QUESTION
Homelife
HomeLife is a relatively young company that competes in the consumer electronics and appliances industry (televisions, computers, kitchen appliances, etc.). The company describes itself as “making your life more enjoyable by making your home more efficient at an affordable price, regardless of how you define efficient.” The company sells a large selection of items, and the range of the products that it carries spans the price spectrum from very low cost to very high end. For example, some of the company’s kitchen ovens cost just under $400, while others cost well over $4,000. HomeLife also has low-end, affordable televisions under $400, as well as very pricey, large plasma televisions that cost over $6,000. It strives to be a low-cost leader for the quality of the product. Compared to its competition, HomeLife offers a very competitive price, if not the lowest. In addition to the cost focus, the company prides itself on providing exceptional one on one customer service. The name of the company, HomeLife, is intended to reflect both the strategy and the philosophy of the organization. With a focus on costs and customer service, the name reflects the company’s concern with the financial burdens customers face, as well as the vast amounts of information that customers must process when making purchasing decisions.
The name HomeLife also refers to the company’s philosophy for managing its customer service representatives: HomeLife cares about its employees’ long-term well-being and success, and offers them a very attractive benefits package including generous leave time, which encourages employees to balance work and family. Customer service representatives who work at HomeLife typically are hired through personal referrals of current employees, or occasionally an advertisement will be placed on the company website or another online job posting site when more than one opening exists. Each month, customer service representatives receive product training to explore the new products they will be selling to ensure that they are knowledgeable and can respond to customer questions.
To motivate them to sell, customer service representatives are rewarded on a commission-based pay plan. What is interesting about this particular incentive plan is that the customer service representatives have some discretion regarding the final price of the company’s products. Most products have a standard markup of 10% to 25%, and the employee gets a portion of this profit. While many of the products sell for the list price, sophisticated buyers and repeat customers are often able to negotiate lower prices for their products. The challenge with this plan is that the company has a reputation for low costs, and customer service representatives who are not willing to negotiate the sales price are viewed as going against this objective. By lowering the prices, however, they are cutting into their own take-home pay. Additionally, while other employees at HomeLife provide valuable support to the customer service representatives, there is no incentive plan in place for them. However, turnover for these other employees is much lower, at 25%.
The company has done fairly well and now has six stores on the West Coast between San Francisco and Los Angeles. With a focus on low costs and customer service, the company has been able to sustain reasonable growth—it just opened two new stores—and a modest level of customer satisfaction among its consumers. At the same time, however, while the customer service representatives seem to be fairly happy and work hard, their turnover is around 70% per year. This turnover obviously involves costs associated with constantly hiring new employees, and it also has a negative impact on customer loyalty and the level of experience of the customer service representatives.
As the company has grown, Maria Gonzalez, president of HomeLife, has realized that she doesn’t have the time or expertise to attend to all the issues related to policies for managing people. Recognizing that it is time for the company to have a full-time director of HR, Maria has decided to hire Daniel Hillman. Daniel has 10 years of HR experience at one of HomeLife’s competitors in the industry. Maria was encouraged by Daniel’s enthusiasm for creating a fun and effective workplace. During the course of their discussions, Maria told Daniel that her main goal for him in his new job is to design an HR system that reduces the turnover among customer service representatives, encourages them to work hard toward the company’s competitive advantage of low costs and high customer service, and adheres to HomeLife’s principles of taking care of its employees.
Answer the following questions :
Provide advice to Daniel regarding the nature of the HR system he should recommend for the customer service representatives at the six HomeLife stores.
Identify a key strategic performance driver for this organization.
How do the customer service representatives contribute to the strategic performance driver you identified?
Design an HR system to realize the strategic performance driver you identified. Be certain to explain how you would
(a) design the work environment,
(b) manage employee competencies, and
(c) manage employee attitudes and behaviors.
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| Subject | Business | Pages | 5 | Style | APA |
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Answer
Human Resource Management System: A Case Study of HomeLife
Representatives.
The advice I would provide to Daniel regarding the nature of the HR system to be recommended for the customer service representatives at the six HomeLife stores include; the nature of HR system should comprise of a system with functions that are people related. People related functions include training, hiring, performance review, safety and health welfare, among others. People-related functions such as training and development helps in reducing the turnover among customer service representatives. HomeLife provides product training to customer service representatives hence enabling them to explore the new products hence making them more knowledgeable towards products they will be selling.
The second recommendation I would make regarding to the nature of HR system is that the human resource system should promote the alignment of HR policies and practices. This feature enables the organization to mesh up HR practices and polices with the organization’s strategies. Therefore, formulation of such strategies provides the organization with competitive advantage over other companies offering same products. Strategies such as building human capital gives HomeLife a competitive advantage and such activity cannot be carried in isolation, they are interdependent. Furthermore, the set HR policies should be able to adhere to the principles of HomeLife which is taking care of its employees.
