Virtual Cross-Functional Solutions Sales Team - Term Paper Example

Insert Header Here} {...} {...} {24 October 2008} Virtual Cross-Function Teams and Forced Ranking Systems: Discussion of Case Studies Case Study One is an examination of some of the problems encountered by Insight Communications in the use of a virtual cross-function team organisation. Case Study Two takes a look at the Forced Ranking method of assessing employee performance, against the backdrop of problems it has caused at Ford Motor Company, Dow Chemical, and Goodyear Tire & Rubber, among other companies. Key Skills for a Virtual Cross-Functional Solutions Sales Team A virtual team is defined as “a group of people who interact through interdependent tasks guided by a common purpose”. (Lipnack and Stamps, 2000:18) As such, it is only the attributes of the individual team members that are important in forming the team. Other factors such as organisational divisions, physical distance, and even time difference between team members are not considered, an omission that is possible because of modern computer communications technology. The case study of the virtual teams formed by Insight Communications indicates that the teams are not performing to expectations, falling well below their target objectives. In Insight’s case, barriers to effective communication seem to be the root cause of the virtual teams’ disappointing performance, both from the point of view of the department head trying to manage the teams and the team members who are tasked with forming, leading, and interacting with the groups. While most of the available literature and commentary on virtual teams puts the onus of making them effective on management rather than on team members, some vital skills for successful team members can be inferred. Because virtual teams are dependent on computer communications, a high degree of competence in computer skills – or at least the ability and willingness to learn new technologies – is absolutely vital to anyone working in a virtual team. Beyond simply being able to use technology to communicate, team members must be able to use the technology effectively. That means being able to write effective e-mails, and speak effectively through phone or other voice communications; in essence, being able to make up for the 80% of human communication which is non-verbal and missing from communication through electronic means. (Fernald, 2006) And finally, every team member must have a clear understanding of the interaction of the team and how each member’s function affects everyone else, so that each can operate independently toward a common objective. Effectively Managing Virtual Team Performance The first step in effectively managing a virtual team is to determine if that kind of structure is indeed the best approach to sales and customer relations. (Leigh, 2005) This consideration may seem intuitive, but is often overlooked because companies focus instead on what seems best for the organisation rather than for the customer. The other prerequisite to being able to manage a virtual team structure is to shift from an emphasis on traditional hierarchical organisation to a network organisation, where skills and relationships of team members to each other take precedence over organisational rank and content knowledge. (Eicher, 2003) In a study of Sabre, Inc., a major builder of airline reservation and booking systems, Kirkman, et al. (2002) suggest two major stumbling blocks to effectively managing virtual teams, both of which relate to communications issues as described in the previous section. The first is the need to minimise “process losses”, inefficiencies, oversights, and duplicated efforts that arise because team members are unclear on what they are supposed to be doing, and what everyone else in the team is doing. Establishing clear goals, expectations, and operating principles at the outset are critical to eliminating or reducing these “process losses”. (Kirkman, Rosen, Gibson, Tesluk, & McPherson, 2002) The second stumbling block is to overcome the feelings of detachment and isolation that can affect the performance of team members who are physically separated from each other. Selecting a team with a good balance of interpersonal as well technical skills, as well as engaging in “team-building” activities to foster trust and personal connection among team members are excellent ways to help overcome these problems. (Kirkman, et al., 2002) Achieving and Accurately Assessing Team Performance Improvements In some ways the virtual workplace can help managers more accurately assess the performance of team members and identify areas for improvement because the lack of personal proximity makes subjective judgments difficult. Sabre, Inc. employs a three-phase process to effectively assess the performance of its virtual teams. First, team objectives are set through the use of a balanced scorecard, an effective means of communicating company strategy in terms of quantifiable objectives. (Evans, EXINFM, 2002, and Kirkman, et al., 2002) Second, by monitoring teams’ electronic communications and by gathering feedback from customers and other team members in a systematic way, a manager can judge individual performance and contributions uniformly, because he sees what team members are actually doing rather than what they simply appear to be doing. (Kirkman, et al., 2002) And finally, comparing the feedback and the record of communications against the results laid out in the balanced scorecard gives a clear, and most importantly, impersonal assessment of what the team and its individual members have accomplished, and where they need to improve. Effective Communication Methods and Feedback Skills Effective communication is the cornerstone of any virtual team organisation. The same means and channels of communication are used by team members to communicate with each other, with customers, with other teams, and with managers. The same channels are also used to deliver feedback from customers to the company, and from managers to team members. All the different methods can be broadly divided into two groups: synchronous communications, such as video or phone conferencing, real-time chat, or “whiteboards”, and asynchronous communications, such as e-mail or newsgroups. (Steinfeld, n.d.) The skills in not only being able to competently use the communication technology, but in also understanding its benefits and limitations are vital for team members and managers alike. Feedback from a manager to a team member – whether it is on a particular project or function, or an overall performance review – has the same content regardless of how the information is transferred, but doing it by e-mail delivers a different message than doing it in person. Delivering effective feedback, then, is a matter of understanding how the communication medium affects the message. In practical terms, that means developing concise writing skills, and for verbal communications, the ability not only to speak but also to listen in the absences of non-verbal cues. One way in which the flow of information can be controlled in order to maximise its effectiveness is through the use of structured work processes call prescriptive systems. One example of these is the so-called electronic meeting system, which guides a group through step-by-step problem solving and decision processes with the help of a third-party facilitator. (Nunamaker, Briggs & Mittleman, 1995, and Steinfeld, n.d.) Another example is a workflow system which determines the routing of documents and communications, so that process losses due to misdirection can be controlled. (Kirkman, et al., 2002, and Steinfeld, n.d.) To ensure that creativity and openness is not stifled, the prescriptive systems should be used alongside so-called permissive systems, such as chat, which do not impose a structure on team communications. (Steinfeld, n.d.) The Pros and Cons of Forced Ranking Systems The second case study takes a look at forced ranking systems, also sometimes called forced distribution systems or “rank-and-yank”, a method of employee performance assessment that ranks employees’ performance in relation to each other, or against a “bell-curve” distribution. (Holland, 2006) Theoretically, a forced ranking system has several advantages, particularly for the large companies that use a version of it. It helps to prevent a condition called “mediocrity creep”, wherein the performance of any group of employees declines over time because assessments and corrections are inconsistently made by managers, or not applied forcefully enough. In a forced ranking system, the trust of higher-performing employees in the effectiveness of their managers is maintained, while lower-performing employees are encouraged to improve or move on, since both groups know that performance will be regularly reviewed. (Davis & Rogers, 2002) An assessment system like forced rankings applied uniformly to an entire workforce also should help companies avoid legal entanglements like wrongful termination, although this was not the case at Ford. In addition, a forced ranking system also helps a company determine how to reduce its workforce and keep its best-performing staff, should that unfortunate need ever arise. (Holland, 2006) Just as Ford discovered, there are also very clear pitfalls to a forced ranking system. A forced ranking system assumes that the relative performance of employees is uniform across an entire workforce, and so is applied uniformly to all departments. But as is often the case, some departments perform better than others, so that the worst performers in one area may actually be as good as or better than the best performers in another. (CNET, 2002) In that respect, forced rankings are not a good measure of individual performance. Even if it is working properly, a forced ranking system will eventually become useless because of its effectiveness; after a number of evaluation cycles, theoretically, all the low-performing employees will have been removed, leaving only high-performing employees that cannot be dismissed or moved without harming the company’s overall performance. (Holland, 2006) Perhaps