Employee Context at K Wik-fit - Essay Example

___________ ____________ ____December 2006 HRM Assignment Employee Context at K wik-fit K wik-fit is an offshoot organization and is dependent for its clients from its parent and main stream organization which runs the auto repair business. However the business of auto repairs is a very successful operation and clocks about 4 million customers on an average per annum, which translates into a very robust 10000 calls per night/day at K wik-fit. K wik-fit's business is to sell auto insurance and other ever expanding categories of insurance to such clients using its persuasive skills with initial and secondary contacts initiated primarily through its call centers. K wik-fit employs a strong work force of 850 employees to execute this task. Case study reveals that work force is distinctly tiered into hierarchies of grass root workers, supervisors and managers. The main employee and HRM context at K wik-fit is that of employee turnover. This context can best be classified as a problematic context as the employee turnover has been very rapid at K wik-fit.Figues reported in the case study indicate that in the K wik-fit's Lanarkshire call center the employee turnover used to be as high as 52 percent. In the year 2001 such high employee turnovers used to translate into vacancy rate as high as 21 percent. This used to present three fold HRM problems. There was a colossal waste of organizational resources invested in training and upgrading employees who only decided to quit soon after receiving such training. Two, an equivalent effort and resource deployment was required to fill the resulting vacancies and three resources had to necessarily deployed yet again to train and upgrade the new recruits. This results in adverse impact on employee productivity and continuation of the organizational work and, in the final analysis, impacts overall company results and profits. Main features of K wik-fit's Human resource strategy The main features of K wik-fit's human resource strategy center on two core concepts found in any human resource management strategic move. These are: one, analyzing in the work environment the possible factors responsible for employees' rapid turnover and removing such factors as far as possible, and, two promoting intra organizational conditions and tie ups which would help motivate the workers to high productivity and enthusiasm. The results of this two fold human resources management programme ,adopted in K wik-fit in stages, has been astounding enough to give it an industry award for human resources management. Factually the stage one of the human resources management initiate has brought down the employee turnover rates from the high of 52 percent to 34 percent with another 2 percent fall being achieved in a matter of couple of months. The initiative has been so successful that t even helped halt employee turnover in the month of January where turnover used of be highest. Even in this month the employee turnover instead of rising over the annual average continued to plummet indicating deep impact of the human resources management initiative. A closer look at these initiative clearly reveals that two sets of human resources tactical moves can be identified separately i.e. one that improves work environment for employee and helps boost their motivation and two that offer to help employees solve work related issues and problems and move to higher productivity and better work standards. In the fact the latter move appears to be an initiation of a system of Total Quality Control (TQM) in the services organization. Behind both tactical moves there is a realization that selling insurance is a complex assignment which is not only monotonous and repetitive but which also requires up to date product knowledge and employee empowerment to meet the challenges posed by growing competition. To top it all such tactical moves have been carefully based upon employee feed back carefully collected earlier on. In the former category one finds that employee motivation is sought to be addressed right from the lowest levels of employee needs in Maslow's need hierarchy. According to Maslow's hierarchy of needs, there are five categories of needs viz. (1) physiological, (2) safety, (3) social, (4) esteem, and (5) self-actualization. They form a pyramid structure with the lowest and broadest physiological need at the base. Pyramid structure also illustrates the fact that breadth of needs, as we graduate up the pyramid, gets reduced indicating that the higher order needs get finely tuned and well defined and perhaps are fewer in number as well. In order to have fully satiated and motivated workers, each lower level needs to be satisfied before one can graduate to higher level needs. Maslow made a complementary hypothesis that physiological, safety, social, and esteem needs on satisfaction, ceased to motivate, while the self-actualization needs motivated an individual more and more as they got satisfied. Maslow's premise was that it is the growth choice that propels any individual toward self-actualization - that of individual growth or "filling one's potential."(Maslow, 1954).For instance free fruits are available to all emploees.Similarly there is a proposal to turn employee eating area into a food court with much wider menu of food available. Then there is lifestyle screening with occupational nurses predicting how the employee would look in years to come if he/she continued with his/her present lifestyle.Attendent improvements are suggested in lifestyles. There is a massage service and beautician provides treatment in a room called Heaven on Earth. The company runs no-smoking sessions and there is an active programme for weight loss called ThinkYourselfThin. Similarly the company runs a crche where 40 kids are catered to and there is garden developed by employees. These initiatives have helped employees improve their persnalities, meet their felt needs and thereby identify more with the organization and improve their stakes in their jobs. Second tactical move concerns the Guardian Angel Programame.It is in fact a smart move and caters to personal needs of the employees as well as ushering them inside the portals of understanding their jobs and related issues much better. This comprises in predetermined meetings of seniors with new recruits. Initially seniors meet new recruits extensively and then gradually at more relaxed time intervals. At such meetings all job related problems and views can be