Executive Summary

This report will look to give WGYC’s Board of directors a lucid and comprehensive evaluation of the telesales sector, including current trends and public opinion of the sector. Recommendations will be made on appropriate reward package schemes that will centralize around their current mission statement which is ‘to provide an outstanding call centre service that is monitored regularly to ensure the highest level of excellence to energy suppliers internationally, allowing our customers to reduce costs, drive revenue, increase cash-flow and concentrate on their core competencies.’ This reports recommendations will strive to improve WGYC’s employee retention and customer service, impacting team members that will be more motivated to succeed through employee of the month schemes with more freedom over their work through working at home. Workers’ well being will be given more consideration through the introduction of flexi-time, and team leaders will act as motivators rather than supervisors ensuring teams are working together in a high-intensity but friendly environment.
Approximate costs of implementation will be £2,000,000 highlighting the high costs of an employee-orientated approach for this sector.

Context

The telesales sector is still a hugely profitable sector in the UK, with total revenues of £2billion. However, between 2010-2015 the sector has seen a decline in annual growth by -1.1% due to an increase in offshore competition and the financial crisis of 2008-09 meant firms had to rein in its costs of expensive outsourcing.1 In the UK it can be difficult for telesales workers to make successful calls due to the ongoing stereotype of cold callers and nuisance calls affecting the public’s willingness to listen to them. This shows the importance of employing the right strategy and employees who can establish a rapport with customers almost instantaneously. This would be difficult to achieve under WGYC’s hard HRM approach, and will be achievable under the CE’s new employee-orientated approach.
Energy suppliers have been under increasing scrutiny over the last few years, especially the ‘big six’ firms. These firms are reducing their bills between 3.5% and 5%, whereas wholesale gas prices have fallen 20% since December 2014.3 There is much injustice felt amongst members of the public concerning energy suppliers, and this coupled with the telesales stereotype, can make it very difficult for WGYC to sell such a service. However, it is worth noting that smaller energy suppliers such as Welsh Gas, who account for 5% of the market, have the highest customer satisfaction. The big six averaged around 50% whereas smaller suppliers such as Ecotricity and Good Energy scored above 80%. WGYC can use this to their advantage when selling Welsh Gas’ service.
Reward strategies and the initiatives established as part of these strategies are parallel to their ability to achieve certain core objectives. It is important for WGYC to develop ‘high performance human resource practices,’ (HPHRPs) that are ‘coherent, interrelated HR practices designed to promote employee motivation and commitment.’
They are key in attracting, retaining and motivating staff as well as driving change and corporate reputation.6 ‘the reward package on offer must be sufficiently attractive… to secure the services of the staff it needs. Attractive packages thus allow the appointment of high-calibre people.’6 WGYC will use these reward packages to maximize their staff retention and customer service.

Recommendations

First and foremost, the key performance indicators (KPI) that have been set will need to change. The first KPI will be dropped, as length of time spent on a call is not relative. Average hold time will still need to be monitored, as customers do not want long hold times. After-call-work will be changed from time to quality- the notes made between calls will have to be detailed in order to be the most relative to customers in the future. Agent’s productivity will not be assessed by time spent on calls, but at the team leader’s discretion. Team leaders will have to monitor team members and note the amount of work done on and off the phone. Sales conversion will still be monitored, as will Sales compliance. Team leaders will act as motivators, rather than supervisors. The choice in supervisors may need to change to characters that can give positive feedback to members of their teams. These changes will increase employee retention and improve customer service.

Basic rate of pay

WGYC need to set their basic rate of pay above the average of £18,000 that is recorded in the south west of the UK in order to increase their employee retention, which will be followed by the maximization of customer service. I would recommend a salary of £21,000 that is below average within the UK, but very competitive within the region.

Performance Related Pay (PRP)

The implementation of PRP must be strategic and holistic, as many organizations have had difficulties in the past due to the ‘rigid uniform, top-down approach.’ The PRP I believe is best suited for WGYC is a profit sharing scheme (PSS) which will encourage employees to maximize their performance and increase their attachment to the company, also increasing employee retention. Research conducted by WorldatWork in 2007 found that 24% of private companies used a profit-sharing scheme. This profit sharing scheme will be team based, increasing team performance rather than individual performance. Team leaders will be part of these teams, and be expected to motivate employees that are not contributing enough and praise members that are doing above what is expected. Team leaders will use a goal-based system which will be evaluated quarterly. Objectives will be set for the team as a whole, where it is up to the team leader to arrange a meeting between all members of the team. These objectives will be linked with organizational goals and KPI’s. All employees will receive a percentage bonus representative of their annual salary, which is set by the board of directors. The board of directors will base this on company performance and if company objectives have been achieved. An additional bonus will be given to the highest performing team based on ability to achieve KPI’s. John Lewis has successfully implemented such a scheme, with its 69,000 permanent employees receiving an annual bonus representative of their annual wage. Last year, John Lewis employees received an annual bonus of 15% of their salaries. Research shows that employee owned businesses generally outperform their non-employee owned counterparts.

