Improving Employee Communication and Retention at ABC Ltd

You are a management consultant and Richard Trafford has approached you on behalf of ABC Ltd for consultation and advice.

Attached is the ABC Ltd case study. You are required to respond to the following.

1.Explain how the psychological contract can be integrated in ABC Ltd considering the significant amount of negative feedback from staff being faced by the organisation?

2.Describe and explain the types of communication mechanisms, theories and methods that can be adopted by Richard to help ensure better understanding and co-ordination not only with existing employees, but also with new employees?

3.Considering the events that happened in ABC Ltd, discuss the importance of conducting appraisals and rewarding employee performance on a regular basis, besides providing possible solutions for retaining employees using above processes? 

The essay content should reflect logical and analytical application of theories or concepts or models to the case. More details on this will be discussed by the lecturer in the class.

Your essay should be written in a professional academic style, while at the same time incorporating theory and correct academic referencing throughout. You MUST write in the third person – this means you MUST not use “I” or “the author” in your discussion. 

Please read the case study and marking criteria on the next pages.
ABC Ltd

ABC Ltd is a private sector organization which manufactures air-conditioning systems and sells them worldwide.  Its head office is located in the north of England, although there are outposts of ABC in Spain, Norway, Australia and Japan.  

ABC has always been run as if it were a small organisation even though its founder sold it to a big electronics concern some five years ago and it has grown from an original staff of twenty at the outset to employ 500 people at head office and something of the order of 3000 across all locations.  It has never had a personnel department, therefore there are very few policies and procedures governing the organization.  Decisions regarding employees (for example, hiring and firing) are usually taken on an ad hoc basis by the relevant manager(s), with the particular circumstances of the case being taken into account.  Furthermore, management have always refused to recognise trade unions, believing that relations within the organization are good enough for employees to be able to air grievances without the need for formal representation.  

Indeed, employee relations have never been seen to present a problem for ABC; the only area that management sees as cause for concern is the shop-floor, where the systems are actually manufactured.  The unskilled and repetitive nature of the work in this department is recognised to make unrest more likely and indeed several attempts to unionise this staff group have been launched in the past.  Other sections, by contrast, are considered not to be in any need of special monitoring – the service maintenance department, for example. The staff working in service maintenance jobs are highly skilled engineers who are employed to maintain and repair the systems that ABC sells.  They are available between 6.00am and midnight should any of ABC’s customers require them.  Everyone in this division has personal “pagers” and takes turns being ‘on call’ which, in the main, means attending to out-of-hours calls as the pager records them and telephoning the relevant client to give them advice.  If the problem cannot be solved over the phone and it is urgent (for example, the air-conditioning system in a hospital has broken down), the engineer will have to go to the client.  

Background Information

Because of the breadth of ABC’s market, the job also involves a good deal of overseas travel.  The service maintenance department is considered to be one of ABC’s selling points, as the cover provided by the team enables the company to promise all their customers a five-year warranty.  Recently it has also been necessary to provide cover for the overseas branches of ABC – there has been a secondment to the Norwegian office for the last six months and Japan have also requested that a UK engineer go out there to work until they can recruit to their several vacancies.  There are twenty engineers in the service maintenance department, as well as the manager and his secretary.  All but one is male.  

It was only when Richard Trafford (the service maintenance manager) realised that he had recruited no less than five engineers in the previous two years, three of whom had left after a very short time and whom he was still trying to replace, that he began to perceive that all was not necessarily well among his team.  When he thought back to those who had left he realised that all of them had gone to jobs elsewhere in the local area.  In other words, his staff members were leaving because they were dissatisfied with the company, not because they were moving away, or retiring, or any of the other reasons why people leave employment.  

‘Well, it can’t be the money,’ he thought.  ‘Those guys get a good whack out of this place plus a company car.  Other places don’t pay so well or offer cars.  It must be something else.  I’ll have to have a chat with them, see what’s going on’. At this point, Richard was interrupted in his reverie by his secretary reminding him of his 10.00 a.m.  meeting with the company directors.  He made a note to himself to look into the matter before gathering up his files and leaving the office.  

In fact, Richard didn’t need reminding of the problem he had been considering that morning.  He returned from the meeting in the early afternoon to be told that a local customer had called, furious because they had had to wait three hours for an engineer to repair their system.  The client’s offices had grown so hot in the meantime that they had to let their staff go home and by the time the system was fixed it wasn’t worth calling everyone back in.  So they had ended up losing a day’s work and were blaming it on ABC.

Challenges Faced by ABC Ltd

‘But I don’t understand!’ he protested to Carl Peters, who had the unfortunate task of breaking the news to him.  ‘We’ve got enough people in, haven’t we?  Why were they kept waiting?’

‘Well, we’ve got four people sick, Richard, and there are about five others abroad.  We need five people to stay here and cover the phones, so that only leaves three to go out to calls.  And it’s been manic these last couple of days ‘cos the weather’s so hot.  Martin had to drive from here to Glasgow and then on to Manchester yesterday to answer urgent calls.  The call from Barnes Brothers just got shoved to the back of the queue.  It’s not our …’

Richard broke into Carl’s explanation: ‘Four people sick!  Have they called in?  I haven’t been told about this otherwise I would have tried to arrange cover.’

