Hausser Food Products
... identity can lead to a low meaningfulness of the job. Siegel commented that “Despite what they say, it’s not the greatest life being out on the road all the time, staying in motels, fighting the competition.” (Tushman, 2002, p.5) The above evidence can also be analyzed from the perspective of a Herzberg’s Motivator-Hygiene Model. At HFP, lack of critical motivators such as achievement, stimulating work, and advancement combined with the presence of hygiene factors such as poor company policies, technical supervision, and interpersonal relationships can lead to a high level of job dissatisfaction. 4 Alternative Solutions for Motivational Issues The problem analysis yields two fundamental motivational issues at HFP: skewed monetary incentive structure and job dissatisfaction. They in turn cause a low level of employee motivation and drastically affect the company’s bottom-line. The following details the possible solutions at HFP. Show me the money! Changing the monetary compensation structure seems to be a necessary solution for HFP. One of the suggestions is that an organizational award such as stock ownership or profit sharing can be a cure to the dysfunctional compensation structure. Profit sharing will not only bring pay equity to the sales team, but it will readjust their personal interests with that of the company HPF. The stock ownership plan will also give the salespeople a stake in the future of the company. Therefore, they may be more willing to contribute to the long term survival of the company instead of the team only. This will in turn eliminates the “us versus them” mentality as demonstrated by the Florida sales team and enable them to work together through this time of crisis. A major complaint of the sales people was that they had to work harder to keep the same pay due to the aggressive nature of the incentive plan, which is currently consist of a low fixed salary with a substantial bonus. A potential solution here is to link the increase in sales performance to an increase in base salary. The not only removes the sales team’s resistance of annually increasing sales quota, but it also reward salespeople for their loyalty to the company. As with any changes in compensation structure, will have the downside of being a highly sensitive and politically charged topic. The magnitude of changes for company bonus and base salary will likely invoke intense emotions on the part of sales team. As the effectiveness of a sales team will still be dependent on the incentive of a team-gain bonus, HFP will need to carefully balance it with an effective profit sharing plan. The transitional effects of a revamped compensation structure may also be a significant short-term negative for the sales people. This will be the first time that the company’s eroding revenue base will affect the sales team’s compensation. This negative reinforcement can have the perilous effect of further demoralizing the sales force and lead to staff exodus. The senior management team may also see effects on their compensation levels as the profit-sharing program is now split with the sales team. A problem with the variable base salary is that it will cost HFP extra salary expenses. Whereas the bonus is based on sales goal and company performance, the increase salary will increase HFP’s fixed cost. HFP will need to balance this consideration with the need to have a high enough increment to base salary to motivate the sales team. 5 Communication Issues at Hausser Food Products What did you say? One of the primary problems at Hausser Food Products (HFP) is lack of effective communication between the sales teams who are on the front line and senior sales executives. There is insufficienct channels of communication to connect these two parties and the meager communication that does exist flows largely in one direction: from the senders at management level to the receivers at the sales team level. Decisions that are fundamental to the job of the sales team, such as the sales targets, are decided through negotiations between two senior managers: the director of market planning and the director of sales (Tushman, 2002, p 3). The only input for these negotiations that comes from below is anticipated sales projections provided by the middle level, regional sales managers. Once the directors have decided on the sales plan, it is filtered down through the regional sales managers to the district managers. By the time the sales team and district manager receive the information it has been distilled into sales figures their sales team must achieve and expense budgets they must not exceed (Tushman, 2002, p 3). These receivers are foremost responsible for attaining the sales plan yet they have no direct way of providing information to decision-makers about its formulation - despite having strong opinions on the sales plan (Tushman, 2002, p 5). The channel of communication has no feedback loop that would allow the sales team to offer their insights on the sales plan. Moreover, the sales team and district manager are unassisted by the senders in decoding the meaning of the sales plan. The only communication between the upper management and the people on the front line of sales comes in the form of figures and numbers. There is no discussion of the sales plan between sales teams and the decision-makers in any form be it face to face, phone or email conversations. This generates a fertile situation for miscommunication: the management intends to use the sales plan as a tool for accomplishing the company objectives while the sales teams interprets the sales