Unit 4 - Individual Project - Management Capstone MGMT659

Management Capstone (MGMT659-1601A-01)

Dr. Bryan Forsyth

Saturday, July 02, 2016

Ronald Wellman

Table of Contents Poor Leadership and High Employee Turnover 1 The Culture of High Employee Turnover and Strategic Development 4 Problem Identification, Impacts, Design of Research, and Literature Research 4 Identify the Problem 4 Prepare a statement of the issue to be resolved 4 Impacts if issues are not resolved 5 Identifying the Consequences if the problem is not resolved. 6 Research 7 Problem Impact and Findings from Research 10 Research Methodology 10 Inductive Reasoning 10 Qualitative Write-Up 11 Compare and Contrast 5 Articles Annotated Bibliography 11 Identification of the problem measurement 18 Identify measurements of success to the problem 19 Data Collection and Research Analysis Methods 21 Data Collection 21 Identification of the data needed 21 Identify how data will be collected before and after the solution states 22 Analysis of data 23 Research Analysis Methods 25 Discuss analysis of measurement results 25 Discuss findings of the measurable results 26 Discussion and Conclusion on Approach 27 Conclusions from Results 27 Recommendations 27 Recommendations for Further Research and Training 29 How successful the solution will be in resolving the issue 29 Compilation of Finding, Conclusions, and Recommendations (Week 5) 31 References 32

The problem of high employee turnover is with the call center for a University that I have worked for in the past. Historically research has shown voluntary employee turnover has been related to job satisfaction and perceived job alternatives. The employee turnover has impacted the level of service to the customers, morale, culture, team work, communications, and career advancement. The turnover rate for a group of 400 advisors in one year was 250 employees. Over half of the advisors left, quit, or were fired for any number of reasons. The numbers are astonishing and this problem is drastically affecting performance at all levels of the company.

The issue to be addressed is the high turnover and the effects of culture on the employees that contribute to the lack of performance and strategic advantage in the workplace. The true issue to be addressed is the lack of quality leadership’s and their ability to adjust and respond to the changing global economy which drastically affects the culture of a company. Leadership with short term goals and lack of vision has little or no strategic advantage and are at risk of a take-over by a competitor. This culture encourages career minded employees to flee and compounds turnover within the company and ultimately decreases profits in the short and long term. A quantitative example to prove the point is a University who showed a 25% profit margin last year, yet the stock continues to go down.

The root issue to be resolved is the lack of leadership within this for profit University. This paper will not solve the lack of leadership issue. This paper will address the issue and title of this paper: The Culture of High Employee Turnover and Strategic Development. When leadership and stakeholders make a visionary commitment to the culture of the workforce the high employee turnover will stabilize and that is when strategic development of the company will have a chance to grow and prosper.

To restate the issue to be resolved, is to say that when the leadership corrects the corporate culture problems affecting high employee turnover the company will see employee morale, productivity, communication, efficiencies, customer service increase and quantitatively profit margins and strategic advantages will increase for the long term.

Identifying some of the impacts of corporate culture and high employee turnover will be to continue to see new and seasoned employees leave the company for other opportunities and job alternative as previously stated. The lack of career opportunity will continue to attract less than desirable employees. Career minded employees will look for more congruent companies with a more desirable and positive culture. For example companies like Google, Zappos, Southwest Airlines, Twitter, Nike, and Facebook to name a few who are using newer types of positive cultures from Holacracy, Power, Task, Hierarchy, to Adhocracy cultures.

The impact of bad culture isn’t going to stay with the admissions and advisor roles within the company. The impact will spread like a virus throughout the University, to all aspects of the company including the teachers and students/customers which is one of the biggest reasons to change the culture immediately. Other issues will include a lower standard of working conditions and workplace pressure and stress.

According to the National Education Association, 50 percent of new teachers quit in the first five years. Why? Because after grading papers, answering to assessment tests, developing lesson plans, taking continuing education classes, and coordinating parent conferences, a "calling" just isn't enough to fuel the tank . A calling isn't a replacement for culture (Spiegelman, 2012). Having the bad culture getting into the customers, will eventually cause a riptide and severely damage the ability for the University to grow and may cause bigger issues with regulatory agencies .

