Performance Measurement and Management - Essay Example

Performance Measurement and Management This paper will introduce the management systems used in the call center industry to meet their targets and goals. The history of exchanging information has been around for centuries now, some started relaying information through drawings, early civilizations even used smoke to convey their thoughts, and then the process of communication evolved through the ages. One example was the invention of the telephone. Telephone is a device used by civilization to communicate with each other no matter how far they are apart from each other. The invention of telephone paved the way to the advancement of technology of communication through the development of digital signals. Then for the last fifteen to twenty years the demands of call centers have tremendously increased. A call center is an operation where employees or agents use computers and specially designed phones to receive calls, do outbound calls on some occasions. These calls then are operated by automatic call distribution (inbound) or predictive dialing system (outbound). The computers that the agents used are specially develop to verify customer data, gather information, and store gathered data (Taylor and Bain 1999). The call center industry provides various types of services and products. There are call centers that handle medical accounts like prescription handling and order taking; some provide service for bank companies like credit and loans, some provide service for reservations in a hotel or air flight, some centers do provide technical support like those who handle internet connectivity and computer troubleshooting. The call center management uses several tools; one of these tools is the automatic call distribution system. This system provides the company various information essential to keep the business running. The system automatically place callers on queue while the agents are busy assisting other customers. The ACD system also presents wide array of statistics necessary for the operation of a call center. The ACD system provides statistics like how many possible calls are to come in for a specific time (this statistic helps the managers control the number of agents that needs to be on the phone on a particular time), the system also presents the number of agents on call and the number of agents waiting for calls to come in. The system provides the ideal length of call time per customer versus the length of waiting or avail time of agents. The system at the end of the shift will display the number of calls the entire account has answered, dropped, and abandoned (this statistic helps the management determine those agents that are seriously working). The system also presents the activities that the agents are engaged to like scheduled breaks, or lunch time, and even if the agents are doing their after call works (Robinson and Morley 2006). Performance Management With the current global economy status, it is imperative for companies to find ways to overcome their struggle to stay in business. With this, call center companies have developed various ways to address the issues they are facing. Bowen and Lawler (1995) stated two management systems on their studies. These two approaches were: (a) production-line approach and (b) empowerment approach. The production-line approach is spearheaded mostly by the managers of the company where in the decision always lies on the superiors without taking into consideration the consent of the employees. And on the other hand, the empowerment approach gives the employees the freedom to decide as long as it would be for the satisfaction of their customers. In achieving customer satisfaction, most customers focus on the length of their wait time (speed of answering calls), number of times they called for the same issue (repetition), the length the customer spent talking to the agent, and the amount that the call cost them (Merchants Group 1997; Parasuraman et al. 1985). The disadvantage of using the production-line approach is that the management will not be able to determine how the customer felt for the service rendered by the agent or how the agent believed that the customer felt throughout the call (Bell and Zemke 1990). The empowerment approach then tends to share information between the employees and the management, this allows the employees to be aware of the company’s progress, allows the employees to handle their responsibilities well through the authority given to them to decide on their daily duties as agents, empowers the employees through recognition of their achievements. Based on the studies conveyed by Callaghan and Thompson (2001), the call center management is based on technology not to control the nature of work but to control their workers. Most call centers practice this kind of management to turn employees’ performance to profitable outcomes. Call center management has massive effect on the company’s progress and development. Call center management do influence the employees’ desire and enthusiasm to perform well beyond the client’s expectations. Call center management also covers the challenges that the company is facing like low performance, attrition rate, and account development. Above all these issues, the most sensitive case is the attrition rate. This issue affects the company as a whole not only a specific center but the entire company worldwide. Why do people come and go out of call centers? Why do these agents decided to leave the company? There is a wide array of reasons why many call center agents leave the industry and long for a greener pasture or a less stressful kind of job. Some obvious reasons include the repetitiveness of job, boredom, worn out dealing with frustrated customers day after day, shifting schedules, family reasons, health issues, wage issues, promotion circumstances, transportation issues, and management issues. With these reasons being mentioned, Convergys Corporation (the largest outsource contact center services provider in the world), developed a way to address this situation that most call center companies face. The company chose to battle this issue straight and serious. Convergys Corporation has more than 75 centers allocated worldwide employing more than 63,000 agents, offering several services like customer care and consulting solutions, these