Competence-related Pay

WGYC should reward team members by the level of competence they demonstrate in carrying out customer calls. Team leaders and team members will be evaluated on different competencies. Team leaders will be assessed on their ability to manage their team and getting the highest performance levels out of their team members. Team leaders will assess team members on the KPI’s, what they need to know, what they need to do and how they need to do it. Pay progression will be linked to different competence levels set by team leaders. Team leaders will assess individuals within the team on a set of competencies within different pay bands. Once all competencies are achieved within a pay band, they will reach the next level within that pay band. Having previously worked in John Lewis and experiencing a similar system, I can say that the system is effective at increasing customer service. Competencies such as receiving positive customer feedback throughout the year and the amount received were held within different bands, making myself strive to improve my customers service in order to progress through the pay bands. From the implementation of this, a multiskilled workforce may occur.
WGYC should implement this competency related pay with non-pecuniary rewards such as offering opportunities for learning and development. When team members and leaders reach a certain level of performance set by managers, they will become eligible to sign up for a programme of their choice, which could include management, customer service and I.T. skills. John Lewis successfully offers its partners a range of programmes that lead to qualifications. In 2012, 1330 John Lewis partners gained a retail diploma, with a third picking up a level 3 qualification. WGYC will have a more professionalized workforce that are committed and offer quality customer service.

Employee of the month

WGYC should implement an employee of the month system. This should be implemented on two levels; between members of a team and members of all teams. The team leader of each team is expected to choose the best performing member of their team, and then write the reason why they are the highest performer. This will then be passed on to a manager within WGYC who will assess each report and choose an employee of the month for all teams. The employee of the month will receive it from the highest manager within WGYC and be rewarded with a bottle of champagne. McDonald’s is a firm that successfully implements an employee of the month scheme, and can be seen in their stores near the counter. In addition, from my experience with John Lewis I noted that they implemented a ‘partner of the month’ award that encompassed the whole store in Cardiff. A trophy is awarded at a meeting held between all members of the store by the store manager, and is a very strong motivator for employees to increase performance and commitment. It is a way of celebrating success that WGYC employees will strive to achieve.

Flexi-time

In the interest of work/life balance, once an employee has reached 3 years service, they will be able to take up a flexi-time contract. A worker is still required to work the same amount of hours as their previous contract, but can tailor it to their lifestyles. A card system will need to be implemented that will clock worker check-in and checkout times and electronically clocked to ensure they are working their contract hours. A report by Regus in 2011 says that 85% of companies offer flex time, with the majority of companies agreeing it improves staff productivity.

Working from home

Once employees have reached 3 years service and are consistently high performers, they will have the option to work from home. Implementation of this will be done through providing employees with software and equipment necessary to work at home. Monitoring of work will be done electronically via software, with workers working at least one day a week in the office to have a meeting with their team leader. An experiment by Ctrip, one of China’s largest travel agents, found that over a 9-month period home-workers performance increased by 13%, and were also more productive per minute. This is a viable option for committed employees who appreciate WGYC’s commitment to their wellbeing.

Evaluation

Performances related pay would need to be evaluated after 2 years. Namely, has it affected team performance? A course of action at this point is to evaluate whether the team leaders are effective in their roles, setting achievable and realistic goals that have a positive behavioral outcome on team members. Concerning the profit sharing scheme, top management will need to assess whether it is an affordable system, and keep it relative to company profits in different levels of company performance.
Competence related pay would be evaluated between 1-3 years. Evaluation of the competencies set will need to be made, and as the team becomes more competent it may need additional competencies for employees to progress further. As team members become more skilled a slimming down of the workforce may be a point of action. In regards to the qualifications, are staff undertaking what is offered 2-3 years down the line? Are they contributing more to the business as a result of these qualifications? A course of action after 2 years may be to survey team members and ask if the programmes are relevant to them, and if additional programmes are needed.
Employee of the month will be evaluated after 12 months. Are employees striving to achieve employee of the month within their teams and do their efforts feel appreciated, not worthless? A plan of action may be to implement a team of the month, rather than employee of the month if members prefer teamwork.
Flexi-time workers will need to be questioned after 12 months whether they feel it is a worthwhile change. Are they performing better and are they more motivated to work the hours necessary?
Employees working at home will need to be evaluated on performance. Is working at home having any affect on their performance, and is their contribution remaining consistent/increasing? If not, then action may need to be taken where members will lose the option to work at home.

Bibliography

Lampel, J., Bhalla, A., Jha, P., Do employee-owned businesses deliver sustainable performance? [online] Available at: http://employeeownership.co.uk/resources/reports/

Messersmith, J., Patel, P., Lepak, D. and Gould-Williams, J. (2011). Unlocking the black box: Exploring the link between high-performance work systems and performance. Journal of Applied Psychology, 96(6), pp.1105-1118.

Paying for Contribution: Real Performance-related Pay Strategies. (2001). Work Study, 50(1) Publisher: Emerald Group Publishing Limited

Torrington, D., Hall, L., Taylor, S. and Atkinson, C. (2011). Human Resource Management. 8th ed. Edinburgh: Pearson Education, pp.519-547.

Torrington, D., Hall, L., Taylor, S. and Atkinson, C. (2011a). Human Resource Management. 8th ed. Edinburgh: Pearson Education, pp.558-566

WorldatWork, Vivient Consulting, (2007). Private Company Incentive Pay Practices. [online] Scotsdale, Arizona: WorldatWork, pp.2-20. Available at: http://www.worldatwork.org/waw/adimLink?id=21776 [Accessed 5 Feb. 2015].

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