Leadership Styles at Mountain West Health Plans Inc - Case Study Example

?November 13, Memorandum Principles of Management Team Mountain West Health Plans, Inc RE: Service Department We have conducted a study on Mountain West Health Plans Inc and identified several problems and their solutions. We will start by highlighting a brief history, which forms the basis of the problems facing the company. Evelyn Gustafson has headed the company for many years as its director of customer services, who retired last year. The company’s vice president, martin Quinn sought to replace the retiree with Erik Rasmussen. The company’s top management has been uncomfortable with the leadership style used by Evelyn because it has led to increased costs of operations through payment of salaries to employees. This had become a problem to the management because it was labor intensive and consumed two thirds of the annual budget. Therefore, the company’s management had been yearning for Evelyn Gustafson’s replacement so that they could curb the increasing labor costs. Evelyn Gustafson had a long history with the company because she had worked there for a long time. She started her career as a customer service staff until she was promoted to being the director of customer service. Her leadership style was centered on putting oneself in the position of the subordinates. She used this style due to her experience in working in that department, and she understood what the employees went through. In her leadership style, she focused on involving the employees in the tasks by making them understand the company products and policies. She also focused on the quality of service that the subordinates offered to customers. In addition, Evelyn emphasized on employee training on the products, problem solving and customer service techniques, which helped to ensure customer satisfaction. Her relationship oriented leadership style also involved ensuring the comfort of employees when performing their tasks by allowing them flexible schedules and breaks. However, her leadership style was not was not appealing to the top management, and they endeavored to change it after her retirement by appointing Erick Rasmussen to the post of director of customer service. Erik Rasmussen is a fresh college graduate in business administration, and therefore, he has no experience in the post. He sought to embrace a leadership style that ensured that the top management objectives of lowering costs of operation were achieved. He used a no-nonsense bureaucratic approach in directing and controlling the employees. He introduced the use of performance measurement standards to measure efficiency and performance of employees. This method measures employee performance based on the number of calls or customers that they handle per hour. This approach emphasizes on working speeds of subordinates, and requires them to handle as many customers as possible during their working time. This method would help to reduce the number of employees being employed in the department. His method also introduced a regulation requiring employees to work in monitored schedules. He ensured that employees spent minimal time on each customer they attend to with an objective of reducing call hold time. This method was completely different from the previously used method, which the employees were used to. Through Rasmussen’s method, the company achieved its objective of efficiency and non-flexible scheduling and cutting back on costs associated with employees. A leader should focus on being in charge of command, organizing and directing, setting processes in motion, and being the reason for others to act or change (Scouler and Chapman, 2012). Leadership styles are classifications of the leader’s behavior in performance of their duties, during our study of the Mountain West Health Plans Inc’s customer service department; we identified several leadership issues, which are highlighted below. Firstly, there is no connection between the leader and the employees (Hendricks, n.d). We found that the leader does not understand the needs of his subordinates in the department. Secondly, there is a difficulty experienced by the employees due to the change of leadership. The method used to change the leadership was drastic, and it did not allow the subordinates to adapt to the new style. In addition, there is a problem with the employees understanding of the company’s products because they are not being trained on the products, services and customer handling techniques. Second, lastly, there are no methods of ensuring that leadership is integrated with the employees because the company is using a bureaucratic style, where the employees have to follow their work schedules. Lastly, the leadership does not encourage employee participation in making decisions during performance of tasks. In addition, we have analyzed Erik Rasmussen’s performance and have come up with some findings. Firstly, he has achieved the overall objective of the organization by working to reduce the operation costs. The company has experienced reduced costs on employee training under his leadership. Secondly, his leadership style of using software automated work schedules based on historical information has achieved efficiency in performance of duties. In addition, his leadership style has ensured that calls handled per hour by employees have increased, and therefore, they have reduced the time subscribers spent on call hold. On the other hand, the quality of service offered by the employees under his leadership has decreased. This is shown by the increased number of complaints by customers, which have increased over the past period. In addition, his leadership has eroded customer satisfaction from the services the company staff offers. We also found out that the employees were not motivated while performing their duties due to lack of training and incentives. Morley (2011) highlights that this can be experienced in this type of leadership since the only motivated person is the leader due to the accomplishments made by the employees under his supervision. Moreover, we compared Erik Rasmussen and Evelyn Gustafson leadership styles, and identified their strong points and weak points, in this company, Evelyn Gustafson used people oriented leadership style, therefore, in this style; the leader is concerned with creating working relationships with employees. We saw that Gustafson was interested in this because she had previously