services evolve around financial companies, technology, and consumer products. Convergys Corporation believes that in order for them to provide the “best in class” customer care among their clients, the company has to minimize the effect of attrition among their contact centers. The company also believed that attrition rate does affect their business in various ways like the quality of their service being rendered to their clients’ customers, the quantity of calls being answered, and the amount of profit the company gathers through their services (Weyforth 2007). Convergys Corporation developed a management system to control the growth of their attrition rates. They tagged the system as EWS or Early Warning System. It was developed in one of their centers located in Gurgaon, India. The system was developed to sustain their agents and other employees. It is known that the country of India has been the focus of call center companies as a part of cost reduction strategy because labor is cheaper in India compared to other countries like the United States of America or the United Kingdom. The company believes that in order to resolve attrition issues, the management should be able to determine its causing factors first. Determining the reasons why an individual would choose to leave the company is a vital step in battling attrition issues. One reason why Convergys Corporation developed the EWS was because the company lost many of their employees right after the training program. It is said that one of the best environment, in terms of training ground, is Convergys Corporation. Some agents tend to train call center skills under the supervision of Convergys Corporation and leaves the company after training to join another call center company. Addressing attrition issues is one strategy of Convergys Corporation to promote cost reduction. If not, the company would spend millions of dollars in acquiring new agents, training them, and offering irresistible packages (Weyforth 2007). The EWS provides the company statistics of their agents’ performance. The system helped the company determine some 50 positive causes of attrition among their agents. Some of these reasons are productivity stability of agents, high rates of absenteeism or tardiness, denial of internal job postings, call quality issues, agent frustration, and high rates of off-phone time. Since the EWS is a type of technology the company has developed, this does not mean that the system does not cover the human aspect of the company. Understanding their agents’ individuality plays a vital role in addressing the attrition issues of the company. Since the system allows the management to address the underlying issues of attrition right before these reasons occur, the system was found effective in preventing the growth of attrition rates within the company. The system also gave the team leaders ample time to communicate with their agents whether on group discussions or through one-on-one conversations. With continuous communication, the management will be able to determine the causing factors of their agents ahead of time and can plan ahead to prevent their agents from leaving the company. The EWS has been implemented to all contact centers of Convergys Corporation around the world, and the system has provided multi-million financial benefits for the company reducing their attrition rate to only 15-25 percent (Weyforth 2007). EWS being an essential tool of performance management implemented by Convergys Corporation, the company has also developed some other management programs to improve the company’s reputation as the best contact center around the world. Some programs that work together with EWS are career path planning, tuition re-imbursement, incentive programs, highly competitive pay, training, social and community activities, home-based jobs, and other career-personal balance issues like schedule flexibilities (Weyforth 2007). Convergys Corporation has also implemented a program dedicated for their team leaders and operation managers. This management program is called “Team Leader Transformation”. The purpose of this management program is to improve the company’s team leaders’ ability to coach and manage their respective teams. The company believes that having reliable and highly skilled team leaders and operation managers will lead to the agents’ higher rate of job satisfaction and will less likely to leave the company (Weyforth 2007). As an example of this management program, the Convergys Corporation held an outdoor training for 19 of their managers from European and Middle Eastern divisions. The managers were tasked to create a badger-watching platform to improve and assess the mangers’ skills in leading the company, motivating their respective teams, and their skills in terms of performance management. The training was held to come up with a common understanding of their duties and responsibilities and to have shared goals among centers. The outdoor training was also held to determine their different individual strength and to address their individual weaknesses (Pollitt 2007). Convergys Corporation also introduced another management program called “Performance-Based Scheduling”. The program was developed to promote effectiveness among their agents. The sole purpose of the program is to compliment those performing agents. The program is to recognize the achievements of their agents who are working hard to attain their individual goals. In return, the program allows the agent to choose the best schedule that they think will suit their lifestyle and preference. The program improved the agents’ performance resulting to higher rate of customer satisfaction. Challenges and Plan of Actions One challenge that Convergys Corporation is facing with regard to the use of EWS is that the agents may not fully comply with the system’s jurisdiction. If for example, an individual wishes to resign and leave the company, the company implemented a program that would tend to save the agent from leaving. The management will then interview the individual and will try to squeeze out as much information as possible to determine the individual’s reasons why he or she came up with the decision. The information that would be gathered would then be reviewed not only for that particular individual but also to be used as a whole for the good of the