‘I don’t know if they called in or not, Richard, but I know we’ve been down on staff constantly recently.  There’s always someone off, and it’s usually two or three.’

‘Right, OK Carl, I’ll ring the customer and eat humble pie.  But I want a meeting with the lads tomorrow, 9.00 am sharp, and we’re going to get to the bottom of this.  Can you let them know for me?’

At 9.00 am the following morning, the service maintenance staff began to gather in Richard’s office.  Richard opened the meeting by telling them that he was concerned about morale in the department and would appreciate any comments they had regarding their own job satisfaction.  At first they were reluctant to say anything but Paul Feather, one of the longest-serving members of staff, eventually go the ball rolling:  ‘Well, what I hate is never knowing what we’re up to, Richard.  I’m getting sick of being called out to places, then having to work really late ‘cos the client’s left it till the last minute to call.  The times I’ve driven back from London at 2.00 am in the morning – and I’ve got a sick wife, as you well know’.

‘Yeah, and we never know how far ahead we can plan our social lives and stuff’, broke in Carl.  ‘The only way to ensure not being called away is to book holiday time.  

I remember when I was due to go and see my parents and you wanted me to fly off somewhere – I’d had the trip arranged for months and suddenly find out the day before that I’m supposed to be going to Switzerland.  Then when I wouldn’t go, you got really mad with me’.

Recommendations

‘Speaking of being called out, I got a page the other night at 3.30 a.m.  I didn’t turn my pager off ‘cos I was on again at 6.00 a.m. and one of the customers thought he’d chance his arm.  So I got woken up in the middle of the night.  It’s not on – they know when they can get hold of us and to leave a message if it’s an emergency.  This wasn’t even urgent – he was just working late and got a bit warm.  It could have easily waited till the morning,’ added Paul.  

‘Plus, the salespeople always make rash promises to the customer – they say they can get the system installed in such and such a time.  They never consult us – they just come back and dump the order sheet on us’.  This came from George Browne, who went on: ‘And what’s more, the job’s actually quite dull, you know.  I know it’s good money and everything, and we get a car, but we always go to the same companies, here and abroad.  Also there’s very little opportunity to train on any system that you don’t already know.  So you end up doing the same work, the same installations and the same repairs, week in, week out.  The only training that seems to go on here is for people who come in from outside!  Another thing – if we were trained in other systems we could fill in for people more easily’.  

At this point Robert Fields was heard to mutter, ‘Yeah and the car thing … that director who bought the flash new company car for herself, fifty grand or whatever it was, when we just got told we had ten grand to spend on our cars, take it or leave it.   She doesn’t have to do thirty thousand miles a year for the company, it’s just for posing’.  Everyone murmured in agreement.  

‘I’m with George on the stuff about the training – I’ve not been here long and I’m bored of the same round of places.  There’s something else too’, said Sarah Jones.  ‘It’s true about the money being all right but if you look at other departments, they’re getting more money than we are, even if you take the car into account.  Look at pre-sales – they’re all on at least five grand more than we are.  The only way to get a rise around here is to threaten to leave, like Carl did that time’.  
‘Now that’s not fair’, Richard burst out.  ‘What about appraisals?  You get an automatic increment after your appraisal, if it’s been OK’.  

Conclusion

‘I can’t remember the last appraisal I had – and anyway, when I did have it you’d forgotten to fill out the form, so it wasn’t much of a discussion.  You just sat there and told me I was doing OK and not to worry, you’d do the form soon.  Anyway, those increments are only in line with inflation, so we’d kind of expect them anyway – they’re not really because you’re working hard or whatever.  We haven’t had a proper performance-related rise in three years’, Sarah replied.  

‘I never even got my increment after my last appraisal – you sent me a letter saying I hadn’t been awarded one, but you never said why!  You said at my appraisal that my work was good and you were pleased with me, so I was expecting one’, chipped in Colin Sanderson, who hadn’t spoken up until then.  

‘And you said that I had to improve, and then I got an increment anyway – which I thought was kind of daft.  Then you sent me to America to do that really big job, booked me away for a week and totally ignored me when I said I’d never get it done in that time.  You had to send John Carter out to help me’, Carl commented.  

There was a brief silence as Richard took all this information in, and the group wondered if they’d gone too far.  When he didn’t say anything for some minutes, George leapt in to fill the gap:  ‘Can I just say something else?  It’s too bloody hot in here most days in the summer ‘cos of the great big glass windows – they let all the heat in and then when you open them, papers go everywhere.  For an air-conditioning company, we’ve got rubbish ventilation up here.  I had to go home early last week because it was so warm – you just can’t concentrate’.  

Finally Richard spoke: ‘OK, OK, I get the gist.  There’s quite a lot here needs dealing with, it seems.  Can we just summarise what the grievances are and I’ll make a point of trying to deal with them as soon as I can’.  Richard was starting to feel somewhat beleaguered.  He had had no idea that things had got this bad.  He made a resolution to act as fast as he could – it seemed that he would have no staff left at all if he did not!