Austwide Financial Services (AFS) is a medium sized company operating in the highly competitive financial services industry. It offers three main financial services: general insurance, financial planning, and lending. There are three state offices located in Sydney, Brisbane and Melbourne. Each state is run almost as a separate entity. Within each state office there is a state manager, a sales team of advisors, and an office manager.
When AFS was first established in the early 1980s there were not many competitors in the industry and there were few government regulations. Since the deregulation of the financial services industry, there has been an explosion in the number of companies entering the market, and a rapid expansion in the range of financial products and services on offer. Many of AFS's competitors have been increasing in size, profitability and market share; however AFS's performance has remained stagnant over the last three years.
Currently there is much dissatisfaction among the AFS advisor network. The advisors are paid on a commission only basis. They are under increasing pressure to push products or sales on to customers in order to improve the company's performance. Some staff are reporting increased levels of stress as they feel their advice is not always objective given the sales culture. Furthermore, given remuneration is based solely on sales, some staff are poaching customers from other geographic areas in order to meet ever increasing (and often unrealistic) monthly sales targets.
Given the nature of the job, many advisors do not work "normal office hours" as they are often required to contact or meet clients in the evening or on weekends. Managers are known to contact staff for work related purposes at all times of the day and night or weekend. For example, team meetings are always scheduled for either weekends or breakfast meetings to minimize work disruption. Staff team building is always on weekends and often at the expense of the team itself.
The following are observations about the work environment at AFS, as well as the experiences of Tom Barker an advisor, and Luke Morgan the State Manager (both based in the Sydney office).
Tom graduated from the University of New England with a Bachelor of financial Services. He was extremely popular in college, elected President of the Social Committee in his final year. He was an extremely good student, achieving high distinction averages across all his units. He was a hard worker, and able to balance his studies with his numerous sporting and college social commitments. Tom was voted by his college peers as the most likely to succeed.
Upon leaving university, Tom (aged 22) wanted to gain experience with a large financial services firm in Sydney in order to better understand the industry. His ultimate goal was to establish his own financial services practice on the NSW coast by the age of 35. Tom joined AFS two years ago with hopes of a highly successful career in Sydney. He has always been open to trying new things and undertaking further learning to expand his skills. Tom believes he is responsible for determining his own direction and success. He is willing to take responsibility for any failures.
Tom has always been known for his good listening skills and ability to empathise with others. He thought that this trait would prove useful in being able to understand and meet client needs. He has also been known for creating harmony among his work colleagues.
Recently though, Tom's friends have noticed he has become increasingly moody, somewhat depressed, and has reported having troubles sleeping. Tom, who is normally a very diligent employee, has also begun taking a number of "sickies".
Other advisors like Tom who have joined AFS have reported dissatisfaction with the narrow focus of their job. Advisors are only allowed to specialise in one product type (e.g. insurance, lending, or financial planning). It means they are not able to utilise the full range of training they have gained from their education and professional qualifications. Furthermore, Tom values honesty and integrity, and feels that the narrow focus of his job limits his ability to provide unbiased and a comprehensive suite of services to clients. Another negative of the job is that advisors are not rewarded or given sufficient time to complete the necessary continuing professional development needed to maintain their license. The State Manager Luke Morgan believes the advisors should complete such training in their own time.
State managers like Luke Morgan (who do not perform any product selling) are paid a salary, plus a bonus depending on the number of products and services sold by the advisors in their geographic region. Their role is largely managerial, i.e. to educate the advisors about the range of products that can be offered to customers, as well as oversee compliance. The State Manager (Luke) makes all key decisions and rolls these out to the advisor network. The advisors (Tom) are frustrated that they do not have any say in the types of products and services they can offer customers. The advisors also feel that it is unfair the State Manager receives a bonus for product sales, when they do not undertake any of the hard day to day work of selling or advising.
Luke is someone who also likes to succeed. He enjoys the power that his position affords. He is considered arrogant and often brags about his large corner office overlooking Sydney Harbour, his company car (Mercedes Benz), fully paid mobile phone, and a generous corporate credit card. These are all rewards he values highly. He believes he is entitled to such rewards due to his long service with the company. Luke is highly disorganised and does not make decisions well (usually relying on instinct rather than fact).
Luke does not demonstrate very good people skills. He continually focuses on results, is extremely impatient, and works long hours. Luke's communications with staff are mainly on a negative basis. For example, he is known for his fiery temper. Whenever Luke comes out of his office with a red face and holding his clipboard, staff know that this means Luke has got his "angry boss" persona on. Such a display is generally associated with Luke yelling at staff and accusing them of poor performance. He usually threatens staff that if they do not improve their performance he will fire them. Tom, like other staff, now know to avoid Luke if they see him come out of his office in such a manner.
Luke does not believe in telling staff when they do a good job, as he believes "well people should just perform well all the time, and why should I praise them for that when it is just their job anyway". For example, Luke recently publically berated Tom in front of his fellow advisors for failing to meet last month's sales targets. This left Tom feeling humiliated and frustrated. Tom felt that he had actually achieved quite good sales, but was becoming demotivated as Luke set ever increasing targets. Tom was further disillusioned because a fellow advisor (Jack McKay) who had been with the company for 10 years and was good mates with Luke, was given a bonus even though his performance was the same as Tom's.
Luke receives considerable pressure from senior management to improve staff performance and cut costs. When questioned about his performance by senior management, Luke typically blames it on others, despite a history of staff complaints about him and a series of poor performance reviews. For a manager, Luke shows little faith or belief in his own abilities. Luke views Tom as just another typical university student who does not care about work or doing a good job, and is only interested in collecting a pay cheque (just like Luke did when he left university).
Discussion questions
1. Use any of the Motivational Drives and Needs theories to explain Luke's and Tom's behaviour. (300 words)
2. How can Expectancy Theory be used to explain Tom's demotivation? (150 words)
3. Discuss how Equity Theory can explain the employee job dissatisfaction being experienced at AFS and give suggestions on how to improve the situation. (150 words)
4. Describe the personality profiles of both Tom and Luke and discuss whether they are appropriate for their job positions. (150 words)