Hole in the Wall - Problems and Recommendations - Essay Example

?Hole in the Wall – Problems and Recommendations Introduction Hole in the Wall is a private business that manufactures double-glazed windows. Of late, it has been experiencing multiple issues, including poor quality of components, substandard final products, increasing number of unsatisfied customers, lack of coordination between the production team and the sales force and mistrust and blaming between the different units over the performance issues. Recently, Hole in the Wall has also faced with attrition problems when one of the three fitting teams quit the company during recession, an economic phase that goes hand-in-hand with layoffs and job insecurity. Faced with a host of problems, Hole in the Wall has sought the consultancy services of the bank that were being offered as part of a promotion in the city. As part of the consultancy services, the bank has found three major underlying problems that led to the issues faced by Hole in the Wall. They are namely, equating performance of the employees with their pay, isolating employees from collaborating and preventing innovation in the process and avoiding conflict management leading to unsettled quality issues and personal enmity. The report analyses the three root problems in details, explores a host of possible solutions for eliminating the problems and recommends the best possible solution to the company for implementation. Equating performance with pay The salesmen are paid exclusively by the commission per window sold, which is often sacrificed while negotiating with clients. The production and fitting teams are also paid based on the number of windows produced and fitted respectively. While this model of compensation is aimed at motivating employees, it leads to unstable salaries, unhealthy sales model and shoddy workmanship (Solomon and Podgursky, n.d.; Hamel, 2013). To earn maximum commission, the salesmen make unrealistic promises to too many customers without co-ordinating with other units and then to commit to these orders, components are procured in a rush and windows are produced as early as possible, leading to substandard products made from substandard materials. As a result, windows are sent back to the factory for rework, thereby increasing the number of unsatisfied customers. Also, since sales are low during recession, numbers of windows fitted are also less, which leads to falling income of the fitting team, perhaps which is why one of the three fitting teams quit. There are two salary models that can replace performance-based pay and eliminate its consequences: a fixed salary and a hybrid salary. In a fixed salary structure, the employees are paid a consistent remuneration every month. This means they do not have to worry about the financial hardships that their families will go through in the event of bad performance in a particular month due to low sales, economic recession or poor market conditions. This creates stability in income and uniformity in the quality of life, thereby giving a feeling of financial security and contention to the employees. It also boosts productivity as they have more time to focus on work and no worries to make ends meet. In a hybrid salary structure, the employees receive a minimum base pay every month that creates stability in income and uniformity in the quality of life, just like a fixed salary structure. However, outperforming employees also get additional variable income based on their performance, such as, higher sales, more units worked upon or overtime hours done at the factory. Therefore, if an employee wishes for a pay raise besides the regular appraisal, he or she may do so simply by giving a little more attention to work instead of looking for another job with higher salary. It also improves the company’s performance without pressurising employees to deliver more (UC San Diego, 2013). While both the pay structures can solve the present problem of inconsistent monthly remuneration and unhealthy race against time to earn more, the hybrid pay structure seems much more viable for Mr. Barker. The base pay of hybrid salary is lower than a comparable fixed salary, which means that he would have to spend less per employee and can keep costs down. Moreover, it can generate the competition that Mr. Barker desires, without hampering the quality of work or customer satisfaction. Employees would definitely strive to earn more, but would not resort to extreme means that harm themselves and the company, since they can always fall back on the base pay cushion instead of hitting hard ground during low performance. The prime advantage of this structure is that good performance is rewarded, yet poor performance is not punished. Isolating employees and preventing innovation Mr. Barker sees his employees as people who have been installed in the company for different tasks, where each person is expected to perform his or her own task and go home. This has created complete lack of co-ordination and innovation. There are two such instances where lack of co-ordination is evident. One, when customers had complained that the fitting team takes too long to fit the windows, the fitting team had blamed the production team for inferior products, the production supervisor blamed the purchasing officer for substandard components and the also, the sales team for bringing more orders than the company can produce. Two, when Mr. Barker found out that the purchasing officer and the production supervisor did not get along; he had to isolate them by scheduling meetings with them individually. The only possible solution that can stop the lack of co-ordination between the different units and make the business more efficient is opening up to the idea of employees contributing knowledge, ideas and feedbacks for each other’s works. While it is true that an employee from one team may not have sufficient knowledge about the work of another team, he or she can still give valuable tips for facilitating smoother work flow from his or her team onto the next team. Special initiatives can be taken to educate all the employees about the entire work flow, so that nobody is in the dark about what happens from start to end. Educating employees beforehand will also be beneficial for the company since it would be able to shift an employee from one team to another without incurring much training costs, whenever required. Innovative ideas can be generated only when people can think out of the box and tend to give innovative ideas about things that are outside their usual domain. Also, there is always the option of screening bad ideas and implementing only the good ones. Either way, the company would stand nothing to lose by promoting an integrated work culture (Lipman, 2013; OPM, n.d.). It is recommended that Mr. Barker implements a training program that would educate employees about the company’s entire work process. Wholesome knowledge as opposed to fragmented