DrainFlow is a large residential and commercial plumbing maintenance firm in the USA. The company has effectively used specialization to reduce costs to stay ahead to its competitors. Although specialization does cut costs significantly, customer complains has been rising lately. The company has been losing its customers to competitors as Lightning Plumber because of customer dissatisfaction. Customers have been complaining from response times, unorganized service and costs. For instance, overcharging customers and rescheduling several appointments due to assigning wrong plumbers to wrong job. Employees have also been experiencing a decline in job dissatisfaction and motivation due to overspecialization.
The company hired a regional manager, Lee Reynaldo, who used to work for a competing firm, Lightning Plumber. She found that the employees aren’t motivated and surveys have shown that 40% of customers felt the experience wasn’t good and 30% would go for competitors. As the company is in trouble and revenues shrink, Lee is proposing to use cash rewards to improve employee performance, job satisfaction and customer satisfaction. Also she wants to find people who are a better fit with the company’s new goals. So it would be better if hiring methods were standardized to find qualified employees.
Therefore, the report will tackle major areas such as job satisfaction, job design, personality traits and organizational behavior.
Employees at DrainFlow are not motivated neither satisfied and that is resulting in poor customer service and shrink in the company’s profits.
Research shows that job dissatisfaction leads to demotivated employees, higher absenteeism and turnover that can lead to decrease in productivity and profits. A study conducted by two researchers, Jim Harter, Ph.D. and Frank L. Schmidt, Ph.D., shows that engagement at work causes higher financial profits performance. “Employees show up for work, they please customers, they build a safer environment, they produce higher quality products — and those things accumulate to affect financial performance”. Several studies have also concluded that satisfied employees are more likely to be productive at work.
Job satisfaction is also related to OCB- organizational citizenship behavior. Satisfied employees tend to act positively and go beyond expectations in their jobs. Employee satisfaction is also related to customer satisfaction. Employees who are satisfied with their jobs are more likely ready to please their customers and provide better service. Satisfied employees have the ability to increase customer satisfaction and loyalty. As all DrainFlow’s employees work directly with customers it is crucial then to focus on employees and customers satisfaction.
DrainFlow’s employees are dissatisfied with their jobs. The current structure assigns tasks without taking into consideration task interdependency. The tasks are unorganized and lack proper coordination and the know-how. The company is facing problems when they send plumber to jobs meant to be for a plumber assistant and vice versa. This is being translated in employee dissatisfaction and poor customer service. The company is divided into four basic job categories which are plumbers, plumbers’ assistants, order processors, and billing representatives.
Developed by J. Richard Hackman and Greg Oldham, the job characteristics model (JCM) says we can describe any job in terms of five core job dimensions: skill variety, task identity, task significance, autonomy, and feedback.
“Skill variety is the degree to which a job requires a variety of different activities so the worker can use a number of different skills and talent”. Employees at DrainFlow have narrow tasks that don’t require variety of skills and talents.
“Task identity is the degree to which a job requires completion of a whole and identifiable piece of work”. Jobs are DrainFlow are interdependent from order processors to billing representatives, task identity will help to build a better communication channel and enhance the task chain.
“Task significance is the degree to which a job affects the lives or work of other people”. Plumbers and plumber assistants score high in this area. Their work affect highly on customer satisfaction. Order processors also play a significant role in customer service. They deal with customers’ calls and their requests and no feedback is collected on how well they performed.
“Autonomy is the degree to which a job provides the worker freedom, independence, and discretion in scheduling work and determining the procedures in carrying it out”. Jobs are designed to perform specific tasks and they are interdependent, so little to no autonomy occurs. Each job is dependent on the next to complete the service.
“Feedback is the degree to which carrying out work activities generates direct and clear information about your own performance”. Feedbacks end-up usually with billing representatives. They are the ones who have to contact customers about payment and receive feedback on the process but not in their performance. There is no feedback system to be followed, so tracking each one’s performance is difficult. When there is no feedback system it is hard to identify their problems and assess their performances.
Redesigning jobs is important at this stage to provide better services. On job trainings is crucial to order processors who received the calls. To provide a better service order processors should be trained to identify customers’ problems so they could assign properly the tasks to either plumbers or assistant plumbers. Job rotations help in understanding better the job and every crucial task and increase job satisfaction, job engagement, and customer satisfaction. Job rotating plumbers and plumber assistants with order processors would provide better customer service. Job rotation reduces boredom and increases motivation in employees (Robbins, 2001). Performance review system and performance appraisal help in assessing employees’ performance and create new challenges for them. Feedback will provide employees with direct and clear information about their own performance. “Job enrichment allows employees to have more freedom and responsibility so that they can assess and correct their own performance (Robbins, 2001). This method increases the degree to which the worker controls planning, execution, and the evaluation of work.”
Using rewards system does motivate employees. There are many ways to pay employees. The best pay system pays what the job is worth usually established through a technical process called job evaluation. Variable-pay program bases a portion of an employee’s pay on some individual measure of performance. First a well drafted customer satisfaction sheet should be handled too billing representatives to keep a proper track of every employee’s performance. Piece-rate pay plan and merit-based pay plan could be beneficial for the employees. Order processors will be rewarded for example on every 20 successful calls whereas plumbers, assistants and billing representatives will be paid based on their performance appraisal. Bonuses for four categories could increase the performance because bonuses are given for employee recent performance, then they will be rewarded on their efforts made to satisfy the customer.
Financial incentives are motivational rewards for employees, used as recognition for their efforts. This reward program sets challenging and higher goals for the employees, thus raising their job satisfaction. However, research suggests financial incentives may be more motivating in the short term. Unfortunately, financial incentives do not work for long term. Employees get used to these incentives and take them for granted. Moreover, employees will become self-centered and have an aggressive sense of competing. They will tend to focus more on their cash rewards and lose the focus on the firm’s goals. Despite the cost effective philosophy of the firm financial incentives could cost the firm fortunes on the long term.
Therefore, other types of incentives could be more effective such as employee recognition programs. Programs as employee of the month or simple public recognition could motivate employee performance. An obvious advantage of recognition programs is that they are inexpensive, since praise is free! Managers can take feedback from customers and employees to decide the employee of the month. They should also seek out and provide training for all employees. The company should reward skills such as training in customer service, plumbing problems and organizational behavior.
After tailoring a reward system for every category, an assessment program is a must to show how effectively the program is running. On a monthly basis feedbacks are collected from customers to track the progress of employees. Do trainings work out for them or they need other programs to be implemented? Is the company giving the right incentives to every category? Customer satisfaction sheet will be kept on record. These records will measure the success of the employee meeting the goals. The sheet will able the customers to rate the employee and from unsatisfactory to satisfactory and to leave additional comments. Monthly meetings also can be effective to take the recorded feedbacks and comments from their employees and take all these into consideration to provide better service. If the system is working well some factors will prove so. Absenteeism and turnover will decrease.