Category Archives: Human Resource Issues in Operations Management

Extra Cash

Extra Cash

1. Besides few opportunities for promotion and intense peer pressure, what other factors might contribute to the high employee turnover rate?

2. What would you do to reduce the employee turnover rate at ATICC?

Extra Cash

Extra Cash

The team also have economic incentives for providing  good service. A bonus plan tied to each team cost and profit can produce extra cash. The employees, most of whom are young college graduate can add $ I ,500 a year to average salaries of 528.000. and pay rise as employees learn new skill. It’s a phenomenal learning opportunity says, 24 year old team member Michael LoCastro. But LoCastro and other complain that promotions are rare because there are few managerial positions.

And everyone comes under intense pressure from co-workers to producer. The annual turnover rate is high: Some 20 percent of ATTCC employees either quit or transfer to other parts of AT&T. Still the team experiment has been so successful that ATTCC is involving employees in planning to extend the concept throughout the company. They will probably come up with as good an organizational design as management could Wajnert say and it will work a lot better because the employees will take ownership for it.

Unexpected Bonus

Unexpected Bonus

Wajnert decided to hire his own employees and give them “ownership and accountability.” His first concern was to increase efficiency not to provide more rewarding jobs. But in the end he did both. In 1986. AITCC set up 11 teams of 10 to 15 newly hired workers in a high-volume division evening businesses. The three major lease pressing functions were combined in each team. longer were calls from customer hunted from department to department. The company all divided its national staff of field agents into seven regions and assigned two or three teams to handle business from each region. That way, the same teams
always worked with the same-sales staff establishing a personal relationship with them and their customers. Above all team members took responsibility for solving customers’ problem . ATTCC’s new slogan: “Whoever gets the call owns the problem.”
The teams largely manage themselves. Members make most decisions on how to deal with customers, schedule their own time off. reassign work when people are absent, and interview prospective new employees. The only supervisors are seven regional managers who advise the team members, rather than give orders. The result The teams process up to 800 lease applications a day very us 400 under the old system. Instead of taking several days to give a final yes or no the teams do it in 24 to 48 hours. As a result AITCC is growing at a 40 percent to 50 percent compound annual rate Wajnert says.


AT&T Credit Corp.

Millions of clerical employees toil in the back offices of financial companies processing applications claims and customer accounts on what amounts to electronic  assembly lines. The jobs are dull and repetitive and efficiency gains minuscule-s-when they come at all. That was the case with AT&T Credit Corp. (AITCC) when it opened shop in 1985 as a newly created subsidiary of American Telephone & Telegraph Corp. Based in Morris town newJersey. AITCC provides financing for customers who lease equipment from AT&T and other companies. A bank initially retained by AITCC to process lease applications couldn’t keep up with the volume of new business. AITCC President Thomas C. Wajnert saw that the fault lay in the bank’s method of dividing labor into narrow tasks and organizing work by function. One department handled applications and checked the customer’s credit standing a second drew up contracts and a third collected payments. So no one person or group had responsibility for providing full service to a customer. “The employees had no sense of how their jobs contributed to the final solution for the customer.

Review and Discussion Questions?

Review and Discussion Questions?

I. Think of three examples of ways in which an organization has changed to become more competitive. What impact do you think these changes have on the employees of the organization?
2. Which of the eight managerial roles do you practice in your role as a student. .. in activities in which you participate …. in your job? Which of Cameron and Whitener’s 10 skills do you use in the e roles?

3. What problems might arise from empowering employees’) What are some of the hurdles that managers must overcome in empowering employees? What could the organization do to address these issues?

4. Would you prefer to work in a traditional work group or in a “elf-managed work team? Why?
5. This chapter mentioned some of benefits of and the difficulties in implementing cross functional and self-managed work teams. What other difficulties can you predict? What other benefits do you see?
6. Is there any inconsistency when a company requires precise time standards and at the time encourages job enlargement?
7. The study team from one American car manufacturer observed that the Japanese used techniques such as job rotation making workers responsible for quality control minimal work classifications and indirect employee participation in management. What gains can be made with this approach in contrast to the job specialization approach? If the Japanese approach were to be adopted in a specialized job environment. what changes would have ta take place far it ta be successfully implemented?

8. How is Technology affecting the workplace?