worked with them in the same capacity they were working. Piraglia highlights that this style has various advantages, and the first one is that it ensures participation of employees and facilitates feedback, which helps the leader to make proper adjustments. Secondly, it makes the employees feel valuable to the organization since they are recognized by the leaders in making some work decisions. Thirdly, this style enhances employee motivation through leader’s mentorship, which makes them be interested in the company’s objectives (Morley, 2011). Lastly, this leadership style ensures that employees are loyal to the organization because they are being supported hence reducing the turnover rates (Pirraglia, n.d). This is seen through the low turnover rates experienced during Gustafson’s leadership. This leadership style has weaknesses one being that it leads to poor performance by the employees. The poor performance arises due to leniency of the leader towards the subordinates as it was experienced in the company. Secondly, this leadership style leads to wastage of time in completing tasks. This was experienced by the long time used by the employees to serve one customer. Lastly, this style leads to decreased profitability of the firm (Pirraglia, n.d). This is because the lead is not focused on efficiency but on the effectiveness, as was the case with Gustafson. Erik Rasmussen leadership style is bureaucratic leadership, and it has its strengths and weaknesses compared to Gustafson’s style. Firstly, it eliminates wastage of time because the leader’s position on issues if final hence, no time is lost on discussions (Zervas and Lassiter, 2007). Secondly, this style ensures that the employees conform to the established regulations in the organization because it uses rules to direct them. Lastly, it ensures efficiency and accomplishment of organizational objectives due to the preset standards (Zervas & Lassiter, 2007). However, this type of leadership has several disadvantages and the first one is decreased motivation of employees (Tia, 2009). Since the employees are not engaged by the leaders in making decisions, they feel less motivated. Secondly, it leads to increased turnover rates due to lack of motivation and high performance standards. Thirdly, this style has no working flexibility of employees because they have to follow strict work schedules (Zervas and Lassiter, 2007). Lastly, it leads to poor productivity of employees due to lack of opportunity to make decisions on issues. In this case, employees feel less valuable, and they leave the organization as it was experienced in Mountain West Company. Several issues were identified in Erik Rasmussen’s leadership, and we will provide recommendations for them, the first issue is that the employees felt that they were not connected to their leader. Secondly, employees are not comfortable working with the automated work schedules being used by the company because it is not flexible for them. Thirdly, it was found that the employees do not understand the company’s products, services and customer service techniques well, and this has an impact on the quality of services offered by the company. Lastly, the employees are not motivated by the leadership style being used by Mr. Rasmussen. After identifying the various problems with the leadership of the company, we suggested some recommendations. Firstly, Rasmussen should talk with Evelyn Gustafson so that he can learn some of the styles she used in her management such as employee participation and involvement. He should learn from her on how to build good working relationships with employees. Secondly, Erik Rasmussen should integrate Evelyn’s leadership ideas with his style in order to build a productive department. In addition, he should reintroduce training programs to educate employees on the company’s products, services and problem solving techniques on customer service. Second, lastly, he should introduce alternating working breaks in daily employee operations in order to give employees time to rest and refresh their energies before they resume their duties. This will also help in increasing their morale and eliminate stress related work disorders. Lastly, since the company is using automated work schedules to measure performance, he should offer incentives to employees in order to motivate them towards reaching desired performance levels. In addition, the company should reward those employees who reach extemporary performance levels so that they can feel motivated. In conclusion, we advise that the combination of the two leadership styles will be most beneficial to the company, as illustrated in the developing leadership style case study (The Oxford Group, n.d.). This is because both Erik and Evelyn have strengths and weaknesses with their leadership styles, and combination of their styles will create a median point, which the company can leverage on in its operations. This will ensure effective and efficient performance in Mountain West Health Plans Inc. References Morley, M. 2011. Task vs. Relationship leadership Theories. Hearst Communications. [Online] Available from: http://smallbusiness.chron.com/task-vs-relationship-leadership-theories-35167.html [Accessed on 13/11/2012]. Pirraglia, W. n.d. Advantages and Disadvantages of people oriented Leadership Styles. Hearst Communications. [Online] Available from: http://smallbusiness.chron.com/advantages-disadvantages-peopleoriented-leadership-styles-10299.html [Accessed on 13/11/2012]. Scouler, J. and Alan C. 2012. Leadership Theories. Businessballs.com. [Online] Available from: http://www.businessballs.com/leadership-theories.htm#leadership-styles [Accessed on 13/11/2012]. Tia, B. 2009. Task and Bureaucratic Oriented Leadership. Hearst Communications. [Online] Available from: http://smallbusiness.chron.com/taskoriented-leadership-disadvantages-36890.html [Accessed on 13/11/2012]. Zervas, C. and David L. 2007. Leadership Styles. Leadership Advantage. [Online] Available from: http://www.leadershipadvantage.com/leadershipstyle.html [Accessed on 13/11/2012]. Hendricks S. n.d. Mountain West Perspectives. Mountain West News. [Online] Available from: http://www.mountainwestnews.org/Page3.aspx?a=Perspectives&ID=49 [Accessed on 13/11/2012]. The Oxford Group. (n.d.). Developing Leadership Style - Case Study. [Online] Available from: http://www.oxford-group.com/PDF/DevelopingLeadershipStyle-ExecutiveCoachingCaseStudy.pdf [Accessed on 13/11/2012]. Read More