.S. Bancorp. “Five Star Service Guarantee: Every business, every employee, every day.” (2008) http://www.usbank.com/cgi_w/cfm/about/fivestarservice.cfm?WT.mc_id=r3284. Read More