Case Study Hint:

Companies often divide up work as a way to improve efficiency, but specialization can lead to negative consequences. DrainFlow is a company that has effectively used specialization to reduce costs relative to its competitors costs for years, but rising customer complaints suggest the firms strong position may be slipping. After reading the case, answer the questions that follows by suggesting some ways it can create more interesting work for employees. Youll also tackle the problem of finding people qualified and ready to perform the multiple responsibilities required in these jobs.

The Scenario

DrainFlow is a large residential and commercial plumbing maintenance firm that operates around the United States and in Ghana. It has been a major player in residential plumbing for decades, and its familiar rhyming motto, When Your Drain Wont Go, Call DrainFlow, has been plastered on billboards since the 1960s. Lee Reynaldo has been a regional manager at DrainFlow for about 2 years. She used to work for a newer competing chain, Lightning Plumber, that has been drawing more and more customers from DrainFlow. Although her job at DrainFlow pays more, Lee isnt happy with the way things are going. Shes noticed the work environment just isnt as vital or energetic as the environment she saw at Lightning. Lee thinks the problem is that employees arent motivated to provide the type of customer service Lightning Plumber employees offer. She recently sent surveys to customers to collect information about performance, and the data confirmed her fears. Although 60 percent of respondents said they were satisfied with their experience and would use DrainFlow again, 40 percent felt their experience was not good, and 30 percent said they would use a competitor the next time they had a plumbing problem. Lee is wondering whether DrainFlows job design might be contributing to its problems in retaining customers. DrainFlow has about 2,000 employees in four basic job categories: plumbers, plumbers assistants, order processors, and billing representatives. This structure is designed to keep costs as low as possible. Plumbers make very high wages, whereas plumbers assistants make about one-quarter of what a licensed plumber makes. Using plumbers assistants is therefore a very cost-effective strategy that has enabled DrainFlow to easily undercut the competition when it comes to price. Order processors make even less than assistants but about the same as billing processors. 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, DrainFlow gets business mostly from the Yellow Pages 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, DrainFlows order processors listen to the customers description of the problem to determine whether a plumber or a plumbers 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, via cell phone a billing representative relays the fee to the service rep, who presents a bill to the customer for payment. Billing representatives can take customers credit card payments by phone or e-mail an invoice for online payment.

The Problem

Although specialization does cut costs significantly, Lee is worried about customer dissatisfaction. According to her survey, about 25 percent of customer contacts ended in 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. That means fully one in four people who call DrainFlow to hire a plumber are worse than dissatisfied: they arent customers at all! The remaining 75 percent of calls that did end in a customer service encounter resulted in other problems.The most frequent complaints Lee found in the customer surveys were about response time and cost, especially when the wrong person was sent to a job. A plumbers assistant cannot complete a more technically complicated job. The appointment has to be rescheduled, and the customers time and the staffs time have been wasted. The resulting delay often caused customers in these situations to decline further contact with DrainFlowmany of them decided to go with Lightning Plumber.

When I arrive at a job I cant take care of, says plumbers assistant Jim Larson, the customer gets ticked off. They thought they were getting a licensed plumber, since they were calling for a plumber. Telling them they have to have someone else come out doesnt go over well. On the other hand, when a plumber responds to a job easily handled by a plumbers assistant, the customer is still charged at the plumbers higher pay rate. Licensed plumber Luis Berger 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 isnt expecting a hefty bill. Im caught between a rock and a hard placeI dont set the rates or make the appointments, but Im the one who gets it from the customer. Plumbers also resent being sent to do such simple work. Susie McCarty is one of DrainFlows order processors. Shes 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 were supposed to follow with the calls to find out what the problem is and who needs to take the job, she explains. The customers dont know that we have a standard form, so they think we can answer all their questions. Most of us dont know any more about plumbing than the caller. If they dont use the terms on the survey, we dont understand what theyre talking about. A plumber would, but were 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. Its not my fault the wrong guy was sent, says Elizabeth Monty. If two guys went out, thats two trips. If a plumber did the work, you pay plumber rates. Some of these customers dont get that I didnt take their first call, and so I get yelled at. The billing representatives also complain that they see only the tail end of the process, so they dont know what the original call entailed. The job is fairly impersonal, and much of the work is recording customer complaints. Remember40 percent of customers arent satisfied, and its 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, as described in your textbook, and many lack the skills or personality traits to complete the customer interaction component of their jobs. They arent trained to provide customer service, and they see their work mostly in technical, or mechanical, terms. Quite a few are actually anxious about speaking directly with customers. The office staff (order processors and billing representatives) realize customer service is part of their job, but they also find dealing with negative feedback from customers and coworkers taxing. A couple of years ago a management consulting company was hired to survey DrainFlow worker attitudes. The results showed 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:

The information about average plumbers and average office workers is taken from the management consulting companys records of other companies. They arent exactly surprising, given some of the complaints DrainFlow employees have made. Top management is worried about these results, but they havent been able to formulate a solution. The traditional DrainFlow culture has been focused on cost containment, and the soft stuff like employee satisfaction hasnt been a major issue.

The Task:

Your task is to prepare a report for Lee 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 youd actually give to an experienced manager at this level of a fairly large corporation. Lee is very smart when it comes to managing finances and running a plumbing business, but she wont necessarily know about the organizational behavior principles youre describing. Because any new proposals must be passed through top management, you should also address their concerns about cost containment. Youll need to make a strong evidence-based financial case that changing the management style will benefit the company.

Questions:

1. Although its clear employees are not especially satisfied with their work, do you think this is a reason for concern? Does research suggest satisfied workers are actually better at their jobs? Are any other behavioral outcomes associated with job satisfaction? Expand on all.
2. Using job characteristics theory, explain why the present system of job design may be contributing to employee dissatisfaction. Elaborate on three (3) ways you could help employees feel more satisfied with their work by redesigning their jobs.
3. Lee has a somewhat vague idea about how to implement the cash rewards system. Describe Three (3) specific ways you would make the reward system work better, based on the case.
4. Explain the advantages and disadvantages of using financial incentives in a program of this nature. What, if any, potential problems might arise if people are given money for achieving customer satisfaction goals? What other Three (3) types of incentives might be considered?
5. Create a specific plan to assess whether the reward system is working. What are the dependent variables that should change if the system works? How will you go about measuring success?
6. What Three (3) types of hiring recommendations would you make to find people better suited for these jobs? Which Big Five (5) personality traits would be useful for the customer service responsibilities and emotional labor?
7. Expand on three (3) realistic recommendations you would give DrainFlow and why.

DrainFlow Plumbers DrainFlow Plumber Assistants DrainFlow Office Workers Average Plumber Average Office Worker 3.5 3.7 2.5 2.5 4.3 3.8 2.4 3.7 4.1 4.2 I am satisfied with the work I am asked to do. I am satisfied with my working conditions I am satisfied with interactions with coworkers. I am satisfied with my interactions with my supervisor my 3.5 3.2 2.7 3.8 3.9 2.5 2.3 2.2 3.5 3.4