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Fleet Bank
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Case study WAC, Analysis and Recommendation
Submitted To:
Sir. Ahmed Fareed
BBA-5-A
2011Submitted By:
Faisal Shakeel 10108Imran Rasool 10112Babrus Ali 10145Rana Asif 10118
How Fleet Bank Fought Employee Flight
Table of Contents
Summary................................................................................2
Introduction and Background:................................................3
Issues, Challenges and Causes:................................................4
Solution:.................................................................................6
Recommendations:.................................................................7
Conclusion:.............................................................................9
References:.............................................................................9
Date: 16/11/11 Page 2
How Fleet Bank Fought Employee Flight
Summary
FleetBoston Financial is the U.S based company who expand its business through
mergers and acquisitions. With enjoying constant growing assets, business and handsome profits,
company is facing the issue of high turnover rate despite having a narrow labor market.
However, the situation of employees is also discussed and the reasons of their low performances
and turnover are extracted. Fleet realized and faced different causes and challenges, after
implementing Mercers methodology, for high turnover. With gradual analysis and
implementation of different situations, Fleet came across towards some realities which they not
aware off before. It came in front that employee’s attributes has the major combined affect on
turnover and afterwards, employee is affected by organizational characteristics and practices.
There are few important checks that organization has to follow for employee’s performance and
awards on the basis on their results which motivate them to stay. On the other hand there is a
basic need of proper training and development for employee’s career and their work load should
be kept in balance. There should be lateral communication process among top to the bottom of
the organization so problems and issues can be identify at the time of their generation and
resolved at the same time. Constant feedback is yet another aspect through which we can get
updated and in touch with employees. It is realized that promotion and development of a strong
organizational culture is immensely required where employees can share their views and ideas so
they feel the part of the family and get associated with the organization; which ultimately
provides the desire outcome of low turnover rate. The need of flexibility in job and timing is also
being addressed; just as shifts timings should be rotating and promotions should be in place
internally after every 6 months or year for the top 3 employees or on their monthly evaluation,
without any biasness.
Date: 16/11/11 Page 3
How Fleet Bank Fought Employee Flight
Introduction and Background:
What are the company’s main assets, is it their instruments and tools or image to
consumers or constant profitability or employees? If we ask this question to thousands owners,
most of them would answer employees. Employee’s performances always play a critical role in
any organization’s success or failure. If they are happy and satisfied, they would lead, fight and
work hard to achieve company goals and targets but meanwhile if they are not satisfied, they
would end the company’s desires in a disastrous way. It is a company’s responsibility to manage,
retain and satisfy its employees in order to get desired outcome and use its human asset as its
competitive advantage.
FleetBoston is pioneer in the field of human resource management. As with the increasing
number of acquisitions, mergers and employee’s turnover, Fleet managed its organization
structure through basic functions of human resource management with the help of internal and
external company analysis and thorough measurement labor force behavior.
FleetBoston bank is a financial company who runs and constantly expands its business by
providing financial assistance and getting a merger or an acquisition. FleetBoston Financial was
the United State’s seventh largest financial company but after the acquisition by Bank of
America, it became U.S’s second largest financial services institute having 60,000 employees in
total.
In era of 1994 to 2003, Fleet kept growing immensely through acquisition, simultaneously, with
increasing numbers of workforce and assets. Fleet realized that its major issue is high turnover
rate which they resolved through different techniques discussed in the case.
Issues, Challenges and Causes:
Date: 16/11/11 Page 4
How Fleet Bank Fought Employee Flight
Issues, challenges and causes are described and explained below:
1. One of the major issues of Fleet was high and increasing turnover rate as it reached to
the level of 25% and 40% in some departments, like customer service representatives,
annually. Despite the fact that Fleet is operating in tight labor market, it was still a high
rate of turnover. In 1997 when the company held a survey and conducted interview
sessions with employees, they found that the reason of high turnover is insufficient pay
rates and heavy workloads. But, later they found that what employees says, does not
reflect their practices. In other words, what employees think that certain things can
motivate their behavior, does not match with the actual motivation indicators? So it was a
challenge to identify the actual reason of high turnover.
