What are the strengths and weaknesses of UCS's measurement and compensation system?
AT&T's pursuit of quality included measurement methods on a number of levels. Quality measurement allowed the company to use this information in order to perform efficiently the following activities:
Customer feedback through surveys aimed in following through the company's blueprint in order to monitor before, during and after sales service quality. An external firm conducted a customer satisfier survey that obtained information as shown from competitors' and UCS customers regarding product, service and treatment perceptions.
Additionally, UCS's survey team administered 10-15 different surveys, depending on variables such as the reason, and manner that the customer had contacted the company, performed internal monitoring processes. These surveys were essentially being used for associate evaluation.
Clearly, the practices involved in managing service quality in this particular firm provided a competitive advantage by allowing shift and efficient response to market demand. However, the sophisticated design of AT&T's quality measurement system eventually transformed its associates from a state of continuous improvement to obsession for excellence. Efficient and "real time" quality measurement expressed through live monitoring and other IT applications, increased performance expectations at an unbearable stressful point for associates.
Additionally, the company's quality measurement system failed to warn against raising expectations on behalf of managers and associates. This was probably due to improper internal HR and external monitoring of other industry key players. Of course, AT&T chose to lead the way by defining a new era of credit card services, but the measurement system should have foreseen the failure of increased expectations as those were expressed by further raising the quality objective.
Associates directly represented the company to its customers and thus service was to be dependent upon their capabilities and desires. AT&T linked performance to compensation in order to motivate its associates to deliver the best possible service. Cash bonuses on top of high fixed salaries along with various award programs added on AT&T's compensation system. In addition, the company offered a free on-site fitness center available for employees and their spouses and reimbursement for undergraduate or graduate courses.
Certainly, AT&T's compensation system was superior to standard industry practices. Employee incentive driven performance along their reported high job satisfaction were almost inevitable results of the company's rewards. On the other hand, the particular system clearly neglected other aspects of employee concerns. For example, exhausting working hours were not linked to a performance rewarding short-term vacation. Furthermore, exceptional service delivery could have been compensated with less monitoring as part of a stress reducing strategy.
What were UCS's goals for the measurement and compensation system? Are these goals still the right ones?
Values which are based on the operating philosophy of AT&T, surely demonstrate issues which are associated with the customers come first, the quality achieved through people and processes, and planning dealing with prevention of mistakes through a continuous quality improvement. The need of the president to offer a service which would combine credit card and calling card supporting its long distance calling revenues seemed necessary. Motivated and empowered employees would set new standards for quality in customers and therefore examine the compensation and measurement system. Moreover, the telephone associates determined what impressions customers took away from UCS so their training and development was a major investment for AT&T, by setting up benchmarking studies comparing to UCS direct competitors....
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