Study $6$: Improving Productivity

Coastal Bank is a large bank in a southeastern city. As a part of a comprehensive internal management study, Madeline

Budge, the data processing vice president, examined the turnover, absenteeism$,$ and productivity figures of all work

groups in the organization. The results Madalene obtained contain no real surprises except in the case of the check$-$

sorting and data$-$processing departments.

The Research

The inquiry revealed that, in general, the departments displaying high turnover and absenteeism rates had low

production figures, and those with low turnover and absenteeism were highly productive. No surprises there.

When analysis began on the check$-$sorting and data$-$processing figures, however, Madeline discovered that both

departments were tied for the lead for the lowest turnover and absenteeism figures. What was surprising was that the

check$-$sorting department ranked first ass the most productive unit, whereas, the electronic data$-$processing department

ranked last.

The computer room is air$-$conditioned, with a stable temperature year$-$round; it has perfect lighting and is extremely

quiet and comfortable. It was known that both groups are highly cohesive and that the workers generally function well

with others in their department. This observation was reinforced by the study$$s finding of the low levels of turnover and

absenteeism in both departments.

The Interview Data

In an effort to understand this phenomenon $($similar low turnover and absenteeism rates, but vastly different

productivity, and productivity levels opposite of what one would expect from respective working conditions$),$ Madalene

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decided to interview the members of both departments. She hoped to gain some insight into the dynamics of each

group$$s behavior. It was discovered that the check$-$sorting department displayed a great deal of loyalty to the company.

Most of the group was unskilled or semiskilled workers; although they have no organized union, each person felt that

the company had made special efforts to keep their wages and benefits in line with unionized operations. They knew

that their work required team effort and were committed to high performance.

A quite different situation existed in the data$-$processing department. Although the workers like their fellow employees,

there was a uniform feeling among this highly skilled group that management placed more emphasis on production than

on staff units. It was their contention that pay increases had been better for operating departments and that the gap

between the wage earners and salaried employees did not reflect the skill differences. Because of that, a large

percentage of the group displayed little loyalty toward the company, even though they were very close among

themselves.

The Challenge

There is some degree of urgency to improve productivity in this situation. A major competitor in the region is increasing

its market share, while Coastal Bank$$s market share is trending downward in the last two quarters. One challenge the

bank faces is how to make the data$-$processing unit more productive. Other low$-$performing departments may need

focus, as well, particularly in the areas of absenteeism and turnover. It is possible that systemwide change may be

needed. What are three questions that you would need answered to decide what actions to pursue in this case