Read and answer the Questions:

(a) Identify the forces pushing for change and the forces restraining the change effort in this case. (b) Was Khaled successful at bringing about change? Why or why not?

(c) What should Khaled do now?

Last year a new president was brought in by DTC'S Board of Directors to improve the companys competitiveness and customer service. After spending several months assessing the situation, the new president introduced a strategic plan to improve DTC'S competitive position. Khaled was hired as vice president of claims, DTC'S largest division with 1,500 employees,50 claims center managers, and 5 regional directors.Khaled immediately met with all claims managers and directors, and visited employees at DTC's 50 claims centers. Through these visits and discussions, Khaled discovered that the claims division had been managed in a relatively authoritarian, top down manner. He could also see that morale was extremely low and employee-management relations were guarded. High workloads and isolation (claims adjusters work in tiny cubicles) were two other common complaints. Several managers acknowledged that the high turnover among claims adjusters was partly due to these conditions.

Khaled decided to make morale and supervisory Ieadership his top priority. He initiated a divisional newsletter with a tearoff feedback form for employees to register their comments. He announced an open-door policy in which any claims division employee could speak to him directly and confidentially without going first to the immediate supervisor. Khaled also fought organizational barriers to initiate a flextime program so that employees could design work schedules around their needs.

One of Khaled's most pronounced symbols of change was the Claims Management Credo outlining the philosophy that every claims manager would follow. At his first meeting with the complete claims management team, Khaled presented a list of what he thought were important philosophies and actions of effective managers. The management group was asked to select and prioritize items from this list. They were told that the resulting list would be the division's management philosophy and all managers would be held accountable for abiding by its principles. Most claims managers were uneasy about this process, but they also understood that the organization was under competitive pressure and that Khaled was using this exercise to demonstrate his Ieadership. The claims managers developed a list of 10 items, such as encouraging teamwork, fostering a trusting work environment, setting clear and reasonable goals, and so on. The list was circulated to senior management in the organization for their comment and approval and sent back to all claims managers for their endorsement. Once this was done, a copy of the final document was sent to every claims division employee. Khaled also announced plans to follow up with an annual survey to evaluate each claims manager's performance. This worried the managers but most of them believed that the credo exercise was a result of Khaled's initial enthusiasm and that he would be too busy to introduce a survey after settling into the job. One year after the credo had been distributed, Khaled announced that the first annual survey would be conducted. All claims employees were to complete the survey and return it confidentially to the human resources department where the survey results would be-compiled for each claims center manager. The survey asked the extent to which the manager had lived up to each of the 10 items in the credo. Each form also provided space for Claims center managers were surprised that the survey Khaled had promised a year ago would be conducted, but they were even more worried about Khaleds statement that the results would be shared with employees (What happens if a manager gets poor ratings from his or her subordinates?). "Even if the survey results aren't great, the information will give us a good baseline for next year's survey.

Each report showed the claims center managers average score for each of the 10 items and how many employees rated the manager at each level of the five point scale. The reports also included every comment made by employees at that center. No one was prepared for the results of the first survey. Most managers received moderate or poor ratings on the 10 items. The comments were even more devastating than the ratings. Comments ranged from mildly disappointed to extremely critical of their claims manager. Employees also described their long-standing frustration with DTC, high workloads, and isolated working conditions. Several people bluntly stated that they were skeptical about the changes that Khaled had promised. "We've heard the promises before, but now we've lost faith."

The survey results were sent to each claims manager, the regional director, and employees at the claims center. Khaled instructed managers to discuss the survey data and comments with their regional manager and directly with employees. The claims center managers, who thought employees only received average scores, were shocked to learn that the reports included individual comments. Some managers went to their regional director, complaining that revealing the personal comments would ruin their careers. Many directors sympathized, but the results were already available to employees.

When Khaled heard about these concerns, he agreed that the results were lower than expected and that the comments should not have been shown to employees. After discussing the situation with the regional directors, he decided that the discussion meetings between claims managers and their employees should proceed by as planned. To delay on withdraw the reports would undermine the credibility and trust that Khaled was trying to develop with employees.

However, the regional director in that area attended the meeting in each claims center to minimize direct conflict between the claims center manager and employees. Although many of these meetings went smoothly, a few created harsh feelings between managers and their employees. The source of some comments was easily identified by their content, and this created a few delicate moments in several sessions. A few months after these meetings, two claims center managers quit and three others asked for transfers back to non-management positions . Meanwhile, Khaled wondered how to manage this process more effectively, particularly since employees expected another survey the following year.