April 6, 2011

Diamonds in the Data Mine and Rewarding Our People

Posted in BADM 720 tagged , , , , , , , at 8:29 pm by Sarah

These two readings describe two great programs used by Harrah’s CEO Gary Loveman to put the company at the top of the industry.  “Daimonds” focuses on the use of collected customer data to create the perfect customer loyalty program, while “Rewarding” is all about the collective bonuses used to reward improving customer service ratings.

The loyalty card program that Harrah’s used to collect information about customers is, of course, brilliant.  The tiered levels of customer rewards appeals to the customers’ sense of achievement, while every use of the card gathers data about customer preferences, all in one sleek technology.  The system is simple and streamlined, and it practically improves itself by telling the marketing department which incentives will be most effective.  I just have to wonder what customers would say if they knew their gambling habits were being recorded for the purpose of the company being better able to relieve them of their cash.

The other reading paints a clear picture of how the company lived up to its desire to be the pinnacle of customer service in their
industry.  While I personally dislike filling out those annoying customer surveys, there really is no better way to find out what customers want than to ask them.  It gives the business an objective, measurable way to examine how their services are being received.

Finally, the collective bonus system had its pros and cons.  Giving the same bonus to the entire department gives the team a common goal and promotes working together to achieve it.  Basing the bonus entirely on customer service scores ensures that employees will be focused entirely on improving that score.  On the other hand, one employee providing bad service can bring down the entire team.  The bonus itself is not that much, but it is a good gesture to show that the company is committed to recognizing employees’ hard work.

March 31, 2011

Extra Reading for Chapter 11

Posted in BADM 720 tagged , , at 12:59 pm by Sarah

This reading was all about the social and psychological changes that afflict people finding themselves in positions of authority, particularly those who become deans in colleges.  I can’t say that I have much personal experience on this topic, never having known any deans personally, but I have definitely seen both good and bad examples of what happens to individuals when they are given power over others.

I’ve seen an employee at a chain pizza store be promoted to shift manager and suddenly start bossing people around unnecessarily while slacking off in the back office.  I’ve seen department store managers who are so bogged down in the logistic details of scheduling shifts and meeting quotas that they lose sight of what the business is actually trying to accomplish.  I’ve seen an entire workforce of employees who were given various promises in their interviews that were never delivered.

On the other hand, I have also seen professors take on the department chair position, without wavering on their commitment to education.  I’ve had direct supervisors who remember what it was like to be in an entry-level position at the company, and show it by looking out for their employees.  I do agree with the author that it takes a special kind of person to use the power they are given for good, but I like to think that those special people are less rare than they are given credit for.

March 24, 2011

HCL Technologies

Posted in BADM 720 tagged , , , at 10:54 am by Sarah

This reading about HCL Technologies was focused on the difficulties with instituting change in a big company.  I thought HCL’s new president went about it in a very smart way, particularly when he traveled to the company’s branches around the world and got everyone involved, right down to the entry-level employees.  This was a huge project, but absolutely necessary for any real change.  The company had to be completely saturated with the new ideas, or else there would always be something holding them back.  (It would have been much easier to build the company in this way from the very beginning, like Southwest Airlines.)

Whenever a company says that they put their employees first, it is always interesting to see whether that will actually happen.  I may be a cynic, but it seems to me that in the vast majority of cases, this claim is empty rhetoric designed to make employees think they are being rewarded for their hard work.  The same goes for companies that claim to put customers first.  They only say that in the attempt to get more people in the door, and thus more revenue.  This reading did a poor job of showing how HCL put their employees first, but they must have done something right if their improvement in the market was enough to draw the authors’ attention.

I think the best part about HCL’s strategy is when the upper managers decide to post their 360 reviews for the entire company to see.  This kind of transparency is great, as long as it is accompanied by transparency of everything else going on in the upper levels of the company.  As an employee I would want to see the status of every decision that could affect my job, and I would want to see how the management collaborates with the people who will have to bear the consequences of those decisions.  Most companies simply hand their decrees down from on high, and I don’t think it’s out of line for employees (and consumers, for that matter) to demand better.