exchanged, solutions sought and advise taken for better assimilation into work environment. This helps remove alienation of the new recruit and addresses a higher level need of belongingness in Maslow's hierarchy. Similarly story telling initiative not only addresses belongingness and socialization needs but also caters to recognition and creativity needs f the employees. Each employee feels inspired by narrating his/her inspirational stories to fellow workers who listen. Then when the story's summary is finally published in an official book the employee attains the recognition and feels that his creativity has been duly rewarded. Lastly the fantasticness initiative is the major strategic move towards TQM.In this best employees of each department, selected annually,are publicized and heralded in the company. Thereafter their personal qualities and working styles are so circulated so that other employees can emulate them for better selling results. This is done without any coercion and is essentially achieved through mingling of such employees with new recruits and other freshers on various occasions during the normal course of business. Human resources management top executives feel that story telling and fantasticness initiatives may help raise employee productivity in the medium to long run. Degree of theoretical fit of the K wik-fit's Human resource strategy Farquharson and Baum ,while detailing two major organizational changes introduced by British Airports Authority, have the opinion that," Now that HR functions have been accepted as more than simply "hiring and firing", organizations are increasingly turning to this area in order to leverage the immense potential of its employees. As HRM gradually establishes itself as integral to the strategy of an organization, companies are integrating this concept into more and more initiatives, programs and schemes..... By putting the emphasis on Human Resource Management.... was, in effect, countering one of the main obstacles to successful change - resistance from employees (Farquharson &Baum 2002). Similarly Becker et al (2001) have been quoted as stating that the past decade has produced research evidence supporting the critical role human resource management plays in the success of an organization. This evidence has been generated in a variety of different types of organizations including manufacturing, professional services and health care (Burke, 2001). K wik-fit's Human resource strategy is essentially a dovetailing of the human resources aspect into wider company concerns which range from corporate governance (employees as stakeholders) and the role of improved company performance in satisfying other stakeholders to overall role of the company in society at large. In order to integrate HR functions with of the company in the case study within the overall strategy of the company HR function activated and found out blockages to enthusiastic commitment to work and attempted to convince workers to choose and actively aim vital work goals and not be distracted with less important alternatives. In fact K wik-fit's took up a complete motivational analysis of human resources comprised in is workers through obtention of their feedback. In order to answer these and other questions about motivation at work an alternative framework is the general cognitive motivation model which, if adopted at work, may help achieve work goals (Graham & Weiner, 1996). For the purposes of this discussion, motivation will be defined as "...the process whereby goal-directed activity is instigated and sustained" (Pintrich & Schunk, 1996). Motivation is also concerned with the amount and quality of the "mental effort" people invest in achieving goals. Mental effort is defined as "the number of non-automatic elaborations necessary to solve a problem" (Salomon, 1984). Modern, multi-national organizations applying cognitive models of motivation (e.g. Hewlett Packard Co., AT&T, Motorola, Wells Fargo Bank, The European Patent Office) have relied heavily on application models presented by Stolovitch and Keeps (1992). They recommend a "human performance technology" and their approach begins with a list of specific and measurable business or organizational goals. Particularly for K wik-fit, as service organization, this is important. Further in this approach a current measure of goal achievement is analyzed. Analysis of three possible causes for failure to achieve a business goal is conducted. K wik-fit's fantasticness somewhat fits this model's billing. The Human Performance system draws heavily on Gilbert (1996), Rummler and Brache (1996) and Harless (1995) who suggest that all performance requires three primary factors: 1) Knowledge which can be presented in training or "hired" with new employees; 2) Organizational policy and procedures which must be analyzed to see if they support or are barriers to business goals; and 3) the motivation of employees to pursue work goals with appropriate mental effort. Most organizational goals require structures coalescing of all three factors. Once this cognitive model is run through workers and supervisors it is likely to throw out major motivational issue with a focus on quality lapses. It is also likely to suggest immediate techniques which can be adopted to raise worker retention at the shop floor. Even training/retraining needs can be identified through this process apart from other work place deficiencies. This would supplement well the Maslow test administered earlier to probe problems deeper. One very large multi-national high technology company has informally reported benefits of "12 to 50 times cost" when using the approach. Most importantly it would align the human resources management function with the overall strategy of the company. 