THE CASE OF SINKING SATISFACTION
Companies often divide up work as a way to improve efficiency, but specialization can lead to negative consequences. NJ Plumbers Plus is a company that has effectively used specialization to reduce costs relative to its competitors’ costs for years, but a rising number of customer complaints suggest the firm’s strong performance may be slipping. THE SCENARIO
NJ Plumbers Plus is a large residential and commercial plumbing maintenance firm that operates around New Jersey. It has been a major player in residential plumbing for decades, and its familiar rhyming motto, “Sinks Big or Small, Remember to Call—NJ Plumbers Plus!” has been plastered on billboards since the 1980s.
Angela Raneri has been a regional manager at NJ Plumbers Plus for about two years. She used to work for a newer competing chain, Pipes “R” Us, that has been drawing more and more customers from NJ Plumbers Plus. Although her job at NJ Plumbers Plus pays more, Angela is unhappy with the way things are going. She noticed the work environment just isn’t as vital or energetic as the environment she saw at Pipes “R” Us.
Angela thinks the problem is that employees are not motivated to provide the type of customer service Pipes “R” Us employees offer. She recently sent surveys to customers to collect information about performance, and the data confirms her fears. Although 60% of respondents say that they were satisfied with the experience and would use NJ Plumbers Plus again, 40% felt their experience was not good, and 30% said they would use a competitor the next time they had a plumbing problem.
Angela was wondering whether NJ Plumbers Plus’ job design might be contributing to its problems in retaining customers. NJ Plumbers Plus has about 2,000 employees in four basic job categories: plumbers, plumber’s assistants, order processors, and billing representatives. The structure is designed to keep costs as low as possible. Plumbers make very high wages, whereas plumber’s assistants make about one quarter of what a licensed plumber makes. Therefore, using plumber’s assistants is a very cost-effective strategy, and it has enabled NJ Plumbers Plus to undercut the competition easily when it comes to price. Order processors make even less than assistants but about the same as billing representatives. All work is very specialized, but employees are often dependent on another job category to perform at their most efficient level.
Like most plumbing companies, NJ Plumbers Plus gets business mostly from print advertising, social media, and the Internet. Customers either call in to describe a plumbing problem or submit an online request for plumbing services, receiving a return call with information within 24 hours. In either case, NJ Plumbers Plus’ order processors listen to the customer’s description of the problem to determine whether a plumber or plumber’s assistant should make the service call. The job is then assigned accordingly, and a service provider goes to the location. When the job has been completed, a billing representative relays the fee to the service representative via cell phone, who presents a bill to the customer for payment. Billing representatives can take the customer’s credit card payments by phone/text or email an invoice for online payment.
Although specialization does cut costs significantly, Angela is worried about customer dissatisfaction. According to her survey, about 25% of customer contacts ended in a no service call because customers were confused by the diagnostic questions the order processors asked and because the order processors did not have sufficient knowledge or skill to explain the situation. This means fully one in four people who call NJ Plumbers Plus to hire a plumber are worse than dissatisfied: they aren’t customers at all!
The most frequent complaints Angela found in the customer surveys were about response time and cost, especially when the wrong person was sent to a job. A plumber’s assistant cannot complete a more technically complicated job. The appointment has to be rescheduled, and the customer’s time and staff’s time have been wasted. The resulting delay often caused customers in these situations to decline further contact with NJ Plumbers Plus— many of them decided to go with Lighting Plumber.
“When I arrive at a job I can’t take care of,” says plumber’s assistant Mike Malone, “The customer gets ticked off. They thought they were getting a licensed plumber since they were calling for a plumber. Telling them that they have to have someone else come out doesn’t go over well.”
On the other hand, when a plumber responds to a job easily handled by a plumber’s assistant, the customer is still charged at the plumber’s higher pay rate. Licensed plumber Cindy Evans also does not like being in the position of giving customers bad news. “If I get called out to do something like snake a drain, the customer is expecting a hefty bill. I’m caught between a rock and a hard place— I don’t set the rates or make the appointments, but I’m the one who gets it from the customer.” Plumbers also resent being sent to do such simple work. Joyce Brothers is one of NJ Plumbers Plus’ order processors. She’s frustrated too when the wrong person is sent to a job, but feels she and the other order processors are doing the best they can. “We have a survey we’re supposed to follow with the calls to find out what the problem is and who need to take the job,” she explains. “The customers don’t know that we have a standard form, so they think we can answer all their questions. Most of us don’t know any more about plumbing than the callers. If they don’t use the terms on the survey, we don’t understand what they’re talking about. A plumber would, but we’re not plumbers; we just take the calls.”
Customer service issues also involve the billing representatives. They are the ones who have to keep contacting customers about payment. “It’s not my fault the wrong guy was sent,” says billing representative Bob Smith. “If two guys went out, that’s two trips. If the plumber did the work, you pay plumber rates. Some of these customers don’t get that I didn’t take their first call, and so I get yelled that.” The billing representatives also complained that they see only the tail end of the process, so they don’t know what the original call entailed. The job is fairly impersonal, and much of the work is recording customer complaints. Remember— 40% of customers aren’t satisfied, and it’s the billing representatives who take the brunt of their negative reactions on the phone.
