Directions for Optimizing Call Center Operation of Tengo Ltd - Case Study Example

The Call Centre and Tengo Ltd Executive Summary The fundamental objective of this study is to analyze the quality service in Tengo’s customer contact centre in an effort to understand the importance of strategic human resource management and its impact on the quality of service offered to customers. Tengo’s customer service division has recently suffered from a consistently increasing employee turnover which has now surpassed the industry benchmark of average employee turnover. The customer contact centre has also received repeated complaints of poor customer service quality as a result of which the company’s reputation is getting degraded. It is with regards to these facts that the researcher has endeavored to investigate the reasons behind such poor quality service and high employee turnover in the company’s customer contact division. The research revealed that the managers faltered on number of levels within the framework of strategic human resource management. Their authoritarian type leadership combined with the absence of adequate training and development facilities as well as reward and recognition framework has significantly deteriorated the motivation level of several employees which in turn increased the employee turnover in the customer contact center. Therefore, after exploring the ongoing situation in Tengo’s customer contact centre, the managers are recommended to follow a follow a team leadership style by emphasizing on the welfare of the employees as well as having adequate training and development programs in place. They are also advised to have proper payment and reward packages in order to boost the engagement level of the employee base by appreciating their effort through appropriate compensations. In addition the managers should also make the employees an integral part of the organizational decision making process in order to make them feel valued within the company. It is expected that the adoption of these measures are likely to remedy the employee turnover issue in the company. Table of Contents 1.Introduction 4 2.Discussion 4 2.1.Main causes of poor customer service quality at Tengo 4 2.2.High labor turnover in the call centre industry 5 2.3.Information to be collected for understanding and remedying turnover 7 2.4.Method of collecting information 7 2.5.Whether turnover in the call centre is universally dysfunctional or not 8 3.Conclusion 8 4.Recommendation 9 Reference List 11 1. Introduction Managing human resource within an organization is arguably the most important responsibility that needs to be handled with utmost sincerity and care by human resource managers (Armstrong, 2012). HR managers need to have a thorough knowledge of the competency and skill sets of the employee base in order to allocate them in different functional departments as per requirement. Shuffling the workforce skillfully is an art and this activity serves as one of the fundamental determinants of organizational success (Hendry and Pettigrew, 2008). Human resource management (HRM) has become increasingly complex in the contemporary business environment largely due to the dynamism of business dimensions (Arthur, 2012). The changing needs and demands of the employee base has decreased the negotiation power of HR managers following which the latter have found it relatively difficult to satisfy the requirements of the workforce (Budhwar, 2009). It is imperative for HR managers to assess the performance of the workforce, recognize their effort through appropriate compensation packages and reward schemes, provide them with proper training and development and ample scope for attaining all round development (Colling and Clark, 2006). These are the aspects that define an effective manager. It is with regard to this fact that the researcher will be conducting a case study on Tengo Ltd which is primarily engaged in notebook manufacturing. The company has recently encountered high employee turnover in its call centre division and it is being perceived that managerial ineffectiveness is the primary cause behind this unfavorable environment (Armstrong, 2012). Therefore, the author will attempt to analyze the main cause behind poor customer quality in Tengo as well as high labor turnover that has gone past the industry average in an effort to make recommendations with respect to strategic human resource management. 2. Discussion 2.1. Main causes of poor customer service quality at Tengo Several rationales can be pointed towards the poor quality of customer service in Tengo. First of all inadequate training and development facilities has deteriorated the quality of service provided to customers. The efficiency of the customer service team is not up to the standard which in turn has affected their response time per customer (Greer, 2010). Consequently, the satisfaction index of customers in terms of customer service provided by Tengo has deteriorated considerably. The customer contact centre has number of functional departments that are responsible for dealing with different technical issues associated with notebook. However, the major problem in the contact centre is that no boundary has been defined between these functional departments. Customer care executives were trained to handle issue hailing from all departments which is why there was an incessant movement between departments prior to the restructuring program. As a result, the executives could not specialize in any particular departments and simultaneously were also not able to tackle problems in areas that were not their specialization (Boxall and Purcell, 2009). This in turn, affected their productivity and efficiency. Another reason that affected the customer service quality in Tengo is the lowering motivation level of the customer care executives. Although they were being paid a considerable higher wage than that offered in other call centre, this wage is only applicable if they work normal hours. However, the customer service executives have complained that they are made to work extra hours for which they are not adequately compensated (Andolsek and Stebe, 2009). Therefore this might be another issue that may have deteriorated the engagement level of the executives towards their work and the organization as a whole. They are only doing this work as a means to meet their financial obligations and are not enjoying their work (Fey and Pavlovskaya, 2009). This is precisely the reason why the motivation factor is missing from their work and in turn affecting the service quality. It might be the fact that the customer care executives are working under an authoritarian leader whose only concern is on the productivity of the organization and not on the well being of the employees (Gratton, 2008). They are being compensated for their work but proper attention is not being given to their work life balance and all round career and personal development. Such a rigid working environment can be considered as one of the major reasons behind the deteriorating service quality provided to customers in Tengo (Pieper, 2007). 