Key strategic performance driver for HomeLife.
Strategic performance drivers are the day-to-day activities carried out at HomeLife in order to come up with a desired performance of HomeLife company (Bratton & Gold, 2017). Key strategic performance driver provides a mechanism for monitoring and tracking employee’s performance hence checking the success of the company. The key strategic performance driver for HomeLife is the good customer relationship between the service representatives and the customers themselves.
How customer service representatives contribute to the strategic performance driver mentioned.
the company’s customer service representatives exercise a customer first strategy. The service representatives use a customer-centric model to enable it identify its key customers such as repeat customers.
Customer service representatives also uses a profit-and-loss strategy for every customer. In this strategy, customer service representatives’ factor in customer profit, credit and discount, product discount and product costs. Such information enables customer sales representatives to get a portion of the profit obtain from the products.
customer service representatives at HomeLife contributes to maintaining a good customer relationship at HomeLife as the company allows for a one-to-one customer service. A one-on-one customer service enables customer service representatives to establish a personalized connection with consumers. This strategy enables customer service representatives to know the kind of products their customers like and it also enables them to provide customers with better service as a way of ensuring the customer does not switch to other companies.
With good relationship created between customers and customer service representatives due to the quality services provided will enable the customers to recommend their friend to make their purchases to HomeLife as the company offers quality products at an affordable price hence this method helps to propel customer loyalty.
The one-to-one customer relation strategy helps in centralizing optimizing and streamlining communication skills of customer service representatives hence stronger relationships. With stronger relationship enables the company to maintain their customers hence increase in sales. Furthermore, better customer relationship will result to a higher satisfaction of customers as customer service representatives will be providing customers with what they need.
Customer service representatives contributes to promoting a one-on-one customer relation through carrying out customer segmentation. Customer segmentation provides customer service representatives with a perfect audience hence enabling them to determine repeat customers and sophisticated buyers have the chance of negotiating for lower prices for their products. Allowing for repeat customers to negotiate for lower prices gives the customer a sense of belonging to the company as he gets discount for products which others do not get. This strategy helps in customer retention.
Design an HR System that Realizes the Strategic Performance driver Identified.
The first step is designing a business case and this is done by taking into consideration the importance of one-to-one relationship between customer service representatives and the customers (Boudlaie et al., 2020). During formulation of a business case the objectives of one-to-one customer relationship which is customer retention should be well stated and the anticipated results which is increased sales and customer satisfaction should also be stated.
The second step while designing HR system is to add technology in the HR system. Creation of a website will enable customers to give out their reactions towards how they were served by different customer service representatives and give out reviews of products they purchased. Such technological innovation will provide the company with a means of fast tracking the importance of one-to-one customer relationship and customer satisfaction.
After identifying employees’ skills, mostly communication skills then the next step in designing HR system is to assign tasks such as selecting employees who will act as customer service representatives. Assignment of tasks is effective as it helps in reducing work load and assigning workers to areas they best fit (Mashali et al., 2019).
The last step is establishment of procedures and policies. Such procedures and policies will provide guidelines to which customer service representatives negotiate prices with customers to ensure customers are not overcharged and the company does not run at a loss.
References
Boon, C., Den Hartog, D. N., &Lepak, D. P. (2019). A systematic review of human resource management systems and their measurement. Journal of management, 45(6), 2498-2537. Retrieved from https://journals.sagepub.com/doi/pdf/10.1177/0149206318818718.
Boudlaie, H., Mahdiraji, H. A., Shamsi, S., Jafari-Sadeghi, V., & Garcia-Pereze, A. (2020). Designing a human resource scorecard: An empirical stakeholder-based study with a company culture perspective. Journal of Entrepreneurship, Management and Innovation, 16(4), 113-147. Retrieved from https://wp.jemi.edu.pl/vol-16-issue-4-2020/designing-a-human-resource-scorecard-an-empirical-stakeholder-based-study-with-a-company-culture-perspective.
Bratton, J., & Gold, J. (2017). Human resource management: theory and practice. Palgrave. Retrieved from http://digitallab.wldu.edu.et/bitstream/123456789/793/1/Human%20Resource%20Management%20theory%20and%20practice%20by%20John%20Bratton%20and%20Jeffrey%20Gold%202nd%20edition.PDF.
Mashali, B., Sheybani, H., Hajiani, E., & Ghanbari, A. (2019). Designing a Mixed Model for Human Resource Foresight in the Public Sector of IR Iran. Management Researches, 12(44), 79-105. Retrieved from https://jmr.usb.ac.ir/article_5013_en.html.