company. The information would then be evaluated if it affects the entire company so that responsive actions could then be implemented. Another challenge that may occur is that if a particular leader is not that effective in communicating with his/her subordinates. Within a team, there should be openness. The company believes that the rule of transparency should be well implemented within the organization. Communication has been a barrier for most companies. This is the reason why the company polished its rule regarding communication. This rule may induce confrontations among the organization’s members but that should just lead to a sturdier relationship. In terms of Team Leader Transformation management program, the possible issue that may arise with this program is the implementation. The company should monitor their team leaders and managers every now and then to make sure that the concepts taught throughout the training are practiced and implemented. Trainings would be useless and would be just a waste of time and money if the concepts and ideologies would not be turned into actions. The only challenge that the company would face with regard to Performance Based Scheduling is the perceptions of some individuals toward this program. An individual may lose enthusiasm in attaining this incentive if he or she believes that the competition is intense and that he or she would not be able to fairly compete with those agents on top. The company should then look at the individuality of the agent here in this type of situation. Determine the reasons why sudden loss of appetite for achievement occurred. Then from there, the management could then develop certain programs that could help like continuous coaching from his or her immediate superiors. Performance Measurement There are several factors that need to be measured to determine the success rate of an individual in a call center industry. An agent who fulfills the standard key performance indicators in some call center companies does receive incentives. Some of the key performance indicators include the agent’s average handling time (AHT – the length of time the agent handled the calls over the number of calls the agent answered within the shift), the agent’s average time of wrapping up a call (ACW- after call work includes creating notes as to what happened on the duration of the call, at this state, the agent will not be able to receive calls until the agent press auto in on the phone to take another call), the average length of time that the agent has been late to report at work (tardiness – when an agent logs in moments after the start of the shift), the average number of days that the agent was not able to report to work (absenteeism), the average score that the agent gets after a quality associate has monitored the call (quality score – a quality associate’s job is to monitor an agent’s call and grade it depending on the attributes given by the clients, an agent would be graded accordingly depending if the agent performed all necessary steps that should take place during a call), and some call center companies do include the agent’s capability to mingle with colleagues among other indicators. Convergys Corporation does practice the above performance measurements. One rule is that the agent should be able to answer an incoming call within ten seconds after the beeping sound on the phone. The company also measures the average number of calls that the agents within a particular shift were not able to answer; this is tagged as abandoned calls. Abandoning calls in purpose is ground for termination of an agent. Rate of abandoned calls is one key performance indicator in terms of per-center daily statistics. The company also implemented a 10-second rule for wrapping things up like notations of what occurred during the call right after the customer hang up on the other end of the line. This 10-second rule allows the agent to finish what needs to get done after the call or time to rest for a bit before taking up another call especially if the number calls overflows the number of agents logged in to answer the calls. Convergys Corporation, like other call center companies, utilizes the advancement of technology to measure these key performance indicators. One example that the company uses is through the use highly specialized phones that record data like how many calls were picked up, how many calls were dropped, how long each call lasted, the average length of time that the agent was on phone communicating with customers, the average length of time that the agent was on after call work mode (ACW), the length of time the agent took breaks and lunch, the exact time that the agent logged in and out of the phone (which indicates the rate of tardiness and overtime). Convergys Corporation also implemented the use of software that works hand-in-hand with the phone, meaning the agent would log in using the phone and the software installed on the computer in an orderly manner, this software is called Time Keeping System. Kotler and Armstrong (1994) presented on their studies that in order for managers to measure the performance of their subordinates, they need to answer few questions to come up with a common standard of measurement. What does the company tend to attain? As the first question implied, the managers should have a clear idea of what targets are to be attained by the group. This is where setting of goals comes into the picture. Setting goals and targets will enhance the group’s enthusiasm to perform well. The second question that needs to be addressed is: what is the situation? Evaluating the current statistics of the group will manifest the average performance of the group. From here, the managers would be able to develop action plans that would lead to the attainment of the set goals and targets. Next question: why is the situation occurring? This is the part where the managers should review the actions taken in accordance to the current statistics of the group. This is vital because this review will present the do’s and dont’s of the company, meaning picking up lessons from previous activities to avoid repetition of sudden failures presently happening. Lastly, what should be done with the current situation? This is the best part for this is where all information had been gathered and the part where the managers would brainstorm ideologies