ECS case study

This case discusses the problems and dilemmas faced by the employees of a leading IT distributor In Malaysia, SEC Bertha. It Is a listed company on the Main Market of Bursa Malaysia Securities Bertha on year 2010 and Is an associate company of SEC Holdings Limited, a Singapore Exchange mall board company – leading CIT distributors In Salsa Pacific. This case highlights the problems related to the De- motivation of the employees, especially in Sales Department of SEC Peer Sad Bad.

As a result, the turnover rate of the employees is increasing and exit interview shows hat the employees can’t find any career growth sense in the company.

Key words: De-motivation, sales employees, turnover rate, career growth PROLOGUE It was a raining Tuesday, at pm, few employees from Sales department gathered at pantry to have a short break before preparing for overtime. It was another month end where everyone was striving for targeted goal set by the management. Everyone was fed up. Kelly: I wonder what time I can go home tonight, my little daughter is still walling for me to bring her to buy for her school clothes.

My husband Is persuading me to quit this job again; I am not sure how long I can hold. Winnie: Well, you do not have much to worry.

You have an excellent account manager. You have already achieved your monthly target isn’t it? Chloe: Exactly! My team is still far apart from it, but manager, Mr.. You is still not giving up and pushing us to get more orders by this week! Stressful indeed! I am not complaining but my account manager is too young in this area, the customers are not as powerful as your teams.

I think my incentive for this month will be disappointing again. Janet: Well everyone, why are you guys complaining? I am not saying anything yet. Hay, frankly I am not stressful, cause I know I will not achieve the target.

I wonder when they able to hire a new account manager for my team. Being here for 6 months, striving alone, I think I will be the lowest achievement for this month again. So De-motivated! But what can I do? Mr.

. You is asking me to wait patiently, but sometimes I feel so unbalance to see little paid after working so hard, yet the Marketing colleagues are getting more incentives than me! Jenny: What? Seniors, I am really surprise. Do you mean they have incentives also? But they are Just doing billing and ordering in house and we have to go outside to get sale? I feel like quitting!

Janet: Ops, I think I should not tell you this. Kelly, Winnie, Chloe: Hay.. SEC BE-READ SEC Bertha distributes a comprehensive range of CIT products comprising of notebooks, personal computers, printers, software, network and communication Infrastructure, servers, and enterprise software from more than 30 leading principals.

With a nationwide channel network of more than 3,000 resellers comprising of retailers, system integrators and corporate dealers, SEC Bertha also segments comprise of the following: (I) CIT Distribution Distribution of Volume CIT products to resellers, comprising mainly of retailers (ii)

Enterprise Systems Distribution of Enterprise CIT products to resellers, comprising mainly of system integrators and corporate dealers (iii) CIT Services Provisioning of CIT systems and services Under SEC Bertha, there are four main subsidiaries which responsible for different scope and group of customers. It can be categorized as below: SEC PEER SEC PEER is a wholly-owned subsidiary of SEC Bertha, began its operations in 1986 to distribute computer peripherals and other hardware to PC dealers. It is a leading value added distributor of Enterprise Systems and solutions serving the business ND enterprise segments of the IT industry.

Currently it distributes Enterprise Servers, Storage, Network products and software to its distribution network of over 500 Enterprise IT resellers and System Integrators throughout Malaysia. It also provides services in the field of Networking & Enterprise IT System Design, Presale’s Support, and System Integration Proposal in support of its Enterprise IT resellers and System Integrators. PEER partner with some of the major IT brands in the world to provide the best of breed solutions and offerings that meets the customers’ needs.

In PER’, there are two main department leaders who responsible for Sales and Marketing.

The main tasks for Sales are to enroll more resellers and definitely, sales target achievement is the main Key Performance Index (KIP). Monthly incentives will be based on the achieved sales billing amount. However, the incentives are counted when the customers pay it within 3 months. If exceed the period, the incentive will be deducted 50% and if exceed 6 months, the Sales will not be able to claim it. There are total eight teams in Sales Department.

There will be an account manager cooperating with a sales coordinator in each team.

In addition, each team will handle some scope of customers, which are decided by the department leader. Whilst, the Marketing employees are in charged to proceed with ordering when Sales obtain the orders and upon delivery, the Marketing will do the billing part. However, there is no KIP set for the Marketing employees. However, monthly incentives will still be distributed according to the team’s billed amount. In addition, there is no overtimes claim in PER’.