Negative corporate culture will eventually lead to poor ethical behavior and a variety of problems. One example of the obvious in this corporate setting was the lack of discussion. For starters when an employee would get fired or leave there would almost never be any talk of why or even mention the person was gone. Astonishing it was like the person never existed! This is analogous of having a family member die and nobody says anything to anyone about it. It’s that ridiculous! It is the cliché example of the elephant in the room that nobody dared talks about, but everyone has to look around to talk and see each other. Team members dare not talk about it in fear of retribution or consequences from leadership. The intimidation and bully factor was intense.

Some of the consequences of not resolving the culture issue are already taking affect and have been worsening over the past three years and the removal of commissions from the advisor compensation. When the incentives were removed the lack of positive culture was exposed and negative culture has been slowly increasing. The negative culture had degraded the quality of work by employees and increasing the employee turnover rates. Consequently the enrollments have fallen. The quality of services and employees has fallen. The employee satisfaction has fallen while fear has increased. The ethics, leadership, values and vision of the company have also fallen and are increasingly miss-aligned.

Coincidentally one of the Presidents of the company, who has also turned over and is no longer with the company came up with a strategic plan to move quickly to market with some of the technology and marketing efforts (not typically seen in education sector) and profits for the University have increased. Unfortunately the high turnover rate is not limited to the advisors. The consequences of this virus have also plagued the leadership and faculty as previously mentioned, by continually steering away savvy career minded individuals to seek employment in other venues.

Interestingly the overall stock of the company continues to fall and remain in penny stock value while the profits margins from the recent year were in the 25% range. When I say penny stock I am referring to the value of a share below $10 and the stock having no equity value to have a brokerage or finance company typically loan out money against the stock. Not a good investment when offering employees stock options as incentives to stay with the company. This is another consequence of bad culture and ultimately poor leadership.

One serious consequence with bad culture is the negative affects it has on employees personally and emotionally. To some extent, corporations are beginning to realize that employees' emotions affect their productivity (Ferro, 2016). A positive culture in a company will help employee deal with difficult issues and can increase efforts and focus on work tasks and overall life quality and emotional intelligence in workers. The lack of good culture and emotional intelligence could lead to potentially risky environments if workers become distraught and lash out uncontrollably either verbally or physically.

Research on high employee turnover as related to culture and profits are how I intend to conduct qualitative research using ProQuest to support the project solutions. I will use research and methods from existing sources to show that the potential locations or root of the problems in culture is the lack of vision from stakeholders and leadership. The impact of the research will clearly show how long term profits and customer satisfaction suffer. Also due to the lack of succession and promotions to internally grow talent in a timely manner hurts the culture and growth of the company and ultimately profits.

Focusing on the issues and impacts involving current trends in systematic analysis of causes and potential solutions for employee turnover in organizations will prove viable options to avoid the inevitable. Research between customer service quality and employee turnover will also be included to show how culture is a necessity when planning corporate strategy and vision to assure long term success with employee/customer satisfaction. Other research on the impacts of leadership practices on employee turnover and influences of culture on employee turnover will offer insight to the root cause of the dilemma.

Using Psychological research showing the increased stress and “workplace telepressure” to perform and negative health consequences with negative cultures. Recent polls show 10% of workers feel overwhelmed 100% of the time while at work. And almost half (48%) overall, feel overwhelmed at work.

In conclusion, leadership with the ability to adjust, change and respond to employee needs with a positive culture in the fast changing global economy will dramatically decrease employee turnover, and increase the strategic advantage. Leadership must continue to focus on the long term vision and culture of the company to remain strategically advantageous from the competition. A positive culture will continue to feed itself and grow just as a negative culture will fester and grow in a negative way. Which would you rather have? It is up to the stakeholder s to purposefully direct leadership in a positive culture for continued measurable results for the company.