2.2. High labor turnover in the call centre industry Business operations especially in customer service oriented call centers are considerably rigorous compared to other activities. Big companies have set up their own call centers in countries that have cheaper labor in order to decrease the cost of operation. Nonetheless, call centre in the current business environment has suffered from high employee turnover. Several reasons have been pointed out behind such high rate of turnover. Firstly, inadequate reward scheme or payment compensation has been pointed as the chief reason by several academic scholars (Fey and Pavlovskaya, 2009; Andolsek and Stebe, 2009). Based on market analysis by Ibis World (2014), it was determined that the situation does not hold true only for Tengo Ltd. Instead, the UK call centre industry is in troubled water since the recession and economic slowdown. Cost cutting became prime motive for such companies during this period and consequently, employees were being terminated while work load was raised on those who were retained in the corporation. According to the authors, the employees working in the call centre are made to work extra shifts without being adequately paid for their work. Their work is not assessed properly which limits their scope of career development (Budhwar, 2009). There are no means for recognizing their effort which in turn deteriorates their motivation level towards their work and the organization as a whole. Call centre representatives frequently complain about facing challenging tasks that becomes virtually impossible at times to complete (Hendry and Pettigrew, 2008). Impossible targets are set every day which at times takes a toll on the workforce, deteriorating their confidence level even further. Upon facing such huge targets, employees give up easily on their hope of succeeding in their workplace following which they tend to leave their job (Colling and Clark, 2006). This has been the case of many call centre executives which has led to an increase in the labor turnover in this industry. According to a call centre labor market report in the UK, employee turnover has increased primarily because of wrong job for individuals, limited scope of promotion, repetitive task, poor pay, high work pressure, poor work environment and unpleasant calls (CFA, 2012). Frequent restructuring is another major reason behind the high labor turnover in the call centre industry. This is precisely because call centre managers are often inclined to recruit bulk of employees in order to fulfill an ongoing target. However once the target is fulfilled, managers often feel that the call centre is overstaffed (Phillips, 2012). It is at this moment that they emphasize on focusing on fewer employees rather than a bulk, following which they decide to slash some of the positions. This results in an unanticipated loss of job for many employees which in turns affect their work profile. That is why call centre employees often choose to resign voluntarily in order to save the embarrassment of being dismissed from their job responsibility (Fey and Pavlovskaya, 2009). 2.3. Information to be collected for understanding and remedying turnover In order to reduce employee turnover managers in Tengo need to have a good understanding of the needs and requirements of the employee base. This will help them to establish a favorable working environment which in turn will enhance the level of engagement among the workforce (Nickson, 2012). The managers need to establish a relationship based on trust and respect whereby employees can convey their needs and requirements in front of the top tier managers (Andolsek and Stebe, 2009). Therefore, information that needs to be collected from the employees includes their feedbacks about the work environment. Managers in Tengo will have to learn about the expectations that employees have from their superiors. In that way, they will be able to give the necessary flexibility to the employees. The employees will have to be made a part of the decision making process which is why valuable opinions regarding the areas of strength and weakness as identified by the managers will have to be collected from them (Greer, 2010). In doing so, Tengo’s managers will be able to give confidence to the employees thereby making them feel valued within the company. This is a very positive method of motivating employees. They also need to collect valuable information regarding the effectiveness of the management style as perceived by the employees (Nankervis, Compton and Morrissey, 2009). This information is extremely critical considering the fact that management style is a fundamental determinant of job satisfaction for employees. Tengo’s managers will also have to gain knowledge regarding the training and development opportunities sought by the employees. It is the responsibility of the manager to ensure that employees are provided with adequate opportunities for self empowerment and career development (Gratton, 2008). Availability of more such opportunities will make them more loyal to the organization. Lastly, the managers need to learn about the skill sets and competencies of the employees upon which they can decide regarding allocating employees to departments on the basis of their skill sets (Bratton and Gold, 2010). In that way, employees will be able to enjoy their work more and be more committed to the organization. 2.4. Method of collecting information The information needs to be collected through questionnaire surveys, one to one interview and group discussions conducted with the employees on a quarterly basis. In that way they will be able to learn about the needs and expectations of the employees which in turn will pave way for them to implement effective strategies that are aimed towards enhancing the engagement level of employees thereby remedying employee turnover. 