Human Resources Management of Kwik-Fit Financial Services - Term Paper Example

Human Resources Management Introduction Kwik-Fit Financial Services is a part of the Kwik-Fit auto centres. Founded by Sir Tom Farmer 10 years ago, the company has been taken over by Ford in 1999. Kwik-Fit financial services were into selling motor vehicle insurance policies to start off. Once the going became better, the company went on to sell a number of other packages including insurance covers for homes, spouses and children. KFFS had employee strength of 632 people working in the call centre. The input for the call centre came from the Kwik-Fit auto centres where customers are met and information is collected. From this information, people go on to contact them and try to sell the policy covers to the prospective clients. This is the approach that the company has adopted. Collecting a list of probable customers from the Kwik-Fit Auto centre was happening every day and more than 10000 probable customer was collected every day1. The call centre contacted the highly probable people in the list and sold the insurance policies and other financial services to these people. This model was successful initially and continued to improve until the time when the company was take over by Ford. Though the value of the company went up when this was again subsequently taken over by another venture capital group, there was no change in the downward trend that has started. This has arisen primarily because, the call centres are human centric and a dissatisfied and unhappy staff does not augur well for the company. The number of people who work in the company for a longer stint slowly comes down as the company started to lose ground. 2. The Context The company was on the verge of growth. As a matter of fact, the company was one of the call centres established in the region and had about 850 employees on its rolls. The employees found themselves de-motivated due to a number of take-overs that has been happening in the company and a number of grievances that were not given a hearing. The annual staff turnover in the company was at around 52% and a vacancy rate that was well over 21%. Naturally, with such large turnover and vacancy rates the company had started doing badly and the company was financially falling down2. The business model of the company was simple. The probable leads list come from their own company Kwik-Fit Auto centre from which the best of the probable are picked up and they are followed up from the call centre. The large scale vacancy and the large turnover of the staff both compounded the problem at the call centre and started to bring the company down to the red. The human resource turn over in the company happens because of large scale unhappiness over the working of the company and the people do not fancy working in the company any more. Of course the pay does matter. But it is more often the working methods and the environment that compounds the issue and accelerates human turnovers in the company. This is also one of the reasons, why vacancies in the company keep increasing. When the friends discuss during the week ends about their companies and they do not spread good news about it, then slowly the number of people who would like to work in it starts dwindling. 3. Main Features Kerin Edwards wanted to identify the changes that are needed in the company to make sure that the company would be again a fantastic place to work. In order to bring this to the fore, she took the step of involving the employees in the idea and organised a series of one day workshops that would highlight and bring out all the ideas that the people had. This brought out more than 6550 ideas in 32 workshops that were held on a single day. Since the employees joined the company no body had asked for their opinions. Now their ideas counted3. Out of these ideas, all those that could be implemented easily and immediately were carried out. This again showed to the staff the commitment of the management and they could bring themselves out again if they had an idea4. The company therefore could bring out all these ideas one after another into practice and this bonded the employees with the company and they found the place more comfortable to work with. This constituted the main feature of the revival plan that the company had towards human resource management. This was made a necessity in order to retain people in the company. Attrition was one of the major problems in the company; a rate of 52% marked the maximum outgo during a year and a vacancy rate of 21% before the changes were introduced by Edward. The major turn for the company was in obtaining the suggestions from the employees and implementing these suggestions soon after. One, this brought in a team effort among the employees to ensure that there is a goodwill and earnestness among them. Second, this also ensured that the commitment of the management is known to the employees and the earnestness is appreciated. It is very important that the company collects the ideas and opinions of the employees but it is more important to implement these ideas at the earliest possible opportunity. This was done in the company under consideration, which ensured that the staff got confidence in the management of the company and on the HR department. The main feature of the change is the change management itself5. There was a clear strategy as to how the changes would get implemented in the company and the results to be obtained after implementation were also planned and metrics fixed. This enabled the company to erase the vacancies completely and also to bring down the attrition rate to more reasonable levels. 