Organizational Motivation and Leadership Paper

Organizational Motivation and Leadership Paper

It is quite common for employees to feel indifferent towards their jobs and this is in spite of their area of work or their social and cultural setup. This indifference is often caused by ineffective management styles, unappealing work, and poor pay. Sales jobs are probably the only exceptions where employees are driven by their commission, which is their only remuneration (Paterson, 2008, para. 6). Sales agents work diligently to meet their targets and earn gainful way. Theoretically sales positions of financial representatives at Northwestern Mutual where commission is the only remuneration, is likely to be staffed by spirited people with great enthusiasm for selling as many life insurance policies as possible. However, this is not always the case. We find indifference here as much as in any other field of work. Appropriate methods of improving employee motivation accompanied by effective management can help Northwestern Mutual reduce indifference levels so that it can broaden its service offerings and cater to larger markets.

Milwaukee, Wisconsin-based Northwestern Mutual is a large financial services company. The company was able to maintain its AAA ratings even during the period of recession primarily because old-school practices (Paterson 2008 para 2). The company’s target customers are people from middle and higher income levels of society who want to buy life insurance policies. Northwestern’s whole life policies come with a premium that’s the highest in the industry, and costs significantly more than its competitors. The company’s operations are spread across the country and not restricted to Milwaukee alone. The branch offices primarily function through their financial representatives who are typically recent college graduates who are pursuing their first employment opportunities. The only remuneration that is paid to them is the sales commission (Paterson, 2008, para4). These financial representatives are not taken on the payroll of the company and function only as contractual hires. Because of the tremendous work pressure, there is typically heavy attrition. One-tenth of the representatives in their 1st year meet sales targets. Northwestern is revered throughout the industry and has earned a reputation for its veracity and customer focus that always prioritizes customer interests above everything else.

Indifference is widespread among financial representatives in their 1st year at Northwestern, It has been reported that only well-to-do candidates opt for this job because there is no fixed remuneration. Usually accustomed to an easy life, these new recruits are unable to come to terms with the hardships and severe competitive pressures inflicted by their jobs. They have to face these challenges with the consequences of their successes and failures all alone as there is little support from seniors (nmfn.com, 2011). Those who survive the ordeal often go on to become future managing partners or directors. The rest succumb to steep targets and zero support or guidance from supervisors. In the first year Northwestern gives its financial representatives a goal of selling 100 policies, 40 in the first half of the year and 60 in the latter half (nmfn.com, 2011). In case the young representatives are not able to achieve this target they are administered a severe warning, which often drives them to pursue interests elsewhere. The indifference of the financial representatives develops what appears to be a no win situation. It is a challenging task for a new recruit to be able to immediately have a policy sales rate of one in three days. Many representatives dread making cold calls and spend idle time surfing the Internet and spending time on unproductive tasks. They do not have the desire to meet potential customers and strive towards closing a sale. Before they know it the six month or year-end is approaching, and the realization that they will not meet their targets further deter the representatives from doing their assigned tasks.

In analyzing the indifferent behavior of employees at Northwestern quite a few motivational theories can become relevant, which may contrast. According to the Investment Theory, motivation is derived from the rewards that one reaps out of the efforts that one has put in (Seligman, 1990). The recruiting officials of Northwestern keep emphasizing the point that it is only the most dedicated person that earns the most commission. However, there can be another point of view. It can be interpreted that motivation takes a back seat for these new representatives when Northwestern makes it evident that the financial representatives would only be contractual hires and not be true employees. This clearly revels the company has little interest in the personal development of the representatives. The absence of a meaningful joining bonus, no fixed remuneration, and limited product training further drive home the point that the company could care less. In such situations the Investment Theory suggests that employees would tend to be indifferent towards their employers. The indifferent behavior of the employees of Northwestern can also be explained by the Activation Theory of motivation which suggests that a person needs to be positively charged to get motivated (Seligman, 1990). Meeting sales targets can be huge catalysts for a select few who tend to take each sale as a big challenge. But more commonly, the employees treat their sales closings as just a part of their routine work and derive no sense of accomplishment for doing it. In such cases, indifference is bound to set in after a while.

The way management perceives the indifference of employees at Northwestern is quite interesting. The agenda of the organization is to breed a group of financial representatives who are capable of keeping their spirits up and working on their own. The grind that representatives go through in year 1 is actually a test devised by the company to pick out those individuals who have the ability to achieve this (Paterson, 2008). The principle behind this is that it is only the future performers that will stay on while the others will automatically quit. But, this is not the right approach. Many of the employees who choose to leave could have been successful at Northwestern and could have contributed towards achieving the company’s earnings targets. The huge transition that is imposed on the representatives without any training or supervision can diminish a person’s overall spirit not to mention his or her desire to close a sales deal. There is a need for a complete shift in management perception at Northwestern to allow supervisors to provide more guidance to new hires and remain committed to their individual development. By achieving this the company would be able to obtain higher rates and develop a concrete employee base. For a company dedicated to customer service, it is ironic that it is antagonizing its customers who have to deal with a new account manager every year throughout their association with the company, which typically spans 30 years. Instead of using out-dated un-savory insurance sales practices and “me, first” mentality Northwestern actually has a lot to gain by introducing better supervision and encouragement for newcomers.

How much employee indifference is affected by power and influence at Northwestern is hard to assess. Influence plays a negligible part because the organizational practices encourage supervisors to remain detached. So the only influence left is the representative’s individual desire to sell more in order to earn more. For a large number of people, this self-motivation is non-existent and they seldom receive any support from the company. There is no regard for any employee unless they are able to achieve their sales targets. Just like influence, there is very limited scope for power as well as improving the morale of the employees. Power only comes to an employee when they reach the director levels, which involves a long journey from the base representative level. Representatives who are convinced that the sales targets are beyond their grasp lose their motivation completely.

In conclusion it is not easy to be a financial representative at Northwestern. In addition to earning only what you receive from commissions, apathy from management is a huge problem for representatives who are just beginning their careers. The indifference employees feel is well explained by both the Investment and the Activation theories of motivation and is a severe deterrent. If Northwestern would make changes to its management strategies by implementing changes suggested by motivational theories, it could considerably enhance its way of functioning.

References

Northwestern Mutual Financial.(2011). Northwestern Mutual Financial. Retrieved from http://nmfn.com
Patterson, S. (2008). “US to Offer Aid to Life Insurers” Wall Street Journal online edition, http://online.wsj.com/article/SB123914741752198971.html
Seligman, Martin E.P. (1990), “Learned Optimism”, New York: Alfred A. Knopf, Inc