the biggest flaw in forced ranking systems is that it is really an imperfect solution to poor management rather than poor employee performance. Giving negative assessments or dismissing sub-par employees is not something every manager can do well, and when they fail, the “mediocrity creep” takes root. (Davis & Rogers, 2002) Forced rankings ‘force’ managers to make these hard decisions, but can in fact actually reinforce bad management practices. An example of this would be managers who intentionally keep poor-performing employees on staff until the next round of evaluations, so that they will be able to meet their quota of dismissals from the bottom end of the scale. (CNET, 2002) Recommendations for Ford’s Performance Management Program The first and most obvious recommendation for Ford is to discard entirely the forced ranking system, because it does not work. Applying a statistical model of normal distribution – the bell curve – to any size group of employees is illogical, because a normal distribution can only occur in a very large sample of random events. (CNET, 2002) Ford Motor Company’s workforce might possibly be a large enough sample, but no employee’s activities are random. Rating employees against each other is similarly illogical, because there is no guarantee that a distribution of performance levels actually exists, particularly at the level of individual departments. Studies have also found that forced ranking systems in most companies lead to lower employee morale; imposing the competitiveness of a forced ranking system is counter-intuitive to fostering teamwork and communication. (Davis & Rogers, 2002) Second, any performance management program should judge employees against standards of performance rather than against each other. These standards should be quantifiable, so that the effectiveness of managers in assessing their employees can in turn be objectively assessed as part of the evaluation of the managers’ performance. Third, the frequency of evaluations should be based on employees’ individual anniversary dates rather than being made according to a set schedule on a department- or company-wide basis. And finally, feedback from other employees and customers – whether internal or external – should be included in any evaluation, whether it is for individual employees, a department as a whole, or an evaluation of managers by employees. (Kirkman, et al., 2002) The Advantages of These Recommended Performance Management Ideas Making changes such as considering outside feedback and placing more emphasis on the evaluation of managers’ performance are ways to strengthen the performance management system and boost employee morale, because they provide opportunities for everyone – managers included – to gain insight into how their work is viewed by those it affects: customers, colleagues, and subordinates. Changing the schedule of evaluations to one based on individual employees’ terms of service further personalises the process, and gives it greater value by making it an ongoing activity rather than one that falls within a specific time period; it stands to reason that the quality of evaluations would improve, because managers are no longer required to do many of them at one time. (Holland, 2006) Measuring the positive effects of these changes would mostly be a matter of measuring an increase in performance, which could be done in a quantifiable way using the three-part process based on balanced scorecards described in the first part of this report. Another measure that would signify success would be a reduction in the number of voluntary resignations; happy employees who stay with their jobs are productive employees. That is, after all, the goal of every company; following these recommendations is a far better way to achieve that goal than the use of a forced ranking system. Works Cited CNET News. (2002) “The Folly of Forced Rankings.” CNET News, reprinted from Strategy + Business, 18 August 2002. 28 October 2008. . Davis, Patty, and Rogers, Bob. (2002) Managing the “C” Performer: An Alternative to Forced Ranking. Development Dimensions International (White Paper), 2002. 23 October 2008. . Eicher, James P. 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(2002) “Five challenges to virtual team success: Lessons from Sabre, Inc.” Academy of Management Executive 16.3 (August 2002): 67. Leigh, Thomas W. (2005) “CRM in sales-intensive organizations: a review and future directions.” Journal of Personal Selling & Sales Management (22 March 2005). AllBusiness. 24 October 2008. . Lipnack, J., and Stamps, J. (2000) Virtual Teams: People Working Across Boundaries With Technology. New York: Wiley. Nunamaker, J., Briggs, R. and Mittleman, D. (1995) “Electronic meeting systems: Ten years of lessons learned.” In: Coleman, D. and Khanna, A. (eds.) Groupware: Technology and Applications. Upper Saddle River, NJ: Prentice Hall, pp. 149-193. Steinfeld, Charles. (n.d.) “Virtual Teams and Group Collaboration Technologies:Challenges in Supporting Distributed Groups.” Michigan State University. 25 October 2008. Read More