March 20, 2011

Strategies of Effective New Product Team Leaders

Posted in BADM 720 tagged , , , at 5:02 pm by Sarah

This reading was all about how problematic it can be for businesses to develop new products.  I believe the issues described are pretty common.  I’ve worked at lots of places where decisions are made without consideration for the people those decisions will affect, there is no visibility and information is withheld as standard procedure, and managers try to control every detail of the work rather than trusting employees to do their jobs.  It’s an environment that is self-perpetuating.  Employees don’t take ownership of their work, and they don’t have opportunities to make mistakes, which means they will never learn anything.

One of the more interesting questions posed by the article is why these problems are so common, when every manager seems to believe that they have the solutions.  Just because we know how to be effective leaders in theory, doesn’t mean we are effective in practice.  The article suggests that leaders have to transform their thinking, though the nature of this transformation was unclear due to excessive wordiness and unnecessarily complex vocabulary.  Personally I think this is a complex question to answer.  It’s hard enough for me to apply the things I’m learning for myself, much less tell someone else how to do it.

I think the most important thing that this article suggests is encouraging inter-departmental cooperation.  I always like to be able to understand the big picture, I try to be considerate of the roles that others play in our work, and I appreciate it when others do the same for me.  That sort of goes hand in hand with the suggestion that information needs to be disseminated quickly and freely from rank to rank, which has been a personal pet peeve of mine.

March 6, 2011

Arrow Electronics and Sins of Commission

Posted in BADM 720 tagged , , , , , at 11:36 am by Sarah

This week’s first reading was about the employee review system at Arrow Electronics.  The CEO was trying to get an idea of which employees to retain in an impending restructuring of the company, but this was complicated by the managers basically giving the same scores to every employee.  It seems to me there are a couple of things that could have been done to help.

First of all, the managers giving the reviews were only told that their comments would influence salary and promotion decisions.  Wanting to appear fair, the managers gave everyone the same ratings, thinking this would ensure that the employees’ compensation would remain equal.  If the managers had been told that their reviews would also influence whether the employee was retained or let go, they might have been more inclined to evaluate the employees more objectively, knowing that if they gave an employee a bad rating, they wouldn’t have to face that person at work for much longer.

Second, if reviewing and providing feedback is such an important part of the managers’ jobs (as stated by the vice president of human resources in the very beginning), then the managers should have been evaluated themselves on how well they performed that job function.  Those managers who gave the same scores to every employee should have been told that by doing so they were impeding the work of the human resources department, and should have been given a low score in that area of their own reviews.

Our other reading for the week cautioned against the dangers of using a performance-based compensation system in the first place.  The author’s bottom line was that if you offer a high enough monetary reward to employees for a particular performance indicator, those employees will do whatever they can to improve in that one area, at the expense of other areas of their jobs.  We have read in other places that money is not as much of a motivator as one might think, but this author’s examples contradict that.  I do believe that motivation is different for each person, so I am skeptical of anyone who says that any one motivator is or isn’t a major factor in all workplaces.

February 27, 2011

Nordstrom and the SAS Institute

Posted in BADM 720 tagged , , , at 11:53 am by Sarah

This week’s readings were about two companies taking very different approaches to employee compensation and incentives.  Nordstrom’s sales per hour system of compensation sounds very unfair to me, especially having experienced the pains of working in the retail industry.  The big difference at the SAS Institute is that the sales system emphasizes customer retention rather than first-time sales.  Instead of a convoluted commission system like Nordstrom’s, the SAS Institute employees earn a flat hourly wage and enjoy tons of perks that benefit their families as well.  In short, Nordstrom employees perform well in order to get rewarded, while the SAS Institute employees perform well as a result of being made comfortable.

