WIS NZ performance management
Fourteen telephone account managers were managed by Telephone Sales Manager. At the time, there were two simple main performance indications, contacts per day and sales per month, used to measure the performance of Telephone Account Managers. The KPIS cover many areas, including sales, projects, engagement, contribution, communication, relationships, complaints, and etc. Incentives were based on sales of quarter and year. Staff could get 10% of exceeding amount of target as the quarterly bonus, and 20% of exceeding amount of target as the yearly bounces. Employees were knee, also encouraged by company and bonus structure, to build up a long-term relationship with customers. Telephone Account Managers usually seek medium-long term projects to grow customers in a term of one to two years, or even longer. Staff saw themselves as account managers, instead of salesperson, who usually acted as a health and safety expert to give professional advices to help customers select proper products. Telephone Sales Manager conducted a bio-annual performance review to discuss the performance of the employees, give advices on how to improve, identify the needs and interest of the employee and help achieve them. Managers also tailored their coaching or “favours” to employees’ personal interests and needs.
Salesforce performance management
In 2009, since Salesforce took over the operation, Salesforce brought along their own performance management system, incentive structure and performance review. Instead of simple contacts and sales, a more complex structure of indicates was introduced, sale of categories of products, conversation rate, monthly sale, growth, and etc. Instead of bi-annual performance review, Salesforce conducts monthly review and one on one meeting fortnightly. Also the new bonus now is monthly, and based on the growth of same month in previous year instead of setting up a target. The incentive is much higher, but hard to achieve. Staff will get up to $1,000 per month if he or she achieves 20% margin growth. A lot new territories created and started developing, and a lot of new staff employed and trained. Currently, only one third of team is still under the employment of WIS NZ. Salesforce also brought their CRM system(Customer Relationship Management software), which dramatically increases the effectiveness and efficiency, also is easy for managers to measure performance of staff. Unfortunately, staff retention dropped dramatically. Many new crew left in six months, some did not even last three month. Recruiting and training become a regular task, customer service become inconsistent.
Advantages and Disadvantages
The advantages of management of Salesforce are obvious, the team has a clear vision of the organisation’s, objectives and strategy with the help of CRM software. The introduction of Salesforce CRM system definitely brings down the difficult level of measuring staff performance. Salesforce CRM system allows managers to look at not only monthly sales figure and personal contacts, but also more detailed information, such as what categories of products the person sold most and least, what the converting rate between quotes and sales is, what staff talked to customers, and etc. By analysing these information, managers easily identify the facts why the person is performing or underperforming and how to coach him or her with individual plan. The speed of growing a territory is much faster than before. Therefore, the outsourcing is successful in term of economic growth and sales professionalism. Keith Macky (2009) listed the system elements:
- A clear vision of the organisation’s mission, objectives and strategy, which is then communicated to all employees.
- The setting of individual performance goals that are linked to team, business unit and organisational objectives.
- The conduct of regular, formal reviews of progress toward these individual performance (and team ones when appropriate), including formal feedback and performance diagnosis to identify barriers to improved performance and plan for their elimination.
- The informal and preferably continuous monitoring of employee performance and feedback provision.
The disadvantage of management of Salesforce are also noticeable, high staff turnover, price undercutting, more individual than a team and low personal attention. Since Salesforce started managing telephone account manager team, a few Wesfarmers employees have left the company not after long, who all complaint about increasing workload and high stress. Coincidently, some new staff recruited by Salesforce left after 3-6 months, and reasons were quite similar. The survey is produced by SHRM and CareerJournal.com, the free, executive career site of The Wall Street Journal, two of my personal favourite sites (,2006).
- 53 percent seek better compensation and benefits.
- 35 percent cited dissatisfaction with potential career development.
- 32 percent said they were ready for a new experience.
The bonus is monthly, not quarterly and yearly, and attractive, but hard to get. Staff are more knee on quick sales, instead of building up long-term relationship, that directly causes that staff intend to under price to secure a sale. The sales strategy is leaning more to price driven, not product driven, which leads quite many incidences of selling products under company-preferred margin, and the company does not appreciate that at all. There is also a high bonus for top salesperson in the team. Team members are quite competitive and aggressive, and like to hold on their ideas and not to share among the team, even if team managers are extremely encouraging. Some team members have acted quite offensive or against this new management or new performance measuring method, who often are being negative to any new ideas or activities put up by team managers to try to lift the performance up. These members usually complaint their personal interests or needs not fulfilled. It seems that all team members are asked to behave as one person, in terms of sales activities and selling style, under the coat of professionalism.
Management Structure
The entire project was divided into two groups by companies. Project manager is from Salesforce, one of team leaders is from Wesfarmers, and the other was recruited by Salesforce. Previous Wesfarmers employees exist in both teams. Due to different HR polices and different employment contracts, Salesforce managers can only coach Wesfarmers employees, but are not allowed to discipline them, that also applies to Wesfarmers manager managing Salesforce employees. The firm should ensure employee discipline and possible eventual dismissal for performance-related problems (Macky, 2009).
