MOUNTAIN WEST HEALTH PLANS, INC.
a. FACTS OF THE CASE:
Mountain West Health Plans, Inc. – Denver-based health insurance company Martin Quinn – Senior Vice-President for Service and Operations Evelyn Gustafson – Former and retired Director of Mountain West Customer Service Department. Her motto “always put yourself in the subscriber’s shoes”. In her time, there were only 10% turnover rates in the department compared to the typical 25% to 45% rate for customer service representative. She firmly resisted all attempts to increase efficiency and lower cost in the department where salaries accounted for close to 70% of the budget. Erik Rasmussen – newly hired Director of Customer Service, the replacement of Ms. Evelyn. He is a young man in his late twenties with a shiny new bachelor’s degree in business administration. The management tasked him to bring down the cost on the department. Under Mr. Erick, the company, for the first time measured the representatives’ performance and used software that generated automated work schedules based on historical information and projected need. Also, the company cut back on training. The department cost was finally heading downward, though department morale was downward, with the current turnover rate climbing at 30%. Also receiving more complaints from subscribers of inaccurate information from inexperienced or representative who sounded rushed.
b. KEY PROBLEMS
How Mr. Quinn will address the issue of low morale among the employees in the customer service department and its high turnover rate, while keeping and meeting the goal of the company to increase efficiency and lower the cost incurred in the department?
To meet the company goal to increase the efficiency of the customer service department and lower its cost. To uphold the morale of the employees and to reduce turnover rate from 30% to 10%.
ANALYSIS OF CAUSES
A. Analyzing the leadership and management style of Ms. Evelyn and Mr. Erik, including their strengths and weakness, and their source of influence:
MS. EVELYN GUSTAFSON
MR. ERIK RASMUSSEN
People Oriented – attention to people
Task Oriented – attention to task
Country Club Management – Thoughtful attention to the needs of people for satisfying relationships leads to a comfortable, friendly organization atmosphere and work tempo Authority-Compliance Management – Efficiency in operations results from arranging conditions of work in such a way that human elements interfere to a minimum degree. Strength
Consideration and motivation of the needs of her subordinates, a happy work environment as a result of her good interpersonal relationship. Valued the interest and personal development of her subordinates. Focus on productivity and efficiency in the accomplishment of organizational goals. Weakness
Uncontrolled cost in her department result of excessive flexibility and too much focus on employees’ personal concern. Inability to analyze the internal culture, less concern of his subordinates’ personal development, interest and needs. Source of influence
Legitimate power - authority granted from a formal management position in the organization. Reward power – stems from the authority to bestow reward on other people. Referent power – comes from an individual’s personal characteristics that command others’ identification, respect and admiration. Legitimate power and Coercive power – refers to authority to punish or recommend, and the opposite of reward power. Leadership of Ms. Evelyn - She is focus on people, highly concerned on the needs and interest of her people. She believes that when people are happy, contented and comfortable they will work hard to accomplish the organization goals. She sees that it is easy to gain the support of people, when its leaders fosters respect and fair treatment, considers their needs and interest, and shows trust in them. Source of influence – From the...
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