4. Other Features A number of suggestions were added and more were also introduced to ensure that there is camaraderie and commitment among the employees. Some of the features that evoked a fair response from the employees included the following: 1. The first stage was to ensure that the work environment in the company improved. In order to execute this, the company introduced a gym for working out, lifestyle screening and a massage service6 (Joseph J Lazzaro, Jul 2001). These enabled the employees to get benefits that were not hitherto available. 2. During the second stage Edwards tried to alter the way the work was done in the company. It was about the interaction between the people and the way productivity was achieved in the company. In line with this, a number of new features were launched in the company. 3. The company had a beautician come to the company every week at a room called Heaven in the Earth. No-smoking sessions and an on-site gym were all part of the Think yourself Thin scheme which was primarily driven to make the people healthier and lean. 4. A buddying system for building the new people by combining them with the existing older employees7 (European Union, Mar 2005). There will be designated guardian angels among the senior people who will groom the newly joined or recruited 'cherubs' for the future work. This ensured that the people are building fresh talents and the existing talents in the older employees get passed effectively to the newer ones. This seems to give better results over a period of time. 5. A story telling method was employed to pass the lessons learnt by one team to the other. This was made regular and one team after another had to present a story along with an object. Every body from the management to the employees would participate in it. At the end of every story, the employee would write the story out and will finally be published as a collection of stories titled, 'Book of you'. This would enable the people to understand each other and this should, therefore, make them work together in a better way. The team becomes better and there by ensures a continuous and ongoing relationship with every one of them. 6. The company is now trying to identify the reason why some perform better while the others do not match up to that. This could be happening due to a number of reasons. All these are identified and an employee of the year award is given to them. Reasons for their success and what made them successful is identified by talking to them; talking to their managers and their colleagues who work alongside. All this help the people to identify, the reasons behind the success of these employees of the year. These success traits are then passed on to the rest of the people and they also understand and are encouraged to adopt the same. 7. The new recruits are made to sit with some of the best people in the company to know how to do their work. It is not just that the person who is the best makes the maximum money but also is enthusiastic about their work and would spread the same across to the new recruit as well. This sharing is termed the 'fantisticness' by the company. This would ensure that the knowledge obtained by the best performers in the company and the speciality skills that they master are passed down to the others and are also recorded. All these features were subsequently brought into the company by Ms Edwards which did bear result. This reduced the company's attrition rate from 52% to 34% and also brought the vacancy rate from 21% to zero as of date. This could happen only because of the employee schemes that were introduced and the nature of changes that have come to happen in the work environment. 5. HR Model The model employed by them works closely with the theoretical models competency model and capability model of HR. Though there was no explicit use of one single methodology, it is found that the techniques of both the models have been employed. In order to identify the right kind of model, let us look at the features that were incorporated in the company and the effect of these models8 (USOPM, 2006). If we closely analyse the HR team in the company has had a complete understanding of the business objective and a full understanding of what is to be done in order to ensure that the laid down target is met. The HR team has been a leader for the company being in the know of the company's strategy and eagerly participating with the company's management to ensure that the company reaches its targets9 (Brad Humphrey & Jeff Stokes, 2000). Though the company ensured that its shareholder's interests are critically protected, it is also true that the company did take certain amount of well calculated and confident risk in trying to go along with the nature of problems faced by the company at that time. The Competency Model of HR primarily tries to identify and activate the following ones to make things better: 1. HR becomes a Business Partner and goes on to help in formulating the business objectives of the company and ensures that relevant set of people are available to carry out the required number of changes in the process adopted. HR needs to be a mission oriented person / department and ensure that the target is achieved under all circumstances. This has happened in the case of KFFS. The HR did display a high sense of understanding the business of the company and also to a large extent, a great commitment to the mission to pull the company out of the red. In order to achieve this, the HR department needs to necessarily be a strategic planner and an innovator10 (Competency model). The department needs to understand team behavior in the company. In this case study, it is seen that the company under consideration was headed by an HR person who was an effective strategic planner. The planner could set the right kind of an environment for their own requirements and also ensure that the company would reach its target if they adopted the strategy that was laid out. The HR team was also innovating ways and means to make the company a better working environment and a better place to be working in. All this could happen only if the HR understood team behavior in the company. 