Assignment Cover Sheet
Course ADM 303 ____ Title of Assignment: ______________________________________
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XYZ Insurance Co.
1 – Identify the issue and define the decision situation-
The first week of every month experiences a high percentage of unexpected/unexcused absences from work. This problem stems from the level of burnout that many sales agents face at the end of a stressful month. The goals are very high and many agents really have to hustle to meet the goal requirements. Because we start over on the first of the next month, the agents can feel a little like a hamster stuck in a hamster wheel. This is compounded when the month ends in the middle of the week because there is not an opportunity to achieve a mental break and refresh their mindset. Many agents take off work the first few days of the new month because they feel exhausted and, sometimes, frustrated. Several may be related to stress (Griffin, 2016, p. 276). To make matters worse, these agents don’t always work extra during the remainder of the month to make up for the missed time. Although this would not alleviate the problem that shorthanded staff creates in the first few days of the month, if the agents are exhausted from trying to hit goal and they take off for a few days on the next month, they are cutting out valuable sales days and repeating the cycle on the new month. It is going to be even harder to hit goal with reduced selling days and so it is a perpetuating cycle. Since we work in a call-center environment and our company, XYZ Insurance, has various contracts with thousands of affiliates, we are required to supply a certain service level to those that are referred to our company for insurance quotes. To fail to do this is a breach of our contracts and XYZ stands to lose some very important and lucrative referral sources. We must have people available to answer calls to keep hold times down to a minimum or our service levels suffer. In order to prevent this from happening, we need to develop a way to either incentivize the agents to come in or penalize the ones that do not. This is a problem that cannot continue, as it is detrimental to the functional efficiency of our company.
2 – Identify the alternatives –
· XYZ Insurance now has a points system to keep track of staff attendance and tardiness. If an agent comes to work more than 5 minutes but less than 30 minutes late, they get .25 points. If they miss more than 30 minutes, they get .5 and if they miss more than half the day, they get a full point. Once an employee hits 6 points in a 12-month period, they are coached. When they hit 10, they get a written warning and, upon hitting 12, they are terminated. Some agents would like a way to eliminate some of the points that have accrued over the year and a points-removal system could be implemented if the staff member is here the first week of the month.
· Another option might be to have year-end bonuses awarded to those that are here the first week of every month throughout the year. XYZ could present a plaque and the bonus to the employee in front of their peers, since employee recognition is possibly the most important element to motivating fellow the staff. (Hopkins, 1995).
· A third option could be to have a drawing at the end of the first week of every month that is only available to those with perfect attendance for that week. A drawing for things like an Ipad, an Apple Watch, a vacation (not to be taken the first week of any month, of course), or some extra vacation proration days. Currently, the agents’ sales goals are prorated if they schedule vacations so that they can still make a good bonus and do not have the fear of missing goal, which can lead to disciplinary action. More of these days might be a valuable gift.
3 – Evaluate pros and cons of each alternative solution –
· Points removal system-
Pros – This would be inexpensive to implement, compared to other options; it would motivate many agents that are nervously close to disciplinary action due to too many points accrued (many of the staff members that are creating the problem to begin with); Staff may feel like they are truly receiving something for their efforts in helping the company (I scratch your back and you scratch mine).
Cons – The points system is kind of a joke because, although points do accrue, they really don’t mean a whole lot if you are a top seller. A top-seller will, likely, never be pulled into an office because of their attendance points. The points system is viewed, by many of the agents, as the administration’s ammunition to get rid of an employee that they no longer wish to have. Because of this, it may not have the impact that we would hope unless we truly start cracking down on the points, regardless of sales skills; This may only motivate the staff that are having points issues. If an agent maintains low points, this may not be an incentive to work when they would rather have off.
· Year-end bonus awards –
Pros – For agents that already value attendance and like the acknowledgement of standing out, this would be a huge motivator. The award would be few and far between, so an agent that received this kind of bonus would be perceived as a reliable employee to the whole organization. This type of loyalty may, otherwise, go unnoticed; Agents might view it as profit-sharing, since the dedication that it took to come in every week of the month for the whole year created much more revenue for the company and the increased revenue would directly financially benefit the agents that helped make that happen.
