Question

Appletree Answers

Service industries strive to relieve their customers’ anxieties, but often those stresses are transferred to the service employees. For example, help desk call center workers face so much tension that turnover rates can reach as high as 125 percent per year. That amounts to a loss of every employee plus a quarter of their replacements in a single year. Since finding new people to fill all those positions can be expensive, the savviest companies look for ways to motivate their employees to be productive and happy so that they choose to stick around for a while.

John Ratliff of Appletree Answers, a company that provides call center and receptionist services for other businesses, was able to expand his company from a one-man operation to a thriving business with 650 employees at more than 20 locations. Appletree supports clients ranging from sole proprietors to Fortune 500 companies in every industry imaginable.

Early in its growth, however, Appletree suffered the same high turnover rate that is common in the call center industry. Ratliff decided to restructure the business to focus on employee satisfaction and wellness. First, he developed a new set of company principles that encouraged staffers to “think like a customer” and “take care of each other”. In order to accommodate his largely Generation Y employees, Ratliff instituted flexible schedules and arranged for additional training programs. Ratliff also encourages employees to submit ideas regarding the company’s projects. A desktop app called Idea Flash lets staffers send their suggestions to executives, further enriching the job experience.

In his quest to turn his company around, Ratliff discovered that some of his employees struggled with problems such as serious illnesses, financial hardships, and even homelessness. To combat these crises, he created the Dream On program to personalized motivation that doesn’t come in a standard paycheck. Similar to the Make a Wish Foundation, Dream On strives to help make selected employees’ “dreams” come true, whether it is a trip to Disney World for a sick child or a luxury honeymoon for a loyal worker.

Working in this newly fulfilling environment had a profound effect on Appkletree’s staff. No longer just seat-fillers, their personal commitment to the company became an integral part of its goals and culture. Because of all this positive reinforcement, Appletree staffers are not only more willing to stay at their jobs, but they also perform their tasks with more energy and effort. John Ratliff’s unique approach gives his company a leg up on the industry while still caring deeply for his employees. That’s known as a “win-win”.

Today, the fast-growing firms provide services in areas such as law, health, telecommunications, entertainment and finance. Together, services make up nearly 80 percent of the value of the U.S. economy. Since the mid-1980s, the service industry has generated almost all the increases in employment.

1. Why is employee turnover very costly for companies?
2. How did John Ratliff increase employee motivation by understanding and adapting the motivational theories? Which theory do you think is more appropriate?
3. How did the Dream On program motivate workers and help build stability within the organization?

Answer 1

a. Why is employee turnover very costly for companies?

Employee turnover is very costly for the company, it not only affects the cost structure, but also affects the goodwill & market image of the company. Finding replacement or new people to fill the vacant positions is very expensive for the companies. It also includes training & development costs, and moreover companies lose their skilled candidates. Finding & hiring new employees, documentation, doing negotiation, providing training to them, making them comfortable with work & organizational culture, all are hectic & time taking tasks. Employee turnover dramatically affected the companies, when employees left their job during peak seasons. Therefore, employee turnover is not a good indicator for the companies.

b. How did John Ratliff increase employee motivation by understanding and adapting the motivational theories? Which theory do you think is more appropriate?

John Ratliff of Appletree analyzes & understands the situation, and gets the idea that only motivation & restructuring the organization's principles will help them to reduce employee turnover. Ratliff restructured the business to focus on employee satisfaction & wellness. He reinforces positive motivation in employees, resulting in bringing employee satisfaction, which in turn, results in reduction of employee turnover & helps to enhance the productivity of employees as well as the company. He worked on these aspects:

• He introduces flexible schedules & training programs, as well as encouraging employees to take care of each other like they take care of their customers.
• He also encouraged his employees to take part in the decision-making process by submitting their views & ideas regarding any project, and for this he introduced an application called 'Idea Flash' through which employees submit their views, in return help Appletree to enrich the job experience.
• Ratliff also worked on employee problems such as serious illnesses, financial hardships, and even homelessness.
• He personalized motivation by launching the 'Dream On' program that helps selected employees’ “dreams” come true.

He utilizes Herzberg Two-Factor Motivation Theory as a most appropriate approach which includes two important factors one is Hygiene Factor which is also called Maintenance Factor, necessary to perform a job, but does not ensure long-term satisfaction & another one is Motivation factor which is utilized to inject positive reinforcement. This factor yields positive satisfaction in employees.

c. How did the Dream On program motivate workers and help build stability within the organization?

'Dream On' program helps the employee to fulfill their dreams & wish-list. Through the Dream on program Ratliff makes employees' dreams come true, for example: they sanction a trip to Disney World for a sick child, or a luxury honeymoon for a loyal worker. In this way Dream on helps employees to make their wish true through the loyalty towards work. Dream on acts as a motivation, or positive reinforcement factor for employees. Employees feel a sense of satisfaction & part of organization. Since company makes employees as their family, therefore, employees also treat company as a part of their family, and they both work for each other's welfare.

After all these, employees are not just seat-fillers, they become more committed & accountable to the company, and align their personal goals with organizational goals. Because of all this positive reinforcement, Appletree staffers are not only more willing to stay at their jobs, but they also perform their tasks with more energy and effort.

"If you liked the answer please give an Up-vote, this will be quite encouraging for me, thank you!"