plan to be a list of unreasonable targets to which they are bound. Misunderstanding of the only information flowing between the parties is seemingly segregating the sales team and upper management further. With lack of regular and effective communication between the two levels, it is not surprising to discover that upper management seems to have little awareness of the challenges facing the sales team on the ground levels and sales teams do not comprehend the pressures that top management must address. The Florida team complains that the management in Atlanta places demand on them that interfere with their ability to conduct the most important aspect of their job, that of making sales. As Portnow, a senior salesman in the Florida team, says: The people in Atlanta also want all kinds of paperwork: sales reports, call reports, all kinds of reports. If you filled out all the things that they want you to fill out; you’d spend all your time doing paperwork and no time out selling, looking for new accounts, making cold calls, or any of the things a salesman really is supposed to do if he’s gonna keep on top of his area. (Tushman, 2002, p 5). Perhaps, the purpose or importance of these duties has not been effectively communicated to the sales team. The pattern is similar in reverse. Top management’s “great alarm” over slumping sales (ibid, p 2) does not appear to be fully understood by the Florida sales team. The situation has reached crisis level and Cooper began to think her job may be in jeopardy if things do not turn around (ibid, 6). Yet the sales team continues to function like it is any other year, unconcerned with the severity of the threat facing the company from the declining sales. They are simply aiming for the minimum sales they need to meet plan plus 10 per cent as they have over the years., with no intention of offering new ideas to generate growth opportunities. They do not demonstrate that they consider the larger picture of how decreasing sales may be influencing the rest of the company (let alone that if the company is in trouble their livelihoods may also be in trouble). This may be the fault of the management team as it has not directly communicated to the district managers or sales team the severity of the market situation. The lack of viable two-way communication channels essentially inhibits the company from reaching its fullest potential. Where is the openness? As elaborated in the previous section, upper levels of HFP’s management and its sales teams are disconnected from each other because the company lacks proper channels of communication. However, this paints an incomplete picture of the communication problem that exists in the organization, for even when the regional manager has tried to develop communication with the Florida sales team, they have not given her any useful or accurate information. In other words, Hausser Food Products is also suffering from a lack of openness in communication that unless remedied would inhibit the flow of communication even if better channels were present. Jay Boyar did not engage in assertive communication with Brenda Cooper, which some experts suggest is fundamental in fostering dialogue (Hellriegel, 2002, p. 453). In fact, Boyar actively sought to mislead Cooper so that she would be unable to discover the true reason for his team’s consistent sales growth. As Cooper explained: I’ve been down there and met with them and I’ve talked with Jay numerous times, but I can’t figure out how they do it. They must be doing something that could be used in other places; but every time I ask how they do it, I get very vague answers like, “Well, we work hard down here” or “We work together as a group; that’s how we are able to do well.” (Tushman, 2002, p 4). Boyar implied that the secret to his teams success is due purely to the efforts they put forth, when he was fully aware that the higher sales was largely attributed to the new market discovered by the Florida sales team. On L. Sussman’s Communication Openness Continuum, Boyar’s communication with Cooper fall much closer to the “Closed, Guarded, and Defensive” end than to the “Open, Candid, and Supportive” (Hellriegel 1998, p. 454). One explanation for these guarded communications is that Boyar and his sales team do not trust the managers above them. They believe that the company does not consider or care about the interests of its salespeople, and this is illustrated by one saleman’s statement that the company is “out to screw them” (Tushman, 2002, p. 5). Therefore they have no motivation to act in the best interest of the company by increasing sales or by offering new ideas on new sales growth opportunities. Instead, their main objective is to look after their own individual welfare, which appears to be achieving the sales plan’s targets plus the 10% extra required to get the bonuses each year (Tushman, 2002, p. 6). Thus, Boyar is intent on concealing his team’s discovery is thus instigated by his perception that Cooper’s goals are aligned with the top management. Given his position in the company, Boyar should have been the communication link between the sales team he supervises and upper management. 