There is a machine which records the In and Out time of the employees. However, there is no enforcement of the checking.

The employees are flexible for the mime to enter office. In year 2010, the management decided to have a spot check of the average time of the employees started working. The result was as below: Department Out time Sales 10. Moa 8.

Pm Marketing 9. Ran 6. Mom In view of annual bonus, PEER has changed its policy in year 2010. For Sales employees, the bonus will be ARM 10,000 plus the announced bonus if the target is achieved and no bonus for those teams who do not meet the goal. For marketing employees, the bonus will be according to the management’s decision after Annual General Meeting which held in month of October yearly.

THE KEY PROPEL AT SEC PEER Gong Jackson, the Managing Director Success did not come easily. Mr.. Gong had gone through a tough time, starting from only a table and few computers. He found few good friends who had a dream in their minds. They went to the IT shops to promote their computers, persuading the schools to adapt with new system and Joining the government’s projects bidding.

His efforts did not go wasted; finally he won a project in year 1998. He managed to get some loan from the financial services and with everyone’s efforts; he was now the managing director of SEC Bertha.

Jerry You Hong Seen, Sales’ Leader Jerry Joined PEER in year 2005 as an account manager who in charge of the reseller of KILL area. Being a graduate of MBA in University of London, Jerry was hired by the management with high expectations. At the first year, Jerry did not meet his target. His partner, the coordinator was very upset as no bonus for that year.

However, Jerry did not give up. He decided to list down his customers list and paid them a visit personally. He used his good speaking skills to maintain good relationship with the customers and successfully to get many big projects’ orders. Ears later, he was promoted to be the senior account manager which still in charge of the same customers but with higher pay and also higher target set by the management. At the same year, the sales coordinator, Karen had decided to quit, due to her pregnancy. She felt stressful and tired, especially working late every day.

This was a challenge for Jerry to cope with outside visiting customers and also inside documentation Jobs. Luckily, after 6 months, his new sales coordinator was hired. And that particular year, Jerry was still able to maintain to achieve his target.

This made the management very pappy to have a good sales person, good in selling and also management. At year 2010, the leader in Sales has decided to retire.

The management had approached Jerry to take over the Job and Jerry had agreed to take this challenge. Jerry stated, “l took 2 hours for the consideration. I am afraid of failing also, but I like to take challenge! So now I have a new identity’ Eddy Lee Joined the company in year 1996, the first batch of employees of SEC. At the beginning in SEC, Eddy, the sales person, strives together with the current Managing Director, Mr..

Gong, visiting the customers one after one.

Today, he did not need to do the front line Job anymore. He had turned his responsibilities to Marketing department, which in charge of ordering and billing tasks. This Job seems to be too relaxing for him. Moreover, Eddy had an assistant, Joey who was the supervisor of the Marketing, was performing on behalf of Eddy.

This sometimes had made the people unhappy and De-motivated, because Joey was rather strict and sometimes can be controlling without considering people’s problems and needs. For instance, Cathy, one of the billing ladies, wanted to take leave for vacation on December.

She had ought the air ticket while promotion period of a local airline. However, after discussion, Joey had rejected her leave application because she claimed that December was the peak season and shall not anyone allowed to take leave. Cathy was very upset because she had planned this family trip for quite some months. She had promised her husband to visit the relatives in Australia.

She decided to talk with Eddy. The conservation between Eddy and Cathy was ended with only one sentence, “l leave the decision to Joey. ” The power granted to Joey was not only within the Marketing department.

In fact, Joey did have a quarrel with the newcomer, Janet last month. “Joey, I need your help tonight.

Tomorrow is the month end and I have some orders must be processed by today. ” said Janet. “No way, you’re too demanding! Why can’t the sales be more efficient in working? Why must last minute? ” complained Joey. “Maybe you have some misunderstanding here. I am not last minute; I Just received the order confirmation this morning. This is concerned about the monthly target; I need the support from your team.

” Janet had some soft words to Joey as she respected the senior.

This is none of my business, that is your target! I will not stay late night. ” Joey walked away after saying this to Janet, left the newcomer worrying in her place. Janet Tan, Sales Cogitator Janet was graduated from a local university with the grade of first class honor in Economics. During the interview, Jerry was impressed by Jennet’s result and attitude and hence enrolled her after one hour interview. After few hours of introduction and basic training given by the HER, Janet was brought to meet her new partner.