and concepts on how to resolve the issue the company is presently facing. Performance measurement is important because this is where the statistics of the business are shown. This is the basis if the business is fulfilling its purpose, if the business is earning, and if the business is capable of staying in the market. Performance measurement also presents the employees’ overall achievements as part of the company. The statistics that the performance measurement presents determine if the employees are still contented with what they are doing and what they are getting from the things they do for living. A study was conveyed tackling the importance of performance measurement. The said study presented that performance measurement is necessary to have a blue print of the amount the business would cost through their employees. The level of performance provided by the employees shows the company’s labor cost. The study also stated that measuring performance will provide data that will showcase the number of employees needed to get things done and to meet the company’s economical targets. Performance measurement also presents the possible result of the employees’ performance. This information provides the managers and subordinates productivity expectations. As what Convergys Corporation has implemented within their organization, performance measurement is also used as basis for the employees’ incentive programs. The statistics of a particular employee determine if the employee is worthy of the incentives offered by the company. This is not used mainly for incentives and bonuses, the statistics could also be used as a basis for promotion or salary increase. The study also presented that by measuring the employees’ performance, the management would be able to see how effective each individual is toward the nature of work (Murdick et al. 1990). Critical Analysis With the concepts presented above and the concepts being practiced by Convergys Corporation, there is only minimal differences. Most of the concepts presented by the researchers are then practiced by the company. The company utilizes both approaches: the production-line and the empowerment. There are situations that need production-line approach like instances where the clients would be involved in the decision-making. And in some cases, empowerment approach is imperative like if the superiors would be out of sight for a while and the agents would be left alone, the agents are then given the responsibility and authority, as well as the challenge of practicing their integrity. There are no obvious benefits as well because the company is practicing most of the academic ideal models provided by the researchers. Areas for improvement would be to address the issues as soon as possible before it the situation become rough and unstable, to make sure that the applicants would be screened well before the company hires them so that abuse of training and learning could be minimized, develop more activities to lessen the stress that the nature brings about to the agents and staff, train more potential team leaders and managers because happy subordinates results to positive productivity, and to create a more attractive and healthy environment especially for the agents since they are the front-liners of the company, they are also the shock absorber for the company. Conclusion The paper presented the facts why performance measurement is vital for a company especially for the call center industry all over the world. The paper also presented the value of performance management. With the concepts mentioned above, we learned that performance management greatly affects the company as a whole. The study showed the importance of goal setting among managers and team leaders so that they could come up with a common goal. We learned that by achieving a common goal as a whole will result to a more positive performance that by taking common steps in attaining these set goals will create a sturdier relationship between the members of the organization. The paper also implied that through the advancement of technology, more and more benefits could be attained. And that through the evolution of technology, communication process was made fast and easy it also provided several opportunities for people seeking high-paying and beneficial jobs. We also learned why many agents decide to leave the call center industry. The paper presented several reasons as to why more and more agents tend to look for a less demanding job. With the reasons mentioned as to why agents tend to quit their jobs, we picked up some lessons on how to prevent attrition rate from rising. The paper also inculcated to us the nature of work an agent has, it may be stressful but as long as you love your job, you will not count your job as a form of work or living. The paper also presented some ways why measuring performance is important for managers because the statistics of their subordinates mirror their own personal performance. The paper also presented some acronyms and terms used in the call center industry and how these terms affect the nature of the business. The paper also showed the key performance indicators that an agent should fulfill day after day, month after month. This also serve as an eye opener for those who wish to be part of the call center industry whether an agent, team leader, manager, or even human resources personnel. And lastly, the paper exposed some of the management programs that Convergys Corporation has in store for their employees. The paper also showed the advantages and disadvantages of these management programs. This paper just presented the reality that is happening inside the walls of a call center company. Balance Score Card A common method that measures performance is the balance score card. In brief definition, the balance score card has been known to be as a performance management tool long been used for measuring small-scale operational activities which could either be connected to a company’s vision, strategy and larger scale objectives, which are a direct reflection of the company’s performance. Kaplan and Norton (2004) cited that balance score card allows a comprehensive and detailed view of the topic at hand, which is for most of the time lies on business. The balance score card focuses on certain factors, such as measuring financial outputs and related factors