Employee Engagement
To successfully carry out performance management, the certain level of engagement from employees is required. To gain a greater appreciation and understanding of Employee Engagement, one must also consider:
In the case of Wesfarmers, managers did seek to profile and evaluate the types of traits, characteristics, competencies and behaviours amongst engaged employees, but failed to motivate those who aren’t engaged in their jobs. Philip Little(2006) lists some of the main benefits to having engaged employees as leading to higher customer satisfaction and increased revenue. “Not only are engaged employees more productive, but they're also more profitable, safer, less likely to leave their employer, and crucially more customer focused.”
Motivation
Motivation is incidental to or defined by goal-directed behaviour (Locke & Ladham, 1990). In reality, given the difficulty in measuring intangible performance contributions to a company, pay for performance is difficult and there is little evidence that pay motivates individuals to higher levels of performance (Moulton, 2005). Salesforce offers an incentive structure of earning up to $12,000 a year, which is very attractive to a telephone salesperson who only gets $38,000 per year. The Salesforce incentive structure usually assure that a salesperson can get some of $12,000 every year, but almost mission-impossible to earn the top commission. Since the structure is based on growth, so salesperson finds it is getting much harder to earn commission in the second and completely hopeless in the third year. Salesforce employees, who still remain after two years, are very unengaged. Julia Cummins(2005) concluded what areas might go wrong:
• Systems and processes too lengthy, lack clarity
• Managers and organisations mistake the intent of the performance system
• Emphasis on backward looking assessment rather than forward looking development
• Too much focus on the process or score and not the commentary
• Managers don’t pre-empt, openly recognise and account for the likely emotional response
• Too much assessment ‘saved up’ for end of the year
• Focus on weaknesses rather than strengths
Besides incentives, there are not many opportunities of promotion for Salesforce employees. Due to the outsourcing contract between Salesforce and Wesfarmers, Wesfarmers can’t approach any Salesforce employees, even who currently work for Wesfarmers, in any words, Salesforce employees do not have any opportunities to be promoted or transferred to other departments of Wesfarmers. The only opportunities here is to be promoted as a team leader if you are truly interested in sales career. As for Wesfarmers employees, they always consider themselves as product expects instead of salesperson, who don’t usually have any interest in sales career at all.
Recommendation
Management Structure
Wesfarmers and Salesforce should, first of all, find a solution of keeping all employees under the employment of one company, not the management of one company. Since Salesforce is managing the team, I strongly recommend that Wesfarmers takes whatever it will cost to transfer all employment of Wesfarmers employees to Salesforce. With keeping all employment under Salesforce, Salesforce will be able to carry out what they are contracted to do, managing the team smoothly, making sure all team members are on same rules, an taking necessary HR processes if required.
Motivation
It seems, currently, incentive is the only motivation for staff. In performance review, it covers many things outside incentive, such as personal interests, contribution to team, social activates, and etc, all of which are not addressed or helped fulfil during daily management. Many staff pursue more than incentive, personal recognition and personal care might help staff achieve higher level. Managers should consider not only using incentive as a bait, also giving true care to understand the needs and interests of staff and offer non-monetary incentives, such as flexible hours.
Engagement
Firm can manage with two key tools to understand staff: formal and informal discussions. By conducting formal and informal discussions (Anatoliy & Jamie, 2009). Salesforce managers are able to establish individual goals, encourage responsibility and accountability, building good relationships, encourage performance and improvement, and facilitate development opportunities.
CONCLUSION
On refection of the research undertaken, and with reference to performance management as a construct, there are motivation, engagement and management structure that supports the notion that for firms who can successfully increase productivity whilst maintaining a sustainable team. By comparing with WIS NZ’s two performance managements, we can tell that the productivity did increase since Salesforce took over the management, but which did create another problem of staff retention.
Recommendations made on management, motivation and engagement will help Salesforce increase WIS NZ’s productivity even further while retaining right staff. Theses changes require both WIS NZ and Salesforce working together to solve the problems. With a stable team, WIS NZ will eventually make it worthwhile outsourcing the telephone account manager team to Salesforce.
Reference:
Dieleman, M., Toonen, J., Toure, H., & Toure, T. (2006). The match between motivation and performance management of health sector workers in Mali. Retrieved 7 November, 2011, from
Macky, K. (2009). Managing Human Resources: Contemporary Perspectives in New Zealand. North Ryde, Australia: McGraw-Hill Australia Pty Ltd.
Little, B., & Little, P. (2006). Employee engagement: Conceptual issues. Journal of Organizational Culture, Communication and Conflict, 10(1), 111. Retrieved 7 November, 2011,from
LOCKE, E.A., & LADHAM, G.P. (1990). A Theory of Goal setting and Task Performance. New York, NY: Prentice-Hall.
Cummins, J. (2005). Current Performance Management Practices on Creative Reward and Motivation Techniques. Retrieved 7 November, 2011, from
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