'Human resources alignment means integrating decisions about people with decisions about the results an organization is trying to obtain'(US,1999).In the present case study the company critically needs low turning over, quality committed and motivated employees-the result which the company is seeking and HR alignment would be complete with HR now aiming to develop such workers. K wik-fit has in fact followed an organization development approach nearly resembling a move to TQM .As a service provider the company is primarily concerned with people, processes and physical aspects of the service. All three can be improved by following and replicating best performing employees. Therefore any realignment of organizational structure has to revolve around this activity closely woven with new found efforts to motivate workers to commit to quality. A Total Quality Management (TQM) strategy of organizational development would be ideally suited for this company for affecting a turnaround from a loss position. With limited scope for differentiation in insurance business the company can concentrate on improving service levels in terms of enhanced product offerings and prompt scheduled service deliveries while at the same time reducing transaction costs for their customers. Critical to the realization of these goals would be the adoption of total quality management (TQM) philosophy. Hence, restructuring, re-engineering of processes and delivering customer requirements are all part of a holistic TQM approach (Parkinson et al, 2000). TQM can be adopted either as a "push" or "pull" change methodology. Leonard (2000) and Schonberger (1992) define "push" as the operational improvement role of TQM whereas the "pull" is the strategic or direction giving, improvement role of TQM. K wik-fit has followed primarily push movement .These opposite movements and tension in between the two in TQM applications are shown by Leonard and McAdam (2001) who contend that many TQM plans limited themselves by devoting more attention on operational issues than to the strategic TQM issues. In order to search an appropriate change model under TQM we can look at the analysis of exceptional companies done by Fitz-Enz (1997) .They summarized best practices to include values driven culture, the formation of partnerships/strategic groups, ongoing review and refinement of strategy, experimentation and risk taking. This approach resulted in a more stable organization with meaningful inclusion of the views of the workers. It can be added that TQM can also have an objective of making the company an" agile" organization as the case study company has to look into futuristic development of customer relationships for increasing the falling repeat orders. This context of the modern competitive environment suggests that successful companies must develop close proximity to the customer and work with the customer to define solutions (Camison, 1998). Ghoshal and Bartlett (1998) note that "the objective is to build a place where people have the freedom to be creative, where they feel a real sense of accomplishment - a place that brings out the best in everybody". A change model built by Ghoshal and Bartlett can be considered for application in the case of Fume Go Ltd. This envisages a change from the traditional corporate structure to an organization characterized as an "individualized corporation". This model is built in a manner to provide managers and leaders a perspective from which to deliberate the changes required their organizations. In a traditional corporate structure where compliance, control and contractual employer/employee relationships dominate, the organizations turn bureaucratic and become less hospitable for innovations and quality consciousness. Such organizations preset work performance and quality standards which rarely improve from such preset standards. The model radically intends to relocate responsibility and the sense of ownership to the employee encouraging greater discipline in getting to targets- a process ably supported by requisite systems and visibility of information. This generates a new "moral" contractual relationship in which each and every employee "takes responsibility for his or her best in class performance and undertakes to engage in the continuous process of learning that is necessary to support such performance amid constant change" (Ghoshal and Bartlett, 1998).This model is most appropriate for K wik-fit as it has already taken up substantial push movement towards change. Moreover this models employee orientation would directly dovetail with HR alignment as discussed earlier as there would be little or no resistance from employees to change. This model can have both strong "push" and "pull" change forces for best outcomes. Works Cited Farquharson,Lois and Baum,Tom. "Enacting organizational change programmes: a centre stage role for HRM" International Journal of Contemporary Hospitality Management. Volume 14 Issue 5. 2002. Burke,Ronald.J. "Why Human Resources Matter". Reinventing Human Resources Management: Challenges and New Directions. Eds: Ronald J. Burke & Cary L. Cooper. Routledge. New York. 2004. Graham, S. and Weiner, B. "Theories and Principles of Motivation", in Berliner, D. and Calfee, R. C. (Eds.) Handbook of educational psychology. Simon & Schuster Macmillan. New York. 1996. Pintrich, P. R. and Schunk, D. H. "Motivation in Education: Theory, research and applications". Englewood Cliffs: Prentice Hall. 1996. Salomon, G. "Television is "easy" and print is "tough": The differential investment of mental effort in learning as a function of perceptions and attributions". Journal of Educational Psychology.76.pp 774-786. 1984. Stolovitch, H. D. and Keeps, E. J. "The handbook of human performance technology". San Francisco: Jossey Bass Publishers.1992. Gilbert, T. F. "Human competence: Engineering worthy performance". Amherst Massachusetts: HRD Press, Inc. 1996. Rummler, G. A. and Brache, A. P. "The systems view of human performance". Training. 25:9.pp 45-53.1988. Harless, J. "Performance technology skills in business: Implications for preparation". Performance Improvement Quarterly. 8:4.pp 75-88.1995. U.S. Office of Personnel Management. Office of Merit Systems Oversight and Effectiveness "Strategic Human Resources Management: Aligning with the Mission". A Study.1999. Parkinson, S., McAdam, R., Henderson, J. "Organizational change evaluation: towards a more subjective approach", Journal of General Management. 25, 2.pp 59-81. 2000. Leonard, 2000D."The strategic dynamics of TQM". 2000. Schonberger, R. "Is strategy strategic Impact of total quality management on strategy", Academy of Management Executive.6, 3.pp 80-7. 1992. Leonard, D., McAdam, R. "The relationship between TQM and corporate strategy: the strategic impact of TQM", The Journal of Strategic Change.10, 8. pp 439-48. 2001. Fitz-Enz, J. "The Eight Practices of Exceptional Companies: How Great Organizations Make the Most of Their Human Assets". Sage, New York, NY. 1997. Camison, C. "Total quality management and cultural change: a model of organizational development". International Journal of Technology Management.16, 4-6.pp 479-93. 1998. Ghoshal, S. & Bartlett, C. "The Individual Cooperation". Heinemann, London. 1998. Read More