As you can probably tell, all employees have to engage in “emotional labor” (i.e., emotion regulation) and many lack the skills or personal qualities to complete the customer interaction component of their jobs. They aren’t trained to provide customer service, and they see their work in technical, or mechanical, terms. Quite a few are actually anxious about speaking directly with customers. The office staff (order processors and billing representatives) realizes customer service is part of their job, but they also find dealing with negative feedback from customers and co-workers taxing.
A couple of years ago, a management consulting company was hired to survey NJ Plumbers Plus workers’ attitudes. The results showed that they were less satisfied than workers in other comparable jobs. The following table provides a breakdown of respondent satisfaction levels across a number of categories:
NJ Plumbers Plus Plumbers
NJ Plumbers Plus Plumber Assistants
NJ Plumbers Plus Office Workers
Average Office Workers
I am satisfied with the work I am asked to do.
I am satisfied with my working conditions.
I am satisfied with my interactions with co-workers.
I am satisfied with my interactions with my supervisor.
The information about average plumbers and average office workers is taken from the management consulting company’s records of other companies. They aren’t exactly surprising, given some of the complaints NJ Plumbers Plus employees have made. Top management is worried about these results, but they haven’t been able to formulate a solution. The traditional NJ Plumbers Plus culture has been focused on cost containment, and the “soft stuff” like employee satisfaction hasn’t been a major issue.
THE PROPOSED SOLUTION The company is in trouble, and as revenues shrink and the cost savings that were supposed to be achieved by dividing up the work fail to materialize, a change seems to be in order.
Angela is proposing using cash rewards to improve performance among employees. She thinks if employees were paid based on work outcomes, they’d work harder to satisfy customers. Because it’s not easy to measure how satisfied people are with the initial call-in, Angela would like to give the order processors a small reward for every 20 calls successfully completed. For the hands-on work, she’d like to have each billing representative collect information about customer satisfaction for each completed call. If no complaints are made and the job is handled properly, a moderate cash reward would be given to the plumber or plumber’s assistant. If the customer indicates real satisfaction with the service, a larger cash reward would be provided.
Angela also wants to find people who are a better fit with the company’s new goals. Current hiring procedure relies on unstructured interviews with each location’s general manager, and little consistency is found in the way these managers choose employees. Most lack training in customer service and organizational behavior. Angela thinks it would be better if hiring methods were standardized across all branches in her region to help managers identify recruits who can actually succeed in the job.
Your task is to prepare a report for Angela Raneri on the potential effectiveness of her cash reward and structured interview programs. Make certain it is in the form of a professional business document that you’d actually give to an experienced manager at this level of a fairly large corporation. Angela is very smart when it comes to managing finances and running a plumbing business, but won’t necessarily know about the organizational behavior principles you’re describing. Because any new proposals must be passed through top management, you should also address their concerns about cost containment. You’ll need to make a strong evidence-based financial case that changing the management style will benefit the company. When you write, make sure you address the following: Why is low job satisfaction something that should be a concern of management? What is the business case for improving employees’ job satisfaction? Using what you have learned about job satisfaction in the course, explain what variable might explain employees’ low job satisfaction levels. What are some evidence-based ideas for increasing job satisfaction?
What is your professional opinion on Angela’s proposed cash rewards system (using what you known about rewards and incentives)? Provide Angela Raneri with some specific ways to effectively implement the system. How should NJ Plumbers Plus measure that performance of their plumbers, plumber assistants, and office workers? In other words, what types of performance appraisals should be used to facilitate the case rewards system? What types of hiring recommendations would you make to find people better suited for these jobs? Which personality traits would be important to look for when hiring (particularly if the goal is to improve customer service)? Would you recommend any other changes (not covered in the questions above) to improve performance and/or commitment at NJ Plumbers Plus? You should write your case analysis in the form of a professional business report. The language should be formal, and you should write the paper in paragraph form, incorporating bullets or headings as you see fit. If using bullets, be sure to write in full sentences and be complete in your ideas. As this is a report, feel free to include a title page (however, it is not necessary to include an abstract or executive summary). Be sure you address all the questions that I have listed above. However, this paper should not be written in Question/Answer format (i.e., I don’t want to see a list of numbered questions and answers–like a typical homework assignment). This is a paper, and the information should be communicated in paragraphs. As long as you eventually address all the questions/points that I have listed, you can present the information in any order that makes sense. Make sure it reads like a report. Your paper must be a minimum of 1000 words (normal margins, single-spaced, 12-point font). There is no maximum (although length is not as important as quality). If you use any sources other than the textbook and lectures (which is optional), you should cite them using APA format (and have a separate references page). There is no need to cite textbook and/or lecture material.
THE CASE OF SINKING SATISFACTION Companies often divide up work as a way to impr
THE CASE OF SINKING SATISFACTION
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