that might influence the output itself. Kaplan and Norton (2004) cited that such factors involved the current market share, the options for long term learning and skills development and process performance. The concept of the balance score card is to generate a balance between factors that affect performance and as such, allows for direct management intervention. Kaplan and Norton (2004) cited that the underlying rationale that bind organizations as well as its members are the linkages direct influence an organization’s financial outcomes. They explain that there are certain factors that put an organization to a bind; however, there are areas in which direct management intervention could be done and these are where balance score card adds value. It allows the management of organizations to achieve a degree of equilibrium during the process of selecting performance measures (Kaplan and Norton 2004). As such, the balance score card has been characterized as a framework for strategic management systems which directly employs quantitative and abstract measures for the process of performance and management analysis. Company managers and directors use the BSC as a tool for navigating the success of a company. In his work Kaplan and Norton (2004), cited that framework of the BSC is comprised of four processes which also constitute the foundation of the strategic management system. The processes are: 1. Interpreting the vision into operation goals 2. Communicating the vision and linking it into individual performance 3. Initiating business planning wherein there is an index setting 4. Giving feedback and suggestion, learning from the employees themselves and using this opportunity to adjust the strategy accordingly. More than being a framework, these four processes serve as a strategy linkage model which managers or supervising directors of the company use in order to sort out the strategic issues as well as the primary needs of the company. The direct goal is to transmit them to the organization and yield effectual employee performance. Kaplan and Norton (2004) further cited that the balance score card could co-exist with other strategic planning systems which indicates the flexibility of the method. Aside from the four the processes that constitute the framework for balance score card, there are also the four general perspectives. Kaplan and Norton (2004) cited that these perspectives aid in performance measures through the means of gathering appropriate performance measures for the enterprise. These four general perspectives serve as the immediate areas in which the four processes would be applied to, to certain extent, this act as the sections in which the management needed to focus to. The four perspectives are: 1. financial perspectives 2. customer perspectives 3. Internal process perspectives 4. Innovation and learning perspectives The financial perspective represents the long term strategic objectives of the organization, focusing on the tangible outcomes. It tackles three important factors for the company, rapid growth, sustains and harvest which focuses and are connected with the financial results of the company. The customer perspective, as the term implies, focuses on the customers of the organization and the factors that could affect their satisfaction and how does the latter influence the sales and targeted goals of the company (Kaplan and Norton 2004). There are various factors that might be involved when tackling customer satisfaction; however, the immediate or fundamental element would be time. Quality, performance and service as well as cost itself. The third, internal process perspective focuses on the creation and method of deliverance of customer value proposition. Kaplan and Norton (2004) cited that it focuses on the activities and key processes in which the company needed to implement and acquired in order to deliver the value that the customer has expected from them. Lastly, the innovation and learning perspective serves as the foundation on which most strategies for intangible assets of the organization are derived. Kaplan and Norton (2004) cited that it focuses on the internal skills and capabilities of the employees and management of the organization, in which the results would certainly affect the value creating internal processes. In a much simpler terms, the innovation and learning perspective concerns itself with human capital, the system of the organization, and the organization capital, all are important in drafting appropriate strategy for the enterprise. Kaplan and Norton (2004) cited that balance score card has long been one of the noteworthy methods that provide succinct information on a company’s condition. This information are used to determine the appropriate strategy that the company should pursue. References Bell, C.R. and Zemke, R., 1990. The Performing Art of Service Management. Management Review, 79(7), pp.42-45 Bowen, D.E. and Lawler, E.E. III, 1995. Empowering service employees. Sloan Management Review, 36(4), pp.73-84 Callaghan, G. and Thompson, P., 2001. Edwards revisited: technical control and call centres. Economic and Industrial Democracy, 22(01), pp.15-37 Kaplan, R. S., & Norton, D. P. 2004. Measuring the strategic readiness of intangible assets. Harvard Business Review, 82:2.pp: 52-63. Kotler, P. and Armstrong, G., 1994. Principles of Marketing. P.55 Merchants Group, 1997. The 1997 Call Centre Benchmarking Participants Report. Murdick, R.G., Render, B. and Russel, R., 1990. Service Operations Management. p.269 Parasuraman, A., Zeithaml, V. and Berry, L., 1985. A conceptual model of service quality and its implications for future research. Journal of Marketing, 49, pp.41-50 Pollitt, D., 2007. Convergys managers build platform for success; Outdoor training helps to create a shared sense of purpose. Human Resource Management International Digest, 15(7), p.25 Robinson, G. and Morley, C., 2006. Call centre management: responsibilities and performance. International Journal of Service Industry Management, 17(3), p.284 Taylor, P. and Bain, P., 1999. An assembly line in the head: work and employee relations in the call centre. Industrial Relations Journal, 30(02), pp.101-117 Weyforth, P., 2007. Building An Early Warning System -- How to help team leaders intervene before agents burnout and attrition rises. Call Center Magazine, 20(06), p.43 Read More