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Yakkatech, Inc.: Case Application (Motivation)

This document describes a case study about YakkaTech, a technology services company. YakkaTech has experienced growth in its customer service division but also increasing customer complaints about quality. Employee turnover and quit rates had risen above industry averages. In response, YakkaTech raised pay rates and introduced profit sharing bonuses to improve morale and reduce costs. This decreased turnover but quality and productivity issues remained or worsened. Experienced employees continue to complain about their work.

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180 views3 pages

Yakkatech, Inc.: Case Application (Motivation)

This document describes a case study about YakkaTech, a technology services company. YakkaTech has experienced growth in its customer service division but also increasing customer complaints about quality. Employee turnover and quit rates had risen above industry averages. In response, YakkaTech raised pay rates and introduced profit sharing bonuses to improve morale and reduce costs. This decreased turnover but quality and productivity issues remained or worsened. Experienced employees continue to complain about their work.

Uploaded by

ThảooNguxii
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Foreign Trade University Module: Management (QTRE303)

Faculty of Business Administration Lecturer: Ngô Quý Nhâm


Department of Management & Human Resource Email: [email protected]

Case Application (Motivation )

YakkaTech, Inc.
YakkaTech, Inc. is an information technology services firm employing
1,500 people throughout Washington and Oregon. YakkaTech has a consulting
division, which mainly installs and upgrades enterprise software systems and
related hardware on the client’s site. YakkaTech also has a customer service
division that consists of four customer contact centers serving clients within each
region.
Each customer service center consists of a half-dozen departments
representing functional specializations (computer systems, intranet
infrastructure, storage systems, enterprise software systems, customer billing,
etc.). These centers typically have more than two dozen employees in each
department. When a client submits a problem to the center using the online form,
the message or call is directed to the department where the issue best applies. The
query is given a “ticket” number and assigned to the next available employee in
that department. Individual employees are solely responsible for the tickets
assigned to them. The employee investigates and corrects the issue, and the ticket
is “closed” when the client agrees that the problem has been resolved.
If the client experiences the same problem again, even a few days later, a
new ticket is issued and sent to whichever employee is available to receive the
ticket. A client’s problems are almost always handled by different employees
each time, even when the issue is sent to the same department. Furthermore, when
a customer center department is heavily backlogged, clients are redirected to the
same department at another regional center, where the problem can be addressed
more quickly.
At one time, YakkaTech operated more than a dozen small customer
contact centers throughout the region, because client problems had to be
diagnosed and resolved onsite. Today, employees can investigate most software
and hardware system faults from the center through remote monitoring systems,
rather than personally visit the client. Consequently, eight years ago, YakkaTech
amalgamated its customer service operations into four large regional centers.
Customer service staff work entirely within the center. When a client visit is
required, the ticket is transferred to an individual or team in the consulting
business, who then visits the client.
YakkaTech’s customer service business has nearly doubled over the past
five years, but with this growth has come increasing customer complaints
regarding poor quality service. Many say that employees seem indifferent to the
client’s problems. Others have commented on the slow response to their problems
where the issue requires the involvement of more than one department. Several
clients have also complained that they are continually educating YakkaTech’s
customer service employees about the details of their unique IT systems
infrastructure.
Another concern is that about 18 months ago, YakkaTech’s voluntary
employee quit rates in the contact centers had risen above the industry average.
This shift increased labor costs due to the cost of recruiting new technical staff
and the lower productivity of new employees. According to results of an
employee survey two years ago (as well as informal comments since then), many
employees felt that their work is monotonous. Some also said that they felt
disconnected from the consequences of their work. A few also complained about
ongoing conflicts with people in other departments and the stress of serving
dissatisfied clients.
In response, YakkaTech’s executive team decided to raise pay rates for its
customer service staff to become among the highest in the industry around the
Pacific Northwest. The assumption was that the high pay rates would improve
morale and reduce turnover, thereby reducing hiring costs and improving
productivity. In addition, YakkaTech introduced a vested profit-sharing plan, in
which employees received the profit-sharing bonus only if they remained with
the company for two years after the bonus was awarded. Employees who quit or
were fired for just cause before the vesting period forfeited the bonus.
Employee turnover rates dropped dramatically, leading the executive team
to conclude that customer service quality and productivity would improve.
Instead, customer complaints and productivity remain below expectations and, in
some cases, have worsened. Experienced employees continue to complain about
the work. There have been a few disturbing incidents in which employees have
been careless in solving client problems or did not bother to forward tickets that
should have been assigned to another department. Employee referrals (where
staff recommend friends to join the company) have become rare events, whereas
at one time they represented a significant source of qualified job applicants.
Furthermore, a few executives have recently overheard employees say that they
would like to work elsewhere but can’t afford to leave YakkaTech.
Discussion Questions
1. What symptom(s) in this case suggest(s) that something has gone wrong?
2. What are the main causes of the symptom(s)?
3. What actions should YakkaTech executives take to correct the problem(s)?

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