Janet was assigned to be in same team with Ivan who in charge of Pennant regions resellers.

After several weeks of product briefing, Janet started to reply the customer’s email and following up the customers’ characteristics with Ivan. One day, it was late night overtime in the office; Ivan told Janet that this would be his last week. After that week, he would return to his hometown to search for better opportunities. Janet was surprised of this news as she was not informed by Jerry when she was interviewed and Joined the company.

To Janet, account managers were somehow related important role to the sales coordinator as they were the key person who brings in the sales.

Janet was rather depressed so she decided to talk with Jerry regarding of her future Job scope. Jerry was not worried about this and he calmed Janet down by for candidates urgently and he promised that he will not leave Janet alone; he will guide her for the temporary period. Two months later, HER was still not able to enroll a suitable candidate to replace Van’s position. Janet was working very hard to sustain the current customers, mails and calls with the customers had been her routine tasks.

Finally, she had successfully obtained a big deal with the help of the product managers.

It was a million’s deal. Janet was excited and called to Jerry on the night itself. This young graduate was expecting some good words from her boss but reality was cruel to her. Jerry informed her that he would be passing this deal to another senior’s team, who he thought of more experienced in dealing with big amount’s business and entertaining the important customers. To Jerry, he was nervous to lose this deal to other competitors so he decided to disappoint Janet.

THE EXIT INTERVIEW The managing director had decided to have a talk dinner with HER team to know more about the employees.

However, the team had rejected the offer by claiming that they ere too busy recently of searching suitable candidates to Join the company. The enrolling method of SEC includes of newspaper, online application (thru Soberest) and mainly through the service of employee agency. The MD was shocked when he was being informed that every week there will be at least two people come for interview, and the enrolling rate was considered reasonable. It indicated that the turnover rate in SEC was very high which he strongly believed that it shall be made further study.

Hence, he has instructed the team to conduct a survey of exit interview in order to find out the main reasons of leaving the company.

The result was been summarized as table below: Reasons of leaving Over workload 21 Lack of career growth 10 Lack of Job security 16 Better salary package offered by other company 20 Sense of powerlessness 13 Working hour is too long 9 Stress from superiors 2 Family / personal matter Insufficient of training From the table above, 25% of the Sales department employees felt that the commission and bonus package offered by PEER was less attractive than other company.

Although money was not the main concern or the employees but when add up with the second reason, lack of career growth, it became the main reason of high remover rate. The employees felt that they had no room of promotion in the company. For the sales coordinator, according to the company’s policy, the highest position they could go for was the senior coordinator. It became their constraint to move further. For the Marketing department employees, they felt boring of repetition of ordering and billing tasks.

Joey had worked more than 10 years in the company to be promoted as the supervisor. It seems to be hard for other employees to be promoted. However, comparing with Sales employees, the working hours for Marketing employees were short; they may go home at pm sharp. In addition, the commission and salary package offered by the competitor located at Koala Lump town area had been a side reason that the employees chose to leave the company. In fact, this caused the loss of the company because many customers were more tied up to the person who served them, instead of the company.

Although basic training about the products’ uniqueness was provided by the company, but the training was more concerned about the selling points of each products and how to make the customers to believe them. However, some employees strongly believe they should know more than that. For instance, they would like to know also the functions of the products, the weakness and the operating methods of each model. Lack of training program made up one of the reason of leaving as a result of exit interview. INSUFFICIENT PARKING LOTS “Kelly, what time you’re going home tonight? Shall we walk together? Said Winnie.

“Please do not leave me alone. Let me know when you’re ready to go. ” said Chloe. The conversation above was not new in the office. Since six months ago, the company had decided to go for a big sized renovation and had expanded its warehouse to the parking area of the employees. Hence, the current parking area was only able to have maximum of 30 cars.

At the time being, only the early birds employees who came before am were able to park at the covered parking lots. It was totally a nightmare to the Sales employees who worked late at the previous night and hard to wake up early.

As a result, they had to park far from the company, by dark and quiet roadside. The sales coordinator had decided to go back home early together to their cars. However, the overtime employees were always complained about this made them insecure while walking to their cars.