2. A committed HR Executive team which has a clear understanding of the HR principles, customer oriented, applies appropriate business procedures to ensure that the HR practices are in line with the theoretical and that of the practical requirements. The executive should be committed to make use of the available HR tools to enable the best results for the company thereby, resulting in the best management of all human resources in the company. Both in terms of employing them fully and employing them in their rightful positions where the respective employees are the most productive. 3. The HR team should be in position to value diversity in the company. As a matter of fact, the HR team should be able to advocate diversity in the company and maintain it. The team should be respecting others in the company. This would help them in resolving conflicts and issues even when such issues are minor and might not require a high degree of attention to resolve the issues. This can be achieved only if the HR personnel have good communication skills and are in a position to communicate with the rest of the company efficiently. 4. HR Leader should be a person who takes the required amount of risk in order to ensure that the target planned for the company is attained. The leader has to be ethical and should stick to the words committed by him / her. The HR team should be planning a clear career path for every individual in the company. Their decisions needs to be decisive and should ensure that there is no violation of their decisions. Such decisions can only be reached if the analysis of the issues under question is flawless and they arrive at the right decision in the course of such analysis. The staff is helped to develop themselves. Either through appropriate training processes and by providing them opportunity to work on newer areas where their new skills will be valued, the staff will be ensured not only technical and professional growth but also managerial growth in the future. Once this is done, it continues to generate confidence in the staff and build trust among the staff of the company. 5. One of the key role of the HR department in any company is to be a change agent. As a change agent, the HR person needs to manage changes from their original conception to their implementation. This means that the company has to be ensure that the changes are in the right spirit and also towards the right end both for the staff and for the company. The HR person should use coalition of skills to enable a change in the company. He should be the catalyst who will bring about the required changes through employing the skills of the staff in the right combination at the right time. Therefore, he becomes the change manager. All these are perused by the HR manager in the KFFS to bring in the major change that brought in rapid growth in the profitability of the company. The Competency Model11 for HR professionals is employed in the above example to bring out the theoretical relevance of the practical implementation that is found in the current case study. Though they might not have been implementing the changes needed by adopting the right theoretical aspect, it is always that the decision made during the practical usage reflects the theoretical aspects directly. The model adopted by the HR department in KFFS matches with that of the Competency Model as earlier explained. 6. Conclusion From the points raised in the earlier sections, the following points can be concluded: 1. The company had a problem of large attrition rate and a larger vacancies problem which was not being addressed by the company and its management. This is very critical because if there are lesser number of people, it is difficult to answer all the calls that come up and hence there is no possibility that there could be an higher revenue inflow. 2. It became imperative that the company immediately adopts certain major steps to remove the above indicated gains. This can happen as an help for productivity or for increased optimisation of purchase decisions. 3. All these needs were met by the staff and the HR department by bringing about relevant changes in them 7. Reference 1. Kwik-Fit, 2006, History, available at: http://www.kwik-fit.com 2. CIPD, 2006, The People Management Award - Previous Winners, available at: http://www.cipd.co.uk/about/awards/people/prev.htm 3. T Reiman & P Oedewald, 2002, The assessment of organisational structure - A methodological study, Espoo, VTT Tiedotteita, Research papers 2140. 4. John P Kotter, 15 Jan 1996, Leading Change, Harvard Business School Press, 1st Edition. 5. K S Cameron & R E Quinn, 1998, Diagnosing and Changing Organisational Culture Based on the Competing Values Framework, Addison-Wesley Series. 6. Joseph J Lazzaro, Jul 2001, Adaptive Technologies for Learning & Work Environment, American Library Association, 2nd edition. 7. European Union, Mar 2005, Action for Change, available at: http://www.eoc.org.uk/PDF/action_for_change_occ_seg_employers.pdf 8. USOPM, 2007, Competency Model for HR Professionals, available at: http://www.opm.gov/studies/transapp.pdf 9. Brad Humphrey & Jeff Stokes, 2000, The 21st Century Supervisor - Nine Essential skills for Frontline managers, Jossey-Bass / Pfeiffer. 10. Competency Model for Human Resources Professionals, 2006 11. Sabrina-Garrett-Owens, et al, 2003, Human Resources Competency Model, Human Resources Academy, University of Michigan, available at: http://www.umich.edu/hraa/hra/HRA.pdf 8. Annexure Read More