Qualitative research methodology used is the dominate method for this capstone paper; however that being said, some of the articles use a quantitative methodology. Using the quantitative articles will offer some numeric and statistical data to reinforce the need for change in a numeric/money manner to better persuade stakeholders and leaders to implement change at the highest level of the organization. The Bureau of Labor Statistics presents new employee turnover rates yearly. These rates have revealed a constant increasing trend in employee turnover. Employee turnover has been shown as an increasing expense to the organization (Brown, 2011).  Studies on this phenomenon show that leaders, who lack the abilities and skills, will have a negative effect on short and long-term employee turnover and can even push highly skilled and loyal employees out.

Characteristics of the qualitative research will be used by observing patterns in similar call centers, retail, and other business settings. After observing the patterns of high employee turnover and lack of leadership a tentative hypothesis will be given and develop general conclusions and theories about the high employee turnover. This qualitative study of resources and articles will be interpretive of employees in their natural settings and will involve multiple sources of data and participants.

The inductive reasoning approach will be used in conjunction with the mixed method study to collect data that is relevant to leadership and high employee turnover. Research will use strategic, ethical and prior personal experiences within the organization to collect data from observations, documents and studies. Analysis and interpretation will provide a deeper understanding of the data and allow for better interpretation. Data analysis process is listed below however in this capstone class, no data coding will be completed. The validity of the resources will consist of cross analysis and focus research in leadership and employee turnover. (Forsyth 2016)

The discussions of the articles to follow will include detailed descriptions and themes to align with strategies, analogies, and metaphors of how the findings relate to the theories discussed in this paper. The problem identification is high employee turnover at a call Center University is due to the lack of skilled and quality leadership at all levels of the organization. We will compare and contrast 5 articles on the subject and develop a review and discuss the finding and conclusions. Then we will identify how to measure the current state of the problem issue. Finally by identifying the intended measurement of success for the problem issue will offer needed steps to correct the issues.

Because the problem issue was stated was the lack of leadership contributing to high employee turnover and it contributed to the lack of performance and strategic advantage for the company. This is attributed to the lack of leadership and vision from stakeholders and leaders. The lack of growth and career opportunities within the organization also contributed to the high employee turnover. I also believe that the lack of change in the corporate structure and organizational commitment contributes to the poor leadership. In my experiences the Organizational Development positions were also a high turnover position cementing the perception that senior leadership didn’t value the role.

A numeric identification of the problem is simply the amount of turnover in a given year. As previously mentioned in Unit one of this course, the turnover rate in 2015 was 250 advisors of a 400 member advisor staffing. Another measurement technique would be to count the amount of leadership trainings, coaching, accountability and score cards instances to improve the leadership. I would also expect to see an overhaul of the corporate structure and internal promotion guidelines with stakeholder’s commitment to the vision, leadership, and culture of the company to increase the decentralization of power and empower workers and departmental communication.

Measurements of success would be implementation of a consistent reduction in employee turnover. Consistent leadership training and employee training to better understand the need and vision of the company. Training would include but not limited to the decentralization of power in the admissions teams to encourage cross collateralization between departments and encourage employee engagement. Rewards like bi-annual promotion cycle and jumping of internal employees to higher positions when continuing education is completed and improved incentive for existing employees to continue and higher education. The current trend is a decrease in these benefits and rewards to despite record profits for the university.

Corporate structure would need to be changed to show progress getting away from the highly matrix silo structure to support the decentralization of power and encourage high performance teams with an incentive program that is compliant with industry law and standards. Without these measurable changes the vision and growth of the university will be short lived. In conclusion the destructive nature of the current unethical, deviant behaviors and nepotism by toxic leadership must be opening punished or fired to prove stakeholders are on board and have skin in the game and leading by example.

Identifying the data will first need to be in the vision of the company. The company must be on the same page when it comes to the vision and mission of the company. The vision statement must include standards of ethical, behavioral, and leadership expectations. That being said, the data will need to be in the form of performance metrics like enrollments, new hires vs. turnover, length of on boarding to permanent status, team and department financial statements (cost and expenses), satisfaction surveys from employees/customers, trainings, milestones.

