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Reliable Underwriters Discussion

Reliable Underwriters Discussion

Q Please read the case and answer the questions at the end. Please respond to two of your peers. Do you agree or disagree? Reliable Underwriters is a risk management firm that provides insurance services to large organizations. Part of its operation is a claims-processing center that employs 156 clerical workers. These workers interact with clients to answer questions and provide information about the status of claims. Reliable has a corporate objective of obtaining the highest possible customer satisfaction ratings. However, recent customer satisfaction surveys suggest that some of the clerical workers are not adequately meeting clients' needs. As part of an initiative to increase customer satisfaction, the management team of the claims processing center has decided to change the performance appraisal process. In the past, ratings have been made on a 5-point scale. A score of 5 represented outstanding performance, a score of 1 represented unacceptable performance, and a score of 3 represented average performance. Last year, 135 employees received a score of 4. Only 3 received a score of 5, and only 2 received the lowest rating. Since almost everyone receives the same rating, employees in the claims-processing center have little concern about being evaluated. For the most part, they see performance appraisal simply as a nuisance. However, the newly proposed process will create major changes. The main change will be the use of forced distribution. Each supervisor must rate at least 20 percent of employees as outstanding and at least 10 percent as unacceptable. This forced distribution is expected to clearly identify top performers. Low performers will also be identified and encouraged to either improve or seek employment elsewhere. Questions: 1. Do you predict that the forced distribution will increase customer satisfaction? Why or why not? 2. Which clerical workers do you think will most strongly oppose the change? 3. How do you think supervisors will react to the proposed change? 4. What problems with contamination and deficiency could occur with the forced distribution ratings?

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1. I do think that forced distribution will increase customer satisfaction. I think that most of the changes that go along with forced distribution are going to ultimately be positive for the business. However, it’s always important to know if the changes that occur will increase or decrease employee morale. Yes, employees will strive to do a better job which improves customer satisfaction, but it could only be out of fear. 2. Those most likely to oppose the change are the 3 workers who had originally gotten a 5 score and the workers whose work would (in the new system) end up receiving a 1. This is because the top scorers would now be lumped in with the 20% and they wouldn’t get the same recognition and the workers in the lowest 10% would be at risk of losing their job.