Positive Employee Practices (PEP)
Several years ago a consultant was called into a large organization to help a newly installed General Manager (GM) of one of the major departments fix a problem.
The GM viewed the problem as low morale. People hated to work in his department. He attributed it to the autocratic management style of his predecessor. His solution was to create a more participative working environment.
Process
A project team was created to interview a sampling of the employees. This was to be the first participative activity and was to serve as a model for the future.
Data on operational philosophy and practices were gathered. Gaps were identified and causes sought. The data were presented to the GM and his direct reports.
Interestingly enough, the GM's perception of a morale problem was accurate. His attribution of cause was totally wrong.
The Problem
In two words, ethical conflict was at the root of this organization's visible morale problem and its many other, hidden problems.
The Findings
This was the sales and service department of the organization. Their performance, as measured by the standard service indicators, was good but it was obvious that employees were highly stressed.
Employees were using both retaliatory (feeding the hog) and self-protective (silent saboteur) behaviors. They were getting even for what they believed were unfair pressures to meet unrealistically high performance requirements and they were protecting themselves from what they characterized as a hostile management environment.
It was the system that was viewed as hostile. The previous GM's management style was not cited by the employees as a major concern.
Sales management was an example of a hostile system. Both sales and service employees were required to make multiple sales attempts during every customer contact and they were required to achieve ever-increasing quotas based on the average revenue generated from each customer contact.
As employees reached their current quota levels, quotas would be raised. The perceived reward for success was to be punished by making future success more difficult. This was universally viewed as unfair.
These employees found several creative ways of meeting (or appearing to meet) their sales quotas and protecting themselves from the organization while punishing the organization for making them meet these sales quotas in the first place. Three examples are provided below.
#1 ‑ The Silent Sale
A customer would call with a service need and the customer service representative would deliver the mandatory sales pitch for supplemental services.
If the customer declined and the customer service representative was below quota, he/she would add the service to the customer's contract anyway. A month or so later the customer would notice that the service had been "mistakenly" added to the bill and would again call the company to have the "error" corrected. The employee got credit for the sale (because it was in the computer system for the required 15 days) thereby beating the quota system.
As a "bonus," call frequency increased due to these intentional "errors" requiring the company to increase overtime and add employees. It was a double victory for the employees. They earned their sales commissions and got the company for imposing such demanding sales quotas.
Upon investigation, we determined that approximately 5% of all sales made by customer service personnel were silent sales.
Of those, over 90% were detected by the customer which meant that over 4% of all incoming calls were to correct intentional errors.
It also meant that about 5 customers in a thousand paid for services they expressly stated they did not want. The ethical implications (both internal and external to the client's department) could not be ignored.
#2 ‑ The Disconnected Customer
In this same organization sales and service people were subject to a series of productivity and quality measurements. One of the performance measurements assessed how efficiently the customer service representatives handled the problem.
Call durations were monitored and automatically recorded. The company's interest was in driving down the average call length so that more calls could be handled by fewer employees.
Supervisors (who were measured on the average call times in their units) used every technical and motivational tactic at their disposal to encourage employees to keep call duration to a minimum. Again, as quotas were met the standards were raised. Shorter and shorter call durations were required.
When an employee's average time rose above the desired goal several options were present. The easiest for the employee was to take calls and then intentionally hang up after only a few seconds. These micro-calls drove down the average time per call at the customer's and company's expense.
The client, with over one hundred employees on the telephones, was averaging (by our most conservative estimate) close to 150 intentional hang-ups per day! Call volume rose. Customer satisfaction fell. And, the company spent thousands of dollars "fixing" their trouble prone telephone system.
#3 ‑ "Coding" the Customer
One final example. This same client was very concerned with customer satisfaction. A staff of market researchers routinely called customers to evaluate their satisfaction with the product and the level of customer service. Any customer dissatisfaction with services received was immediately communicated to the supervisor and the "guilty" employee was punished in an effort to improve service levels.
For customers who preferred not to be troubled with a follow-up call, a code could be placed in their file to eliminate them from the print out of current contacts used to select customers for follow-up phone calls.
Here was an easy way to avoid punishment. If a sales or service employee "lost their cool" with a customer, they simply went into the records and coded the customer for no follow-up calls.
In this way they assured themselves that the only customer complaints that would reach management were those where the customer took the time to write. They knew that only a very small percentage of dissatisfied customers would go to that length. Once again the employees found ways to protect themselves from a perceived hostile management.
The Ethical Conflicts
Here is a classic example of good people feeling compelled to do bad things to survive in an ethically hostile working environment.