So which system is better?  One would think that the multitude of lawsuits against Nordstrom would answer that question, but I think it’s a little more complicated than that.  Certainly the SAS Institute would be a much better choice of environment for the average worker, someone who just wants to support their family without being on their feet all day and to feel like the employer actually cares about them personally.  But there is a small part of society that might actually choose Nordstrom’s environment, namely those who are already confident in their ability to outperform others and are willing to step on a few people on their climb to the top.  And I am all for keeping those kinds of people confined to the retail industry.

The problem is that they are not confined.  The SAS Institute’s philosophy of fairness and trust is a rare one in business.  The majority of companies can only see as far as their bottom line, and their company culture teaches employees that they have to be cutthroat in order to prosper.  I think this view of business is so widespread because it is the easy and cheap way.  It is short-term, low-investment, instant gratification.  But then there are a precious few companies like the SAS Institute and Southwest Airlines from the reading a few weeks ago, who favor a more long-term, nurturing, reap-what-you-sow approach to business.  These exceptions to the rule show that you don’t have to sell your soul in order to succeed in business or in life.

February 16, 2011

Southwest Airlines: Using Human Resources for Competitive Advantage

Posted in BADM 720 tagged , , , at 3:57 pm by Sarah

This case about the complete saturation of company culture at Southwest Airlines was a very interesting read.  As the text says, companies all over the place say something along the lines of “employees are our greatest asset,” but how often do we see that sentiment put into practice?

I think a major factor in Southwest’s ability to maintain that company culture is that the company started out that way.  To change an existing company over to the kinds of processes that Southwest goes through would be a major overhaul and would upset a lot of people within.  Building a company from the ground up, however, makes it easy for the founders to set whatever precedents they want from the very beginning.

I get the impression from this reading that what makes business sense to other companies simply doesn’t make personal sense to Herb Kelleher.  I know what it’s like to be a victim of the cold corporate mentality, so I can really appreciate someone who bends over backwards for his employees, business be hanged.  He seems to understand that employees are people, not robots, and has gotten excellent work out of them by making them happy.

Southwest’s situation does seem impossible when viewed from within an average company, but this case shows how they’ve done it, and it all makes a lot of sense.  The part I’m not sure about is how this is supposed to help the average manager.  How could my manager, for example, ever hope to instill these things throughout our global company?  It would take a huge revolution, and I’m willing to bet he wouldn’t keep his job long enough to make it happen.  Rather than being inspirational, Southwest’s story serves as a reminder to the average worker that most of us are just cogs in the machine.

February 8, 2011

Extra Reading for Chapter Four

Posted in BADM 720 tagged , , , , , , at 3:32 pm by Sarah

United Pilot Article

At my job, exceptional customer service is sometimes difficult to provide.  My team goes through the same process with almost every customer, and we use a lot of “canned” or pre-written emails to communicate with customers.  Occasionally, though, we do get inquiries that require some individualized attention, and I consider these to be opportunities. 

These are most often questions from customers who are unclear on our processes or are having trouble using our online tools, and though we often have similar answers, I try to make a point of exceeding the customer’s expectations by anticipating their next question or providing clear, step-by-step solutions to their problems.  More often than not, this extra effort will go unnoticed by customers.  But sometimes I do get a reply saying thank you, and just knowing that I have made someone’s day a little easier makes it all worthwhile.

Rules of Engagement

Speaking of my job, I have to admit I have no idea what goes on behind the scenes regarding the business benefits of employee happiness.  We do have some perks and some flexibility, but due to the nature of our business there are some pretty annoying aspects of the job as well.

As far as work-life balance goes, we are able to arrange for time off most of the time.  But during our busiest times of the fiscal month, everyone has to stay at work until their team’s work is done, sometimes late into the night, regardless of what is happening in their personal life.  I often wonder how employees with children at home are able to do this.  But I must admit that when our volumes are high at the end of the fiscal month, everyone hunkers down and gets focused, and things get done much faster because no one wants to be at work too late.  In our case, getting the job done is motivation in itself.