Cons – This will not motivate agents that find it hard to be reliable because it would require too much dedication over a long period of time; many people like the instant gratification that comes from their contribution and this would not meet that desire.
· Prize drawings –
Pros – Agents like “stuff” and, in the past, these types of giveaways have proven very effective; there is a relatively short investment on the agent’s time because it only requires dedication for a week a month. They could choose to miss here and there but still have the opportunity to win during the months that they chose to attend the whole first week. It’s not an “all or nothing” type of solution.
Cons – There really aren’t any that I can think of except for cost.
4 - Selecting the best alternative –
I believe that, in the sales environment, very different things motivate certain people. In the insurance industry, the office rains money. It really is not a financial strain to implement ALL of these solutions. In the past, when XYZ Insurance needed us to work massive amounts of overtime, the agents would win prizes and money all day long as an incentive to pitch in and help resolve the service level issues. Giving away four Ipads a month is not even putting a dent in the budget and awarding the “Attendance Superstars” at the end of the year with a few thousand dollars is a drop in the bucket compared the amount of benefit that the reliability of these agents bring to the table. Some agents could care less about eliminating attendance points but like to win pricey gadgets that they can’t afford to buy for themselves; Others, could care less about the gadgets because they make enough money that they buy what they want but they would love to eliminate some of these points; another group of individuals (like myself) just love to be acknowledged and to feel like a superior employee and that would be the only motivation they need. In this case, I believe a multi-level approach is going to be the best solution to the emergent problem.
5 - Implementing the chosen alternatives -
All of the options are going to require an approval on the budget requirements. There will have to be financial allocations for each of the three options.
· To implement the points-removal system, IT may be able to create a program that would automate the process but until then, HR is going to have to be in charge of making sure that the points are properly accounted for. Although this is the least expensive of the three options, I think, there will still be a financial burden due to the staff required to implement it and properly follow up on its accuracy.
· To start having year-end bonuses, a certain amount per-person would have to be set aside for the rewards at the end of the year. For the first couple of years, it will be hard to determine how many people will qualify so over-budgeting will be necessary. Sales staff are not motivated by little amounts of money for a lot of effort, so the financial gain would have to be at least $5,000 to create a strong enough dedication in the staff to pull it off. Also, a plaque would need to be awarded to those that achieved such a high honor because other accomplishments already get a plaque and many staff members would be motivated by that alone.
· Prize drawings are going to require little effort really because we already do so many things that way. The drawings would have to take place the Monday after the first week of the month, that way those that qualified could look forward to the instant gratification of going home with a new toy. The management would have to make sure that the items are on the premises, however, because when I won my Ipad Air 2, I was disappointed that I had to wait to receive it. Sales agents want what they win as soon as they win it, so proper planning will be key to keep the staff engaged every month.
6 - Following up and evaluating the results -
The most difficult part of evaluating the results may be to tell which method of the three is creating the biggest impact. To discover this, however, XYZ could use the surveys that they send out monthly to ask the staff which reward systems they prefer and label them in order of preference. It would be easy to tally those results. Ultimately, it may not be important which one is most productive if incorporating them all at once would immediately remedy the situation of our service level drastically dropping at the beginning of every month. The change would be immediately apparent by calculating the amount of planned time off and call-ins that occurred after the change and comparing those results with prior years of the same months. Ultimately, studies show that a multi-level approach should be used to deal with absenteeism. People with good attendance habits tend to be more motived by rewards while habitually absent staff may still need a disciplinary approach to fix the problem. (Cole & Kleiner, 1992)
References
Cole, T. C., & Kleiner, B. H. (1992). Absenteeism Control. Management Decision,30 (2). doi:10.1108/00251749210011151
Griffin, R. W. (2016). Fundamentals of Management. Boston, MA: Cengage Learning
Hopkins, H. (1995). A challenge to managers: five ways to improve employee morale. Executive Development,8 (7), 26-28. doi:10.1108/09533239510099129