The data from enrollments and advisor data will include typical metrics associated with the scorecard used for rating performance like starts, script adherence, compliance adherence, and CEC standards. New hire data will include the number of new hires, training and mentoring schedule, turnover rates and times when they were terminated/quit, expense to the company, length to complete temporary status to permanent status, and post-employment survey from fired employees. Other data needed about the teams and departments in admissions to include financial statements that will list cost per employee, production, and scheduling breakdown and cost analysis. Included in the data will be leadership responsibilities and expenses. Other survey information about leadership, employee, fired or ex-employee will be needed, including enrolled students. A (SWOT) analysis will need to be performed by the coalition to determine the strengths, weaknesses, opportunities and threats from the data collected to best determine areas of strategic advantage (strengths) and areas of risk (opportunities/threats). Keeping implementation simple by using Kurt Lewin’s 3 step model of change to Unfreeze-Change-Refreeze for short term wins. The coalition will need to prioritize these short term wins by deducing the highest areas of risk to stakeholders, leaders, employees, and customers.

Kurt Lewin

Other data will include a breakdown of yearly and ongoing trainings for new hires, existing employees, and leadership will be needed and costs associated with those. Corporate milestones and visions data will be needed to accurately state the purpose of the teams and leadership. This data will need to support the ongoing career secession plan for advisors and promotion cycles to build new leaders.

Data will be collected from various departments depending on what data is needed. For example the data for the typical metrics associated with the scorecard used for advisors will be collected by the Directors of Admissions (DOA’s). The new hire data will be collected by Human Resources department. The surveys will be conducted by a third party, independent firm and offer complete confidentiality. Confidentiality will be very important and complete disclosure from the university and corporation will be needed and reinforced. Transparency will be needed to assure employees of no backlash, recourse or retribution. The coalition will also be held to non-disclosure contracts, non-compete contracts and anonymity with the survey information. The third party will also need to access if there are any laws being broken and will be held to the same disclosure contracts, non-compete contracts with exception when violations occur and legal issues come up. There will also need to be a process established for handling these types of legal situations.

The financial data will be obtained from the accounting and finance departments to include cost per employee, trainee, production and cost per student. The scheduling and cost information will be collected from payroll. Breakdowns of yearly trainings, new hires, employees and leadership will need to be collected from payroll including promotion cycles and annual costs of living increases.

After the solution data should be fed in an organized fashion to the coalition to increase efficiencies in data collection. Numeric information can be sent from the financial, accounting, payroll, and human resource departments electronically and collected in a cloud data base set up by the IT department in a secure manor. Survey information can also be set up in a secure, confidential manor to allow coalition members to access it virtually and allow them to operate more efficiently. The goal is to make the coalition data collection virtual and automatically fed in real time for the best analysis and monitoring. For example if we have a bad hiring or training round, the coalition wants to know about it immediately to try and correct the problem. There will be automatic triggers set up in the system to provide an early warning system to try and avoid major problems and a coalition dashboard to monitor trends.

First a (SWOT) analysis will need to be conducted on the coalition. The SWOT will help deduce key areas of its member abilities and areas that the guiding coalition needs to be aware of when they are analyzing the data. Once the data is analyzed it will need to be prioritized by the coalition or a third party administrator to use the SWOT to help with those decisions. The analysis of the advisors and DOA’s scorecards will look for inefficiencies and areas to reduce costs. Typically management has seen this as a reason to limit overtime. Critical thinking needs to be applied to flexible scheduling and more efficient use of peak times of enrollment. Focusing on improving advisor efficiencies during those times setting up systems to help DOA’s support advisors during peak times. The processes that advisors go through to enroll a student must be addressed and analyzed. For example a completely electronic (paperless) signing of documents for advisors and directors needs to be seriously considered to reduce the application start to finish time, with potentially real time enrollment and stitch-in process to limit (MIA) Missing In Action students. MIA students waste advisors time and university money and detract advisors form more important, higher priority duties like interviewing and enrolling prospective students (PS).