2. Job security was one of the basic causes of high turnover. Due to constant merger and
acquisition, employees saw it as a major threat for their job because of large number of
applicants and workforce available. Employees therefore, prefer to switch to external
opportunities in time, in order to do not get layoffs or termination.
3. Employees attributes was the major cause of turnover and retention also. These attributes
includes promotion, experience, job status, pay growth, and performance appraisal. Fleet
analyzed reason of leaving was high performing employees were remained constant at
their current position for past two or three years and students who completed their
undergraduates or graduates degree. They were neglected and not supported by career
development facilities.
4. Pay level had smallest affect on turnover but it became one of the largest causes when it
comes to the increment of pay levels in previous years. Employees look for incentives,
perks and other financial time to time rewards to keep them motivated.
5. Yet another issue which Fleet faces and realized that management stability was a tough
situation to handle. Increase in turnover of managers and supervisors results in high
number of employee’s turnover. If managers and supervisors leave, they expect their
loyal employees to also leave. If not, than subordinates might think that there is more
outside opportunity due to which they are leaving and so they should also avail those
opportunities. Or subordinates having close attachment or other professional attachment
Date: 16/11/11 Page 5
How Fleet Bank Fought Employee Flight
to supervisors will lead to dissonance and disconnection in the group or department
which ultimately results in subordinate’s turnover.
6. Revision of hiring criteria was also required as there were some loop wholes needed to be
fulfilled and despite of heavy investment in this area, there needed a strategic
development and implementation of new ideas and strategies. As there was major
numbers of newly hired employees were getting out of the organization and were
switching off.
7. There was a challenge to bring new strategies and ideas to retain employees, so they can
be get motivated and do not think about leaving. Few little steps in small areas which
mainly get neglected but has a combined affect on turnover rate and workforce
performances.
The main issues and causes of high turnover which needs immediate corrective actions includes
motivational aspects of an employee; how he get motivated towards organizational goal and
retention, and other employees attributes which been disturbed and need some serious way to
solve out. Organizational characteristics and practices come on second step as some employees
prefers flexible timing, balance workload and balance work life, and also does include
innovation in office work.
Solution:
Solutions adopted by Fleet Bank are scheduled in same sequence as issues and challenges
are listed above:
1. For tackling high turnover rate and the issue; that what an employee say is different to
what he actually do, Fleet used Mercer’s methodology to determine and analyze
workforce characteristics and other factors which manipulate employee’s behavior and
decision whether to stay or leave. They collected the data form different departments and
a lot them key variables which identify and help in manipulating results and apply the
conditions on employees and saw their responses; similarly to what consumer responses
when he is obliged to make trade-offs between decisions.
Date: 16/11/11 Page 6
How Fleet Bank Fought Employee Flight
2. On job security Fleet provided solution through mercer’s observation that employees
prefer to get experience to make them more marketable. So in this case Fleet decided to
provide career development and provide career opportunities within organization, and
provide them a reason to stay as they are being provided by a platform where they can
enhance their experience and mobility. Fleet decided to compensate those employees who
take risk to stay with the company in the case of merger and acquisition.
3. Instead of providing compensation or pay increment, Fleet provided a greater opportunity
to built personnel asset by developing experience through internal job motilities. Thus,
this provides as a greater saving for future instead of having temporary benefits. For
those employees who recently completed their graduates and undergraduates studies,
Fleet told their managers and supervisors to make sure these employees do not leave and
engage them by providing them greater career opportunities within organization and
through orientations, job fairs, and promotions.
4. On the issue of turnover due to no encouragement on performances and constant pay
level over the months/year, Fleet provided constant pay increase to those employees who
perform constantly and show their worth in the organization.
5. Fleet realized that management stability is very necessary and provided the solution that
to do not let subordinates to attach with one manager or supervisor but let them attach
with every one and share equal sense of respect, love and encouragement among them.
Fleet decided that if there is need for replacement, than replace one manager/supervisor
with other well know personality who is same popular and familiar with employees.
6. On hiring criteria, Fleet discovered that it is good to have those new comers who have
past stability and has spent more time on there previous job because it reflects towards
longer future stay from an employee.