2.5. Whether turnover in the call centre is universally dysfunctional or not Employee turnover is essentially referred to total number of employees that are leaving an organization with respect to total number of employees working thereof. Employee turnover is considered unhealthy because it increases various costs associated with human resource management. Moving forward with paper, it is apparent from the situation at the call centre division of Tengo that the turnover in this division is universally dysfunctional. The underlying reason behind this is the fact that the highly skilled or the best performing employees are leaving instead of the lesser skilled or weak performing ones (Boxall and Purcell, 2009). In this context, dysfunctional situation indicates towards a condition when no strategy can be implemented to avoid the adversity. This is an undesirable scenario where the managers in Tengo might face a shortage of skilled and efficient employees. As a consequence, the quality of service may deteriorate significantly. The effort of the skilled officials is not being recognized by the superiors which in turn is decreasing their level of motivation (Arthur, 2012). Another reason that might have contributed to the dysfunctional turnover in the organization is the new restructuring program. The organizational restructuring has led to the loss of 30 jobs which includes both skilled and unskilled employees. This might have created a sense of insecurity regarding the jobs among the skilled executives which is why they decided to look for a better rather than stable opportunity (Armstrong, 2012). Human resource management in Tengo has been extremely ineffective which is why the managers failed to make an estimation of the required number of employees within the call centre. This is precisely the reason why the mangers at one point felt that the call centre might be overstaffed. After the establishment of this fact, that the managers took a drastic resolution which in turn wracked havoc impact on the organizational environment, following which the rate of employee turnover increased drastically by 10%. 3. Conclusion The case study revealed crucial information regarding the factors that triggered the high employee turnover in Tengo’s customer contact centre. It was learnt that inadequate training and development facilities was one of the major reasons behind employee de-motivation. Employees in the organization felt that their efforts are not being recognized and they are not being valued within the company. Their recruitment in the company is on a requirement basis after the fulfillment of which they will dismissed off from their responsibilities. This created a sense of insecurity among the employees which in turn compelled them to leave Tengo and look for better opportunities. In addition, the employees were made to work extra hours and were not being adequately compensated for their effort with proper pay or reward package. This in turn deteriorated the engagement level of the employees thereby decreasing their commitment towards the organization. The turnover in Tengo is universally dysfunctional which in turn led the company to experience high employee turnover in terms of the loss of highly skilled and experienced employees. The skilled employees felt that they were not being considered within the decision making process and there was not organizational hierarchy that separates them from the junior employees. The organizational restructuring strategy was considerably drastic and untimely. The manager of Tengo’s call centre should not have dismissed 30 employees at once as in doing so the manager is infusing a sense of fear among the existing employees regarding their future in the company. As a consequence, a lot of employees in the company’s technical division resigned from their job within the next two months. This is an adverse scenario that indicates the highly ineffective human resource management framework that exists in Tengo’s customer contact centre. 4. Recommendation Considering the current situation in Tengo’s customer contact centre, the managers of this decision are advised to consider the following recommendations: Firstly, the managers in the customer contact center should introduce proper training and development framework in order to provide ample scope of development for the employee base. The HR managers need to employ a team leader style which would encourage them to emphasize on the well being of the workforce as well as the productivity generated by the company. The managers need to pay more attention in making sure that the employees are getting ample scope to develop their own self both professionally and personally. It is up to the managers to encourage the employees to give the required effort and at the same time attain work life balance. Secondly, the managers in Tengo have to introduce a reward and recognition framework whereby the efforts made by both the senior and the junior members will be recognized and appreciated. The reward can be in monetary terms or in the form of an offer of higher designation. In that way, the mangers will be able to bring in the best performance out of their workforce and keep their motivation level intact. This is one of the most widely accepted strategies to reduce employee turnover. Thirdly, Tengo’s managers will have to make their employees feel valued within the organization by making them a part of the organization’s decision making process. The managers will have to establish a robust communication framework whereby employees will be able to provide valuable inputs regarding the areas of improvement. This will help the managers to identify the company’s strength and weakness following which they can adopt appropriate strategies to deal with different situations. In addition, managers in Tengo will have to learn about the need and expectations of the employees in terms of workplace environment, management style, worm department choice, payment and reward and so on and so forth. It is duty of the managers to give flexibility to the employees to discuss their issues. This will make the employees more committed towards the organization. Lastly, the managers in Tengo will have to make an accurate assumption of the requirement of employees within the organization in order to make sure that they are not overstaffed. This is precisely because an overstaffed workplace will always compel organizations to initiate organizational restructuring. Such strategies may often have an adverse impact leading skilled workers to leave jobs because of insecurity. Although companies sometime consider high employee turnover to be a good thing as it reduces the operational cost, but if it is not controlled properly then it might tarnish the reputation of a company in terms of their ability to retain employees. This is one aspect that managers of Tengo need to be mindful of. Reference List Andolsek, D. M. and Stebe, J., 2009. Devolution or de centralization of HRM functions in European organizations. International Journal of HRM, 16(3), pp. 311-329. Armstrong, M., 2012. Armstrongs Handbook of Human Resource Management Practice. 12th ed. 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Human Resource Management: an international comparison. 4th ed. London, Thousand Oaks CA: Sage Publication. Read More