New hire date analysis from the HR department will include hire and training time frames to permanent status to encourage DOA’s and leadership to lead by example and mentor new employees to increased productivity. Analysis should also include team size and focus on improving the employee to student ratio. With the current state of high turnover it stands to argue that advisors can operate with lower employees but a more efficient process. With proper analysis the coalition could potentially conclude that and show that increasing the salaries of the productive employees would actually lower costs opposed to the money wasted on high turnover. The end result would be improved employee and customer satisfaction, higher profits, better culture and incentives for employees to work together to achieve enrollments.

Analysis must be done with complete transparency and complete confidentiality. This has been an issue in the past when management was able to search and find out what employee said what on an employee satisfaction survey. This showed a complete lack of leadership and integrity. The university followed up with an anonymous survey but the talk among the advisors is that the lack of trust already established had sabotaged any effort to actually see improvement. To this day the majority of advisors are afraid to speak their mind and afraid of retaliation which is very common. Therefore the university will need to go above and beyond to show anonymity and confidentiality. Employee relations data will also need to be analyzed to help guide the coalition in what actions and priorities will need to be addressed. Information about the independent third party will have to be made readily available and encourage employees to contact the third party to offer support and confidence in the confidentiality of ALL surveys to rebuild trust.

Analysis of measurement results will mostly fall on the guiding coalition. The coalition will need to compare the survey results from leaders/employees/turnover/customers to deduce problem areas and then prioritize them for actionable activities. They will need to focus on short term goal/wins that will align with the long term vision of the stakeholders.

Financial analysis from the finance, accounting, and payroll departments will need to be reviewed with a SWOT analysis. Areas of strengths and opportunities/threats will need to be discussed to optimize the numbers to find ways to truly incentivize employees. Because of the commission taken out of the advisors and DOA’s positions there is no real motivation, other than fear of losing one’s job, to motivate employees. The lack of incentives juxtaposition creates a big problem for morale, trust, motivation, productivity and culture for the university. The advisor position has been watered down and compounded by the lack of leadership, has increased employee turnover and the numbers need to be analyzed to find a way to increase monetary incentives for advisors to the level they once were when turnover was at its lowest, and coincidently the pay was at its highest.

Focusing on moving top priority objectives forward will help create positive trends and momentum that will increase morale and overall culture at the university. The customer/student experience will also increase and learning will benefit from the changes. Communication between stakeholders, leadership, advisors and students will be increased and financial objectives will be met.

Leadership will empower employees to better serve the people they assist and it will be validated by the qualitative feedback from surveys and measurable quantitative financial results. Retention of employees will improve and employee/student satisfaction will show measurable results of improvement. Human resource department work load will be reduced from the lack of employee turnover and allow them to work more efficiently and diligently on secession principles. Conclusively stakeholders will increase value with the continuing organizational development by the guiding coalition to effectively analyze data in an ongoing manor and increase communication, efficiencies and ultimately global strategic advantage over the competition.

High turnover rate of employees can be attributed to the lack of leadership in numerous research studies. The lack of quality leadership in any organization would logically lead someone to believe that employees would leave nor be motivated to continue to work for the company. Research showed the lack of leadership was the biggest influential factor driving high employee turnover. Some researched concluded that it was the employee impressions or perceptions about leadership that guided their decision to leave. It didn’t matter if their impressions of the leadership were true or not. Employees would leave on their perceptions of leadership. The same study also concluded that the leadership’s impression or perceptions of their leadership style wasn’t always accurate to their actual leadership style. The gap between perception and reality on both the employee and leadership proved to be larger than expected.