The interview data revealed that every employee knew what was happening. Interviewees claimed that if they lied or cheated, it was only because everyone else was doing it. They had to or they risked being fired.
These people felt conflicted. Two values, both espoused by the organization, were is opposition. Providing quality service and being efficient were seen to be mutually exclusive. They looked to management for guidance.
Management was giving them incongruent messages. The organization's public position was that service was the number one priority. The perceptions of employees was that the organization's private position was, "Revenue generation and cost control (efficiency) were numbers one and two, Customer service was a distant third."
Several employees characterized it this way. "Good sales excuse everything else."
Employees blamed management for putting them in a position where the only alternative was to cheat customers and lie to management.
Efforts to bring this concern to management's attention were infrequent and unsuccessful. Supervisors told employees they were in the same bind with their management. The only option was to "play along".
The Feedback Meeting
Once the data were understood a summary report was written and a feedback meeting scheduled. The GM and his seven direct reports assembled to hear the project team tell them how the morale problem would be solved and how a more participative working environment would be created.
The GM and his seven direct reports were shocked. Their agenda was disposed of in minutes. The majority of the next two hours was devoted to the ethical issues uncovered in the interview process.
The presentation team tried to keep it low key, but it was not easy. They were angry. The team, made up of employees, felt that they finally had an opportunity to tell their GM the truth. Here was a caring, compassionate leader who was concerned about his employees' morale.
Imagine their reaction when the GM, hearing the report, turned to his direct reports for confirmation of the findings and was told, "There have always been a few employees who cheated to earn higher commissions, but this report is wrong. There is no widespread pattern of ethical conflict."
Somehow, despite this wholesale denial of the team's findings by their own mid-level management, the team prevailed. They cited example after example until the GM was convinced that there was more unethical behavior going on than he had suspected or than his direct reports were willing to admit.
He thanked the team and took their recommendations under consideration.
The Team's Recommendations
Five short term recommendations were implemented as a result of this project.
First, the GM held a series of small "town meetings" to share the findings of the project team and his concerns with his employees and to hear their recommendations on how he might turn the situation around. This met his need for a more participative working environment and his need to be fully convinced that the team's findings were accurate.
Second, a Customer Service team was created to recommend ways of reestablishing customer service as the organization's number one priority.
Third, an Ethics team was created to identify the ethical conflicts that existed in the organization and recommend interim and long term solutions.
Fourth, all employees attended an ethics training program to learn about their responsibilities for ethical conduct and to sharpen their skills for coping with the inevitable ethical conflicts.
Fifth, all management employees attended a three day off-site conference, where the details of the findings were shared. The GM laid down the law. Ethical misconduct would no longer be condoned by a management team more focused on artificial numbers than on serving their customers and employees. Subgroups met to discuss and recommend ways of addressing each of the team's findings not covered in the recommendations implemented to date.
The Long Term
In addition to the short term steps listed above, the GM approved a long term program of Total Ethics Management.
The organization's values were reaffirmed and communicated in a variety of ways.
An ethics strategy was developed, complete with measurable goals and objectives.
The code of conduct and other ethics policies were dusted off and used as guidelines for day-to-day decisions and actions.
Ethical behavior at all levels was measured and rewarded.
Climate surveys and follow-up interviews were used to monitor employee perceptions of ethical conflicts. As new conflicts were identified they were referred to the appropriate employee involvement team.
There were annual leadership conferences for all management people celebrating the organization's return to ethical business practices and teaching the additional leadership and communication skills needed to prevent backsliding.
The impact of the renewed emphasis on integrity on the organization's financial performance was monitored closely.
Periodic ethics training was continued for all employees, including sessions on values clarification and strategies for resolving personal ethical conflicts at work.
The Results
Five years after the project team first revealed the ethical disarray in the client's organization the results are still very impressive.
The morale problem evaporated as ethical conflict was surfaced and virtually eliminated.
Customer service levels are at an all time high and are routinely audited for accuracy and integrity.
Productivity is at an all time high. The organization is doing 15% more work with 20% fewer people. Some of that gain is attributed to technology. The majority is attributed to increased employee commitment and the elimination of feeding the hog and silent sabotage.
There are productive employee involvement teams looking at ways to improve service, efficiency, quality of worklife and ethical effectiveness.
Benefits costs per employee are down as employees no longer are getting sick as the result of living in constant ethical conflict.
The client retired. His successor, one of those direct reports who denied the initial feedback, has become a champion of ethical effectiveness and has taken the TEM program even further than the original client dared.
Two employees were fired. One, a supervisor, was given an ultimatum. Get ethical or get out. She chose to get out. The other, a service employee, thought she could fool everyone with a new, creative form of silent sabotage. She failed.