7. Fleet brought new ideas and plan which they decided to implement strategically and
slowly with the analysis of their results, includes:
a. Manageable workload on new comers in first six months.
b. Constant feedback process.
c. More training and orientation.
Date: 16/11/11 Page 7
How Fleet Bank Fought Employee Flight
d. Diversity of rewards to diverse workforce; which increases loyalty and eliminate
discrimination.
e. Special payments for those employees whose referrals stayed for at least 6
months.
Recommendations:
Fleet Bank took excellent steps towards improvement which is being also reflected through
results but if I were at there position I would have taken/suggested few more steps and provides
addition to already taken steps. These steps are discussed below:
1. First of all, after reading the case and having a critical analysis, I have found that Fleet
Bank lacks the organizational culture which is the key element and basic fundamental of
ever grooming organization. There is no sense of loyalty, love, ethical responsibility; as
being an old employee or even the new one who take some good lessons through
orientation and personnel development, so it is important to bring that kind of culture into
the organization where there is not always the instrumental reason for staying in the
organization but there can be self attachment with the organization. But for this
organization has to take few steps to bring this aroma into the roots of the organization.
2. Appraisal and awards are the fundamental expectation of every employee. It is essential
in a business to motivate employees with constant appraisal and awards. Perks,
commission and salary increment are always motivating substance through which
improvement is guaranteed in many situations. Some employees preferred self-
actualization and self esteem. If in an organization there encouragement given to
employee in the shape of employee of the year or worker of the month, it would create
desire to work and stay in the organization.
Date: 16/11/11 Page 8
How Fleet Bank Fought Employee Flight
3. The possible solution to get best out of nothing is to
motivate employees by giving moral boosting
lectures and orientations. There ethical
responsibilities should be delivered and realized to
them through workshops or training seminars.
Through these kinds of activities we would see a
push in employee’s performance and loyalty; at
least for a time being. These sessions should be
scheduled not only once but on continual basis.
4. Planning needed everywhere from recruiting to firing, as constant review of all policies
and strategy is needed. Training of fresh people and molding them to required desires is
long term solution and beneficiary as well. Company should focus on fresh people as
well and inherit loyalty in them and give them a sense of strong organizational culture.
We need to show them that company posses a strong culture of loyalty, love and
cohesiveness/bonding for employees and expect the same from them. We should try to
bound them by proving employee development and career orientation, and with constant
revision of there basic responsibility; which is to be loyal to the company. We need to
keep in mind that, are we planning, doing, checking, and adjusting on continual basis?
And we need ourselves updated all the time with molding and changing behaviors of
employees.
5. Communication, provision of 360 degrees feedback, employee’s performance evaluation
and parallel motivation should not be breached at any stage of the organization.
Performance charts should be displayed, so employees can get motivated and excited and
always be in the competition in order to get recognized by the organization.
6. One last step should be taken that employee’s health and career plans should be
introduced or provide some kind of special benefits through which they always get
associated with the organization; such as life/body insurance, employee’s child
educational plan, pay increment on marriage or official holidays for one week on
marriage and so on… This will create a belief that company does care about their loyal
and good performer employees and there is a give and take on both ends.
Date: 16/11/11 Page 9
How Fleet Bank Fought Employee Flight
Conclusion:
If you are in a business then you have to carry one the rule of give and take. To manage
the turnover rate, company has to recognize and appreciate their employees and take care of
them. Motivation is a key to success whether it is for the owner or employee. So is the case with
Fleet Bank. For retaining employees and keep running a successful business, a company has to
have a keen focus on all functions of human resource; as they are the company’s assets, from
staffing, training and development, motivation to maintenance, company has encourage all the
functions to get the desired outcomes. To understand employee’s behavior it is not always
necessary to conduct surveys or interviews, sometimes you have to go beyond this and with
methodologies like mercer’s, you have to analyze, think critically, plan, do, check and implement
strategically in order to get desired outcomes.
References:
Nalbantian & Szostak, (2004), How Fleet Bank Fought Employee Flight, Harvard Business
Review.
Azhar, I. &. (n.d.), Introduction to Human Resource Management, ‘How Fleet Bank Fought
Employee Flight’, Human Resource Management.
Date: 16/11/11 Page 10