The discussion and conclusion on the approach to the subject is important in this scenario because it involves the reality of the quality of leadership and the perceptions of the leaders and the employees. The approach leadership must consider to resolving the high turnover is extremely important to achieve desirable results. Leadership must make it abundantly clear the vision and mission of the company. Leadership must tie in and personify the vision and mission of the company with actions personally and corporately by training, implementing, and reinforcing the objectives with the employees and leadership itself. When the perception of bad leadership is rampant in a company it will be harder for leadership to close the gap with existing and new hire employees.

The first step in recovery is for the leadership to acknowledge the problem. The leadership in this organization doesn’t recognize there is a problem yet. If they did realize there was a problem nothing was being done to change it. This is why the data collection via confidential surveys will be so important from employees, leaders and customers. Action research will improve how the company operates and the students learn. This type of continuous learning and continuous adapting organization will create a strategic advantage. The four-step process that Margaret Riel recommends that is adapted from Understanding Action Research is and excellent model that will help the company study and plan, take action, collect and analyze evidence, and reflect for a repeatable progressive problem-solving model.

The Dunning-Kruger effect is the bias or illusion of mistakenly assessing ones ability better than it actually is. Metacognition means thinking about thinking, someone’s perception of himself or herself is attributed to correctly realize their ineffectiveness to measure their performance and incompetently inflate self-assessments. This Dunning-Kruger effect was prevalent in the University setting at all levels of leadership and employees. At all levels there will be unknown unknowns. Typically the higher educated individuals are better equipped to recognize their inability to know all things and predict the future. Socrates said, “The only true wisdom is to know that you know nothing.” This would explain the good leadership on the academic side of the University and the lack of leadership on the business side that was exhibited in the situation.

Often less educated employees and leaders suffered dramatically from this however executive leadership also proved to know what they were doing but acting unethically and with deviant behavior despite this illusory superiority complex and lack of conscience. A great example and tragic example would be the recent lack of leadership with the financial operations of the company in the latest article showing both the CEO and the CFO recently resigned. The former CEO was replaced by Todd Nelson who came from both Apollo Education and Education Management Corp. However, Mr. Nelson has a track record, which is littered with regulatory problems, which resulted in over $100 million in past fines and penalties (Pearson, 2016).

Using confidential surveys will need to be the norm and proper way to determine the effectiveness of leaders, employees, and customers. It will be the truly non-biased way to accurately deduce what the outcomes or perceptions of the outcomes for the business. It would be interesting to know were the gap in leadership started and how the shareholders and executive leadership lost control. The gap with ethical leadership has been widening and it appears to spread in all aspects of the business. Ongoing training at all levels of leadership and employees will be the key and need to be monitored by the guiding coalition. It is one of the best ways to see that all parts of leadership will be held accountable. Incorporating all levels of employees and leadership and having a fair and just system that will motivate and move things in a positive direction and begin to rebuild trust.

Lack of leadership and the current financial situation might cause potential leaders to try and step up to try and change leadership, to enact the needed changes. To make changes the current leadership would have to realize there is a problem and stakeholders would have to want to make a consorted effort for change management. Without stakeholders support the likelihood of a change succeeding would unlikely. With the combination of systematic research, training, and surveys to properly measure results and perceptions will lead to business results and notable increases in profits and decreased expenses. In light of the latest article shareholders will most likely be demanding sweeping changes. It will give the current leadership an opportunity to step up and make a difference and do the right thing. Unfortunately it may be too late for the current organization to make changes and potentially there could be a forced buyout from a company with deep pockets to handle and manage the money correctly for CEC. The $700MM needed to fund the financial aid of students attending the school isn’t inconceivable and could be the right investment for the proper company. It could turn out to be a “schooling” of a M&A buyout on how to buy a good product for penny’s on the dollar, that was poorly managed, and turn it around and make some huge profits on the back end. The unfortunate tragedy is all of the quality employees that have already left and will be forced to leave by the circumstances the company is in. Employees that could have been future leaders and employees like myself who are trying to wait it out for an opportunity to act and move on leadership opportunities. Hopefully the current leadership will produce an action timeline and set milestone to turn the proverbial boat around. Time will tell and we don’t know what we don’t know.