6 Alternative Solutions for Communication Issues Just call me anytime… As illuminated in the previous section, the channels of communication between upper management and the sales teams are inadequate. This prevents the two groups from understanding or caring about each other’s needs. The modest communication that does exist is largely unidirectional from top to bottom. Thus, an obvious starting point for solving the communication problems would be to improve these lines of communication. Companies such as Pillsbury have implemented strategies such as anonymous employee input hotlines in order to close the feedback loop between management and employees (Kreitner, 2003, p. 458-459). Hausser Food Products could enhance communication by developing a similar system, such as offering secret feedback forms. They could offer anonymous employee surveys or develop a website on which feedback and ideas could be posted. Opening up this formal channel of communication may help the organization find out what is happening at the lower levels of the organization. Lower management may also be encouraged to share their ideas with top management. Another way to improve communication within the organization could be to build trust by promoting from within the company. Typically, regional managers are people with business education backgrounds who are hired externally (Tushman, 2002, p 2). They are new to the company and thus, have no practical understanding of what it entails to be a salesperson at HFP. Yet, their responsibility is to motivate, coordinate and manage sales teams. Many of the salespeople have been with the company for decades yet have never moved into such management positions in the company. This could be contributing to the lack of trust displayed between the regional manager, Brenda Cooper and the district manager, Jay Boyar. Perhaps if there are opportunities for sales people to be promoted to higher management roles, the regional managers would be better able to gain the trust and respect of the sales teams they represent. By facilitating the trust, there would be an environment more conducive to communication openness and so the regional managers could better link levels of the company and the sales teams. The problem with this solution is that it may not improve the amount of effective communication between Atlanta management and the sales teams because it fails to address the reasons why the Florida sales team actively concealed information. Making channels of communication available to the employees and improving the context for communication openness are only part of the problem: they have to want to speak before any effective communication will occur. Thus, a solution is needed to increase the incentive employees have to share their ideas such as how to improve sales. Another problem is that when information is disclosed, it has to be verified and confirmed and that may be hard if the person’s name is to be protected. When feedback channels such as those mentioned above are done anonymously, there is no accountability. There is the risk that the system may be abused by someone might be playing a prank or fabricating evidence with vindictive intentions. It may be more practical to just align the company goals to that of the organization and then open up a candid form of communicating through feedback and emails and maintain secrecy when the situation requires it. Before the carrot, now the stick… The extreme cohesiveness of the Florida sales team should be broken if its goals cannot be aligned with that of the organization for they are proving to be destructive to the company’s well-being. The overall company’s sales growth has declined drastically, their market share reduced significantly and job loss is on the horizon, yet the Florida sales team who holds the key to rectifying this situation thinks of its own narrow interests. Another solution therefore to induce communication could be done through instituting a system of punishment for dishonesty and distortion that is detrimental to the company. Cooper strongly suspects the Florida team is being deceptive but feels powerless on how to get them to open up. If Cooper was able to punish such behaviour she may be able to get the critical information from the sales team. Furthermore, this could set a precedent for all future teams to be aware that they should be leery of valuing team’s goals at the expense of the company’s best interest. The prospect of punishment for keeping secrets may offset the intimidation given to new sales recruits, essentially acting as a prevention measure for counter-productive behaviours. However, the problem with this solution is it may actually act as a de-motivator. After all, the regional manager would have to justify to her superiors why she is punishing one of her most successful sales teams. It may serve to reinforce the negative and adversarial emotions already held by sales employees towards their company and may cause employee exodus. I want to play too. In order to improve communication, Hausser Food Products not only needs to establish formal channels through which communication can flow between top management and its employees, but also eliminates the barriers that discouraging the employees from engaging in open communication with their superiors. When the Harley Davidson Company was losing money and market share, its executives became dedicated to facilitating communication channels from the employees to management. On Harley Davidson’s transformation into a leading motorcycle manufacturing company, its leader explains: “we finally listened to our people.” (Waterman, 1998, p. 62) The way they accomplished this was by institutionalized a system that allowed employees input into decisions traditionally made only by management (ibid, p. 63). A similar approach may be effective in solving HFP’s communication problems. The company could consider including sales teams in the process of determining the fundamental decisions governing their jobs: the annual sales plan. Goa...