Last week, one employee from SEC ASH had dad a report to police station because her car was missing. Her car was parked at the roadside not far away. She had lost not more than a car but the important documents which included the company’s financial reports that was not publicly announced yet.

This made her very upset and troubled because she had to redo everything before the dateline of this month end. Besides, if the report was revealed to the competitors, this would bring a big loss to the company. She could only rely on the police to bring her back the documents now.

Another overtime night, Kelly, Janet and Jenny were staying late in the office. They had a chit chat during a break. “I’m so tired, let me go home now! ” Jenny complained. Muffing lady, be steady! You would not be complaining anymore when you reach my age! ” said Kelly. “Because we know complain does not helps. No one cares your feeling here.

Add up by Janet. “Oh my seniors, I am thinking to type the letter now! Shall I type yours too? ” said Jenny. Although this was a Joke among few sales coordinators, but they did not know that, Mr.. Gong was sitting quietly in his office.

He was thinking to have a rest so he switched off the light and air conditional, let the door opened to have some air. Surprisingly, he overheard this chat. He started to think seriously of the problems faced by the employees. What would he need to do to increase the morale and motivation of the employees? Shall he make any adjustment of the department roles and duties?

With a sigh, Mr..

Gong has decided to make a call to Jerry in the next day early morning to discuss the problems he found in the company. He was going to assign this heavy task to Jerry to ensure a solution was attained for the sake of the team and company. INTRODUCTION OF THE COMPANY SEC Bertha is a listed company on the Main Market of Bursa Malaysia Securities Bertha on year 2010 and is an associate company of SEC Holdings Limited, a Singapore Exchange main board company – leading CIT distributors in Asia Pacific. It distributes a comprehensive range of CIT products, value-added product support and technical services.

Under SEC, it includes of STAR, PER’, US and ASH. This case study focuses on the dilemmas facing by PER’.

SEC PEER is a wholly-owned subsidiary of SEC Bertha, mainly responsible to distribute computer peripherals and other hardware to PC dealers. In PER’, there are two main department leaders who responsible for Sales and Marketing. Sales are in charge to expand the customers’ ease (front line) and Marketing is in charge to make the ordering and billing after the delivery is done (sales support). DILEMMAS / ISSUES 1 . Over-workload for sale coordinators a. Whether there is too much workload for the coordinators? .

Whether Jerry, sales leader is not considerate about the sales burden? C. Is the sale team De-motivated? 2. Lack of fairness in Job scope distribution a. Whether the Job design and Job characteristic are suitable for employees? B. Whether the customer regions/ purchasing power are being distributed fairly to each sales team? C. Is the commission package offered / amended by the company fair to .

Lack of enforcement in company policy a. Is there too much freedom given to the employees? 4. High turnover rate a. Are SEC’s employees facing insufficient level of motivation and satisfaction to their jobs? . Whether the lack of manpower (account manager) causing more workload to the sales coordinator? C. Is the salary package offered by the competitor more attractive? 5.

Insufficient security level of the company a. Whether the company should prepares temporary parking area for the employees? ASSUMPTIONS 1 . Joey is a lawful person. In her mindset, everything shall act according to the rules. 2. Marketing department thinks that sale teams are fully responsible on servicing company customers.

3. The company is located at a rural area and the nearby buildings are occupied by manufacturing foreign workers. . Eddy is satisfied with what he owns now and does not have much ambitious targets at this moment. 5. HER team has difficulties to recruit new members due to salary package which is limited by the company’s policy.

6. The competitor in same industry is offering higher salary and commission package. INDIVIDUAL MARS MODEL In sass, researcher identifies four key factors which are critical influence on individual behavior. The four factors are Motivation, Ability, Role perceptions and Situational factor, which represented by the acronym MARS .

Motivation represents the forces within a person that affect his/her direction, intensity and persistence of voluntary behavior while Ability includes both the natural attitudes and learned capabilities required to successfully complete a task.

Besides, Role perceptions are the extent to which people understand the Job duties assign to them and expectation to them. Lastly, employees’ behavior and performance also depend on how the Situation supports or interfere their goal. These four elements of MARS will affect the behavior of the employee and performance outcome.

In this case where the main issue is about how to solve the declining employees’ spirit and working performance, we have applied MARS model to analysis the issues and also in problem solving. JOB MOTIVATION (M) Need theories of Motivation Needs mean “Motivating force that compels action for its satisfaction.