knowledge brings more confidence in one’s working process. A special mechanism, such as, anonymous notes in a drop box or a monthly brainstorming session with all employees, should also be implemented for collecting ideas, suggestions and feedbacks from employees, gathering them at one place and evaluating their effectiveness. Implementing effective ideas or suggestions and recognising the respective contributor would automatically create a competition for innovation among employees. Lastly, Mr. Barker should immediately facilitate the collaboration between the purchasing officer and the production supervisor, instead of isolating them from each other, since co-ordination between the components procurer and the product manufacturer is critical in order to deliver high quality products. Avoiding conflict management Mr. Barker had initially scheduled weekly meetings between his purchasing officer and production supervisor. However, conflicts had been breaking out between the two. As per Mr. Barker, each of the meetings turned out to be a disaster. However, upon realising that the conflict between them could not be solved easily, he isolated them from each other by scheduling meetings with each one of them individually. Although the conflict between the two proved to be unproductive, the isolation has not led to an effective solution to the problem. Mr. Barker is currently acting as an intermediary between the purchasing officer and the production supervisor, who continue to hold grudges against each other to the extent that the production supervisor blames the purchasing officer of procuring substandard components. This not only has led to the quality issue being unresolved, but also holds the probability of further escalation of their arguments. Conflicts within the different teams of a company are unavoidable and may lead to a re-alignment of whole or part of the company’s strategies or operations. Escalated conflicts frequently lead to non-productive arguments, which are not aimed at the greater good of the company, but are simply mechanisms of venting anger against each other. However, amicably resolving the conflicts can result in better performance of the company. Conflict management is based on the belief that all conflicts are not necessarily non-productive and some conflicts can actually prove to be beneficial to the company. Such conflicts need not be resolved. Rather, they should be allowed to take place in a proper way in order to obtain the best possible outcome. Conflict management can be done by Collaborating, where the parties try to find out common solutions that address to everyone’s priorities; Avoiding, where parties simply put aside their priorities and avoid the issue that has created the conflict to let be what is; Competing, where one party forces its priorities over another without co-operation; Compromising, where parties find a middle ground that can achieve bits of everyone’s priorities; and Accommodating, where one party sacrifices its priorities to make way for others (University of Maryland Extension, n.d.; Massachusetts Institute of Technology, n.d.; Soin, n.d.) Hole in the Wall is a company that has its procurement, production, sales and post-sales fitting divisions. Since these divisions are inter-related and create a continuous business process, it is highly recommended that all the teams are given equal importance while managing conflicts. Thus, among the various styles of conflict management, a Collaborative style is recommended for Hole in the Wall. Under this style, parties perceive the conflict not as a medium to vent anger, but as a problem that needs solution through mutual participation. They do not want to sacrifice their interpersonal relationships for the sake of the conflict at any cost and seek solutions that cater to everyone’s priorities. The aim of Collaborative style of conflict management is to reduce tension between people, maintain professionalism and generate a “one size fits all” answer to problems. In the context of Hole in the Wall, this would not only create a harmony between orders taken and units produced, but also improve quality of components and the final products. Conclusion The problems that currently plague Hole in the Wall are serious, though not uncommon. Mr. Baker, the proprietor, has been facing increasing customer complaints, inferior product quality, substandard components sourcing and unrealistic promises made by salesmen. Worse, it is also experiencing mistrust between the different units, lack of co-ordination between the capacity of the production unit and the commitments made to customers and a severe blame game where nobody takes the responsibility for falling product quality and customer satisfaction. As part of the consultancy service provided to Hole in the Wall, the bank has found that the management needs to initiate several reforms to tackle the three major problems, namely a pay structure of employees that forces employees to resort to unethical practices and harm the business, lack of engagement of employees in strategy formulation and innovation and avoidance of conflict management that leads to unsorted quality issues and personal enmity. The reforms that the bank recommends to Hole in the Wall are introducing a hybrid pay plan that gives financial security and boosts their eagerness to increase performance by ethical means; implementing a program that would cross-train and educate employees about the company’s work flow; generating innovation by devising a mechanism of collecting ideas, feedbacks and suggestions from employees; facilitating collaboration between the purchasing officer and the production supervisor to iron out quality issues and also, introducing a Collaborative style of conflict management in the company to increase professionalism and create wholesome solutions that satisfy everyone’s priorities during conflicts. Reference List Hamel, G. 2013. The Pros & Cons of Employee Pay Being Fixed Vs. Variable & Dependent on Performance. [online] Available at: [Accessed 6 December 2013]. Lipman, V. 2013. Why Employee Development Is Important, Neglected And Can Cost You Talent. [online] Available at: [Accessed 6 December 2013]. Massachusetts Institute of Technology, no date. Conflict Management. [online] Available at: [Accessed 6 December 2013]. OPM, no date. Performance Management. [online] Available at: [Accessed 6 December 2013]. Soin, R. no date. Conflict Management--Style and Strategy. [online] Available at: [Accessed 6 December 2013]. Solomon, L.C. and Podgursky, M. no date. The Pros and Cons of Performance-Based Compensation. [pdf] Milken Family Foundation. Available at: [Accessed 6 December 2013]. UC San Diego, 2013. Chapter 10 Rewarding Performance. [pdf] UC San Diego. Available at: [Accessed 6 December 2013]. University of Maryland Extension, no date. Conflict Management Styles. [pdf] University of Maryland Extension. Available at: [Accessed 6 December 2013]. Read More