6N212: Management in Organizations Case: The Treadway Tire Company: Job Dissatisfaction and High Turnover at the Lima Tire Plant Harvard Brief Case: # 2190 (June, 2008) Case Analysis Questions:
1. Briefly describe the situation today at the Lima Tire plant. Treadway Tire's plant in Lima, Ohio must confront strong job dissatisfaction and high turnover among its line foremen. The foremen are caught in the middle of an adversarial relationship between the union and management, and they must cope with the needs and interests of both. They also perceive limited opportunity for career advancement. Solving the problem requires rethinking the philosophy that guides workforce management and changing the Treadway culture that has grown up around that philosophy. Facing mounting pressure to reduce costs and increase productivity, director of human resources Ashley Wall must work quickly to analyze the root causes of the problem and provide an action plan to reduce turnover of the line foreman segment
2. What is the relationship between line foremen at Treadway’s Lima Plant and other groups within the plant: general supervisors and area managers, top management, the union, hourly workers, each other? Why do you believe the relationships are as they are? 3. How do you feel line foreman feel about their jobs and why? Be specific about their sources of dissatisfaction. How engaged are the line foreman? How would they respond to Gallup’s 12 Questions of a Strong Workplace? Expand on your position. 4. What are the consequences of those feelings? What is the “ripple effect” of having disengaged line foreman? 5. What are the costs of turnover within the Lima plant? Direct? Indirect? How would you calculate the cost of turnover if you were Ashley Wall making a presentation to top management? (Hint: Look at number of hours worked per month, salary plus benefits, and how long it takes to come up to speed in the role) What is the magnitude of the turnover problem? Here is a formula for calculating the direct cost of turnover:
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Average Hours Worked/Month x Wage/Hour (including benefits) x Number of Months for Learning Curve x Productivity during Learning Curve x Number of Positions Turned Over = Direct Cost of Turnover 6. Discuss the elements of the current work system that are contributing to the problem. How does each negatively impact engagement and job satisfaction? Out of a total of 50 foremen at the Lima facility, 23 of these positions have turn over. The job of line foreman at Lima was a daily challenge, requiring foremen to juggle and resolve a variety of personnel, resources, and administrative issues in a 12-hour shift. On top of this, line for felt often pulled in different, often conflicting directions by management, the workers, and the union. Meeting performance goals is the most important duty of the line foreman. Every day a break out report of the previous day’s actual performance vs. forecast was circulated to all line foremen, general supervisor, area managers, and the plant operating committee. The report detailed such metrics as labor hours per unit, units completed, and units rejected owing to quality issues. If the results fell below forecasted levels, the foreman was subject to a severe tongue lashing and usually threatened with poor performance review. Responsibilities A foreman’s top priority was to start the tire production line each work day and ensure that no technical issues would stop production during the shift. Due o the Strenuous nature of long shifts, the scheduled hourly workers often came late to work or called in sick, causing foremen to scramble for last minute substitute workers and assign them spontaneously to appropriate task. Morale
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No Matter what happens, we’re expected to meet or exceed targets, which get higher every year. Feel powerless to discipline the employee due to the union. They don’t feel like they have authority, but yet they have all the responsibility. Hiring process-ok Training-Foreman did not receive formal training. The company did not want to invest in the training. Goals As long as you meet targets without aggravating the union or management too much, you’re fine. Promotion Line foremen just don’t see any way to move up at Lima. No room for advancement. Survey The company did not offer clear opportunities for advancement Conclusion Morale and productivity were imperiled. The plant was not satisfactorily developing new managers. Relations between management and the union were threatened. Issue from the survey Management is sensitive to employee problems. Did not feel prepared to accomplish duties Immediate supervisor is not a positive role model. Tone at the top Training
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7. What action plan should Ashley Wall recommend? Be specific in describing your recommended actions. 8. What key lessons will you take away from this case relative to building an engaged work culture and being an effective manager? Discuss the elements of the current work system that are contributing to the problem. How does each negatively impact engagement and job satisfaction? In this case, there are many elements of the current work system that are contributing to the problem. The problem can be attributed to the inefficient training system in place, which resulted in undertrained foreman. The current training process was a sink or swim mentality forced upon the foreman. Due to the lack of proper training, the line foreman did not have the proper tools to do the job right or run things properly. This lack of training has lead to a low job satisfaction and low employee engagement among foremen. Another element contributing to the problem was the constant pressure from managers to meet or exceed targets no matter what happened in the factory. The foremen were under constant pressure and judged on a daily basis on their production results. The bosses often threatened the foreman to get results. This type of leadership style caused tension between the supervisors and the foreman. The constant pressures on targets lead to a high stress environment, low employee morale, and low job satisfaction among foremen. Foremen were also faced with long shifts and very substantial workload. These long work hours increase the stress and fatigue on foremen, which will lead to a less productive employee. Even if foremen are able to handle the long shifts and substantial workload, they are face with few opportunities to move up within the company. The long shifts, substantial work load, and the lack of opportunities have lead to low employee engagement, higher stress, and low job satisfaction.
What action plan should Ashley Wall recommend? Be specific in describing your recommended actions. Ashley should recommend a training program for new and current foremen that will prepare them on how to effectively do their job adequately. This would be a good long term investment for the company. This training program would enable these foremen to have better experience and results in the workplace. Providing appropriate training and information will make employees feel more valuable and will result in better job satisfaction. The company should have hiring process to promote from internal candidates. This process accompanied with the appropriate training and employee development will lead to employee retention. These steps will show the foreman that the company is loyal to
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qualified employees. This will boost employee retention, motivation, employee engagement, and job satisfaction. The company should put less pressure on the foremen for immediate result on things that are outside their control, for example sick employee. The results should be adjusted based on the head count for that particular day. Introduce a productivity measure per employee, not per department. Ashley should also propose shorter shifts. Shorter shifts would improve the productivity of the plant. The longer the shifts lead to less productive employees at the end of a long shift. The current length of time for each shift could be reduced so that it causes less stress on the individuals and help with work life balance. People can work strong for a time, but once they reach fatigue, they begin to make more mistakes and they’re more irritable. The shorter shift will increase employee morale and job satisfaction. 8. Empower your employees, treat them with respect, and be someone your employees would follow, Train. Empower your employees, treat them with respect, and be someone your employees would follow.
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