Needs range from basic survival needs satisfied by necessities, to cultural, intellectual, and social needs satisfied by necessaries”2. According to Mascots need hierarchy theory, seeks to fulfill the next one, and so on. 3 This model can be divided to five basic needs, Physiological, Safety, Love, Esteem, and Self-actualization.

One must satisfy lower level basic needs before progressing on to meet higher level growth needs. Once these needs have been reasonably satisfied, one may be able to reach the highest level called self-actualization.

In this case study, most of the sale coordinator is still maintaining at the lowest level of Need Hierarchy. They are striving for the sake of their physiological need that is to earn a living. This can be clearly proved by the excess overtime hours by the coordinators, even there is no overtime pays as per Meany’s policy.

They work late to be able to achieve the targeted goal set by the management so they can claim for the commission. Besides, the motivation of the employees is very low, which can be seen from the conversation between Kelly, Winnie, Chloe, Janet and Jenny.

They want to go back home earlier but most of them have not yet reach the monthly target. They even feel unfair as other departments who do not have sale target also will get incentives which sometimes are higher than them. Jennet’s situation is considered the worst as her team is lack of one account manager who suppose to be the team leader.

Janet has feedback her situation to Jerry but failed to get any solution. Motivating Employees through Job Design Job design refers to a set of activities involve alteration with the intent of improving the quality of employee Job experience and Job productivity. Job design is a process of putting together various elements to form a Job.

4 Job design is viewed as Top- Down Approach where management is responsible to create meaningful combination of Job task for the service agents. Management can use three ways to design employee’s Job function where: a.

Job Enlargement: involves putting more variety into worker’s Job by combining specialized tasks of comparable difficulty. B. Job Rotation: call for moving employees from one specialization to another c. Job Enrichment: enrichment entails modifying a Job such that an employee has the opportunity to experience achievement, recognition, stimulating work, responsibility and advancement.

Management should look into the exit interviews conducted by HER department. The top reasons that employees choose to leave the company is due to over workload and unattractive basic salary and commission package offered by the company.

The sales coordinators usually need to work until late night but are not aid for the extra hours. If the target is not achieved by the sales team monthly, then the management will question them and request for countermeasure proposal. However, even if the set goal is achieved, the sales team might not able to claim full amount commission.

It could be due to the customers’ late payment. This made some sales team feels unfair as incentives received by marketing department is not affected by the customer’s payment pattern which indicates that marketing could earn more than sales team.

Furthermore, the customer accounts database is already pre-determined by the management. Each sales team will be distributed with some accounts of customers and it may be varied in term of the business size, purchasing power and geographic location. Some team has strong base of customers which allow them to achieve their target easily.

Unfortunately, some young team will have weaker Coordinators are assigned to their team when they first Joined in the company and they are not allowed to change team even there is vacancy.

ABILITY (A) In order to complete a task successfully, an employee should have the skill and capabilities which is suited for the specific role. In order to strengthen his/her impotency, one should always sharpen the skills which are useful and applicable to the Job tasks. In this case study, basic training about the products’ uniqueness was provided by the company, but the training was more concerned about the selling points of each products and how to make the customers to believe them.

However, employees needed more than that, they would like to know also the functions of the products, the weakness and the operating methods of each model for them to communicate easily to the customer. ROLE PERCEPTION (R) Role perceptions are the extent to which people understand the Job duties assigned to them.

Employee should understand the specific duties, understand the priority of the duties and understand the behavior needed to complete the task.

From the case study, the sale coordinators do not have a clear role perception as some of them might need to act like an account manager as there is not any leader in their group. The marketing department also does not understand what type of Job duties and behavior they should behave as they think that their Jobs are only ordering and billing instead of backup and support other department. SITUATIONAL FACTOR (S) It is defined as the environmental conditions beyond the individual’s short term intro the constraint or facilitate behavior.

In this case study, the company has decided to go for a big sized renovation and has expanded its warehouse to the parking area of the employees.

Hence, the current parking area is only able to have maximum of 30 cars. As a result, most of the employees have to park far from the company, by dark and quiet roadside. The working overtime employees are always complained about this because it makes them feel insecure while walking to their cars. Their worries are worsening when there is an employee’s car being stolen and his causes the employees unable to focus during working.